8.16.24 Strength of the U.S. Consumer; Realfinity's Luca Dahlhausen on Dual Licensing; Housing Starts and Building Permits

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

On a sad note, entrepreneur “Famous Amos” passed away a few days ago. Cookies are a major food group for me, and here was a fellow who had fun and made money providing a simple product and helping consumers! Home loans sure aren’t simple, but here in Michigan, at the MMLA, and across the nation there are a lot of mortgage people focused on helping consumers too. The talk in many places revolves around continuing to lower the cost to produce a loan, how certain exceptions should be made to the LO comp rules (for bond programs, for instance), and how the owners of servicing are quick to refinance borrowers. The folks attending the MMLA conference from Illinois are also watching a story unfold involving Ishbia. No, not Mat. His brother Justin; “A Chicago billionaire is ruffling feathers in a ritzy Lake Michigan neighborhood after he razed shorefront bluffs on his property to make way for an enormous $44 million mega-mansion. Justin Ishbia, 46, who co-owns the Phoenix Suns NBA team with his brother Mat, is already hard at work constructing his new home in Winnetka - which has seen the bluffs on his 3.7-acre property completely leveled and all greenery removed.” I know, not mortgage-related, but the activities certainly highlight the rights of property owners. (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 Realfinity’s Luca Dahlhausen on the dual licensing future that potentially awaits originators and real estate agents.)

Executive available

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(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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Mortgage Investors Group (MIG) achieved 100% VOIE conversion improvement with Truv. MIG was facing rising costs of verification of income and employment and decided to make a change that led to 80% cost savings and 100% conversion improvement. “It’s really about partnering with somebody in the future you can trust, is going to save you money, protect your company, and make the customer experience better. And Truv checks all those boxes,” said JR Huber, EVP of Sales and Production. Hear how they did it: Watch now!

“Meet Axos Bank at the Western Secondary Market Conference! Are you headed to the Western Secondary Market Conference in Palos Verdes? Don't miss the opportunity to connect with the Axos Bank Warehouse Lending team and learn about our exciting expansion plans. Why Choose Axos Bank? Stability and Reliability: As a full-service bank, we offer a stable and reliable lending experience you can trust. Customized Mortgage Solutions: Let’s discuss your mortgage strategy and explore how our extensive experience can benefit your business. Let’s Connect! Reach out to Eric Nelepovitz or Justin Castillo to schedule a meeting at the conference. For any warehouse lending inquiries, call us at 888-764-7080 or visit Axos Bank Warehouse Lending. Discover how Axos Bank can help you achieve more with your mortgage lending strategy. We look forward to meeting you!

Join NMP for a OriginatorTech Deep Dive on NewDoor by LenderHomePage on Tuesday, August 20, at 2 PM ET / 11 AM PT to see how mortgage lenders effortlessly create hyper-local, co-branded social media content for their real estate agents to capture attention and drive leads. NewDoor creates SEO-friendly content and social post-worthy co-branded unique content using AI models built to gain the attention of buyers, sellers, search engines, and social network algorithms. This 20-minute session will showcase in a group demo with you and other mortgage professionals how NewDoor helps mortgage lenders create hyper-local, co-branded social media content for real estate agents. These OriginatorTech DeepDives are referred to as collaborative demos where you get to kick the tires of some of the latest and great tech improving the origination process. As a bonus, you can win a $50 Amazon Gift Card for the three best questions asked during the live webinar. Register here.

The Xactus verification suite enables you to order all your verifications while vetting just one provider. For example, Xactus’ employment and income verification allows you to easily cascade between vendors including its newest addition, Thomas & Company’s employment and wage verification, as well as Experian VerifyTM, The Work Number® from Equifax, and more! Xactus has recently added another Tax Transcript vendor, Halycon. Xactus works only with the best and is constantly adding and evaluating partners to ensure streamlined workflows, increased efficiencies, reduced costs, and less data waste. Get the best value out of what you are paying for by working exclusively with Xactus. To learn more, schedule a meeting at the MBA Annual in Denver. Or email sales@Xactus.com for more information! Be sure to follow Xactus on LinkedIn .

STRATMOR’s virtual customer experience workshop

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Your consumer experience is an outcome and reflection of your CX Vision and Strategy. Without the clear guidance of a CX vision, each employee interprets customer centricity in their own way, leading to conflicting definitions and behaviors. Curating your own CX Vision and Strategy will be crucial to both security and growth through coming market shifts, and it is one of the main areas of focus for our upcoming workshop. Join STRATMOR Group for its virtual Customer Experience Workshop, September 17, 18 and 19, to learn from STRATMOR customer experience experts as well as peer lenders how to optimize your loan processes to maximize repeat and referral business and achieve your growth goals. Learn more and register today.

