7.25.24 Presidential Chaos; AXIS' Michael Simmons on Appraisal Evolution; U.S. Economic Growth

Thanks to today's podcast sponsor, LoanCare. LoanCare has successfully navigated clients and homeowners through market change for 40 years. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics™, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. LoanCare is part of Fidelity National Financial, a Fortune 500 company and leading provider of services to real estate and mortgage industries.

Transcript

As lenders continue to deal with change (the latest rumors have Flagstar is selling its mortgage group to Mr. Cooper, but ask your rep!), many people took note when ex-President Trump claimed, during his recent speech, that, “mortgage rates have quadrupled” during the Biden Administration. So, if Agency 30-year fixed rate mortgages were 3 percent, due to the pandemic, not due to political policies, they’d be at 12 percent now. That is not the case. There are still economics to discuss (Fannie Mae’s Chief Economist Doug Duncan will be interviewed today) but politics seem to be sucking up all the air in the room, and no, this isn’t the situation in a historical third-world nation. The presumptive Democratic nominee dropped out of the race one month before his party’s convention. A former president, and 2024 candidate, convicted of 34 felonies in a New York courtroom. A highly controversial Supreme Court decision on presidential immunity. The most consequential presidential debate in U.S. history. An assassination attempt broadcast on live TV. A judge dismissing additional charges against the former president, citing the Supreme Court ruling. It’s political chaos, and it’s far from finished. (Today’s podcast is found here and this week’s is sponsored by LoanCare, known for delivering superior customer experience as a mortgage subservicer through personalization and convenience, and supporting MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with AXIS’ Michael Simmons that provides a “finger on the pulse” of the appraisal industry and current trends in the valuation space.)

Employment; consulting exec available

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Lower, LLC had the opportunity to celebrate with over 200 top agents in the Columbus, OH market at the Columbus Crew (MLS) Title Night celebration at Lower.com Field. All were treated to an intense match followed by an amazing fireworks display. Amir Syed, Chief Growth Officer for Lower, who also conducted the opening coin toss, commented, “This was a great opportunity to celebrate wins with top producers from both sides. Sometimes we need to take a moment, pat each other on the back, and say ‘You got this!’ This event did that for so many great people.” Energized by the attendance of the event, CEO Dan Snyder stated, “The growth we’ve seen this year has been outstanding and that activity is ramping up in the second half of 2024. We’re just getting going!” Discover more about why the Lower Platform is unmatched in delivering efficiency and top tier performance.

Funding for growth and MSR accumulation is tricky in this environment. There are new alternatives… Explore all your options. An IMB Consultant with 34 years’ Executive Management experience in the mortgage space is available to support your efforts. E-mail industry veteran Steve Landes.

Asurity Technologies, LLC announced that 37-year vet Patti Joyner, CRCM, has joined the company to lead its growing training business. “Patti will continue her training and industry association work, while adding her unique capabilities to Asurity’s ecosystem, where Asurity’s clients have come to expect top-notch expertise, training, and advice.” Congratulations!

“We are thrilled to introduce Brokers First Funding, your new BFF in Wholesale! We opened our doors in May 2023 and have quickly become the fastest-growing lender in the Wholesale space. “The only way we could grow so fast is by attracting fantastic AEs and supporting them with the best and brightest Op team in the industry. If you’re an AE looking to expand your territory and make more money, contact shabi@bffws.com.”

(As a reminder, anyone searching for employment can post their resume at no charge at www.lendernews.com, and potential employers can view all resumes for several months for only $75.)

Lender and broker software, products, and services

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Down Payment Resource, the hub of everything down payment assistance (DPA), has exciting news to share: The company’s just-released Q2 2024 Homeownership Program Index (HPI) report reveals there are now over 2,400 DPA programs, more than ever before. DPR has been tracking DPA programs since 2008 and maintains an impressive database of every program in the nation. But what’s truly amazing is DPR’s Lender Suite, which makes it easy to operationalize DPA with support for LOs, underwriters, product managers and capital markets. DPR helps you generate leads by inviting borrowers to discover their DPA eligibility, matches borrowers with eligible programs, provides underwriters with program requirements and guidelines, and makes it easy for your product/secondary team to identify programs that align with your market and secondary strategy. Schedule a demo today to learn more.

