8.14.24 Inflation Under Control; MBA's Mike Fratantoni on Economic Modeling; Yields Like Soft Landings

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

This morning I head through Chicago to Michigan to the MMLA Conference, where one of the discussion topics will be the NAR changes and how they impact lenders (if they do). What would some consider a great job for a “washed up creative” to do? Well, as this short video that Maryland’s Ken S. points out, real estate agent comes to mind, and reminds us that three out of four participants in a real estate transaction have no interest in a low price, and in fact want a higher price. “The more money they spend, the more money I make!” Homeowner’s insurance will also be a topic, as once again our clients, or potential clients, are facing rates that sometimes cause the loan to fall through. For those out there hoping for lower mortgage rates… what will lower rates do to housing prices, especially houses in the first-time home buyer sector? (Today’s podcast is found here and this week’s is sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. Hear an interview with MBA’s Mike Fratantoni on volatility, spreads, and how the latest economic data is fitting into the Fed’s thinking.)

Employment & transitions

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A national lender is looking for a sales leader for the Financial Institutions division. The Company is looking for a proven manager that has experience with promoting and managing business development for white labeled TPO / fulfillment / technology / servicing solutions created specifically for Banks and Credit Unions. The right candidate, who can live anywhere, will be “hands on” with the sales and originations processes for existing and new customer relationships. For more information, please send your resume to me for confidential forwarding.

U.S. Bank is pleased to share Shelly Kobb has joined its Home Lending leadership team and will lead its Correspondent and Housing Finance Agency (HFA) Lending business channel. Shelly brings over two decades of third-party originations leadership to her new role and most recently served as vice president, head of Correspondent Lending Non-Delegated for PenFed, and just prior to that as senior vice president and head of Correspondent Lending for EverBank/TIAA Bank, a role she held for a decade, and for two years during that tenure also served as interim head of all home lending. “I am thrilled to be part of U.S. Bank, leading its Correspondent and HFA team. As I begin traveling with the team in the coming days, weeks, and months, I look forward to engaging with U.S. Bank clients and partners at various industry conferences and events, including the NCSHA Annual and the MBA Annual.”

“Yeah, you could keep hustling to grow someone else’s empire. Or… You could use all your hard work to grow your own. Motto Mortgage franchises are known for their ability to expand earning potential of office owners... and we’re pretty proud of that. ‘There is so much potential for growth within the Motto network and from here, the sky is the limit! Motto was instrumental in giving us the tools necessary to make us successful by offering a structured startup with continued support and direction including marketing, compliance, advice, and branding, which is HUGE.’ (Tracy Holtsclaw, Motto Mortgage office owner.) That’s right: We've put an entire mortgage brokerage together for you. Ready for more earning potential? Email franchise@mottomortgage.com for all the details.

(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, services, and products

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What does the CFPB have in store for mortgage servicers? The most recent proposed rule, “Streamlining Mortgage Servicing for Borrowers Experiencing Payment Difficulties,” is poised to make significant changes to loss mitigation requirements. Industry comments are due in less than a month. With proposed RESPA changes, early intervention, notification of loss mitigation determination, credit reporting consistency, and assistance for those with limited English proficiency all on the table, you’ll want to check out Clarifire’s current blog, “CFPB Proposes More Rules for Mortgage Servicers.” Discover more about the proposed rules and how CLARIFIRE® is uniquely designed to help your organization implement changes quickly and easily for uninterrupted servicing of your borrowers’ needs. Connect with us today to streamline and add capabilities to your organization and experience CLARIFIRE®, a modern, intelligent innovation that’s truly BRIGHTER AUTOMATION®.

