Hello 2025, goodbye 2024. It’s been 50 years since Jaws or Godfather Part 2 were on the screens. A half a century since Kung Fu Fighting first graced our airwaves. Despite the turn of the calendar page, the issues bond markets, lenders, and vendors face are the same. “Rob, what’s the word on the street about companies (lenders and/or servicers) making money out there?” Well, to be blunt, there are lenders out there who are earning 25 basis points or more on production without any servicing. Then again, there are lenders eking out a gain with their servicing but losing money without it. Ask your management if your company would be profitable without servicing. If there is one thing that lenders have learned about being profitable without servicing, it is a willingness to hold sales and branches accountable… actually accountable through actions rather than merely talk. Do you want to engage in unprofitable activities just to try to outlive your competition? (Today’s podcast can be found here and this week’s is sponsored by The BIG Point of Sale, which offers a highly configurable, easy to install point of sale solution. Its simplified consumer workflows and web-based portals allow for consumers and loan originators to collaborate with the back-office team to keep everyone informed throughout the loan process. Hear an interview with The Big POS’ Matthew VanFossen on the ins and outs of mortgage technology, from creating valuable products to implementation and training that will help companies maximize success.)

Software, Products, and Services for Lenders

“Start the New Year right by joining us at ICE Experience 2025, March 10–12 at Wynn Las Vegas. It’s your chance to dive into 50+ expert-led sessions, hear from inspiring keynote speakers, and network with the movers and shakers of the mortgage industry, all centered on helping more people realize their dream of homeownership. Don’t miss out on the opportunity to gain the strategies, insights, and connections that’ll set the stage for your success in 2025. Want to know more? Visit our website to check out the full lineup of sessions and speakers. Register by January 15 to take advantage of our final discount. Register now.”

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.

Freddie and Fannie News

FHFA released its 2025 Scorecard for Fannie Mae, Freddie Mac, and Common Securitization Solutions. The annual list of objectives includes steps for the Enterprises to better manage risk, support market improvements, and facilitate enhanced resilience of the nation’s housing stock.

Freddie Mac has surveyed and tracked the attitudes of Baby Boomers for nearly a decade. As of 2024, there were 65 million Baby Boomers, accounting for 20% of the U.S. population and 36% of total homeowner households. This latest research follows two prior surveys, the first in 2016 and again in 2021, in which Freddie Mac sought to track Boomers’ attitudes and perceptions in several key categories. New research indicates Boomers hold $17 trillion of country’s total home equity. Three quarters of homeowners born before 1964 are likely to leave much of their $17 trillion in home equity to their children, according to Freddie Mac’s latest analysis of the housing perceptions, preferences and plans of Baby Boomers.

Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-16 announces updates to the following topics: 2025 conforming loan limit values, information security, credit underwriting, automated collateral evaluation (ACE) and ACE+ PDR, Freddie Mac Gateway and Fee-only repurchase alternative program.

Take a look at December’s new updates to Loan Selling Advisor which includes: loan Limits Values for 2025, new Indicator, Look and Feel When Importing Loans, Uniform Loan Delivery Dataset (ULDD) Revisions, Customer Test Environment (CTE) Downtime in December, Annual Digital Certificate Renewals – December 2024 and January 2025, Green Bond Guarantor Single Issue Execution, Funding and Settlement Statement Screens: New Look and Feel, Mission Index Guarantor Single Issue Execution, Freddie Mac Gateway, Critical Purchase Eligibility Messages and Uniform Appraisal Dataset (UAD) and Forms Redesign ULDD CTE Timeline.

Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-H announced the extension of the Home Possible® Very-Low Income Purchase (VLIP) mortgages credit subject to updated eligibility requirements. In support of affordable lending and sustainable homeownership, Freddie Mac is extending this VLIP credit effective for mortgages with settlement dates on or after March 1, 2025, and on or before February 28, 2026.

Freddie Mac and Fannie Mae (the GSEs) announced the joint publication of technical resources for the Uniform Closing Dataset (UCD) v2.0 Specification (UCD v2.0).

Fannie Mae’s December Servicing Guide update, Announcement SVC-2024-07, includes changes to allowable foreclosure attorney fees, bankruptcy attorney fees, and Mortgage Release document preparation cost, plus other miscellaneous updates.

Fannie Mae’s Economic and Strategic Research (ESR) Group just published its latest outlook for the housing market and economy. Find out where they think the Single-Family market is headed next year.

During the weekend of Jan. 25, Desktop Underwriter® (DU®) for government loans will be updated with changes for FHA loan limits and VA county loan limits. Details can be viewed in the release notes. Additionally, read the integration impact memo.

Fannie Mae’s Q4 2024 Appraiser Update provides more details on recent appraisal-related Selling Guide updates, covers new Collateral Underwriter® (CU®) messages, reviews property data collection for hybrid appraisals, and more.

