Fresh Off Their First PPP Loan Forgiveness Denial Appeal Win, Johnston Thomas Shares Key Steps To File A Successful AppealRead Now
TMC preferred partner law firm, Johnston Thomas, has been providing critical assistance to numerous IMBs and credit unions that had their Payment Protection Plan (PPP) Loan Forgiveness Applications (“Application”) denied by the SBA. With Johnston Thomas’s Mortgage Banking Practice indicating its ongoing efforts are already proving to be successful, its Chairman, James Brody, shared some invaluable tips to help other mortgage bankers increase their chances of filing successful appeals.
Per James, if your Application has been denied, the steps that you must take in order to file a successful appeal, include, but are not limited to, the following:
(1) Carefully review the Loan Decision Letter, which should indicate the official reason(s) for denial and provide you with a roadmap of those issues that must be thoroughly addressed in your Appeal.
(2) Collect any and all documentation that can support the arguments made in your Appeal and include them as exhibits, such as letters and notices from investors about delays caused by COVID and record volume.
(3) Ensure your Appeal is properly filed within thirty (30) calendar days from receipt of the SBA’s final loan review decision.
(4) Provide your lender with a copy of the Appeal, which will cause the lender to extend the deferment period of the PPP loan until a final decision has been made.
(5) Understand that the appellate process is not over once you submit your Appeal and be mindful of additional actions that may need to be taken after the filing (i.e., such as filing a timely objection to the Record where warranted). Although there is more involved in the filing of a successful appeal, these tips are critical for your Appeal to have any chance of success.
Although it can take months to work your way through the appeals process, Johnston Thomas’s early efforts have already proven to be successful, and they are confident in their chances of achieving similar results for the other clients they are representing. In addition to Johnston Thomas being well situated to assist mortgage bankers with their appellate needs, its team of mortgage banking attorneys can assist your company with all its compliance and industry related legal needs (e.g., LO compensation, contract negotiations, licensing, trademark, employment, CFPB/State audits, ransomware/data breach, joint ventures, marketing service agreements, M&A, litigation and more). If you are a TMC member in need legal support or consultation, please contact James, to schedule a complimentary 30-minute consultation, which is made available as a valuable member benefit.
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BY RICH SWERBINSKY, PRESIDENT & COO OF THE MORTGAGE COLLABORATIVE
NOTE – This piece is satirical in nature and all of the quotes below are fabricated.
If you’ve seen one prediction column or economist projection for the mortgage industry for 2022, you’ve seen them all. And they’re always wrong. Raise your hand if a year ago you were predicting 2021 would be nearly as busy as the record-setting 2020 and that any of this madness would have ensued?
Yeah, that’s what I thought.
So let’s have some fun and take a shot at some really bold predictions on mortgage industry related headlines we could see in 2022.
Ishbia Issues Another Edict (January 20, 2022)
Tired of not seeing his name in the news, United Wholesale CEO Mat Ishbia once again demanded his customers “bend the knee”, threatening to stop doing business with mortgage brokers that sell loans to competitors Caliber Home Loans, Home Point, Flagstar Bank or loanDepot. Ishbia made headlines in 2021 by issuing a similar edict to his customers that sold loans to fellow competitors Rocket Mortgage or Fairway Independent Mortgage Corp.
“The business advantage of being a mortgage broker is having access to many different lenders products and pricing,” said Ishbia. “By eliminating brokers ability to sell to our vastly inferior competitors and to essentially become retail net branches of United Wholesale, everyone wins. Especially United Wholesale.”
UWMC shareholders may disagree. The stock sits at $5.94/share, falling precipitously from its post-IPO $13 price throughout the course of the last year.
Zillow Reveals Shocking Home Valuation Methodology Process (February 4, 2022)
Three months after shuttering it’s iBuying program and laying off 25% of their employees after $1 billion in losses, Zillow Group Inc. provided shocking insight into the home valuation errors that led to the failure of that division of the online real estate marketplace behemoth.
