Last year I mentioned that today is the only day that is also a command. A few folks corrected me, saying that “March first” fits that bill as well. Live and learn. Here in Los Angeles at the L1 yearly event, folks are definitely here to learn but some of the talk is non-mortgage, like looking forward to Daylight Saving Time beginning this weekend (spring ahead!). Companies who learned to “save their pennies for a rainy day” are continuing to spend the money earned in 2020 and 2021 on smart technology, although a few are still using it for signing bonuses with inconsistent results. Lenders are certainly analyzing, purchasing, and using technology that they didn’t have time for during the pandemic 3-4 years ago. All of this while producing quality, compliant loans, something that never changes for good lenders. (Found here, this week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with Rutledge Claims Management’s Aubrey Gilmore on customer experience in the hazard insurance space.)

Lender and Broker Services, Products, and Software

Tired of the slow, clunky loan process holding you back? Lender Toolkit can partner with you to unleash the ultimate automation experience and smoke your competition. Engage with Lender Toolkit to be successful on the journey to Encompass Web. Empower your origination with intuitive, guided, automated Task-Based Workflows. Lightning-fast pre-approvals, leaving manual work in the dust with AI Underwriter. Automate income verification, lower manufacturing costs, and reduce cycle times with Prism Income. Enable your production staff to easily validate and deliver accurate disclosures, saving you time and sanity with Disclosure Automation. Ready to crush it at EXP24? Don't miss the chance to see our solutions in a live demo! Space is limited so book today here. P.S., Need a pre-EXP24 adrenaline rush? Join our Supercar Experience on March 18th! Go-karts, supercars, networking, and even a Ricky Bobby cameo await. More info here. Remember, as Ricky Bobby said, "If you ain't first, you're last!" Book your demo today and secure your spot in the winner's circle.

Maxwell’s New Mortgage Lending Report Points Towards Market Recovery in 2024! Wondering what to expect from 2024’s market? Maxwell’s brand new Q4 2023 Lending Report shows powerful signs of market recovery. In a major reversal, loan volume in Q4 grew year-over-year for the first time since 2021. Plus, the report reveals areas where lenders are finding opportunity, such as through outside-the-box offerings like HELOCs. To gain exclusive data, charts, and advice on how to get ahead of the market reset, click here to download Maxwell’s Q4 2023 Mortgage Lending Report.

“Lender Price is thrilled to be recognized as the winner of the 2024 ICE Lenders' Choice Award for Innovative Service Provider. The ICE Innovation Awards recognize industry leaders who are pushing the envelope by creating extraordinary solutions with ICE Mortgage Technology® to achieve their business goals. In today’s market, it's essential to choose a vendor that is trusted by some of the largest institutions in our industry. We have a proven record of providing lenders of all sizes with powerful PPE technology to help them navigate changes in the market. Our pricing engine is extremely flexible, scalable, and easy to use, offering a cost-effective, comprehensive suite of solutions unique to our clients’ needs. Capital markets teams benefit through enhanced features including base price automation, granular margin management, multidimensional rules management, pipeline monitoring, and much more. Get in touch today or book a meeting with us at ICE Experience 2024.”

Matic, a digital home insurance platform built for the mortgage industry, recently announced a new partnership with GVC Mortgage to extend its marketplace of over 40 A-Rated carriers into GVC Mortgage customer offerings. GVC Mortgage joins over 100 lenders, servicers and banks, representing 20 percent of home loans processed in the U.S., that partner with Matic to integrate the insurance shopping experience into the homeownership lifecycle. Now more than ever, mortgage leaders are turning to Matic to help them offer value to customers, generate revenue, and reduce costs in a tough housing market. If you’re a mortgage leader, don’t miss out: Book a demo with Matic to learn how to add an ancillary revenue stream that removes friction from the insurance process and keeps customers within your existing systems. Book a demo.

Improve end-of-loan processing with a capability that can make the lien release process seamless. The ICE MSP® loan servicing system now offers Automated Lien ReleaseSM (ALR), a seemingly simple capability that helps servicers release fully paid liens in days, not weeks. ALR streamlines the normally cumbersome lien release process by combining document creation and automated workflows into one solution, and routing lien release packages for eSigning and eRecording according to local county regulations. Read the new blog from the experts at ICE Mortgage Technology to see how ALR is helping servicers release fully paid liens in a fraction of the time.

TPO, Broker, and Correspondent Product News

Gateway Correspondent Lending continues to expand its product offerings to give clients the necessary tools to succeed. These include Temporary Buydowns as well as Non-Delegated Jumbo options with loan amounts up to $3M. In addition, Gateway offers the Texas Veterans Land Board Housing Assistance Program. This program offers below market interest rates to qualified Veterans residing in the state of Texas. Veterans with a service-related disability of 30 percent or greater can qualify for an additional 0.50 percent reduction in interest rate. For more information, please reach out to CorrSales@GatewayLoan.com or your Regional Sales Manager. Contact information can be found at www.gatewaycorrespondent.com.

“GHMC is now FCM TPO, and as part of our ongoing commitment to growth and alignment within First Colony Mortgage, we are embarking on a significant transition. Effective March 4th, we will be transitioning and operating our TPO channel under "First Colony Mortgage" FCM TPO. This transition marks an important milestone in our 40-year journey. With our new TPO Leadership team: Nectar Kalajian, (Managing Director), Omar Cantillo (President), and Deborah Schwartz (COO), we look forward to delivering what we know best: Service, Products, Technology and Pricing. Please reach out to Omar Cantillo to inquire about becoming an approved broker or find out about the three NDC options we currently offer.” - Corey Shelley, Chairman of First Colony Mortgage.