Happening today! Unlock Success with Truv and Encompass. Integrate Truv with ICE Mortgage Technology (Encompass) to cut costs, ensure compliance, reduce manual tasks, and enhance borrower experiences. Join our live demo to see Truv in action within Encompass. Learn how to retrieve, refresh, and store reports in the Encompass eFolder. Ask questions live directly to experts from Truv. Get more out of Encompass with Truv! Sign up!

STRATMOR Ops Workshop in three weeks

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While we were all hoping for a modest rebound in the housing market during the spring and summer selling season, it simply has not materialized. It’s still a challenge to earn profits on the production side of the house. Based on MBA Quarterly Performance Report data, 58 percent of lenders were not profitable on production (excluding servicing) for Q1 2024. Operations executives have tried to keep their core team together, but even that has become problematic as staff reductions continue. So, what can lenders do now to continue to streamline operations and weather the enduring downturn? Join STRATMOR Group for its virtual Operations Workshop, August 13,14, and 15, to interact with STRATMOR advisors and peer lenders about improving operational efficiency, overcoming recent challenges and pain points, and current trends in mortgage operations. The three two-hour virtual sessions are designed specifically for senior operations executives. Contact STRATMOR to learn more and reserve your seat today.

Broker & correspondent product and program news

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“We are thrilled to introduce Brokers First Funding, your new BFF in Wholesale! We opened our doors in May 2023 and have quickly become the fastest-growing lender in the Wholesale space. ‘The only way we could grow so fast is by attracting fantastic Account Executives and supporting them with the best and brightest Operations team in the industry. Many of us have been together for over 20 years and are in lockstep in the steadfast belief that everything begins and ends with the Broker,’ said BFF’s President, Shabi Asghar. ‘My partner, Aaron Leffler, and I are determined to assemble the best talent in the industry to support the Broker community.’ If you’re a Broker looking for a new BFF, contact us to learn more, and follow us on LinkedIn, Instagram, and Facebook.”

“Button Finance continues to build its reputation as a market leader in the home equity industry. We now offer HELOANS and HELOCs in PA, MD, NC, and OR. When working with Button, you will make up to 5% borrower-paid compensation where allowed. Button Finance is also excited to launch our new HELOC offerings tailored for investor properties, available for both our broker and correspondent partners. Our investor property loans now allow AVM for subject properties and DTIs up to 50%, with FICO scores as low as 660, ensuring a fit for various financial situations. Please email us for more information or to sign up. If you're looking for a job, please email Rose!”

Verus Mortgage Capital is helping lenders benefit from the huge amount of home equity that exists throughout the country with its closed end second lien mortgage program. According to the Intercontinental Exchange, strong home price growth increased mortgage-holder equity to a record $16.9T in the first quarter of 2024, $11T of which can be leveraged while retaining a 20% equity cushion, also an all-time high. With Verus’ closed end second lien program, homeowners can keep their low interest-rate first liens while they tap into their equity, making it a smart alternative to a cash-out refinance. This and Verus’ other non-agency solutions are designed for borrowers who need more flexibility: the self-employed, property investors, foreign nationals, etc. To learn more, meet with Verus at the Western Secondary Market Conference August 19-21 in Palos Verdes or contact Jeff Schaefer, EVP – National Sales, at 202-534-1821.

“Newrez Wholesale is excited to announce big changes to our Blueprint platform, with more coming over the next few months. In the initial release earlier this week, we’ve launched changes which make the platform simpler and easier to use. The intuitive new dashboard design focuses on the menu items you use the most, presenting a clear and clutter-free workspace and minimizing distractions. Upcoming closings and missing milestones are featured, so you know exactly what needs your attention. New guided workflows now include breadcrumb trails to lead you through each process, so you can find your way to the next steps easily. Let us show you what all the excitement’s about. Contact your Newrez Wholesale account executive to learn more. Not a partner? There’s never been a better time to join us. Contact us and learn how to become an approved wholesale broker with Newrez Wholesale.”

The Lending Spot updated its Foreign National Guidelines, no more proof of residency needed. Borrowers are allowed to live inside the US. ITIN borrowers are now eligible with no credit.

PHH Mortgage has turned on the ability to accept AOT Bulk trades.

Newrez posted updates for its approved Correspondent Clients; effective with applications on or after July 11, 2024, the SmartVest Product Summary and Underwriting Guide has been updated.