“In hindsight, using the Magic 8 Ball to predict the direction of the value of homes we were iBuying was reckless,” said Zillow CEO Rich Barton. “Our research indicated it was providing better results than the Executive Decision-Making Dart Board we used to use, but the bottom line is it wasn’t good enough and our shareholders deserve better. It’s what we do, we value homes. And we need to re-examine our methods.”
Chopra Attempts Failed Coup of Mortgage Bankers Association at Technology Conference (April 12, 2022)
Consumer Finance Protection Bureau (CFPB) Director Rohit Chopra, fresh off his hostile takeover of the FDIC and declarations of war against overdraft fees and “big tech”, attempted to overthrow the Mortgage Bankers Association (MBA) at their recent Technology Solutions & Expo Conference this week at the Bellagio Hotel in Las Vegas, NV.
During the opening general session, Chopra unexpectedly charged the stage in a “I’m from the government and I’m here to help” t-shirt as CFPB operatives barred and guarded the exit doors. Chopra started unfurling a plan to overtake and fold the MBA under the umbrella of the CFPB, an independent regulatory agency with no oversight. The mostly Republican and highly confused crowd of attendees almost immediately started to get hostile, causing Bellagio security to quickly leave Ben Affleck’s blackjack table to restore order and to escort Chopra and his operatives off the premises.
Biden Administration Under Heat as Housing Inventory Falls to Lowest Levels in US History (May 23, 2022)
President Biden continued to come under increased criticism this week for his administration’s role in a worsening housing inventory problem in America as the monthly supply of houses in America fell to 0.1 months. A six-month supply is considered healthy. Biden is under heat for a series of actions that has increased an already frenetic demand for housing while doing nothing to help improve a long-standing dearth of housing supply.
“My advisors failed to properly inform me that the laws of supply and demand apply to the housing market,” said Biden. “After a long nap and a glass of warm milk, my team and I met this afternoon and we’re going to learn from and get better from this.”
Homebuilder Group Endorses Styrofoam for New Home Construction Amidst Exploding Lumber Prices (June 3, 2022)
With lumber prices soaring to new all-time highs this past week, National Association of Home Builders CEO Jerry Howard endorsed the use of Styrofoam for new home construction at an impromptu press conference outside of his local bar as America’s housing inventory issue continues to worsen with the summer months approaching.
“Despite the facts that Styrofoam is a dangerous air pollutant and poses a great threat to humans, the environment, and animals and takes over 500 years to decompose, leaching harmful chemicals into the environment in the process – I am now formally endorsing Styrofoam as the preferred material for new home construction in America,” said Howard. “It’s cheap, readily available, and most importantly, we don’t have any other options.”
Mark Calabria & Small Throng of Supporters Lead Attempted Raid of Capitol Building (July 6, 2022)
18 months to the day after a throng of Trump supporters did the same, former FHFA Director Mark Calabria led a failed siege of the Capitol Building with seven of his most loyal followers joining him. The group was easily rebuffed by 86-year-old part-time security guard Sal Browning, who was unarmed.
In exile for close to a year after being forced out of office by President Biden in 2021, Calabria’s taken to the popular right-wing social media platform Parler in recent months calling for FHFA to implement a new fee on all loans sold to Fannie Mae and Freddie Mac, who purchase 62% of all conforming loans in America. Calabria claims that his purported 0.75 point “Mortgage Bankers Are Evil Market Fee” would generate $930 million annually that would put the government-sponsored enterprises “back on the path to exit conservatorship”.
AIME Set to Host First Ever “Royal Rumble” On Super Bowl Weekend (September 20, 2022)
The Association of Independent Mortgage Experts (AIME) today announced an exciting new annual event that will debut annually this coming February on the Saturday of Super Bowl weekend. Titled the “Mortgage Broker Royal Rumble”, the event seeks to ease raging hostility in the wholesale/broker mortgage channel through a professional wrestling themed event.
