Chrisman Commentary - Daily Mortgage News
Chrisman Commentary - Daily Mortgage News
10.29.24 Chatter From Denver; Joe Uzee on Flood Insurance; More Selling in the Capital Markets
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.
Heard in the hallways here at the MBA’s annual convention in December. “I wonder if the MBA’s volume estimate of $2.3 trillion for 2025 includes all of the hard money deals that I’m doing? Me and every broker I know is doing them: why make 1 point when I can make 3-4 points?” “I’m exhausted. The time change Sunday can’t come soon enough.” “Every lender out there should be ready to help borrowers regardless of the outcome of the election. Betting on a coin toss is no path to success.” “Rob, I hear a lot about ‘heavy lifts.’ Where I come from, that means ‘pain in the a$$.” “I’ll be happy when Fannie and Freddie stop jacking up their gfees without warning… Don’t they know that hurts our pipelines?” “Have you seen all the vendors advertising AI in their booths?” I have indeed, but it is certainly a hot issue, although whether it is life changing remains to be seen. On today’s Mortgages with Millennials, Credit Karma’s Arun Mohan will be interviewed about AI, technology, and how it may impact the mortgage workforce. (Today’s podcast can be 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 Gulf Coast Bank’s Joe Uzee on the two sides of the national flood insurance debate and his thoughts on how we can lower insurance premiums and promote home affordability.)
Employment, broker operation wanted, IMB seeking branches
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“Join Our Team: Well-Capitalized IMB Seeking Branches and Acquisitions! Are you seeking a partner who values your expertise and offers growth resources? We are a well-capitalized independent mortgage bank (IMB) in the Southwest, actively looking for Loan Officers, Branches, and acquisition opportunities for small to midsize IMBs in CO, ID, NM, NV, OK, OR, TX, and UT. As a direct seller-servicer with FNMA, FHLMC, and GNMA, we provide competitive products and personalized services to enhance client satisfaction. Our lean structure ensures competitive pricing, a variety of mortgage products, and a profit-sharing model that rewards your efforts. We prioritize a collaborative environment where your input helps shape our company's future. If you're a leader seeking a high-touch, growth-focused partner, let's connect. Contact Chrisman’s Anjelica Nixt for a confidential conversation about this opportunity or acquisitions.”
“We have a bank client looking to buy a mortgage brokerage company with a minimum of 5 loan officers. The preference is the South, but open to other areas of the US. The bank is a well capitalized $1 billion plus bank. Please contact Joe Garrett: jgarrett@garrettmcauley.com (510) 469-8633.”
“Disrupt Financial Services with Figure, the #1 non-bank HELOC Provider Figure is transforming financial services through our innovative technology platform. Backed by top investors, we have originated $12B in loan volume and are growing fast! Figure is hiring our first Collections Supervisor to scale and build out our early-stage delinquent accounts team. You will build strategies to reduce roll rates, optimize collections processes, and manage an incredible team of driven individuals. If you would like to make a direct impact with one of the most innovative companies, apply here!”
(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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“Lenderful Solutions is again taking the mortgage lending experience to the next level! At the MBA Annual Elevate Conference in Denver, CO (booth 219), we are excited to announce Refi Turbo, an innovative Point-of-Sale (POS) solution designed to capitalize on the lower-rate refinance boom market. Borrowers can easily shop loan programs tailored to their refinance goals and quickly complete an easy-to-use application. Lenders can target current portfolio loans, attract new borrowers, and efficiently manage the increase in volume with our built-in automation tools, i.e., AVM, Credit Pulls, and Title Quotes, resulting in quick closures. Lenderful Solutions, a division of national title and settlement provider Mortgage Information Services, Inc., remains committed to Elevating the lending experience with affordable, cutting-edge, and customer-focused technology. Explore our complete suite of solutions: Mortgage with PreQual Express, Home Equity Turbo, Consumer, Small Business/Commercial, and Reverse Mortgage. Lenderful Solutions continues to ‘Digitize the Process and Humanize the Experience.’”
Webinar alert! Mark your calendars: First American Data & Analytics will share its best tips and tricks for DataTree and FlexSearch. Join its team on Wednesday, October 30 at 2pm Eastern for a complimentary 30 min webinar where they will walk though how to help you streamline your property search. Additionally, their experts will show you how to find targets quickly using specialty searches, identify vacant structures and more using enhanced filters in their DataTree Platform, and how to search their nationwide repository of property documents using the FlexSearch function. Register now for this must-attend event.
“The Best Servicing Team in the Business, Bar None! You’ve heard that Cenlar has the best team in the mortgage servicing business. Our talent runs deep. Altogether our leadership team boasts on average 20+ years in mortgage loan servicing experience. In the last year alone, we have recruited some of the best talent. From default to IT to risk management, we have earned our reputation as a leader. Let’s discuss how Cenlar can meet the mortgage servicing needs of your organization. Call 1-888-SUBSERV (782-7378) or visit here. We want to be your trusted partner, each and every day.”
