12.10.24 Neutral Fed Funds; MIAC Analytics' Dan Libby on MSR Hedging; Steady as She Goes

Thanks to today's podcast sponsor Bundle, the attorney-prepared legal documents company that is dedicated to the real estate, mortgage, and title industries. Their tech-enabled platform fuels the operations and execution of documents from deeds to subordinations to assignments and everything you need for any order in one bundled price. Save 20% with the discount code "Chrisman" all week.

Transcript

“To the paranoid people who check behind shower curtains for murderers: if you find one, what's your plan?” What’s the Fed’s plan? The Federal Reserve is approaching a critical inflection point in its monetary policy because Fed officials are increasingly indicating that interest rates may be near the upper end of the so-called “neutral rate” (i.e., the level at which monetary policy is neither stimulating nor restraining economic activity). And that means the plan of possibly slowing the pace of rate cuts or not changing them at all after the expected cut next week (following one in September and one in November). Today’s Capital Markets Wrap at 3PM ET, presented by Polly, will discuss this and what might happen to Freddie and Fannie in the Trump Administration. And credit union mortgage strategy will be the focus in today’s ACUMA discussion at 1PM CST, 2PM ET. (Today’s podcast can be found here and this week’s podcasts are sponsored by Bundle, the attorney-prepared legal documents company that is dedicated to the real estate, mortgage, and title industry. Save 20 percent all week with the code “Chrisman.” Hear an interview with MIAC Analytics’ Dan Libby on a deep dive into strategies, risks, and emerging best practices for hedging in the MSR market.)

Employment; small lenders wanted; exec available

_________________________________________________

“Sales Executive for Mortgage Quality Control (QC)! Are you a dynamic salesperson with experience in post-closing? Join our team at Advanced Data as a Nationwide Sales Executive for Mortgage QC. This remote role in obtaining new business is key to driving market growth, establishing a strong presence, and ensuring operational excellence in our QC division. You'll leverage advanced tools to optimize and automate the post-closing quality control process for mortgage enterprises. We’re looking for a highly motivated professional with deep mortgage industry knowledge, strong communication skills, and a proven sales track record. Enjoy the flexibility of working remotely with full support and resources to succeed. As part of Ascend Companies, we offer unparalleled opportunities for career growth and development. Reach out to Angela Langford.”

“Floify, the leader in mortgage POS solutions, seeks a strategic and energetic go-getter to join its team as a business development representative. In this position, you’ll be a key driver of company growth, consulting with senior-level prospects from initial contact through appointment setting and relationship management, while working closely with our marketing team to support campaigns, maximizing outreach efforts and lead generation. Requires excellent organizational skills; bachelor’s degree; and 2+ years of experience in biz development, sales or lead generation, ideally in a B2B mortgage SaaS environment. Must be proficient with CRM software (e.g., Salesforce, HubSpot) and sales prospecting tools. If you're an ambitious, self-motivated individual ready to make a tangible impact in a dynamic growth-oriented environment, this role is for you! Apply at our website.”

“Transitioning to a larger company doesn’t mean sacrificing your independence. At Homestead Funding, we’re committed to helping independent mortgage banks integrate into a broader network while maintaining their unique identity. Our goal is to support you in serving your community while providing tools and resources to elevate your business, enhancing your efficiency, profitability, and client satisfaction. With innovative technology, a strong operational support system, and streamlined processes, we position your business for long-term success. Discover how our Cranberry Township and Greensburg, PA branches made the leap and thrived. Join a team that empowers your growth and celebrates your success. Contact Dave Stagnitti (518-390-5960) to learn more.”

A current EVP/CXO executive is looking for opportunities as an EVP of Sales or a C level position surrounding sales (Chief Sales Officer, Chief Revenue Officer, Chief Strategy Officer, Chief Operating Officer, etc.). The 20-year veteran is geographically mobile, licensed, and experienced in Consumer Direct, Process Design & Improvement, Data Analytics, Digital Transformation, Artificial Intelligence, Technology Stacks and their integration, Operations, Marketing, Vendor Management & proficient in Sales Training, Sales Management, and Telephony. Interested parties can send Anjelica Nixt a note for forwarding. 