The main event features a tag-team battle between Anthony Casa and The Mean Guy From Better.com vs. The Sucker Punch Guy and The Chair Over The Head Guy from this epic recent brawl. The co-main event will feature United Wholesale CEO Mat Ishbia taking on the entire Rocket Mortgage management team in a steel cage match after calling them out on social media and unexpectedly having them accept. The Rocket Mortgage management team opened as 900-1 favorites in early betting at Las Vegas casinos.
Forty-Two Hospitalized in Nashville as Margin Compression Drinking Game Turns Ugly (October 28, 2022)
Forty-two attendees of the MBA Annual Convention were hospitalized this week due to alcohol poisoning as the tough business climate for mortgage bankers and Nashville’s Broadway music district proved to be a bad match.
Discussions with the hospitalized revealed that the source of the carnage was the resuscitation of what they called “The Margin Compression Drinking Game”. Borne during the winter of 2019 during a similarly tough stretch for the mortgage banking industry, conference attendees took to taking a swig of their favorite adult beverage every time they heard the phrase “margin compression” uttered. With interest rates higher than they’ve been in a long time throughout most of 2022 and refinance business nearly non-existent, lenders pricing purchase business very aggressively to keep deal flow coming in has been driving profits down and also driving mortgage bankers to drink.
FHFA Raises Conforming Loan Limits to Over $1.5 Million As Home Values Continue to Skyrocket (December 6, 2022)
The Federal Housing Finance Agency (FHFA) today announced the conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2023. In most of the U.S., the 2023 conforming loan limit for one-unit properties will be $1,547,200, an increase of $900,000 from $647,200 in 2021.
The move was made in response to exploding home values in America throughout 2022 as a series of moves to increase already ferocious demand were levied with housing inventory already at historically low levels and with many impediments to the new-home build market present.
Voldemort Variant Sets Off Unexpected Refinance Boom to Close Out 2022 (December 28, 2022)
While 2022 was a rough one for the mortgage industry, 2023 is set to get off to a busy start for lenders as the Voldemort variant of the COVID-19 virus spread rampantly through America in early November, causing the Federal Reserve to “untaper” their mortgage bond purchasing, driving 30-year fixed rates to their lowest levels ever.
In many ways, the mortgage playing field has evolved into something far more inclusive and empowering for women. This special report explores how MPA’s Elite Women have pushed the boundaries in diversifying the traditionally male-dominated mortgage sector.
Three TMC members were recognized with top honors, and six members and a
preferred partner received honorable mentions. Congrats to all recipients!
BY RIGH SWERBINSKY, PRESIDENT & COO OF THE MORTGAGE COLLABORATIVE
Last week we took you on a comprehensive, chronological and comical review of EVERYTHING that happened in the mortgage industry in 2021.
Now, let’s take a look at all the awesome developments within The Mortgage Collaborative (TMC) this year. We evaluate success by how effectively we’re able to positively impact our member companies and by that measure, 2021 was our most prosperous year yet as an organization. It was a year that saw TMC significantly expand our virtual menu of networking and educational events, return to in person events, add 52 new lender members and 14 new preferred partners, and much more.
TMC Connect: Setting A New Standard for the Mortgage Industry
We will always be an in-person event organization. But seeing the value we’ve been able to drive to all of our member company’s staffs through our virtual offerings has been intoxicating and became a huge focus for TMC organizationally this past year. No one in the mortgage industry is coming even close to what we’re offering our members in this arena:
Right now we have 23 TMC Connect sessions on our Member Event Calendar for January, with more coming. All are open to all the employees of all of our member companies at no cost.
Reunited At Last: A Return to In-Person Events
It was glorious.
The time away and the absolutely fabulous Terranea Resort just added to what was our most successful conference yet with 400 of our members in attendance. Just take a look at this agenda!
We’ll be at the equally fabulous Fontainebleau Hotel & Resort in Miami, FL from March 19-22. Registration is now open!
