5.24.24 Hikes or Cuts; Joe Dombrowski on Millennial Home Buying; Early Close Memorial Day

This week’s podcast is sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. 

Transcript

"Abandon all hope ye who enter here." (Dante’s words, not Disney’s.) That could be the slogan of Times Square, but for those who just spent days at the Secondary conference in Times Square, trying to avoid everything in Times Square, you can look forward to the same event at the same place in the same hotel next year, May 18-21, 2025. Manhattan has so, so much more to offer. In a year, will groups still be discussing Attorney Opinion Letters, offering a savings on refis and new construction for Agency loans? What about LOs coming real estate agents, and vice versa? (For lenders considering that, given the NAR lawsuit that isn’t 100 percent settled yet, Attorney Brian Levy addresses dual licensing in “Double Dipping and Conflicts of Interest” and “Employee or a Duck?”.) Found here, this week’s podcasts are Sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. Today’s has an interview with Tour de France cyclist Joe Dombrowski on his transition from an athletic career to one in (potentially) residential lending.

Jobs & lenders wanted

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“Dreaming of a better way to run your business? We’re on a mission to empower independent mortgage banks like yours to reach new heights of success. As part of the Homestead Funding team, you’ll maintain your independence so you can focus on production. We provide cutting-edge tools, technology, and executive support to help you thrive without the burdens of regulations or compliance. Our extensive product line is constantly evolving to meet market demands, ensuring you have the programs and financing solutions to successfully assist diverse clients. Plus, our dedicated marketing team is here to amplify your visibility and attract new leads through print and digital campaigns. Since 1995, we’ve been inspiring professionals like you to thrive. Our force in the industry has proven that growth doesn’t mean sacrificing independence. Contact Dave Stagnitti to learn how you can accelerate your career with Homestead Funding, 518-390-5960.”

A 49-state licensed mortgage lender with a large servicing and strong capital base, seeking to expand retail footprint by partnering with large production teams or regional mortgage banks interested in a capital partnership. The goal of the relationship is to leverage back-office mortgage functions (e.g., secondary, technology, compliance, operations, and licensing) to provide you with long-term production growth opportunities. By partnering with us, you can utilize our mature systems to add loan officers and scale your operations across the US. If you are a strong retail loan origination team feeling constrained by layers of management, or an independent mortgage lender looking for new options for your team, we offer a compelling alternative to standard “branch” offerings. Confidential and serious inquiries can email Chrisman LLC’s Anjelica Nixt.

“Evergreen Home Loans™, a leader in the Western U.S. mortgage industry, is proud to announce its fourth consecutive recognition at the Puget Sound Business Journal's Corporate Philanthropy Awards 2024. This accolade underlines our steadfast commitment to community engagement and philanthropy, a core aspect of our corporate culture that attracts passionate professionals dedicated to making a difference. Located across Arizona, California, Idaho, Montana, Nevada, Oregon, and Washington, Evergreen is continually looking for talented individuals eager to advance their careers in a supportive and dynamic environment. Join us in our mission to provide affordable home financing solutions and make a meaningful impact in our communities. Explore opportunities at Evergreen Careers.”

Canopy Mortgage is attracting producing loan officers across the Nation and remains profitable as we move into the summer! How many national lenders can say that they’ve made it to profitability this year? Not many. Canopy Mortgage is forging ahead with significant momentum and looking for branch managers to be part of their success story as they continue to innovate and empower LO’s with highly efficient tech that’s driving down the cost to fund a loan. Looking for a better way to run your business? Contact Josh Neumarker at 888-696-9076 for more information or to schedule a one of a kind Tech-Demo to see where the magic happens.

Nations Lending notched another win. Mortgage Executive Magazine has ranked Nations as one of the top 40 mortgage companies in the country. CEO Jeremy Sopko cited the recognition as proof of the company's commitment to customer experience and industry innovation. The philosophy of Home Loans Made Human® has led to the continued success of Nations. This recent accolade comes on the heels of Scotsman Guide naming several of their originators in the top 5 percent nationally. Nations hosted its Presidents Club Awards to celebrate many of these top producers. The event also honored and recognized the contributions of non-producing support staff. Nations Lending President Bill Osborne summed up the spirit of the event. "It's our way to show how thankful we are to everyone that makes this company great."