Effective Feb. 3, 2025, to conform to the Federal Reserve’s ISO 20022 standards, the Seller’s Designation of Wire Transfer Instructions (Form 482) will be updated to require sellers to provide Beneficiary Address (street, city, state, zip) information for whole loan purchases. The beneficiary address is the address of the business entity receiving the funds. More information can be found in Fannie Mae Loan Delivery release notes.

Fannie Mae posted the December Appraiser Quality Monitoring (AQM) list to Fannie Mae Connect™.

Borrowers now have greater flexibility when planning energy improvements with HomeStyle Energy. Fannie Mae has extended the age of an energy report from 120 days prior to the note date to no more than 24 months prior to the note date, allowing the borrower more time to determine the improvements to be made. This change is effective immediately.

Read the Selling Guide announcement for details.

Freddie Mac and Fannie Mae (the GSEs) have published FAQs to provide information about submitting property data using the Uniform Property Dataset (UPD). They include examples to help users comply with American National Standards Institute (ANSI) when documenting the living area of a home. Additionally, The GSEs have published ROV FAQs to provide additional information about the borrower-initiated reconsideration of value (ROV) requirements. Please refer to Single-Family Seller/Servicer Guide Section 5604.4 for the comprehensive policy requirements.

Capital Markets

Rates are determined by supply and demand, and on Tuesday the 31st, U.S. Treasuries initially saw modest buying interest, pushing yields lower across the curve, partly driven by a weaker-than-expected December Manufacturing PMI report from China, which fueled safe-haven demand ahead of the New Year's holiday. However, the buying momentum faded during the *cash session*, and renewed selling pressure caused yields to rise, particularly at the “belly” and long end of the curve, resulting in a steepening of the yield curve. This movement reflected a broader market trend heading into 2024. Meanwhile, housing data showed the FHFA Housing Price Index rose 0.4 percent month-over-month in October, while the S&P Case-Shiller Home Price Index Composite-20 increased 0.3 percent month-over-month, both showing steady year-over-year gains of 4.5 percent and 4.2 percent, respectively.

**The “cash session” in the bond market refers to the regular trading hours when bonds are bought and sold in the "cash" or "spot" market, as opposed to the futures market. In short, the cash session is when bond prices are actively influenced by current market conditions, and any significant moves in bond prices (like a shift in yields) typically occur during this time. During the cash session, bonds are traded at their current (or "spot") prices for immediate delivery and settlement, typically within two business days (T+2). In the U.S. Treasury market, the cash session usually runs from 8:00 AM to 3:00 PM Eastern Time. It's during this period that the majority of trading activity takes place, and it's when market participants, including institutional investors, hedge funds, and individual traders, buy and sell Treasury bonds and other fixed-income securities. The “cash session” contrasts with the “overnight session” or “futures market,” where positions can be taken for future delivery or to hedge against price changes. The cash market reflects the true supply and demand for bonds at any given time, impacting bond prices and yields.

Following the New Year’s holiday, today’s economic calendar kicked off with two weeks of mortgage applications data from the Mortgage Bankers Association. It isn’t pretty. Mortgage applications decreased 21.9 percent from two weeks earlier. The results include an adjustment to account for the Christmas holiday.

“The Market Composite Index, a measure of mortgage loan application volume, decreased 21.9 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 55 percent compared with two weeks ago. The holiday adjusted Refinance Index decreased 36 percent from two weeks ago and was 10 percent higher than the same week one year ago. The unadjusted Refinance Index decreased 62 percent from two weeks ago and was 6 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 13 percent compared with two weeks ago. The unadjusted Purchase Index decreased 48 percent compared with two weeks ago and was 17 percent lower than the same week one year ago.

“’Mortgage rates moved higher through the last full week of 2024, reaching almost 7 percent for 30-year fixed-rate loans,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Not surprisingly, this increase in rates, at a time when housing activity typically grinds to a halt, resulted in declines in both refinance and purchase applications.’

“The refinance share of mortgage activity decreased to 39.4 percent of total applications from 44.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.2 percent of total applications.” The FHA share of total applications was 16.6 percent, the VA share of total applications was 15.7 percent, and the USDA share of total applications was 0.4 percent.

We’ve also received weekly jobless claims (211k, lower than the 221k expected). Later today brings the final December S&P Global manufacturing PMI, construction spending for November, Treasury announcing the details of the mini-Refunding consisting of $58 billion 3-year notes and $39 billion and $22 billion reopened 10s, and Freddie Mac’s the Primary Mortgage Market Survey. We begin 2025 trading with Agency MBS prices are better than Tuesday’s close by about .125, the 2-year at 4.20, and the 10-year yielding 4.52 after closing 2024 at 4.57 percent, which was 69-basis points (nice!) above where it began the year.