Before President Biden quit his reelection bid, markets had been pricing in a “Trump Trade.” This meant investors placing bets on a steeper yield curve and placing money into stock sectors that were most likely to benefit from a Trump Presidency. That certainly has slowed in the last 48 hours, though I would caution against jumping to conclusions about the path ahead, especially when it comes to the mortgage sector. The FOMC is still expected to cut the federal funds rate by 25 basis points at its September meeting followed by another 25 basis points rate cut in December, with more cuts to come in 2025, but that doesn’t necessarily mean that mortgage rates will decline. It’s already been priced in, so only the disappointment of investors’ hopes for easy money being dashed would hurt markets most. VP Harris sealed her status as the presumptive nominee yesterday after securing the support from more than enough delegates and raising a record-breaking haul of donations during her first day as a candidate. Speaking of Californians that no longer reside there, today, I am back in California. Oh wait, that’s something Rob would say when he writes these opening paragraphs. Over the past couple of weeks with him on vacation (odd for him to not share his travel plans with you), I (Robbie, writing to you from the top of Mosquito Pass today via the wonders of modern technology) have had the pleasure of writing the daily commentary in its entirety. Much more work than the capital markets section that I have been writing for the past 15+ years. Some minor changes you may have noticed are a preview of what is to come. We have some big plans for media expansion here that I’m looking forward to sharing with you in the coming days and weeks. Stay tuned! (Today’s podcast is found here and is sponsored by LoanCare, known for delivering superior customer experience as a mortgage subservicer through personalization and convenience, supporting MSR investors with a focus on customer engagement, liquidity, and credit risk. Today's episode features an interview with LoanCare’s David Vida on servicing beyond expectations.)
Lender and Broker Services, Products, and Software
Mortgage Investors Group (MIG) achieved 100% VOIE conversion improvement with Truv. MIG was facing rising costs of verification of income and employment, and decided to make a change that led to 80% cost savings and 100% conversion improvement. Hear how they did it from JR Huber, EVP of Sales and Production. Watch Now!
Don’t miss the opportunity to connect with TMS Correspondent and Servbank Subservicing at the California MBA Western Secondary Market Conference in Palos Verdes, CA, on 8/19 and 8/20. Learn about TMS Correspondent’s unique advantages, including their agency-style direct credit box, builder forward, limited-release portfolio ARM, and a suite of DPA programs to help you close more loans. Meet with Servbank Subservicing to explore their exceptional borrower experience scores, first-call resolution, and compliance ratings. Make sure to visit TMS and Servbank’s meeting space at the Terranea Resort. Mark your calendar for Monday, August 19, and Tuesday, August 20, and schedule a meeting today with TMS Correspondent (correspondent@themoneysource.com) and Servbank Subservicing (subsales@servbank.com).
“California: Announcing homebuyer assistance up to $350,000 per household to help low- and moderate-income residents (homebuyers and renters) impacted by wildfires in California in 2018 and 2020. The NEW ReCoverCA Homebuyer Assistance Program, is now available from Golden State Finance Authority (GSFA), featuring down payment and closing cost assistance up to $350,000 in the form of a deferred second mortgage with a zero percent note rate, fully forgiven after 5 years of ownership and occupancy. Counties eligible for 2018 funds are: Butte, Lake, Los Angeles, and Shasta. Counties eligible for 2020 funds are: Butte, Fresno, Los Angeles, Napa, Santa Cruz, Shasta, Siskiyou, and Solano. Properties eligible for financing through the Program must be located outside of High or Very High Fire Hazard Severity Zones. Join us for a Lender Training on the ReCoverCA Homebuyer Assistance Program and start helping families recover and re-establish long-term housing. For more info visit www.gsfahome.org.”
