I get asked if I think our industry puts too much emphasis on what the Federal Reserve is doing, and its being able to control inflation. In a word, my answer is yes. The Fed has a hand in inflation, but it isn’t the whole story. A President cuts off immigrants, so labor costs for picking lettuce or building a house go up. A ship carrying a load of raw materials from Africa is taken over by pirates, or gets stuck due to a port strike in a foreign nation. Tariffs are implemented, raising the prices since average consumers pay entirely for higher tariffs. Crops like corn or oats have a bad year. On and on. For the past two years, inflation has eclipsed everything else at the Fed. U.S. central bankers appear ready to cut interest rates in September amid monthly price numbers continuing to trend down toward the Fed’s 2 percent target and Chair Powell will likely flag a cut more explicitly after a policy meeting at the end of this month. The Fed signaling that interest rate cuts are approaching could help a homebuilding recovery that has been stuck in low gear due to high interest rates. For those out there hoping for lower mortgage rates, I would ask you what will lower rates do to housing prices, especially houses in the first-time home buyer sector? (Today’s podcast is found here and is sponsored by Calque. Calque provides a binding backup offer on a borrower’s departing residence, which empowers lenders to provide a bridge-like experience with easier qualification and less risk. Today's episode features an interview with Figure’s Jackie Frommer on tappable home equity and products to help borrowers leverage it.)
Software, Information, Products, and Services
“Here at Newrez Correspondent, our main mission and goal is to support our customers. We were recently ranked the #3 Correspondent Lender in the country in the Scotsman Guide® Top Mortgage Lenders for 2024. This can only be achieved by having incredible customers who trust in the value we bring each and every day. In striving to improve our client offerings, we recently launched our co-issue platform, enhanced our closed-end second mortgage program, and added eNote delivery for a significant number of clients. We have an array of products and pricing options to meet every customer’s needs, so if you aren’t a partner today or offering these programs please contact us here. You can also meet Chris Nobile at the Michigan Mortgage Lenders Association August 14-16 or Rebecca Sommer, David Pistone, and Baird Marble at the Western Secondary Conference August 19-21. #TheTimeIsNow.”
“Mortgage compliance can be challenging, but you don't have to face it alone. If you service 1,000+ active MINs as of March 31st, 2024, your MERS® Annual Report must be reviewed by a qualified third party. The Optimal Mortgage Services team is here to help! Our audit services go beyond checking boxes; we integrate seamlessly with your team, bringing both expertise and technology to provide tailored reviews that adhere to the latest regulatory guidelines. Our experienced specialists offer proactive support, ensuring you stay ahead of compliance changes and mitigate risks effectively. By initiating your MERS ® Annual Report Review now, you can enjoy peace of mind before the December 31st deadline! Contact us to schedule a consultation and discover how Optimal Mortgage Services can simplify your compliance journey and deliver comprehensive solutions that meet your unique needs.”
Do you have clients that need cash now? With Rocket Pro TPO you can go from “hello” to cash in your clients’ hands with lightning speed. Home Equity Loans are HOT and Rocket Pro TPO will cover the $795 origination fee from now through August 18. Pass on more savings so your clients can get the cash they need. Rocket also offers Home Equity Loans powered with AVM (Automated Valuation Model), providing faster and more cost-effective valuations. With AVM, valuations are delivered in seconds, nearly five days faster than traditional appraisals, saving clients time and money. Interested? Price a loan today. Remember, this is a limited time offer, if you’re interested in these savings and more, contact Rocket Pro TPO today and unlock the full potential of your business.
“Unlock Success with Truv and Encompass. Integrate Truv with ICE Mortgage Technology (Encompass) to cut costs, ensure compliance, reduce manual tasks, and enhance borrower experiences. Join our live demo to see Truv in action within Encompass. Learn how to retrieve, refresh, and store reports in the Encompass eFolder. Ask questions live directly to experts from Truv. Get more out of Encompass with Truv! Sign up today.
Investor and Agency News
Effective with applications on or after July 1, 2024, North Carolina, New York, Pennsylvania, and Vermont have been added as eligible states to Newrez Correspondent Closed End Second product.
The MBAF partnered with the national Mortgage Bankers Association, as well as other financial associations, to advocate against the approval of the PACE (Property Assessed Clean Energy) financing legislation, SB 770. However, the Governor signed the bill allowing it to go into effect on July 1st. The MBAF will continue to propose changes to the PACE lien priority issues that will result from the bill becoming law in order to protect consumers and sustain financing options with Florida. We thank our partners at the Mortgage Bankers Association and Mortgage Action Alliance for their unwavering support in this effort.
The Florida Association of Mortgage Professionals (FAMP) announced that on July 1, Florida enacted a new provision to its laws that will save senior citizens potentially millions of dollars in Florida by reducing the amount of Documentary Stamps on reverse mortgages. This legislation, sponsored by State Senator Blaise Ingoglia and House Ways and Means Chairman Stan McClain, was enacted during the 2024 Legislative Session. These changes were identified by FAMP during its Day at the Capitol in Tallahassee, where more than 30 legislators were contacted in person and at the FAMP legislative reception. Moving forward, Doc Stamp Taxes will only be applied to the principal limit amount, and not the entire mortgage amount.
Got a loan scenario or need an LTV estimate? Plaza offers a quick and easy way for your Account Executive to get you answers through the Rapid Reverse App, allowing you to focus on what matters most.
