1.27.25 Live From Austin; CoreLogic's George Gallagher on LA Fires; Full Trading Week

Rates seem like they're higher for longer and it's the perfect time for you to consider a HELOC / HELOAN strategy. Figure is the right partner. 50% of the top IMBs use them and if you're not one of them, it's time to get on it. Check out Figure.com and their information about partnerships on their website.

Transcript

“Dr. Oz says rubbing coffee grounds on your naked body will get rid of cellulite. Apparently, you can't do this in the downtown Austin Starbucks.” Here in Austin at the MBA’s IMB conference, some of the informal talk is about the reasons why U.S. home sales in 2024 fell to their lowest level in nearly 30 years. (No homes to buy? Are insurance and property taxes too high? Everyone who wants a house already has one?) Donald Trump has ordered "emergency relief" on housing affordability, and plans to attack regulatory costs: “Hardworking families today are overwhelmed by the cost of fuel, food, housing, automobiles, medical care, utilities, and insurance. Moreover, many Americans are unable to purchase homes due to historically high prices, in part due to regulatory requirements that alone account for 25 percent of the cost of constructing a new home according to recent analysis.” I am not sure how much of that 25% is addressable at the Federal level and how much is local building / environmental codes. That said, it is encouraging that the government is taking a look at the issue. (Today’s podcast can be found here and this week’s is sponsored by Figure. 50 percent of the top IMB’s use them, and if you haven’t examined your HELOC/HELOAN strategy recently, it’s time to get on it. Hear an interview with CoreLogic’s Greg Gallagher on the short and long-term implications of the Los Angeles fires in regard to affordability and insurance.)

Employment & transitions

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“Logan Finance recently introduced our new Sales Director, Jeff Garrison. Jeff brings a vast background in mortgage lending and has held senior management roles with industry giants such as Bank of America and Wells Fargo along with IMB experience in leading New Leaf Lending. Jeff’s illustrious 30+ year career demonstrates his skill in creating, building, and managing sales organizations. Per Nick Pabarcus, Logan’s Chief Revenue Officer, “Jeff’s focus will be the expansion and growth of the sales organization, emphasizing client relationships, and ensuring that each of our valued business partners are served with excellence. Jeff’s extensive experience fits nicely into Logan’s long-term growth strategy and his ability to service the client is unmatched. Not only is Jeff an amazing operator but he is an individual of fantastic character that fits perfectly into our culture. We’re thrilled to welcome Jeff to the Logan team.” If you’re an experienced Non-QM Account Executive and want to join Logan, apply now!”

Looking to align your mortgage company with a partner that shares your commitment to success? Evergreen Home Loans® is actively pursuing acquisitions with companies ready to thrive in today’s dynamic market. At Evergreen, we offer exceptional resources, including a dedicated marketing team to support your Loan Officers, innovative loan products to meet diverse borrower needs, and a construction lending program that sets the industry standard. With a strong financial foundation and a vision for sustainable growth, we’re ready to help your team flourish. Let’s explore how joining Evergreen Home Loans® can unlock new opportunities for your business. Contact Evergreen’s CEO and Founder, Don Burton or call 206.300.9965 to start the conversation. Learn more about what makes Evergreen a great partner at Discoverehl.com.

“Calling experienced non-QM account executives! Deephaven Mortgage had a record-breaking year in non-QM volume in 2024. Due to the demand and the need to fuel our growth we are hiring wholesale account executives. If you are highly motivated and have existing relationships in the non-QM space Deephaven would love to talk to you. We offer a proprietary suite of non-QM products, strong pricing, webinar support, best-in-class scenario desk, fully integrated platform, superior customer service, great benefits, and unmatched company culture. Contact Deephaven's Chief Sales Officer Tom Davis for a confidential conversation. Visit here to learn more about Deephaven Mortgage.”

Congratulations to 30-year vet Jodi Hall, the new President and CEO of The Mortgage Collaborative. Jodi “is a visionary leader known for driving innovation, operational excellence, and organizational growth. As the Founder of DandaRoad, LLC, she has played a key role in modernizing mortgage processes and advising lenders on cutting-edge technology solutions.”

(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.)