Government program-related investor updates

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Although conventional conforming production continues to make up the lion’s share of applications, FHA & VA & USDA loans are running at about 30 percent, per the latest MBA stats. (The figures released this week for last week showed that refinance share of mortgage activity increased to 48.6 percent of total applications from 41.7 percent the previous week. The adjustable-rate mortgage share of activity increased to 7.3 percent of total applications.)

FHA published a temporary, partial waiver to certain requirements in the Code of Federal Regulation’s 24 CFR § 203.18(e)(3) for FHA’s 203(h) Mortgage Insurance for Disaster Victims Program for victims of the Hawaii Wildfires disaster. This partial waiver only applies to the Hawaii Wildfires disaster (DR-4724-HI) and does not apply to any other PDMDA. All other requirements of the 203(h) program remain unchanged, including requirements for the maximum mortgage amount, occupancy, or extent of the damage sustained. 

FHA published Mortgagee Letter (ML) 2024-16, Extension to the Effective Date of Appraisal Review and Reconsideration of Value (ROV) Updates, to extend the implementation deadline of the provisions outlined in ML 2024-07, from September 2, 2024, to October 31, 2024.

May 2024 brought great news with a 17% increase in HECM endorsements, totaling 2,460 loans. The Wholesale/Broker sector bounced back impressively with a 27% rise after two months of decline, while the Retail/Direct segment showed steady growth with an 11.1% increase. Plaza Home Mortgage® was ranked among the top 10 in HECM originations for May 2024. Plaza stated that this achievement is a true testament to the trust and support of our amazing clients, and we're grateful for the opportunity to continue serving you with excellence. See the full report for more HECM information.

Capital markets: a real jumble of information

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Freshly released data on U.S. retail spending and the labor market yesterday underscored the strength of the world’s largest economy. Retail Sales rose 1 percent last month, compared to 0.3 percent estimates. On an annual basis, retail sales rose 2.0 percent, the most since early 2023 even in the face of high prices and borrowing costs.

For those playing along at home, the increase in retail sales outpaced the rate of inflation in July, which connotes an understanding that the improvement in retail sales was driven by increased demand on top of price increases. That comes on the heels of the July Consumer Price Index print coming mostly in-line with expectations, which sent bond yields a touch lower as investors grow more confident that the Fed will cut rates in the coming months.

Investors had been concerned the U.S. economy was slowing to a recession, which would lower rates, but robust retail sales and lower-than-expected weekly jobless claims point towards strong economic growth, which would raise rates. Some of the data is being “explained away.” While consumer-price inflation continues to slow and retail sales surged in July, the latter was largely due to a rebound in auto sales following a cyberattack on dealerships the month before. Excluding autos, retail sales rose only 0.4%. Industrial production also fell by 0.6% in July, partly due to Hurricane Beryl. Despite expectations of a rate cut in September, the extent and pace of future cuts remain debated, leading to potential market volatility.

St. Louis Fed President Musalem suggested the time is nearing for a rate cut as risks to inflation and labor are “more balanced.” Traders have cut back their expectations of Federal Reserve interest rate cuts for later this year following resilient US economic data releases. Markets are pricing in less than 30 basis points of easing next month and expect a total of 92 basis points of cuts for the rest of the year, down from over 100 before the data was released.

Today’s economic calendar kicked off with housing starts and building permits for July (1.238 million, -1.5 percent, below expectations, and permits were also slower than expected at -4.0 percent). Starts were expected to slip to 1.330 million from 1.353 million while permits were seen slightly higher at 1.460 million from 1.454 million. Later today brings the first look at August Michigan sentiment and remarks from Chicago Fed President Goolsbee. We begin Friday with Agency MBS prices about .125 better than Thursday’s close, the 10-year yielding 3.87 after closing yesterday at 3.93 percent, and the 2-year is at 4.03.

Two Michigan gents are out hunting in the Upper Peninsula, and as they are walking along, they come upon a huge hole in the ground. They approach it and are amazed by the size of it.
The first hunter says, "Wow, that's some hole; I can't even see the bottom. I wonder how deep it is."
The second hunter says," I don't know, let's throw something down and listen and see how long it takes to hit bottom."
The first hunter says, "There's this old automobile transmission here, give me a hand and we'll throw it in and see".
So they pick it up and carry it over, and count one, and two and three, and throw it in the hole.
They are standing there listening and looking over the edge and they hear a rustling in the brush behind them.
As they turn around they see a goat come crashing through the brush, run up to the hole and with no hesitation jump in head first.
While they are standing there looking at each other, looking in the hole and trying to figure out what that was all about, an old farmer walks up.
"Say there," says the farmer, "you fellers didn't happen to see my goat around here anywhere, did you?"
The first hunter says, " Funny you should ask, but we were just standing here a minute ago and a goat came running out of the bushes doin' about a hunert miles an hour and jumped headfirst into this hole here!"
The old farmer said, "That's impossible. I had him chained to a transmission!"

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, “Hiring: Do You Remember How to Do That?” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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