“This lender landscape demands both speed and adaptability, which is why Sierra Pacific Mortgage (SPM) is rolling out AI within our proprietary origination system, ExpressLoan™, that provides precise and comprehensive guidance tailored to a borrower’s needs in a matter of seconds. No more wasting time sifting through underwriting guidelines to qualify potential loan scenarios! Hey Sierra is designed to fill the gaps in the mortgage industry, giving both tech-savvy newcomers and seasoned professionals an equal opportunity to work smarter, not harder. Whether you're looking for FHA, VA, Conventional, or other loan product guidelines, Hey Sierra is the tool you turn to if you want to become a more efficient and effective loan originator. Ready to work with a lender who equips their originators with the cutting-edge technology they need to serve more clients and grow their business? Connect with a member of our Sales Leadership Team today.”

Broker products

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Calling all mortgage brokers! Kind Lending is pumped to announce the return of VIBE 2024 - Very Important Broker Exchange, the ultimate "Growth Mindset" event designed to supercharge your success! VIBE is the only growth mindset event of its KIND within the Mortgage industry with a one-of-a-KIND speaker lineup. Don't miss out on hearing and learning from industry-shaking speakers, Glenn Stearns, Grant Cardone, Barry Habib, and more to be announced! Join us at the Pearl Theater located at the beautiful Palms Casino Resort in Las Vegas, NV on Friday, 10/18. Registration and Sponsorship packages are open and ready for the taking! Visit www.kind-vibe.com to learn more, catch up on VIBE 2023, and/or reserve your spot at this one-day, growth mindset event! We look forward to vibin' with you in October at the entertainment capital of the world!

“Rocket Pro TPO continues to deliver valuable training opportunities! Earlier in May, a new Pro Performance Sales Training was held for partners and featured insights from three mortgage industry experts. Attendees learned how to convert social media engagement into leads, close more loans by meeting clients at the right time and place on social media, and provide ongoing value to clients even after they've bought a home. The training also offered tips on using analytics to target messaging with confidence. Now, this exclusive training is available to everyone: catch the replay here. Additionally, mark your calendars for IGNITE Live on July 9th, 2024, hosted by Mike Fawaz, EVP of Rocket Pro TPO. This event will cover industry discussions, current trends, and offer insights on staying ahead in the current market. Don't miss this opportunity. Contact Rocket Pro TPO today to explore partnership opportunities that can benefit both your clients and your business.”

Agency and investor correspondent & broker news

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Federal Housing Finance Agency (FHFA) issued a Request for Input (RFI) on the mission of the Federal Home Loan Bank (FHLBank) System as the Agency considers next steps for related rulemakings. The RFI provides an opportunity for the public to provide feedback on a core recommendation of FHFA’s Federal Home Loan Bank System at 100: Focusing on the Future report. Recognizing the importance of government-sponsored enterprises serving a clear public purpose, the report recommends clarifying the mission of the FHLBank System and updating how the Agency evaluates the FHLBanks’ achievement of that mission.

FHA published ML 2024-09 amending FHA’s eligibility requirements to remove the home office geographic address from data that must be the same in both the Lender Electronic Assessment Portal (LEAP) and SAM.gov. This change will streamline data reporting and support lender compliance by reducing potential contradictory information between the LEAP and SAM.gov platforms.

The Appraiser Quality Monitoring (AQM) list is moving to Fannie Mae Connect™. You can find it and over 80 other reports using the app’s search feature. The list will continue to be available on the AQM webpage through July 30, 2024, after which Fannie Mae Connect will be required for viewing.

Fannie Mae issued Selling Notice,  Area median incomes (AMIs) will be implemented in Desktop Underwriter® (DU®) and HomeReady® application programming interfaces (APIs), Loan Delivery, and the Area Median Income Lookup Tool effective May 19. The AMIs will continue to be applied in DU based on the casefile create date, while the Application Received Date provided in Loan Delivery will be used to determine which AMI limit to use when evaluating eligibility for the loan-level price adjustment (LLPA) waiver.

Discussed in Pennymac announcement 24-48, Fannie Mae and Freddie Mac have both issued recent clarifications on how seller-paid real estate agent commissions are treated in light of recent settlements and ongoing litigation involving the National Association of Realtors (NAR).

Fannie Mae and Freddie Mac announced the 2024 Area Median Income (AMI) limits with an effective date of May 19, 2024. Pennymac is aligning with these change, view Pennymac announcement 24-49. 