Broker and lender products, programs, and software

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Servicers: what if you could predict why your customers are calling before they say a word? The ICE Customer Service solution offers call prediction models that provide the top three reasons a customer may be reaching out, helping your support staff tailor interactions to resolve calls faster and provide a better customer experience. And most importantly, these models are built with privacy and transparency in mind. ICE safeguards proprietary data by using models that are accurate, private, and explainable… No black-box algorithms involved. Plus, constant feedback loops increase the models’ accuracy over time and help them adapt to your unique business needs. Read ICE’s new blog to learn about how they’re delivering the future of customer service with tools that protect data and help support agents resolve more customer inquiries in just one call.

The Future of Funding: OptiFunder Connects the Dots Across the Warehouse Ecosystem! OptiFunder has redefined the warehouse funding process by seamlessly connecting all participants in the ecosystem, from originators and warehouse lenders to major LOS systems, eVaults, fraud prevention tools, investors, custodians, and more. Recognized as the fastest-growing private mortgage tech company, OptiFunder surpassed one million loans funded through its WMS, secured significant partner integrations, including FraudGuard and FundingShield, and launched Greyhound, designed specifically for warehouse lenders to optimize their lending operations. By automating critical funding through repayment and loan sale activities and connecting all key players, OptiFunder empowers mortgage originators and warehouse lenders to work better together, eliminating inefficiencies and minimizing risk. These advancements reflect OptiFunder's mission to drive a fully connected funding lifecycle for originators and warehouse lenders, making the mortgage process smarter and more streamlined than ever before. Meet the OptiFunder team at the IMB Conference in Austin this week or visit the website to learn more.

Unleash Your Potential with the Top Dog Program! Introducing Kind Lending’s Top Dog Program, the ultimate way to elevate your broker game! Designed to celebrate and reward our top partners, this program offers clear pathways to success with exciting rewards at every level. Advance through the ranks (Good Dog, Big Dog, and Alpha Dog) and unlock premium perks like EPO waivers, private event strategies, and exclusive access to pilot programs. It’s more than recognition… It’s about growth, innovation, and building stronger partnerships. Whether you’re a new Puppy just starting out or ready to claim Alpha Dog status, the Top Dog Program is your opportunity to thrive and lead the pack. Don’t wait: Join the program that’s reshaping broker success. Visit here today and start your journey to the top! Kind Lending. Where brokers lead, and success follows.

In today’s competitive mortgage marketplace, customizing workflows and borrower experience is crucial to differentiation. With the industry-first configurability of Maxwell Point of Sale, lenders can define workflows for any mortgage product, while configuring triggers and business rules to align the borrower experience to operational processes. Maxwell Point of Sale also features more than 60 third-party integrations, allowing lending teams to seamlessly connect with other vital pieces of their workflow, from credit and verifications to pricing and disclosures. Maxwell Point of Sale also sees a 60% increase in pull-through from Rate Lock to Close versus its top competitors. Want to learn more? Let us know and we’ll show you what Maxwell can do for you and your borrowers.

USDA, VA, and FHA products continue to shift

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President Trump had a flurry of activity last week, some of it dealing with mortgages and affordability. The Mortgage Bankers Association said the efforts should include eliminating FHA’s life-of-loan premium requirement and a reduction in the mortgage insurance premium charged by FHA. We’ll see.

FHA published Mortgagee Letter ML 2025-05 providing updated and revised guidance for nonprofit organizations seeking approval to participate in FHA’s nonprofit programs. The updates in this ML are designed to increase nonprofit organizations’ participation in FHA’s nonprofit programs by expanding the relevant experience requirements and simplifying the application and recertification requirements for nonprofits seeking approval and placement on the FHA Nonprofit Roster. Nonprofits must be approved and placed on the Roster to participate in FHA nonprofit programs that leverage their unique expertise to offer affordable homeownership opportunities for low- and moderate-income individuals and families.

USDA Rural Development Final Rule, effective March 4, 2025, implements changes to 7 CFR 3550, which makes existing manufactured homes that meet specific criteria, eligible for financing. In addition, the Final Rule reduces regulatory burdens related to manufactured housing requirements and provides flexibilities for energy efficient manufactured and modular homes located in land lease communities operating on a non-profit basis.