Government, FHA, VA, and USDA Program News

At the Texas Mortgage Banker’s Southern Secondary Conference, I spent a little time with Alanna McCargo, President of Ginnie Mae. Without Ginnie Mae execution, FHA & VA programs would not be able to scale. Ginnie Mae is a government-owned corporation that guarantees mortgage-backed securities for federal housing programs; it does not run the FHA, VA, or USDA programs.

What is Ginnie up to? Ginnie is striving for transparency, with an eye on the “social good.” Another goal is supporting the aging population. Eligibility requirements. Ginnie has new capital requirements at the end of the year to help insure stability. Ginnie is working on making its platform accessible and wants to make sure to include smaller banks and credit unions.

We should realize that Asia is the largest area investing in Ginnie Mae securities. (Remember that Ginnie doesn’t issue securities itself.) Discussed in the Press Releases post, Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.53 trillion in January, including $28.1 billion of total MBS issuance, leading to $10.8 billion of net growth. January’s new MBS issuance supports financing for more than 91,000 households, including more than 46,000 first-time homebuyers.

Approximately 77.6 percent of the January MBS issuance reflects new mortgages that support home purchases, because refinance activity remained low due to higher interest rates. In terms of the loans backing those securities, California is the largest state in the portfolio and Texas is the 2nd largest state in the portfolio at $241 billion.

In a new Ginnie Mae All Participants Memorandum (APM) 24-01, Ginnie Mae announced modernizations to its Manufactured Housing Mortgage-Backed Securities (MH MBS) program in an effort to expand program participation and support additional liquidity for borrowers for manufacture housing. These enhancements are part of a comprehensive program review that considers the evolving risk environment since the last major program update in 2010. The changes were announced in a White House factsheet delineating Biden-Harris administration actions to boost housing supply and lower housing costs, which build on the U.S. Department of Housing and Urban Development’s Strategic Plan to enhance the role of manufactured housing in the United States.

FHA published Mortgagee Letter (ML) 2024-02, Payment Supplement. This ML establishes FHA’s new Payment Supplement loss mitigation home retention solution designed to help additional borrowers avoid foreclosure and retain their homes when other FHA home retention options are unable to generate a sustainable monthly mortgage payment reduction.

FHA announced the publication of its final rule, Indexing Methodology for Title I Manufactured Home Loan Limits (Docket No. FR-6207-F-02). This rule establishes indexing methodologies using data from the U.S. Census Bureau to annually calculate the loan limits for its Title I Manufactured Home Loan Program, which provides insurance on loans for manufactured homes titled as personal property. The methodologies introduced through this rule are intended to expand the financing options for borrowers seeking to purchase or refinance a manufactured home. The indexing methodologies in the final rule will allow FHA to annually calculate and adjust Title I Manufactured Home Loan Program loan limits using sales data compiled by the Census Bureau. The provisions in this final rule become effective on March 29, 2024.

USDA Rural Development issued a bulletin announcing interest rate decrease for SFH Direct Programs.

Plaza Home Mortgage® recently helped a client close a 203(k) renovation loan in just 13 days. Empower your borrowers with the opportunity to purchase a home needing repairs or renovate their current home with a refinance by incorporating renovation costs into their mortgage using the FHA 203(k) Standard or Limited loan program.

Capital Markets

Rising demand and limited supply continue to contribute to increased demand for housing. New home sales rose 1.5 percent in January, however after a downward revision to December’s data, January's 661,000-unit sales pace was lower than the originally reported pace of 664,000 in December.

On a year-over-year basis, new home sales rose 1.8 percent. Somewhat of an oxymoron considering high land costs, stringent regulations, construction expenses, and limited financing options create hurdles in developing affordable housing, making homeownership unattainable for many individuals and families. While new home inventories are rising, the average price fell 2.6 percent during January. This is a sharp contrast to resale home prices, which rose 5.0 percent as inventories remained low. The construction of affordable housing units fails to keep pace with this escalating need.

We also learned last week that manufacturing activity continues to slow with new orders for durable goods falling 6.1 percent in January as a 58.9 percent drop in nondefense aircraft orders led to the decline. Consumer confidence came in lower than expectations in February, declining from 110.9 to 106.7 as consumers are becoming more sensitive to perceived weakness in the jobs market. Real personal spending declined 0.1 percent in January and discretionary spending growth fell to an annualized rate of 0.8 percent. Finishing the fight against inflation continues to be the main concern of policy makers and in January the PCE deflator stood at 2.8 percent year-over-year.

The U.S. jobs report for February will be the headline economic event of the week, though Chair Powell delivers his semiannual monetary policy testimony before Congress on Wednesday and Thursday. Economists forecast that employment likely increased by 190k during the month, and the unemployment forecast is anticipated to stand pat at 3.7 percent. Notably, the month-over-month increase in average hourly earnings is expected to slow to +0.2 percent from +0.6 percent in January. On Thursday, the ECB will announce its latest monetary policy decision.

Outside of jobs, other data points of interest include ISM non-manufacturing PMI, factory orders, ADP employment, JOLTS job openings, wholesale trade, Challenger layoffs, trade deficit, productivity, and unit labor costs. Agency prepayments will be released after Wednesday's close and into the evening, while Class A net out is on Friday. Today’s calendar consists of just T-bills and Fedspeak. We begin the week with Agency MBS prices little changed from late Friday, the 10-year yielding 4.20 after closing last week at 4.18 percent, and the U.S. risk-free 2-year Treasury at 4.55.