The Power of the Network Gets More Powerful
TMC has no employees tasked with “selling membership”, and our growth strategy is “quality not quantity”. So adding 52 new lender members in a year that was as busy and distraction-laden as 2021 was no small feat. If we continue to manage our growth properly, it adds to the value of membership in so many ways. TMC Benchmark and the peer groups within it become more meaningful. We’re adding more brilliant leaders nationally that are willing to share experiences and best practices with the member base. And we’ve been able to expand our Working Groups and Collaboration Labs. We’re at 260 lender members as we head into 2022.
We also added 14 new Preferred Partner companies in ’21. That brings the count to 71 Preferred Partners that offer TMC’s members powerful discounts and incentives that our members utilize to operate more strategically, efficiently, and profitably.
Continued Growth With Our Collaboration Labs & TMC Benchmark
Over the last 13 months, we’ve conducted 17 virtual and 5 in-person Collaboration Labs comprised of 153 different member companies. Over 100 members have now signed up to submit data to TMC Benchmark, our industry leading monthly data benchmarking tool that’s included for free as part of membership. Both initiatives become more powerful the more they grow as we’re able to build out more meaningful peer groups with each.
Other Relevant Developments
The best is yet to come as our team continues to work on “what’s next” for our members. We are equally focused on the emerging but not-evident-as-of-yet needs of our lender members as we are the most pressing issues of today. Our team is constantly engaging them and procuring their feedback on the ways we can continue to drive creative value to their organizations through the growing, powerful, “pay it forward” network we’re all lucky to be a part of.
BY RICH SWERBINSKY, PRESIDENT & COO OF THE MORTGAGE COLLABORATIVE
Volume (and productivity) continued to trend downward in November for the national network of lender members of The Mortgage Collaborative that submit data to TMC Benchmark. Closed loan production (in units) fell 11% during the month when compared with the month prior.
New applications taken also dropped by 11% month-over-month after dropping 7.0% and 12.4% the two months prior.
The product mix on new closed loan production trended towards more non-conventional products with that share of closed loan production at a 2021 high of 7% in November. Conventional products represented 74% of closed loan units with government products coming in at 19%.
The purchase/refinance mix trended slightly more purchase month over month, with purchases accounting for 62% of all closings. Here's the purchase share we've seen in TMC Benchmark the last six months:
June 2021: 65%
July 2021: 67%
August 2021: 61%
September 2021: 61%
October 2021: 61%
November 2021: 62%
Operational efficiency waned in October for the TMC network to its lowest levels since 2019 and we saw efficiency fall even further in November. The number of closed loan units closed per full-time processor dropped to 9.4 in November versus the 10.1 October total. Closed loan units per full-time underwriter dropped to 28.6 from 30.9 the month prior. Closed loan units per full-time closer plummeted again to 26.7 from 33.3 (dropped from 37.0 to 33.3 last month). The average loan originator closed 4.8 units in November, down from 5.3 in October. LO comp came in at an average of 94.8, up 1.5 bps from last month's 94.5 total.
Average annual compensation paid to operational staff continued to fall in November as well, with average annual comp paid to FTE processors seeing the biggest drop, going from $53,400 to $50,400 this month. Underwriter annual comp fell to $83,500, $8,000 lower than where it was two months earlier. Average annual comp paid to closers dropped slightly from $55,500 to $55,200.
The average "app date to clear to close date" dropped to 41.0 days in November. Let's take a look at how this number has trended throughout the course of the last year:
December '20- 47.4
January '21 - 47.9
February '21 - 43.1
March '21 - 42.8
April '21 - 45.7
May '21 - 43.8
June '21 - 41.8
July '21 - 43.2
August '21 - 42.5
September '21 - 42.3
October '21 - 42.6
November '21 - 41.0
The average cost per closed loan unit our members paid for their loan origination system (LOS) came in at $113 in November, down $10 from the month prior, likely representing lenders changing LOS providers. The average cost per closed loan unit for our members point-of-sale (POS) system was $50 in November and $85 for their CRM.
53% of this month's participants in TMC Benchmark were depositories and 47% were IMB's. 38% originate under $500M a year in annual volume, 22% originate between $500M-$1B, and 40% originate over $1 billion per year in annual production.