11.29.24 Fertility Rates; Neena Vlamis, Lance Reese, and Chris Anderson on Data Integrity; Early Close

Today's podcast is brought to you by Truework, an all-in-one platform for verification of income and employment. With Truework, lenders save up to 50% on verification costs by replacing their complicated in-house waterfalls with a single platform that automatically orchestrates all major verification methods to produce an accurate and usable report for every verification request. Learn more at www.truework.com.

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“I was late to my cannibal family's Thanksgiving dinner. I got the cold shoulder.” LOs are experts on family life and demographics. The share of both same-sex and opposite-sex households with children under 18 (married and unmarried) declined from 2019 to 2023, a reflection of drops in U.S. fertility rates. Among female couple households, 25 percent of married and 16 percent of unmarried couples had children in the household in 2023. Among male couples, 9 percent of married and 3 percent of unmarried couples had children in the household. About 21 percent of female couple households included a child in 2023, compared to just 6 percent of male couple households. A house hunter recently told me, “I’m not going to AI buy my house.” NAR is good at producing reports on how people actually do buy and sell houses, and it is worth a gander. (Today’s podcast can be found here and this week’s are sponsored by Truework. By connecting every verification method into one platform, Truework helps lenders eliminate process disruptions, maintain a competitive borrower experience, and reduce the fiscal impact of verifying income. Hear an interview with A and N Mortgage Services’ Neena Vlamis, Wilqo’s Lance Reese, and MCT’s Chris Anderson on data security and the importance of access to data for the mortgage industry.)

Lender wanted; jobs

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“Evergreen Home Loans® is seeking to acquire a midsized mortgage company that shares our values and commitment to exceptional customer service. With over 37 years of experience, Evergreen is dedicated to helping homeowners achieve their dreams through innovative loan products and a people-first approach. We will take care of your Loan Officers and provide them with the tools to succeed, creating an environment where they can thrive. This acquisition is an opportunity to join forces, combining strengths to achieve lasting success and expand our reach. All inquiries will be handled confidentially. If your company is interested in exploring this opportunity, please contact Evergreen’s founder, Don Burton, directly. (206.300.9965) Let’s build a stronger future together!”

“Loan Officers! What Legacy Will You Leave? Your career is more than just a series of deals, it’s your legacy. At radius, we offer the tools, leadership, and culture to help you leave a lasting impact in the mortgage industry. If you’re ready to create something enduring, let’s connect and discuss your future. For confidential inquiries, contact Carla Herrera (781-742-6500).

Want a volume boost in 2025, no rate drop needed? Planet Home Lending’s top MLOs and branch managers thrive with solutions that make deals happen. Imagine this: Buy Before You Sell and Cash Offer programs that give local real estate agents an edge, personalized servicing statements with your name front and center, builder programs that open new doors, and automated past-client marketing. If you’re crafting your 2025 plan, let Planet make it your best year yet. Reach out for a confidential conversation today with SVP Doug Long at (407) 399-5505. Let’s thrive in ’25! 

Lender and broker software, services, and products

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Tired of meeting people, and being asked, “What does your company do?" Gaffney Austin can fix that! When it comes to the mortgage business, the crew at Gaffney Austin are the communication experts, available to handle all your PR needs. Looking to get your company in the news or nab notable industry awards? Gaffney Austin’s got you. The staff will work with you to create a powerful communications strategy designed to elevate your company’s public profile and expand your reach. Gaffney Austin builds impactful media campaigns that deliver real results.

Would you get on a plane with broken or outdated flight controls? Would you feel safe flying blind, hoping all systems are functioning? Managing a mortgage business without complete, real-time insights is like piloting a plane without a dashboard. Are you equipped with the key reporting and analytics to steer your business confidently? With Gallus Insights, you’ll have the data and clarity you need right at your fingertips… No guesswork, just precision. Ready to elevate your data game? Connect with Augie Del Rio, founder and CEO of Gallus Insights, to learn how Gallus can help you take control.

Did you know it’s possible to close loans in an average of 15 days? Investing in automation now is key to streamlining your underwriting processes and setting yourself up for future success. Click here to learn how the ICE Mortgage Analyzers™ and ICE Data & Document Automation™ can help you improve accuracy and loan quality, accelerate closings and provide a better borrower experience.

Congratulations to Panoramic's inaugural class, who just finished their module on securitization, for passing the halfway mark of their 14-week capital markets course! Students represent some of the most influential companies in the industry, including lock desk, capital markets and production professionals, along with technology and C-Suite executives. The combination of exclusive podcasts, learning modules, discussion forums, and excel-based modeling exercises creates an immersive experience unique in the industry in terms of depth and breadth of capital markets topics. From hedging best practices to servicing cash flows to performance attribution and more, this course is designed to take their professional knowledge to the next level. Additionally, current students’ invaluable feedback throughout the first semester has inspired enhancements and informed new material already incorporated into next semester’s course. Panoramic’s Spring class starts January 19th, 2025, and is already filling up! Enroll now for the Spring semester, and follow us on LinkedIn!

