THE LETTER X

The Week Ahead

Bonus Issue

Presented by: EPM

Last week's issue had some issues with the publishing, so I missed a few contributors. Not wanting to short change their work on contributing to TLX, I wanted to pay them some special attention, along with a few other tidbits.

I hope you had an amazing MLK day and enjoyed yesterday's issue!

CFPB News

President-elect Joe Biden will nominate Rohit Chopra to be the next director of the Consumer Financial Protection Bureau, according to four sources familiar with the decision, choosing a strong consumer advocate aligned with Sen. Elizabeth Warren (D-Mass.).

MBA: MORE THOUGHTS ON CHOPRA AT THE CFPB

• We suspect that Chopra would prioritize enforcement, redo debt collection regs and overhaul the rules for payday lenders – though that could take a while. As Capital Alpha’s Chuck Gabriel points out, Chopra, as the CFPB’s former loan ombudsman, will be a major headache for the student loan and for-profit college industries. Eventually, Chopra would get to the task of tightening rules on bank overdraft fees.

• Chopra will likely renew the CFPB’s focus on fair lending by restoring the Office of Fair Lending, as Politico noted. That could be done more quickly than many other things, such as redoing the payday lender rule, which requires a rulemaking process, comment period, and all the regulatory accoutrements.

• As for the confirmation process, we expect the senators to stick to their party line. To be sure, there’s a chance of defections from folks close to the middle like Joe Manchin (D-WV), Lisa Murkowski (R-AK), Susan Collins (R-ME) or Mitt Romney (R-UT). But we wouldn’t count on it.

• Once upon a time, there was a notion among many senators that presidents deserve deference to nominate whoever they want as long as that person isn’t beyond the pale. But that’s pretty much a quaint vestige of a distant era, and most Republicans consider Chopra beyond the pale, anyway. We don’t buy the idea that Republicans are going to give Biden a pass on progressive nominees because he and Mitch McConnell have shared some poignant personal moments in the past.

• In fact, we expect Republicans to procedurally slow-walk the nomination, taking as much time as they can to submit questions for Chopra and perhaps placing a temporary “hold.” They can point to recent examples of Democrats doing the same.

• A big question that remains is who Biden will pick to be acting CFPB director. Our understanding of the Federal Vacancies Reform Act (Section 3345) is that Chopra couldn’t be named acting director and be nominated to the Senate. We could hear news on this in the next day or two.

Non-QM X: Highly Qualified Non-QM News

Tom Hutchens - EVP of Production at Angel Oak Mortgage Solutions

We expect the housing market to stay hot in 2021. People will continue to relocate to suburban homes, small businesses will start to reopen, remote work will give rise to the gig economy and the millennial cohort will continue the transition from renter to homeowner. In the non-QM space, this translates to momentum — and a lot of it.

These macroeconomic trends provide a solid foundation for growth. Large non-QM lenders like Angel Oak are back on track due to quick coordination and communication at the height of the pandemic. We are not back to pre-COVID levels yet, but we are moving closer every day. That means there’s room for immense growth for discerning brokers.

Growth back-drop

You might not know just how fast-growing the non-QM market was before the pandemic essentially halted the entire mortgage industry. Volume basically doubled year-over-year from 2018 to 2019. Unfortunately, 2020 temporarily hindered that growth, but now non-QM is back and booming. 

Non-QM in 2021

We are still expecting the non-QM market to sit between 5% - 10% percent of the overall origination business, meaning it could eventually be as large as $200 billion of total origination volume. The market has a ways to go in order to reach that goal, but we are optimistic that it will get there.

In short: 2021 will be a huge year for non-QM. Want to get involved? Feel free to reach out to me anytime!

The Edumarketer

Ginger Bell, Speaker, Author, Learning Expert @ Edumarketing

Mortgage Video Planner Weekly Videos

Happy New Year! Make this the year you start creating videos and we are here to help you do just that! We’ve created a 52-week Edumarketing Mortgage Video Planner that has 52 weeks of video ideas. Each week this year we will be sharing a video focused on the topic suggestion for that week.

Join us for 52 weeks of mortgage content ideas. If you've ever wanted to create videos to educate consumers and real estate professionals, then this video planner and video series is for you. You can get your Edumarketing Mortgage Video Guide on Amazon. https://ginger.wiki/3hRna9c

Week One covers Veterans. Join Ginger Bell for 52 weeks of video content ideas!  

Week One

https://youtu.be/L5I5FqUBZis

Week Two

https://youtu.be/9L2hStflZic

I hope you enjoyed this bonus issue of TLX! Have a great day!