At the direction of FHFA, Fannie Mae and Freddie Mac have updated their Selling Guides to provide more specificity regarding lender responsibilities to ensure that properties are covered by adequate insurance. Pennymac Announcement 24-50: Property Insurance Sufficiency provides additional information.

United Wholesale Mortgage (UWM) announced 0 percent Down Purchase, a program aimed to help more borrowers become homeowners without an upfront down payment. This UWM-exclusive program allows qualified borrowers to receive a 3 percent down payment assistance loan up to $15,000 from UWM. This loan will not accrue interest and will not require a monthly payment. Contact UWM for borrower requirements.

PHH Mortgage updated Government UPB LLPAs and Spec Adjustments to allow for more accurate pricing.

Capital Markets: an early close… who’s locking today anyway?

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On the heels of the latest Federal Open Market Committee meeting minutes from Wednesday, which unsurprisingly showing that FOMC voters feel they need to see more evidence of disinflation before considering any interest rate cuts, markets yesterday finally received some data from this week to crunch on.

New-home sales disappointed, dropping 4.7 percent in April after an above-average print in March. The pullback was a bit sharper than anticipated but can largely be explained by early April's move higher in mortgage rates. And speaking of mortgage rates, 30-year fixed mortgage rates fell below 7 percent for the first time since that early April rise, according to Freddie Mac’s Primary Mortgage Market Survey. Separately, initial jobless claims dropped again.

New home sales declining means both new and existing home sales are now trending in negative directions. While rising inventory levels in the resale market are a factor weighing on new sales, existing home sales (a much larger portion of the market) have been in a downward trend since hitting a six-year peak at the end of 2020.

Existing home sales are currently running at just 79 percent of the millennium-to-date sales average. This is partly due to the majority of American homeowners being locked into their homes from record low mortgage rates as a result of QE4. Two cheers for Jerome and his efforts that will keep tens of millions of homes off the market for years to come. As far as new home sales slacking, single-family home building has been lacking since 2008.

U.S. business activity grew the most in two years in early May, evidenced by flash Manufacturing and Services PMI readings for the U.S. showing accelerating growth. The reports invited some speculation that the Fed could hold off on its initial rate cut, with pricing for a September cut now a coin-toss. If you recall, the minutes from the FOMC’s May 1st decision showed “many” Fed officials questioning whether policy was restrictive enough. Some even mentioned a willingness to tighten further if needed.

Fed speakers, of which there seem to be far too many, have stuck to the script since that meeting, cautioning investors that they will need to see more evidence of disinflation before any rate cuts are appropriate. If you don’t agree with the "too much Fed speak” sentiment, look no further than this week’s Atlanta Fed Financial Markets Conference. Atlanta Fed President Raphael Bostic has taken the stage on six different occasions, and there were eight other Fed speakers issuing remarks for public dissemination.

Today’s economic calendar is under way with durable goods orders for April at +.7 percent! Expectations were for a decline of 1.0 percent month-over-month versus a 0.9 percent increase previously. Later today brings remarks from Fed Governor Waller, and final May Michigan sentiment. Pay attention to the 1-year and 5-to-10-year inflation expectation components of the Michigan figures, which the Fed places an emphasis on when it comes to the central bank’s theory of what causes inflation. It hasn’t been pretty lately: The 1-year index has risen three releases in a row to 3.5 percent, while the 5–10-year index has also increased over the past three releases to 3.1 percent and has weighed on market hopes for rate cuts this year.

Things stop trading at 2PM ET, 8AM HT, per SIFMA’s recommendation ahead of the Memorial Day holiday. We begin the day with Agency MBS prices unchanged from Thursday’s close, the 10-year yielding 4.49 after closing yesterday at 4.48 percent, and the 2-year little change at 4.94.

My Dad (U.S. Navy, 1942-1962) was always quick to remind me that Memorial Day doesn’t honor servicemen and servicewomen, or veterans. It is a federal holiday in the United States for remembering the people who died while serving in this country’s armed forces. The number totals about 1.1 million, almost half of which were in the Civil War, fighting against one another. First recognized in 1868, it was set on the last Monday in May starting in 1971. Give those who gave the ultimate sacrifice for our nation more than a passing thought, not only Monday but throughout the year!

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Down Payment Assistance Programs Helpful But Not a Universal Remedy.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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