HighTechLending Wholesale is now offering Jumbo Proprietary Reverse Product, the Platinum Reverse. This product comes in three variations: Maximum LTV Fixed Rate, Adjustable Rate with a Line of Credit, and Reduced LTV with a lower Fixed Rate. Visit Online at HTLwholesale.com.

A&D Mortgage launched its ADvantage Partner Loyalty Program. This unique program is set to transform the way mortgage brokers operate, providing them with unparalleled benefits and rewards while revolutionizing their businesses. The ADvantage Partner Loyalty Program is designed to recognize and appreciate the dedication and commitment of its esteemed broker partners.

With announcement 20240708-CL, AmeriHome reminded Sellers that the new policies related to appraisal reconsideration of value (ROV) are effective for Mortgage Loan applications dated on or after August 29, 2024. See the announcement for details.

Capital markets: rates continue down, esp. the 2-year yield

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MCT has recently released its latest whitepaper, Mortgage Pipeline Hedging 201, building on the foundation of MCT’s first whitepaper in the series, Mortgage Pipeline Hedging 101. The latest whitepaper, authored by Cody Echols, Sr. Capital Markets Technology Advisor at MCT, delves deeper into best practices that enhance mortgage lender profitability, efficiency, and execution related to pipeline hedging. The whitepaper also reviews various hedging instruments, baseline inputs used in mortgage pipeline hedging, and recent industry advancements that have reshaped the hedging landscape. If you’re interested in learning more advanced hedging concepts that review how to calculate durations factors, duration adjusted coverage, and coverage percentage, download the Mortgage Pipeline Hedging 201 whitepaper today.

Turning to interest rates, since everyone seems to be waiting for “lower” rates… Even with investors looking ahead to today’s Q2 GDP release and tomorrow’s core-PCE figures, there was still some notable data to digest yesterday. New home sales in June disappointed, declining by 0.6 percent month-over-month, with the seasonally adjusted annual rate falling to 617k from 621k. Continuing a recent upward trend, the supply of homes reached a 20-month high of 9.3 months, while the median price increased to $417,300. Separately, the S&P Global Manufacturing PMI for July dropped to the lowest since December 2023, though the S&P Global Services PMI rose to its highest level since March 2022.

Political uncertainties, including the Presidential election and Congressional outcomes, are sucking the air out of the room, but let’s focus on the macroeconomic narrative. Economic growth has slowed since the beginning of the year, with real GDP likely growing around 1.5 percent annualized in Q2 2024, down from 1.4 percent in Q1. This deceleration is attributed to high interest rates, reduced spending by low- and moderate-income households, and a larger trade deficit. Inflation is expected to continue to ease, with both total and core PCE inflation likely slowing in tomorrow’s release, reflecting trends in the Consumer Price Index (CPI).

The first look at Q2 GDP (+2.8 percent, much stronger than expected), durable goods orders for June, and weekly jobless claims (235k), and core PCE +2.9% kicked off today’s calendar. Later today brings KC Fed manufacturing for July, several Treasury auctions that will be headlined by $44 billion 7-year notes, and Freddie Mac’s latest Primary Mortgage Market Survey. We begin the day with Agency MBS prices better by .125-.250, the 10-year yielding 4.22 after closing yesterday at 4.29 percent, and the 2-year down to 4.36.

One day a florist went to a barber for a haircut. After the cut, he asked about his bill, and the barber replied, “I cannot accept money from you since I’m doing community service this week.”

The florist was pleased and left the shop.

When the barber went to open his shop the next morning, there was a ‘thank you’ card and a dozen roses waiting for him at his door.

Later, a cop comes in for a haircut, and when he tries to pay his bill, the barber again replied, “I cannot accept money from you; I’m doing community service this week. The cop was happy and left the shop.

The next morning, when the barber went to open up, there was a ‘thank you’ card and a dozen doughnuts waiting for him at his door.

Then a Member of Congress came in for a haircut, and when he went to pay his bill, the barber again replied, “I cannot accept money from you. I’m doing community service this week.”

The Member of Congress was very happy and left the shop.

The next morning, when the barber went to open up, there were a dozen members of Congress lined up waiting for a free haircut.

And that, my friends, illustrates the fundamental difference between the citizens of our country and the politicians who run/ran it.

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, “Catastrophe and Climate Risk Is Only Increasing”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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