(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

_________________________________________________

Imagine a future where your borrowers feel truly valued, informed, and connected to your services. This is more than just a nice-to-have. It’s a vital component of your success. No matter which direction you look, ensuring you achieve both borrower satisfaction and engagement is critical. The industry continues to use modernization and automation as the drivers for expanding borrower access to their mortgage servicer and gaining answers and results. It’s time to go beyond just answering the phone! Our blog, “Fresh Ideas for Borrower Communication Success in 2025,” helps you explore what you need to be ready to provide immediate access to expertise and activities that your borrowers are looking for, including real-time self-service. Kick off the new year by delivering the capabilities that both you and your borrowers are looking for with CLARIFIRE®, modern process automation, the future of our industry.

Leading execs discuss how to win the great mortgage reset in 2025! On 12/18 at 2 PM ET tune into HousingWire for an exclusive webinar featuring Sagent’s EVP, Servicing, Perry Hilzendeger along with industry experts David Sheeler (Freedom Mortgage), Earl Duhman (Gateway First Bank), and Liz Balce (Carrington Mortgage Services), where they’ll dive into essential strategies for success as we head into 1Q25. Topics that the panelists will cover include emerging servicing tech and the role of AI, unlocking the secret to refi retention, and more. Don’t miss this opportunity to build your 2025 playbook with expert insights. Register in the link here even if you can’t attend. You'll be the first with access to the recording. 

Save $300 on underwriting fees with Maxwell Capital’s Winter Windfall Special.

Looking for ways to pass savings on to your borrowers this holiday season? For a limited time, take advantage of Maxwell Capital’s reduced fees with the Maxwell Winter Windfall. This applies to all non-delegated conventional, jumbo, DSCR, and 2nd home loans. With Maxwell Capital, lenders can access competitive secondary market pricing on a wide array of products, including agency, jumbo and non-QM across wholesale, delegated and non-delegated delivery options. Schedule a call with the Maxwell team today and start doing more for your bottom line.

Thoughts on the 2025 tax bill: what might be ahead

_________________________________________________

Have you checked out the thought leadership section on the new Chrisman Commentary website? Yesterday featured a piece from Morgan Wise, Chief Financial Officer at Atlantic Bay Mortgage Group, on what homebuyers need from the 2025 tax bill. Changes are part of broader efforts to address economic disparities and increase housing accessibility, but their final implementation will depend on legislative approval. Key proposals under discussion include new tax credits and adjustments that could make purchasing a home more accessible, especially for first-time buyers. Main takeaways include a first-time homebuyer tax credit (there's consideration for reinstating a significant tax credit to help offset rising housing costs, a move reminiscent of previous federal initiatives like the 2008-2010 tax credits), affordable housing investments (a focus on supporting housing development in underprivileged areas through incentives like the Low-Income Housing Tax Credit and the Neighborhood Homes Credit, aimed at boosting homeownership and community development), and an impact on 1031 exchanges (that would limit tax deferral benefits on real estate exchanges, potentially affecting higher-value transactions but freeing resources for other housing priorities).

Non-Agency news along with correspondent & wholesale notes

_________________________________________________

JMAC Lending offers two exceptional Non-QM programs for your borrowers to qualify on the cash-flow of the property; no tax records, personal income or paystubs are required. The products are great for borrowers who do not have sufficient funds to meet the reserve requirements with agency guidelines or meet the minimum FICO score of 720 for borrowers with ownership of 7 or more properties. Plus, experienced investor borrowers do not need to own a primary residence.

A&D Mortgage announced the launch of the AI Guideline Assistant within the A&D Bot platform designed to revolutionize how partners access and navigate Non-QM guidelines. This tool delivers accurate, real-time responses to guideline queries, saving partners valuable time and speeding up their workflows. The AI Guideline Assistant is specifically built for Non-QM partners who need instant access to complex guideline information without the hassle of manual searches. Whether clarifying eligibility requirements or confirming underwriting standards, the tool leverages smart technology to analyze queries and provide precise, up-to-date answers instantly. Leveraging data insights from a diverse underwriting data set, the AI Guideline Assistant quickly evaluates key loan criteria, helping brokers better understand eligibility and potential risk factors for both conventional and Non-QM loans. With advanced analysis capabilities, the chatbot can assess borrower profiles, analyze financial data patterns, and identify potential red flags, all in real time.

Contents included in Citi Correspondent Lending Bulletin 2024-11 includes hazard insurance updates, IRS Tax installments, New York CEMA: E-Note Closings & Splitter Agreement, Single Source Validation (SSV) - DU Pilot, and unacceptable Collateral – Illegal Units. Also, monthly list updates on depreciating markets and disaster policy. Limited review clarification for Condo Projects and SPCP Community Lending terminology.