“Embrace a new era of excellence with AFR! We're igniting enhanced speed, efficiency, and service excellence! Our commitment to enhancing your experience has never been stronger, with key improvements designed to redefine efficiency and service quality. We've meticulously streamlined our processes to deliver quicker turn times and reduce conditions, ensuring a seamless journey from application to closing. Behind these enhancements lies an expanded team and bolstered resources, poised to accelerate your path to success. Whether you're a first-time partner or a long-standing client, we invite you to experience the benefits of our significantly improved pricing options across all scenarios. Take the leap with AFR and discover that every interaction embodies our dedication to exceeding your expectations. Ready to explore a brighter future? Partner today or contact us: call 1-800-375-6071 or visit here to learn more about how AFR can elevate your experience today. (NMLS 2826)”
“Life happens whether we’re ready or not. When your customers experience a life event, that’s an opportunity for you to reach out at a critical moment in their life, offer expert advice and support, and engage them in meaningful conversations about their financial needs. Total Expert Customer Intelligence makes that all possible with the addition of Life Event insights. By combining in-house and third-party data, we’re able to identify when your customers get married, become parents, change careers, and more so you can continue to guide your customers through every major financial milestone. Read our Three Keys to Activating Life Event Engagement blog to learn how you can leverage Life Event insights to build deeper relationships and grow your business.”
Agency Policy and Procedure Updates
How can you get to know the market you serve to better understand how to establish trust, overcome hurdles and meet the needs of clients who have never owned a home? With 20 years in the housing industry, Maria Labie, Vice President, Lending Relationship Specialist at Independent Bank, in Freddie Mac Insight Articles, shares five ways to engage with first-time homebuyers. For more guidance on how to serve first-time homebuyers, visit the Equitable Housing webpage.
Fannie Mae posted its July Servicing Guide update which clarifies expense reimbursement policies and provides other miscellaneous updates.
Effective July 27, 2024, Fannie Mae will offer closing cost appraisal assistance on eligible loans in the U.S. territories of Guam, Puerto Rico, and the U.S. Virgin Islands. The assistance will reduce appraisal costs for eligible purchase money and refinance loans. Lenders should contact Fannie Mae for program criteria and eligibility details.
Fannie Mae published the results of an in-depth consumer survey that explores consumers’ understanding of the mortgage process, their confidence navigating it, and the obstacles and opportunities consumers face in obtaining housing that’s affordable.
Fannie Mae’s Appraiser Update has been redesigned to enhance content and improve the reader experience. The latest issue covers a range of topics including your rights and responsibilities under the recently published reconsideration of value framework, avoiding and fixing appraisal deficiencies that could result in letters to the relevant state regulatory agency, and more.
Fannie Mae issued a Press Release reminding homeowners and renters impacted by disasters of available mortgage assistance and disaster relief options given the forecasted hurricane and wildfire seasons, including Hurricane Beryl and California wildfires. Mortgage servicers also are reminded of options to assist homeowners under Fannie Mae’s guidelines during these circumstances.
Freddie Mac posted a reminder homeowners and mortgage servicers of its immediate relief options as hurricane season and wildfire season ramp up, including for those currently affected by Hurricane Beryl and the California wildfires. Freddie Mac’s forbearance program provides homeowners mortgage relief for up to 12 months without incurring late fees or penalties.
Make sure your systems are ready to receive the most optimal LPA experience. Freddie Mac’s August release for Loan Product Advisor® (LPA℠) supports enhancements to the system-to-system specification and implements important updates to align with policy changes in the Single-Family Seller/Servicer Guide.
Correspondent and Wholesaler News
Carrington Mortgage Services, LLC (CMS), one of the nation’s largest privately held non-bank lenders, boasts an impressive slate of loan offerings and services direct to consumers, investors, mortgage brokers and mortgage bankers nationwide. As part of its ongoing commitment to serve diverse homeowners, and to provide a needed offering for an often-overlooked homeowner audience, CMS is introducing Section 184 Loans for Native Americans for its retail lending customers. Loans offered through this program require a low minimum down payment – generally 2.25%, or as low as 1.25% for loans of less than $50,000. Section 184 loans can only be used for single-family homes (1-4 units) and for a primary residence. To read more visit: www.carringtonhc.com.
Newrez posted updates for its approved Correspondent Clients; effective with applications on or after July 11, 2024, the SmartVest Product Summary and Underwriting Guide has been updated.
