Guess whos back...back again

PLUS: Charted: Mortgage demand jumps

January 20, 2023

GM. This is Mortgage Nuggets. The newsletter that takes mortgage news and turns them into an easy-to-read email for you. Every Mon, Wed, and Fri morning.

Welcome to the 872 new folks joining us since Monday. Let's dive in!

1. He is back

Government name: Michael Strauss. And boy, does he have quite the resume:

  • Abruptly shut down Sprout Mortgage in early July, resulting in employees not receiving their last paychecks, no severance packages, and health insurance being canceled

  • A $2.45 million mortgage fraud settlement with the SEC to his name

  • Accused of accounting fraud by SEC, and there are ongoing investigations by New York authorities.

Now, Michael is back with a brand new fraud mortgage company called Smart Rate Mortgage, LLC, registered in FL, with a start date of August 1, 2022, according to the NMLS.

It is unclear if the firm originated or bought any loans, or how it would fund new mortgages. There is also speculation about whether Strauss took clients who had loans in the pipeline when Sprout shut down.

All this is happening while still, 600 former employees have not had their dues cleared. Unbelievable.

2. Charted: Mortgage demand jumps

Mortgage rates are at the lowest* level since September, and that is bringing new demand into the mortgage market.

The seasonally adjusted Mortgage Purchase Application Index rises 24.7% to 198.7.

That's the highest reading since September 2022.

On a year-over-year basis, purchase apps are down 35.4%.

3. BofA freezes hiring

Bank of America has initiated a partial hiring freeze as it attempts to quell costs and braces for a possible recession, Bloomberg, which cited sources familiar with the matter, reported on Wednesday.

Executives at the Charlotte, North Carolina-based bank have been told to pause hiring except for the most vital positions, according to the wire service.

While other firms, such as BNY Mellon and Goldman Sachs have initiated culls in their workforces amid a potential recession, BofA had so far managed to avoid such measures.

4. More Nuggets

Rumors of mega-MSR offerings from Wells Fargo stir market. if accurate, the sales could squeeze market liquidity and drive down prices, MSR experts say (Gaflh)

LOS collab. loanDepot and Black Knight partner on integrated loan origination system (Press)

Reset: The Fed’s ongoing housing market ‘reset’ sees buyer cancellation rate at one of the nation’s largest homebuilders spike to 68% (Fortune)

5. Meme of the day

☀️ See you on Monday!

p.s. If you like this newsletter, your friends may too. Forward it to a friend, and let them know they can subscribe here. Written by Ian M.