UWM fans are interested in the latest “3 points video” with Mat Ishbia where he discusses credit report costs increasing by 40%, a new study finding borrowers need just a 50-75bps improvement to refinance, and how rising housing stock inventories lessening impact of slowdown in construction.

For your next December Presence win, Rocket Pro TPO extended its 24-bps credit offer through December 15th. Plus, get an extra 20 bps bonus credit on VA and FHA loans.1 Hear from Fawaz about how partners are using 24 Takeoff to elevate year-end deals and maximize client savings, especially for larger loan amounts.

AmeriHome Mortgage General Announcement 20241108-CL summarizes previously published changes made during November, additional changes made with this announcement, and recent Agency and regulatory news.

HomeLend has launched Prime and Non-QM Jumbo Loan programs on its platform. This new product roll-out “offers lenders liquidity in a mortgage product arena that has been lacking in the past several years due to the instability of a rising interest rate environment. Investors and securitizers of Jumbo loans may utilize HomeLend to help ramp production and increase volumes in a timely manner. Lenders and investors may sell and purchase jumbo loans on a flow basis and engage in real-time pricing via the HomeLend technology platform.” Loan programs include full Documentation 12 and 24 month, bank Statement and 1099 Options 12- and 24-Month Options. Loan products include 15 Year & 30 Year Fixed Rate, and 5/6 ARM, 7/6 ARM, 10/6 ARM. Max Loan Amount: Up to $5mm. Min Loan Amount: $600k. FICO options as low as 620. Max LTV/ CLTV 80%. Primary Occupancy Only. Cash Out options up to $1mm, Primary Occupancy. (Loan features noted above vary by loan product and other factors.)

Deephaven Mortgage has a new home equity solution: Equity Advantage HELOC. Loan amounts from $25,000 up to $400,000. DTI 50% • Maximum CLTV 85% for primary. Maximum CLTV 70% for secondary. Owner-occupied, second homes and investment properties. Full doc, bank statements, and assets allowed for income verification. SFR, townhomes, condos, second homes and investment properties. Open-ended loan with a term of 5, 10, 15 or 30-years. Available on 1st and 2nd liens. 100% drawn at time of origination with a 100% draw feature.

Capital markets: steady as she goes

_________________________________________________

What to look forward to this week: inflation reports, more Treasury debt, and heightened geopolitical risk (from France, Syria, South Korea, Iran, Ukraine, etc. the list is seemingly endless). Chinese manufacturers are said to have recently begun limiting sales to the U.S. and Europe of key components used to build unmanned aerial vehicles. Oh, and the country’s government announced new stimulus measures yesterday. Like I said… As the market weighs the fallout from all of this, bond yields somehow rose yesterday. Normally, in periods of uncertainty these yields drop, as investors drive the price up due to the less risky nature of the asset class. But normal seems to be a thing of the rose-tinted past.

Following last month’s solid jobs report that was released on Friday, financial markets this week will focus on inflation releases (CPI and PPI), the last major data points ahead of the Fed’s December interest rate decision next week, when a 25-basis points cut is priced in as a near-certainty. Today’s economic calendar kicked off with the NFIB Small Business Optimism Survey for November rising in November to 101.7, up from 93.7 in October and well ahead of the 94.2 level expected by analysts. (This was the first time in nearly three years that the indicator has broken the 50-year average of 98, and marked the highest reading since June 2021.) We’ve also received the final look at Q3 productivity (+2.2 percent) and unit labor costs (+.8 percent, lower than expected). Later today brings Redbook same store sales, and several Treasury auctions that will be headlined by $58 billion 3-year notes and a buyback in 1-month to 2-year coupons for up to $7.5 billion. Overnight, the RBA was out with its latest monetary policy decision, where the cash target rate was held steady at 4.35 percent. We begin the day with Agency MBS prices a few ticks (32nds) worse than Monday’s close, the 2-year yielding 4.14, and the 10-year yielding 4.23 after closing yesterday at 4.20 percent.

We start with this video about kindness. (Warning: tissue may be required.)

In a more light-hearted vein, here is a Christmas To-Do List from Northern California’s James H.:

Cut down perfectly healthy conifer. Check.

Wrap in electrical wiring fabricated in China. Check.

Place in a bucket of water and drag it into the living room. Check.

Plug it into home electrical system. Check.

Shove cardboard boxes under incendiary device, thumbing your nose at Prometheus. Check.

Cross fingers until Christmas. Check.

If I did this in July, I’d be hauled away.

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).

qoɹ

(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.)