“VIBE, Very Important Broker Exchange, Kind Lending’s annual mortgage broker event, is back and better than ever! Join us on Friday, October 18th at the Pearl Theater in Palms Casino & Resort in Las Vegas (baby), NV! Enjoy the entertainment capital of the world with a full day of growth mindset sessions! We have a one-of-a-KIND speaker lineup that you will not find at any other event in the U.S., including Glenn and Mindy Stearns, Grant Cardone, Barry Habib, Navy Seal Team 6 American Hero, and more to be announced! Let's get this party started! Connect with your Kind AE to access your FREE registration code today! If you’re not yet working with Kind, email us and we’ll send you a code! Visit here to learn more about this once in a lifetime mortgage event!”

“At wemlo®, we know that time is constantly ticking for busy mortgage brokers. That’s why wemlo offers flexible, scalable third-party processing services to help brokers reclaim their time and boost productivity. Here’s how it works. Brokers collect borrower applications while wemlo processors hustle behind the scenes to prep the files for closing. This way, brokers can focus more on revenue-boosting activities like closing deals and delighting clients. Trust us, wemlo processors are in the business of keeping customers happy… Just look at our 4.6-star* rating from borrowers. Ready to add extra hours to your clock? Book your wemlo demo today.

ELEVATING CUSTOMER EXPERIENCE WITH 3 KEY STRATEGIES. Transforming the mortgage servicing experience is more than just policy or technology… It's about a well-rounded culture where teams are equipped with the right tools and shared priorities to relentlessly pursue a top-notch customer experience. At Sagent, the team has built an agile, and relevant customer-focused team that sets a new standard for excellence. For a deep dive into these strategies, check out the latest article from Sagent’s Chief of Staff Priya Seenath, where she breaks down this approach which eliminates silos and opens doors for advanced innovation, helping to transform the customer experience.

“Citi Correspondent Lending is proud to introduce the newest addition to our Community Lending Platform, our Special Purpose Credit Program. This program can help meet home financing needs of borrowers with subject properties located in Majority-Minority census tracts within select markets. With 4 loan plan options utilizing credit parameters from existing products/programs, it provides down payment and underwriting flexibilities, while offering features that include closing cost assistance and premium pricing for qualified borrowers. To learn more, schedule some time with us at the upcoming Western Secondary Market Conference or complete our Prospective Correspondent Questionnaire. We’re excited to discuss the new Citi SPCP, as well as the complete offering of products and services Citi Correspondent Lending provides.”

Conventional/conforming (F&F) changes won’t stop

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This month Freddie Mac will begin refactoring the Single-Family Seller/Servicer Guide (Guide).

What is Refactoring? Refactoring is the process of reformatting and rewriting content to become more easily consumed by both humans and machines. For humans, it enhances the digital reading experience, improving use and searchability of information. For machines, it facilitates search engine optimization.

The Single-Family Seller/Servicer Guide Bulletin 2024-F announced the extension of the effective date for the appraisal reconsideration of value (ROV) requirements originally announced in Bulletin 2024-6. This will give Sellers additional time to implement ROV processes. Sellers must now comply with the ROV requirements for Mortgages with Application Received Dates on or after October 31, 2024. This date change aligns with Fannie Mae and HUD.

Freddie Mac Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-10 announces updates pertaining to Income underwriting and documentation requirements related to: Self-employed income, Income from non-arm’s length employment, Calculation of income from fluctuating hourly employment, Social Security retirement and Social Security disability income types, Asset and income modeler (AIM) enhancement to use employed income data for closed loans, IRS Form 8821 as an acceptable alternative to IRS Form 4506-C, Refactoring of Chapters 5304, 5401 and 5601.Read the Bulletin for details on these and other updates that may impact your business and our borrowers.

Fannie Mae Selling Guide has been updated to include revised policies and guidelines pertaining to rent credit with an option to purchase and rent-back credit and other miscellaneous updates. Additionally, Fannie Mae updated its Income Calculator to include evaluation of borrowers who have less than 25% business ownership. The new income evaluations are available to customers accessing Income Calculator through integrated technology service providers and to mortgage professionals using the free web interface. View SEL-2024-05 for more information.