“Maxwell wants to meet you at MBA Annual at booth #301. Maxwell is thrilled to welcome our mortgage partners to our hometown of Denver, CO. Maxwell powers all the ways you do mortgage with the only ecosystem of integrated software, services, and capital. From our fully customizable Point of Sale to our mortgage-focused Business Intelligence, fully-onshore Fulfillment services and competitive Secondary pricing, Maxwell is your partner for everything mortgage. Stop by booth #301 at the show to pick up one of our famous milk frothers or other premium swag. You can’t miss us. We look forward to seeing you there!”
“Join Truv at the Mortgage Bankers Association Annual Conference in Denver from October 27-30! Visit us at booth #119 in The Hub Expo to discover how Truv’s instant, automated #VOIE and #VOA solutions can streamline your processes with industry-leading coverage of over 96% of the U.S. workforce. From the federal government to Fortune 1000, NASDAQ, healthcare, and gig platforms, we’ve got you covered. Plus, enjoy unlimited, free re-verifications and a user experience designed for fast and easy payroll connections. Schedule a 1:1 meeting with our team now.”
Lender disaster related news continues
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A disaster declaration from FEMA triggers policy and procedure mechanisms from servicers and lenders. After all, who’s going to lend money on a structure that can’t be lived in?
Recently there’s Tennessee Tropical Storm Helene DR-4832. South Carolina Hurricane Helene DR-4829. Florida Hurricane Helene DR-4828.
In the wake of the devastation caused by Hurricane/Tropical Storm Helene and Hurricane Milton, the Federal Housing Administration (FHA) reminds mortgagees about its guidance for servicing and/or originating FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations within the U.S. and its territories where the President has declared a major disaster under the Stafford Act. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond. This guidance serves as a reminder that applies to all Presidentially-Declared Major Disaster Areas (PDMDAs), which can be found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), unless communicated otherwise through waivers or mortgagee letters.
On 10/24/2024, with Amendment No. 3 to DR-4832, FEMA identified an Incident Period End Date of 9/30/2024, for Tennessee counties affected by Tropical Storm Helene from 9/26/2024 to 9/30/2024. See AmeriHome Mortgage Disaster Announcement 20241033-CL for inspection requirements.
On September 29, 2024, with DR-4829, the Federal Emergency Management Agency (FEMA) declared that federal disaster aid with individual assistance had been made available to counties in South Carolina to supplement recovery efforts in the areas affected by Hurricane Helene. FEMA provided an Incident Period End Date of October 7, 2024. See AmeriHome Mortgage Disaster Announcement 20241031-CL for inspection requirements.
On 10/23/2024, with Amendment No. 8 to DR-4828, FEMA declared federal disaster aid with individual assistance to DeSoto County in Florida affected by Hurricane Helene from 9/23/2024 and continuing. See AmeriHome Mortgage Disaster Announcement 20241030-CL for inspection requirements.
From out of Denver comes F&F (GSE) news bites
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Freddie Mac announced several measures that will “boost housing affordability for borrowers and first-time homebuyers in particular. With advancements to its automated underwriting system, appraisal waiver expansions and progress in the down payment assistance space, the company continues its collaboration with the industry to increase efficiency, lower costs and provide additional opportunities to get qualified borrowers into homes they can afford.
“Freddie Mac introduced LPA ChoiceSM, the latest enhancement to its Loan Product Advisor® (LPASM) automated underwriting system. LPA Choice offers tailored information about purchase requirements, as well as actionable feedback that can help lenders of all sizes make faster, informed decisions to help qualify more borrowers. This innovation will allow for fewer resubmissions to LPA, more acceptances of qualified borrowers and time savings for lenders, delivering a better borrower experience. Feedback messages will relate to loan characteristics including debt-to-income (DTI) ratio, loan-to-value (LTV) ratios and reserves.
“Freddie Mac is also making two of its appraisal alternative offerings available to more borrowers for purchase transactions. Specifically, Freddie Mac’s automated collateral evaluation (ACE) eligibility will increase from 80% maximum to 90% LTV/TLTV. ACE leverages proprietary models along with historical data and public records to allow lenders to originate certain loans without a traditional appraisal, while appropriately managing risk. This will help lower-income borrowers, including many first-time homebuyers, who are not currently eligible to have their appraisal waived.
“To date, Freddie Mac’s ACE waivers have saved borrowers more than $1.63 billion in appraisal fees. The eligibility for ACE+ PDR (property data report), which allows for the onsite collection of property information instead of an appraisal, will increase from 80% maximum LTV/TLTV to applicable program limits (e.g., up to 97% for Home Possible® loans); helping open the cost-saving opportunity up to a wider population.
“The new ACE and ACE+ PDR appraisal waiver expansions will be available to Freddie Mac-approved Sellers using Loan Product Advisor. Additional requirements and the effective date will be announced in an upcoming Single-Family Seller/Servicer Guide Bulletin. These efforts build on Freddie Mac’s longstanding commitments to make homeownership more accessible for low-income families.”