Plaza Home Mortgage® products and pricing are now available to all wholesale mortgage users on the ARIVE loan origination platform. For those new to ARIVE, it's a complete LOS that enables seamless origination from anywhere. With ARIVE, you can streamline your pipeline and document storage, issue instant pre-approvals, run 1-click AUS, and send disclosures effortlessly. ARIVE offers precise rate quotes, generates fee worksheets with real fees, runs instant TCAs, sets up rate alerts, manages margins, and much more.
Plaza announced two pricing improvements to its Closed-End Second Lien program, effective immediately for new loans locked. Increased Max Rebate: Now up to (2.500).
New LLPA Price Improvement for loans with a second lien LTV > 20% (calculated by second lien loan amount divided by value):
Second Lien LTV > 20% and CLTV <= 60%: .250 price improvement
Second Lien LTV > 20% and CLTV > 60%: .500 price improvement
Discover how to access Plaza's renovation lending resources in this video. Learn about Plaza’s famous One Packs, guidelines, training, and marketing tools to help you succeed. Watch now and take your renovation lending to the next level.
Pennymac Correspondent Group posted three new announcements. Topic description and link to announcement details are as follows:
24-67: Updates to Conventional, Government and Jumbo LLPAs
24-68: Fannie Mae and Freddie Mac Down Payment Assistance Alignment
24-69: AUS Jumbo: Zoned Agricultural and Max DTI Expansions
USDA Rural Development Fiscal Year 2024 income limits for the Single Family Direct Loan and Grant Programs were published on July 12, 2024 through Procedure Notice 618.
The income limits were updated in the impacted websites and systems (e.g., UniFi and Section 502’s Self-Assessment tool). The Guaranteed Underwriting System (GUS) and the Income Eligibility calculator on the Eligibility Website have been updated with the new income limits.
FHA posted a new draft of its Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Appendix 8.0 – FHA Defect Taxonomy for Servicing Loan Reviews (Servicing Defect Taxonomy), on FHA’s Office of Single Family Housing Drafting Table (Drafting Table) for public review and feedback. This proposed draft covers servicing loan reviews and aligns FHA’s Defect Taxonomy with the requirements in Handbook 4000.1, Section III – Servicing and Loss Mitigation.
FHA published Mortgagee Letter (ML) 2024-13, Revisions to the 203(k) Rehabilitation Mortgage Insurance Program including updates to the 203(k) Consultant Requirements and Fees. This ML implements updates to the Section 203(k) program guidelines, which are intended to reduce barriers to using the program.
MBA Builder Application Survey
The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for June 2024 shows mortgage applications for new home purchases increased 0.7 percent compared from a year ago. Compared to May 2024, applications decreased by 16 percent. This change does not include any adjustment for typical seasonal patterns. “Applications for new home purchases slowed in June, consistent with broader declines in single-family construction and new building permits as well as typical seasonal patterns,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The average loan size edged lower for the second consecutive month, and the share of FHA applications increased to 28.7 percent, as first-time buyers continue to account for a growing share of demand for newly built homes.”
Added Kan, “MBA’s estimate of new home sales showed a monthly decline to a pace of 626,000 units, the slowest in four months. Mortgage rates dipped below 7 percent in June but that did little to spur purchase activity.” MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 626,000 units in June 2024. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
Capital Markets
There’s not a whole lot going on out there to report. China, one of the biggest foreign holders of Treasuries, offloaded a net $42.6 billion worth of long-term U.S. securities, with Treasuries accounting for more than half of that. A continued divestment trend would likely put upward pressure on yields. And speaking of upward pressure on yields, former President Trump’s proposed tariffs, should he be reelected, are expected to send prices higher for Americans, stoking both inflation and bond yields.
There is no data today, though Two Fed speakers are scheduled: New York President Williams and Atlanta President Bostic. Earnings season on Wall Street continues as well. We begin the day with Agency MBS prices roughly unchanged from yesterday’s close and the 10-year yielding 4.21 after closing yesterday at 4.19 percent; the 2-year is up to 4.49 percent.
Employment
June Highlights: Movement's Top Retail Ranking and New CFO Appointment! June was a big month for Movement’s retail operation, with the lender checking in at No. 5 in Scotsman Guide’s retail rankings while also naming Mike Wells’ it’s Retail Chief Financial Officer. With more than 25 years in the mortgage industry, Wells will drive financial performance and strategic planning for Movement's retail sales organization. In addition to its Top 5 ranking, Movement secured impressive marks in other key categories, such as No. 7 Top VA Lender, No. 8 Top FHA Lender, No. 15 Top Non-QM Lender, and No. 21 Top Wholesale Lender. For more information on the unique ways Movement is equipping its loan officers, whether it be through products, coaching, technology, branding and more, please visit movementlo.com.
In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label and no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.
Sagent, a fintech company modernizing mortgage and consumer loan servicing for America’s top banks and lenders, appointed bank and nonbank finance executive Jaime Gow as Chief Financial Officer. Previously, Gow served as CFO of America’s largest mortgage servicer, Mr. Cooper, and as head of banking finance at First Horizon Bank. As Sagent CFO, Gow will oversee financial operations; lead strategic planning and dealmaking with customers; ensure long-term investment in Sagent’s Dara, LoanServ, CARE, Tempo, Loanboard, and Datascape platforms; and help accelerate Sagent’s profitable market share growth in America’s $14 trillion mortgage servicing sector.
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