“Artificial intelligence and automation are top of mind for nearly every industry player in 2024. At Optimal Blue, we embrace AI with a purpose: to help our customers solve real-world problems, improve efficiencies, and maximize profitability on every loan transaction. The AI-powered Profitability Assistant in the CompassEdge hedging and loan trading platform, announced in August, uses generative AI to provide an unbiased analysis of day-over-day changes to your P&L. It quickly summarizes top factors influencing profitability, highlighting impacts in dollars and basis points, saving senior secondary marketing professionals hours of research. Building on its success, we’ve added a monthly view that offers CFOs and secondary marketing leaders’ month-to-date summaries of top profitability drivers. This enhancement streamlines end-of-month analysis, allowing lenders to easily understand their performance without needing to manually compile and analyze daily reports, thus providing a holistic perspective on profitability trends over time. Read more in the press release.”

Government program (FHA, VA, USDA, HECM) news of note

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The Federal Housing Administration (FHA) posted a draft Title I Letter (TIL), Adoption of the Uniform Residential Loan Application (URLA) for Title I Loan Programs, on FHA’s Office of Single Family Housing Drafting Table (Drafting Table) for public review and feedback. Currently, Title I loans require program-specific loan application forms for each of the two Title I programs: forms HUD-56001 for Title I Property Improvement and HUD-56001-MH for Title I Manufactured Home loans. This draft TIL proposes to replace these two Title I-specific forms with the industry-standard loan application form, Uniform Residential Loan Application (URLA) (Fannie Mae Form 1003/Freddie Mac Form 65), and the new HUD Addendum to the Uniform Residential Loan Application for Title I Loans (form HUD-92900-TI).

By replacing the Title I-specific forms with the more commonly used industry standard URLA, HUD seeks to simplify its Title I loan application process, enabling lenders to use existing origination system technology to collect borrower data, which eliminates the financial burden of acquiring multiple software licenses or manually completing a Title I program-specific application form. FHA believes these changes will encourage greater lender participation in the Title I program. Interested stakeholders are encouraged to thoroughly review the draft TIL and provide feedback by December 18, 2024. Instructions for providing feedback are posted on the Drafting Table. FHA will carefully consider all feedback received before publishing a final TIL. As a reminder, this draft is not official departmental policy and cannot be used in connection with any FHA-insured mortgage until finalized. FHA’s existing policies remain in effect until amended. 

The U.S. Department of Housing and Urban Development (HUD) has invested $231,000 to provide solar power for low-income senior residents in a Maine apartment complex. Funded by the Inflation Reduction Act, this project aims to enhance energy and water efficiency through technological advancements while supporting vulnerable communities. Click here to read the full press release.

The Single-Family Housing Guaranteed Loan Program (SFHGLP) is seeking input on proposed revisions to several chapters of technical Handbook 1-3555 in anticipation of the upcoming publication of the Existing Manufactured Home Final Rule. The proposed revisions have been posted to the SFHGLP Policy Desk, accepting comments through December 8, 2024. 

Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.658 trillion as of October 2024. Additionally, Ginnie Mae issued $45.2 billion in total MBS, resulting in a net portfolio growth of $11.1 billion. This issuance supports the financing of over 133,000 households, including more than 55,000 first-time homebuyers, and approximately 59 percent of issuances reflect new home purchases. 

FHA is seeking industry feedback on its Proposed New Loss Mitigation Waterfall. This draft proposes updates to FHA’s permanent loss mitigation options based on learnings from its temporary COVID-19 policies. When finalized, FHA will also extend the existing COVID-19 recovery options past April 30, 2025, giving stakeholders time to implement new loss mitigation, claims, and reporting requirements. Interested stakeholders are encouraged to thoroughly review the draft and provide feedback by December 23, 2024. Instructions for providing feedback are posted on the Drafting Table. FHA will carefully consider all feedback received before publishing a final update to Handbook 4000.1. As a reminder, this draft is not official departmental policy and cannot be used in connection with any FHA-insured mortgage until finalized. FHA’s existing policies remain in effect until amended.

United Wholesale turned industry heads this week by announcing United Wholesale Mortgage (UWM) is removing Loan Level Pricing Adjustments (LLPAs) on FHA, VA, and USDA loans for borrowers with a FICO score of 600 and above. “Available now until March 31, 2025, this initiative aims to improve pricing by up to 150bps for borrowers who are typically impacted by the highest LLPAs and provides brokers with a competitive edge.”