In May 2024, Fannie Mae issued Selling Guide Announcement SEL-2024-03 related to the development of a framework for lenders to review and respond to a borrower-initiated reconsideration of value (ROV). While lenders are encouraged to implement the ROV policy immediately, they must do so for loans with applications dated on or after the new effective date of Oct. 31, 2024.

Thanks to MBA advocacy, FHA, Fannie Mae and Freddie Mac announced that they will delay the implementation date for their recently announced Reconsideration of Value policy. Originally scheduled for August 29 and September 2, respectively, the new implementation date for both agencies will be October 31, 2024, providing lenders with an additional 60 days.

Newrez issued an announcement to its Approved Correspondent Clients containing information on most recent agency announcements, effective immediately for all loans in the pipeline, unless otherwise noted. Clarifications and/or corrections to the Newrez Guides effective July 30, 2024, and a summary of previously announced guidelines that have been incorporated into the Newrez Underwriting Guide.

Pennymac posted new announcements, click the link for details. Announcement 24-75: Fannie Mae and Freddie Mac - eMortgages and eNotarization Now Eligible for Manufactured Homes. Announcement 24-76: USDA Rural Development: 2024 Income Limits Update. Announcement 24-77: USDA Procedure Notice 621: Chapter 11 Ratio Analysis Updates. 

Effective for new applications dated on or after August 9, 2024, Pennymac removed the “Turn-key Investments” requirement from Freddie Mac and Fannie Mae product profiles. View Announcement 24-78 for details.

Capital markets: inflation under control?

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We learned yesterday that U.S. producer prices rose last month by less than forecast, signifying that the ongoing moderation in inflation, aside from the blip at the beginning of the year, is alive and well. The producer price index rose 0.1 percent month-over-month in July, which was not only less than expected, but a deceleration from June. On a year-over-year basis, the index rose 2.2 percent. If you strip out the volatile food and energy categories, the index was flat in July and rose 2.4 percent year-over-year. The tamest PPI reading in four months was certainly something to celebrate for those hoping for Fed easing in an otherwise quiet summer trade to kick off the week.

Showing some signs of economic strength, the NFIB Small Business Optimism Index rose to 93.7 in July, its highest reading since February 2022. This fourth consecutive uptick is a clear trend of improvement in sentiment, even as underlying details continue to reveal hesitancy in the demand outlook amid a cloudy economic and political landscape. Atlanta Fed President Bostic told CNBC that the initial rate cut will happen before the end of the year if the economy evolves as expected and that he does not expect a recession.

Though today’s highlight is the July CPI report, mortgage applications from MBA kicked off today's calendar, increasing 16.8 percent from one week earlier. Overnight, the RBNZ was out with its latest monetary policy decision, holding the Official Cash Rate rates steady at 5.5 percent where it has been since May 2023. Consumer prices for July were +.2 percent, core +.2 percent as well, and +2.9 percent year over year (the first time below 3 percent in some years) versus expectations for headline and core readings both increasing 0.2 percent month-over-month and 3.0 percent and 3.2 percent year-over-year versus 3.0 percent and 3.3 percent in June, respectively. After the latest inflation data, we find Agency MBS prices roughly unchanged from Monday’s close, the 10-year yielding 3.86 after closing yesterday at 3.85 percent, and the 2-year at 3.98.

(Given yesterday’s quips, from San Francisco Jim A. piled on.)

I went to a museum where they had all the heads and arms from the statues that are in all the other museums.

Everywhere is walking distance if you've got the time.

Sometimes, when you cannot hear me, it's because sometimes I'm in parentheses.

I bought some powdered water at the prepper store, but I don't know what to add.

A lot of people are afraid of heights; not me, I'm afraid of widths.

I saw six men kicking and punching the mother-in-law. My neighbor asked, “Are you going to help?” I replied, “No, six should be enough.”

My idea of a Super Bowl is a toilet that cleans itself.

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, “What Happened to that Mortgage?” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2024 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)