HighTechLending Wholesale is now offering Jumbo Proprietary Reverse Product, the Platinum Reverse. This product comes in three variations: Maximum LTV Fixed Rate, Adjustable Rate with a Line of Credit, and Reduced LTV with a lower Fixed Rate. Visit Online at HTLwholesale.com.
National residential lender PrimeLending, a PlainsCapital Company, now offers Loan LIft, a mortgage underwriting process that helps ensure borrowers’ positive financial behaviors, such as consistent rent payments, are captured during credit eligibility assessment, potentially resulting in better loan terms and more lending options. How does Loan Lift work? Through unique service model that combines innovative technology, a wide range of options, including 400-plus mortgage programs, and experienced mortgage experts. “Today’s borrowers don’t fit in a one-size-fits-all mortgage,” said Tim Elkins, PrimeLending’s Chief Production Officer. “With Loan Lift we can offer our customers more options and more expertise when financing a home. It’s just one more example of how the customer always comes first at PrimeLending.”
Over the last 12 months, Luminate Home Loans and its NEO Home Loan Division, leaders of the modern mortgage movement with more than 400 loan officers in offices across the country, have teamed with zavvie, an award-winning real estate software technology company used by thousands of loan officers nationwide, to turn hundreds of home buyers, including first-time buyers, into cash buyers. Loan officers at Luminate Home Loans and NEO Home Loans can equip qualified first-time buyer clients with pre-approved cash offers, helping buyers "win the deal," according to company officials at Luminate and NEO. Traditional mortgages, FHA, and VA loans are all obtainable through this new program.
A&D Mortgage, a leading provider of innovative mortgage solutions, launched its groundbreaking ADvantage Partner Loyalty Program. This unique program is set to transform the way mortgage brokers operate, providing them with unparalleled benefits and rewards while revolutionizing their businesses. The ADvantage Partner Loyalty Program is designed to recognize and appreciate the dedication and commitment of its esteemed broker partners. Understanding the challenges faces in a competitive market, A&D developed this program to empower them with exclusive advantages and incentives.
Pennymac stated its alignment, in Announcement 24-70, with Freddie Mac’s removal of restrictions for custom MI and LPMI. Changes effective with applications dated on or after June 5, 2024.
Ginnie Mae’s observation of increased prepayment activity in certain areas of its program has prompted Pennymac, posted in Pennymac announcement 24-71, to monitor prepayment speeds of correspondents (for all loan products) and will proactively address those exhibiting elevated speeds.
With announcement 20240708-CL, AmeriHome reminded Sellers that the new policies related to appraisal reconsideration of value (ROV) are effective for Mortgage Loan applications dated on or after August 29, 2024. See the announcement for details.
FHA published updates to the SF Handbook 4000.10 including the incorporation of changes in previous Mortgagee Letters. AmeriHome Mortgage accepted the updates in the timeline provided by FHA. Unless otherwise stated, updates may be implemented immediately, but are mandatory for case numbers assigned on or after August 19, 2024. Key changes are highlighted in pink font in Amerihome Product Announcement 20240709-CL.
Citi Correspondent Lending introduced five new Best Practice documents addressing common co-op document deficiencies to help lessen these types of delays. Correspondents who deliver co-op loans to Citi are strongly encouraged to share this information with appropriate staff. View Citi’s announcement new Co-op document best practices.
Deephaven Mortgage has made exciting improvements to its DSCR cash flow loan. Recently announcing a new DSCR 5-9 Unit product that falls under its DSCR program, additionally increasing loan amounts for DSCR product. This mortgage loan is one of Deephaven’s most utilized products for real estate investors due to the flexibility it provides. It is a quick to close solution investors appreciate in competitive markets to continue to build their portfolios.
Plaza Home Mortgage® has improved pricing on FHA and VA loans to help support affordable housing, act now to take advantage of this great opportunity. For government loans under $300,000, use the Quick Pricer tool in BREEZE to secure the best pricing. Many note rates may have better pricing not shown on the rate sheet. This applies to all FHA and VA loans, except for the FHA 100% Combo Loan Program and Renovation loans.
