With the whirlwind of Trump Administration news (Jonathan McKernan to lead the CFPB, playing hardball in Gaza, ending penny production, pardoning former Illinois Gov. Rod Blagojevich, freeing Mark Fogel, firing the head of government ethics, beginning the gargantuan task of cutting government spending, trying to rename of the Gulf of Mexico, ramping up deportations, to name a few), it is good to keep an eye on residential lending. I received this note. “Rob, stick to mortgages and keep politics and regulatory changes out of your Commentary.” Unfortunately, they are all intertwined, and lenders are keenly aware of what helps or hurts borrowers. (The MBA has assured us that the CFPB’s APOR will be released Thursday.) For example, the new HUD Secretary Scott Turner says he plans to quickly launch a review to root out inefficiencies at the agency, and that Fannie & Freddie privatization, cost-cutting, and a new name are his priorities. For lenders, especially independent mortgage bankers attending the TMBA conference, current topics include the Community Reinvestment Act for IMBs, restrictions on foreign ownership of U.S. soil, state adoption of the CSBS model capital, liquidity, and governance framework, and watching to see how the state by state impact of the NAR settlement plays out. (Today’s podcast can be found here and this week’s is sponsored by CoreLogic. Originators who leverage their Marketing Solutions as part of their customer retention practices have seen their pipelines increase by up to 4 times when compared to traditional lead generation methods. Hear an interview with Mortgage Advisory Partners’ Brian Hale on the recapitalization of Fannie and Freddie.)
Lender and Broker Services, Products, and Software
“If you're heading to Vegas for #X25, make sure Floify is on your must-visit list. Swing by booth #417 or book a meeting with us in our larger onsite suite for a customized pick-me-up. We’re serving up survival essentials tailored to your mood and appetite, because let’s face it, conferences can be exhausting. But that’s not all. Be among the first to get the inside scoop on Floify’s groundbreaking new feature allowing you to customize your loan application and expand your offerings with Non-QM, HELOCs, Construction, and more. Whether you’re running on fumes or just need a break, walk-ins are welcome, though appointments are highly recommended for some one-on-one time with our team. Secure your spot now and get ready for what’s next!”
“Heading to SFVegas later this month? The Clayton Team will be there and ready to discuss how our 30+ years of experience can help smooth industry challenges and help you capitalize on the opportunities in today’s market. A recognized leader in due diligence, servicing oversight and compliance solutions, Clayton has the scale and expertise to manage residential or commercial engagements of any size, ensuring assets and processes meet quality, compliance and reporting standards and comply with regulatory, rating agency and investor requirements. While at the conference, learn more about our Focus platform, which allows clients to efficiently access deal information and seamlessly upload, validate, and work exceptions, all in one place with a single sign-on. Schedule a meeting with Clayton VP-Business Development Tom Coffey and stop by Booth 86 at SFVegas to learn how Clayton can help your firm close time-sensitive deals at the highest quality level and with market-leading, personal service.”
Informative Research is now integrated with Thomas & Company’s Wage and Employment Verification service, expanding its clients’ access to employment and income data. This partnership increases the agility of Informative Research’s streamlined solution for verifying income and employment (VOI/E), providing lenders with access to tens of millions of employment records across various industries, including many of the nation's largest employers. By combining Informative Research’s innovative technology with Thomas & Company’s expertise in employer services, the partnership delivers greater flexibility and customization for lenders’ verification strategies, all while maintaining robust data privacy and security standards. The integration underscores Informative Research’s commitment to providing solutions that help lenders operate more efficiently and better serve borrowers. Learn how the new integration can bolster your verification strategies today.
‘Tis the season to be vigilant! As we approach Valentine’s Day, St Patrick’s Day, and other holidays, cybercriminals are ramping up their efforts to exploit vulnerabilities in company systems. Businesses must prepare for increased phishing attempts, ransomware, and other sophisticated social engineering techniques. Read Richey May’s latest blog, implement robust security measures, and enhance system detection and monitoring to protect your company from Romance Scams. Remember, cybersecurity is not just about compliance; it's about staying one step ahead of increasingly sophisticated attackers. Contact Richey May’s Cyber Team today to build your resilience.
No more chasing borrowers for upfront fees. Fee Chaser sends a secure payment link, collects funds instantly, and seamlessly updates Encompass® by ICE Mortgage Technology™, all without extra effort from your team. Fast, secure, and hassle-free for both lenders and borrowers. Check out Fee Chaser today.
Correspondent and Wholesale Program News
Since the successful launch of Foundation Mortgage’s Correspondent channel, both Full and Non-Delegated, Foundation has expanded its reach to offer NonQM products to mortgage bankers nationwide, offering more flexible loan products for borrowers. Foundation Mortgage has integrated the same reliability, consistency, versatility and competitive advantages that it offers through its Wholesale channel, making it one of the fastest growing nationwide NonQM lenders. If you are interested to learn how you can build your lender platform on a solid Foundation and capture more origination opportunities and increase your bottom line, please contact Matt Brammer for Eastern U.S. or Boris Firquain, for Western U.S.
“Verus Mortgage Capital is the leading non-agency investor, and in 2025, our commitment to providing the best products and pricing is unwavering. With our clients and improvements, we plan to increase production by more than 30%. How? By offering enhanced, flexible non-QM solutions such as its Prime Ascent Plus Loan Program. It’s a smart financing alternative for self-employed workers, those with non-traditional income, and many other creditworthy consumers with either traditional or alternative income documentation. And it’s just one of many non-QM loan solutions Verus offers to help the underserved achieve their homeownership dreams. Take charge of this new year by partnering with an experienced investor that understands non-agency and has a proven track record of success. Contact Jeff Schaefer, EVP of National Sales, for more information (202-534-1821).”