FHA Mortgagee Letter (ML) 2025-04 takes into consideration stakeholder feedback received on the draft ML announced in FHA INFO 2024-79, dated November 20, 2024. The provisions announced in this ML create greater flexibilities for borrowers using income received from individuals who rent space in borrowers’ homes referred to as boarders in Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) to qualify for an FHA-insured mortgage. These new flexibilities include revisions to the required underwriting standards for documenting and calculating this type of income.

Per FHA’s published Title I Letter (TIL) TIL-489, FHA adopted the commonly used industry standard URLA, simplifying its Title I loan application process. This enables 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 its Title I program.

FHA published updates to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). This update includes minor policy changes, technical edits, and incorporates previously published policy. Stakeholders are encouraged to thoroughly review and familiarize themselves with the revisions in Handbook 4000.1. See the Handbook 4000.1 Transmittal for a summary, as updates, changes, effective dates, and other pertinent information is reflected and incorporated. For comparison purposes, a separate redline version has also been posted on the Handbook 4000.1 Information web page. The online version of Handbook 4000.1 is being updated and will be available soon.

Pennymac Announcement 25-08 provides information on USDA’s December announcement regarding a reduction to the seasoning period and updated housing payment requirements for refinance transactions required for loan applications dated on or after 1/23/25.

An update to Government LLPAs effective for all Best-Efforts Commitments taken on or after Thursday, January 16, 2025 was described in Pennymac Announcement 25-06.

Pennymac Announcement 2025-04: VA Full Doc and VA IRRRL Program updates.

Pennymac Announcement 2025-05 updated Government LLPAs effective for all Best-Efforts Commitments taken on or after Tuesday, January 14, 2025.

Updates to Government LLPAs, effective for all Best Efforts Commitments taken on or after Wednesday, January 22, 2025 was announced in Pennymac 25-09.

Capital markets: a full five days of trading ahead

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Last week was relatively light on economic data. Existing home sales finished the year with positive momentum and were up 2.2 percent in December with gains seen across many property types. On an annual basis, existing home sales were up 9.3 percent, however they remain 20 percent below the average pace in 2019. The market continues to face multiple challenges including elevated mortgage rates and limited supply which is keeping home prices from easing in many markets. Affordability remains a key challenge facing many potential homebuyers.

Elsewhere, initial jobless claims rose to a six-week high as fallout from the Southern California wildfires began to show in the data. The labor market has been resilient as claims continue to hover near historic lows, however continuing claims have recently begun to increase, suggesting that unemployed workers are having a difficult time landing their next role. The health of the labor market is a key area Fed officials monitor and will influence future monetary policy decisions. In the meantime, no changes are expected following the Federal Open Market Committee’s (FOMC’s) meeting this week.

This week brings the end of the month as well as the latest decision from the FOMC on Wednesday afternoon, followed by Chair Powell’s press conference. The Fed is expected to hold rates steady at 4.25 to 4.50 percent, though the markets will be looking for clues regarding future rate moves as more executive orders are announced by the Trump administration. In addition to the Fed, Sweden’s Riksbank and the Bank of Canada have meetings on Wednesday, while the ECB is on Thursday.

Notable U.S. data includes housing, durable goods orders, the first look at Q4 GDP, and PCE. In addition to the usual bill auctions, Treasury will auction month-end supply today and tomorrow. Today’s calendar is underway with the Chicago Fed National Activity Index for December. December new home sales are next and will be followed by Dallas Fed Texas manufacturing for January, and Treasury auctions that will be headlined by $69 billion 2-year notes and $70 billion 5-year notes. We begin the week with Agency MBS prices better than Friday’s close by .250-.375, the 2-year yielding 4.20, and the 10-year yielding 4.54 after closing last week at 4.63 percent.

I was pulled over by a policeman in Texas.

He asked if I had any weapons in the vehicle. I told him I didn’t.

He then took out his gun out of its holster and said, “Here, you should never travel without a gun in Texas” and took off.

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. STRATMOR’s current blog is “Leaders Don’t Wait for Markets”. 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 2025 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.)