Fannie Mae announced changes to the eligibility requirements for Value Acceptance (previously known as appraisal waivers) and Value Acceptance + Property Data (also known as inspection-based appraisal waivers), two key components of the company’s valuation modernization options. “The changes are part of Fannie Mae’s ongoing efforts to offer a balance of traditional appraisals and appraisal alternatives to confirm a property’s value in order to meet the needs of the market.
“Beginning in Q1 2025, for purchase loans for primary residences and second homes, the eligible loan-to-value (LTV) ratios for Value Acceptance will increase from 80% to 90% and Value Acceptance + Property Data will increase from 80% to the program limits. Both options are designed to match the risk of the collateral and the loan transaction.
“’Fannie Mae is on a journey of continuous improvement to make the home valuation process more effective, efficient, and impartial for lenders, appraisers, and secondary mortgage market participants while maintaining Fannie Mae’s safety and soundness, said Jake Williamson, SVP of Single-Family Collateral & Quality Risk Management, Fannie Mae. ‘Responsibly increasing the eligibility for valuation options that leverage data- and technology-driven approaches can also help reduce costs for borrowers.’
“Since early 2020, Fannie Mae estimates the use of appraisal alternatives such as Value Acceptance and Value Acceptance + Property Data on loans Fannie Mae has acquired saved mortgage borrowers more than $2.5 billion.
“Value Acceptance leverages a robust data and modeling framework to confirm the validity of a property’s value and sale price. Alternatively, Value Acceptance + Property Data utilizes trained and vetted third-party property data collectors, such as appraisers, real estate agents, and insurance inspectors, who conduct interior and exterior data collection on the subject property. Lenders are notified of transactions that are eligible for Value Acceptance or Value Acceptance + Property Data via Fannie Mae’s Desktop Underwriter®.”
Capital markets: interest rates aren’t helping production
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Another day, more selling in the bond markets, which made for a continuation of a slide that started on September 17 and accelerated in early October. The selling continued through a $69 billion 2-year note auction, which met poor demand, and only a modest rebound after a $70 billion 5-year note sale priced worse than expected but featured decent internals.
Inflation has slowed substantially over the past two years, but there is a disconnect between what inflation data shows and what millions of Americans say they are experiencing. For evidence of the stickiness of inflation, watch this week’s payrolls report with an eye on average hourly earnings. There is a high correlation between nominal wages and core-services CPI ex-shelter, which is currently the Fed’s preferred measure of core inflation. If underlying employment conditions once again heat up, monetary policymakers could find themselves facing another wage-inflation spiral.
Prepay speeds are at two-year highs (according to the ICE Mortgage Monitor), and we are seeing delinquencies creep up, which is bad news for MSR portfolios. The delinquency rate has moved up to 3.5 percent, while the single month mortality, the amount of the portfolio that prepays per month, increased to 0.64 percent, the highest since August of 2022.
Advanced indicators for September kicked off today’s economic calendar. The good trades deficit () with retail and wholesale inventories (). Later today brings Redbook same store sales, September house prices from Case-Shiller and FHFA, October consumer confidence, JOLTS job openings, Dallas Fed Texas services, and Treasury auctions that will be headlined by $44 billion 7-year notes and $30 billion 2-year FRNs. We begin the day with Agency MBS prices worse about .125 from Monday’s close, the 10-year yielding 4.32 after closing yesterday at 4.28 percent, and the 2-year at 4.16.
On the outskirts of a small town, there was a big old pecan tree just inside the cemetery fence. One day, two boys filled up a bucketful of nuts and sat down by the tree, out of sight, and began dividing the nuts. “One for you, one for me, one for you, one for me,” said one boy.
Several dropped and rolled down toward the fence. Another boy came riding along the road on his bicycle. As he passed, he thought he heard voices from inside the cemetery, so he slowed down to investigate. Sure enough, he heard, “One for you, one for me, one for you, one for me…” He just knew what it was. He jumped back on his bike and rode off. Just around the bend he met an old man with a cane, hobbling along.
“Come here quick,” said the boy. “You won’t believe what I heard! Satan and the Lord are down at the cemetery dividing up the souls!”
The man replied, “Beat it kid, can’t you see it’s hard for me to walk.”
When the boy insisted though, the man hobbled slowly to the cemetery. Standing by the fence they heard, “One for you, one for me. One for you, one for me.”
The old man whispered, “Boy, you’ve been tellin’ me the truth. Let’s see if we can see the Lord!” Shaking with fear, they peered through the fence yet were still unable to see anything. The old man and the boy gripped the wrought iron bars of the fence tighter and tighter as they tried to get a glimpse of the Lord. At last, they heard, “One for you, one for me. That’s all. Now let’s go get those nuts by the fence and we’ll be done!”
They say the old man had the lead for a good half mile before the kid on the bike passed him.
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 STRATMOR blog is titled, “Help Borrowers Tap Into $36 trillion Available in Home Equity.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).
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