CFPB In The News
A nominee is not a sure thing, but It would seem the concerns about “deletion” of CFPB were premature. Here’s some thoughts from an insider. “He seems like a serious pick who would understand/appreciates the value of regulation, supervision, and enforcement. McKernan is a hopeful pick for the Agency, universally known to be reasonable and a good pick to fix what needs fixing at the CFPB.
“Frankly, after the last two weeks, anyone short of Genghis Khan would be welcome, given the traumatization that has taken place here in the ranks. But there is already a school of thought that thinks this may be a good cop/bad cop situation echoing the Mulvaney – Kraninger handoff. We’ll see what happens.”
FHA, VA, and USDA Program Changes
If you want a great view of the Ginnie program, comprised mostly of FHA, VA, and USDA loans, the best place to start is here, straight from the horse’s mouth. FHA servicing volume hit $1.39 trillion at the end of the fourth quarter of 2024. For smaller, and larger for that matter, lenders selling their government servicing, Lakeview/Bayview topped the FHA servicer ranking and Freedom Mortgage was the leader in servicing VA loans with over 17 percent of the $175 billion outstanding.
FHA published Mortgagee Letter (ML) 2025-01 updating the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Appendix 8.0 – FHA Defect Taxonomy (Defect Taxonomy) with revised introductory sections and new content focused on Title II servicing loan reviews. FHA’s Defect Taxonomy is the agency’s method for identifying loan-level defects and is used to categorize FHA policy violations and corresponding remedies, which are then communicated to mortgagees through the Loan Review System.
USDA Rural Development announced an interest rate increase for SFH Direct Program, effective February 1, 2025.
AmeriHome Correspondent General Announcement 20250106-CL summarizes previously published changes made during January, additional changes made with this announcement, and recent Agency and regulatory news.
Effective with new commitments received on or after today, AmeriHome Mortgage increased the maximum base loan amount for VA loan transactions. View AmeriHome Mortgage Product Announcement 20250105-CL for details.
Reach more borrowers in more markets and grow your volume in 2025. JMAC Lending’s Down Payment Assistance program provides an FHA first with a 3.5% or 5.0% DPA that can go toward the down payment and/or closing costs. Learn more about JMAC's FHA DPA Program and how to Submit these loans.
Effective immediately, PHH Mortgage is removing some overlays on Non-Credit Qualifying FHA Streamline Refinances and VA IRRRLS.
loanDepot’s Legal Rearview Mirror
This week loanDepot filed an 8-K outlining the resolution of a longstanding lawsuit by former COO Tammara Richards. Various claims were dismissed several years ago, and several additional claims were dismissed just before the trial. On Friday last week, a jury unanimously found in favor of loanDepot on the remaining claims, giving the company a complete victory. Here is the 8-K and with it loanDepot President and CEO Frank Martell said, “We are pleased with the jury’s unanimous decision, which has vindicated our position on this case from the beginning. We take great pride in our commitment to fostering a professional workplace where we respect our colleagues and customers in the communities where we live and work. We remain focused on the important work of Project North Star, which lays the foundation for a very positive trajectory in 2025 and beyond.”
Capital Markets
President Donald Trump's early economic policies have created significant uncertainty, with plans to raise tariffs on Canada, Mexico, and China causing concern among businesses. While some companies are optimistic about Trump's pro-business stance, others are worried about the impact of deportations and federal workforce reductions. Generally speaking, turmoil doesn’t help markets and certainly makes it hard to hedge a pipeline. Hopefully, we all remain calm, since what is said or done one day may be reversed the next.
Bond yields hit one-week highs yesterday ahead of today's release of January’s Consumer Price Index. CPI was expected 0.3 percent, prior 0.4 percent. The market closed essentially where it opened after the White House confirmed the new 25 percent tariff on aluminum and steel imports. Fed Chairman Powell's first day of testimony on Capitol Hill did not produce any surprises with Mr. Powell maintaining a similar tone to his most recent FOMC press conference. There was a strong $58 billion 3-year note auction that stopped through by more than a basis point, breaking a streak of five consecutive tailing auctions in that tenor.
Mortgage credit availability improved in January, with the Mortgage Credit Availability Index (MCAI) rising 2.5 percent to 99.0, signaling a loosening of lending standards, according to the Mortgage Bankers Association. The Conventional MCAI saw a 3.8 percent increase, driven largely by a 5.3 percent jump in jumbo loans, while the Government MCAI rose by 1.0 percent. Joel Kan, MBA’s Deputy Chief Economist, noted that the expansion was fueled by more options for cash-out refinances, jumbo, and non-QM loans, though primarily for borrowers with strong credit. If this trend continues, it could support the spring homebuying season.
Today’s economic calendar kicked off with mortgage applications from MBA, which increased 2.3 percent from one week earlier. However, the focus is on the CPI report for January as well as Chair Powell going back to Capitol Hill. CPI (+.5 percent, core +.4 percent, stronger than expected, and +3.0 percent year over year, +3.3 percent core y-o-y. The Treasury will be active, notably with a $42 billion 10-year note auction, and we will receive remarks from Atlanta Fed President Bostic and Governor Waller. Despite the strong CPI numbers, Agency MBS prices are roughly unchanged from Tuesday’s close and the 10-year yielding 4.52 after closing yesterday at 4.54 percent.
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