(As one would expect, the move prompted some comments. “They are gambling the rates will get better next year and why not?” “UWM dropped the LLPAs on the lower FICO Govies. I’m not sure why they are seeking those loans. Their rates are not that attractive, not bad, not great on the higher FICOs. They are about a constant ½ - five-eighths percent out of the market on the higher FICOs.” “That is a good move, but on a broader scale, it would be better if the FHA dropped its monthly MI.”

Plaza Home Mortgage® recently shared new improvements to the FHA 203(k) renovation loan program to align with the FHA Mortgagee Letter 2024-13. In case you missed it, here’s a recap of the changes: Limited 203(k) project cap has increased to $75k, Limited 203(k) now allows consultant fees to be financed, Mortgage Payment reserve of up to 12 months is now allowed, Standard 203(k) maximum construction period has increased to 12 months, Limited 203(k) maximum construction period has increased to 9 months, Consultant Fee schedule has been updated. Refer to Plaza’s FHA 203(k) Program Guidelines for complete details or connect with your Plaza Account Executive if you have any questions.

Got a loan scenario or need an LTV estimate? Plaza Home Mortgage offers a quick and easy way for your Account Executive to get you answers through the Rapid Reverse App, allowing you to focus on what matters most, your business. By connecting with your Plaza Home Mortgage Account Executive, you can swiftly obtain an LTV estimate based on: Plaza’s margins, The age of the youngest spouse, purchase, and down payment figures, and more.

In October, the reverse mortgage industry saw a slight uptick in key metrics, despite overall business being somewhat lukewarm. According to this article, recent data shows applications and counseling sessions had moderate increases making it a positive indicator for growth potential. However, broader economic factors and rate hikes continue to weigh heavily on market activity. Read more about it or email reverse@plazahomemortgage.com to stay informed on reverse mortgage offerings and how you can educate clients about reverse options.

At the other end of the food chain, in the secondary markets, residential lenders originated $112.67 billion of FHA and VA loans in the third quarter, the highest quarterly volume in a few years. According to figures compiled by Inside FHA/VA Lending, “VA originations totaled $47.14 billion, up 13.7% from the second quarter. On a year-to-date basis, originations increased 13.6% from a year ago. The improvement in the VA program was led entirely by refinances as the agency recorded sequential as well as year-to-date drops in purchase-mortgage originations. Meanwhile, FHA endorsed $65.53 billion of mortgages in 3Q24, a 7.7% sequential improvement. That brought year-to-date production to $179.19 billion, a 12.2% increase from the first nine months of 2023.”

Capital markets: as expected, quiet with a flat yield curve

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We received a lot of housing data leading up to the Thanksgiving holiday, and there appears to be some positive momentum. Notably, Pending Home Sales rose by 2.0 percent in October, reflecting resilient demand despite elevated mortgage rates. Expectations were for a 1.5 percent decline. That marked a continuation of strength after September's robust 7.5 percent increase. Personal spending also grew 0.4 percent in October and personal income rose 0.6 percent, showcasing continued consumer engagement even amid inflationary pressures. The PCE Price Index climbed 2.3 percent year-over-year, while the core measure rose 2.8 percent, underscoring the persistence of inflation. Durable goods orders showed muted growth, rising just 0.2 percent in October, signaling restrained business investment.

Before the holiday, Treasury yields fell to their lowest levels in a month following a strong $44 billion 7-year note auction and the cease fire in Lebanon, with the 30-year yield reaching lows last seen in mid-October. Oil and gas prices have weakened of late, and energy prices feed into almost everything the inflation indexes attempt to measure. This will help provide the Fed justification to cut a few more times, though those rate cuts are already priced in.

Today’s early close sees just Chicago Purchasing Manager’s Index for November, scheduled to be released later this morning. Futures settlement close is at 1:00pm ET while SIFMA’s recommended close for cash bond trading is 2:00pm ET. We begin the day with Agency MBS prices roughly unchanged from Wednesday evening, the 2-year at 4.19, and the 10-year yielding 4.21 after closing Wednesday at 4.24 percent.

The Jewish Taxi Driver (Warning: Rated PG):

A drunk woman, stark naked, jumped into a taxi in New York City. The taxi driver, who happened to be an old Jewish man, opened his eyes wide and stared at the woman. He made no attempt to start the cab.

She said to him, "What's wrong with you, honey? Haven't you ever seen a naked woman before?"

The old man said "Lady, I'm not staring at you, I am telling you, det vould not be proper vair I come from".

She said, "Well, if you're not staring at my boobs sweetie, what are you doing then?"

He said, "Vell, I am looking and I'm looking, and I am tinking to myself, 'vair in da hell is dis lady keeping de money to pay for dis ride?'"

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 “A Lender’s Personal Touch Can Help After a Disaster.” 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.)