The Lending Spot updated its Foreign National Guidelines, no more proof of residency needed. Borrowers are allowed to live inside the US. ITIN borrowers are now eligible with no credit.
As of Monday, July 15th, 2024, PHH Mortgage turned on the ability to accept AOT Bulk trades.
In a joint release, six federal regulatory agencies issued a final rule, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, designed to help ensure the credibility and integrity of models used in valuations for certain mortgages secured by a consumer’s principal dwelling. In particular, the rule will implement quality control standards for automated valuation models (AVMs) used by mortgage originators and secondary market issuers in valuing those homes.
FHA posted a new draft Mortgagee Letter (ML), Calculation of Debenture Interest Rates for Home Equity Conversion Mortgages (HECM), on FHA’s Office of Single-Family Housing Drafting Table for public review and feedback. This draft ML proposes updates to HUD’s calculations for the payment of debenture interest for HECM claims and establishes a process for retroactively adjusting the calculation of debenture interest for claims filed on HECMs that became due and payable on or after September 19, 2017. View FHA INFO 2024-47 for full details.
Capital Markets
Despite the uncertainty emanating from Washington, the week got off to a quiet start in the bond markets. There is some interesting economic data on the calendar this week (none of which was released yesterday, unless you love the Chicago Fed National Activity Index), including existing home sales today, new home sales tomorrow, a look at second quarter GDP, $213 billion in Treasury auctions, and most important of all: the PCE index release on Friday
If any economic release this week has the potential to move markets, it's the PCE. The annualized headline number is expected to drop 0.2 percent month-over-month to a 2.4 percent annualized rate while the core is forecast to decline 0.1 percent to 2.5 percent. There are two more CPI releases before the Fed's September FOMC rate decision, and four out of the last six have shown an annualized drop, albeit to 3 percent, which remains well above the Fed's 2 percent target.
Philadelphia Fed non-manufacturing for July (-10) kicked off today’s calendar, and will be followed by Redbook same store sales for the week ending July 20, June existing home sales (seen increasing 4.05 million, down from 4.11 million) Richmond Fed manufacturing and services, and several Treasury auctions that will be headlined by $69 billion 2-year notes. We begin the day with Agency MBS prices roughly unchanged from yesterday’s close and the 10-year yielding 4.23 percent after closing yesterday at 4.26 percent; the 2-year is at 4.51 percent
Employment and Transitions
“Join ICE and embark on an exciting career in mortgage technology! We’re redefining the industry with innovative solutions that enhance every step of the end-to-end mortgage lifecycle. Our open network integrates groundbreaking technologies, connecting origination and servicing seamlessly. ICE’s dynamic and collaborative environment is perfect for those eager to advance our cutting-edge origination and servicing tools, evolve our product and pricing engine (PPE), enhance our consumer engagement suite and help deliver best-in-class closing solutions. Whether you're new to the field or a seasoned expert, we have opportunities to shape the future of mortgage technology and the industry itself. Explore our job openings and help us transform the industry at ICE!”
TPO Go accelerates team growth and commitment to exemplary service! Wholesaler Third Party Origination Go (TPO Go), has accelerated growth of its staff in recent months in key operations and broker support roles. In an effort to continue to uphold the firm’s commitment to exemplary service, increasingly shorter underwriting and processing timeframes, and real-time broker support, TPO Go has welcomed Phil Brousseau as head of operations, along with Jennifer Sosebee as head of underwriting, as well as Adam Beam as head of account management. The firm has also strengthened its broker sales and support team with the addition of veterans Patti White and Tyler Rhea as senior account executives. TPO Go offers a wide variety of loan programs, including loans from Fannie, Freddie, and Ginnie, as well as niche renovation and HFA programs. Brokers also benefit from USDA, VA, TPO GO 100/Chenoa and a proprietary first-time homebuyer program.
A seasoned Mortgage Executive is seeking a new opportunity to help lead a mortgage lender or vendor toward achieving their growth goals. Are you a mortgage lender or vendor (established or new) in need of leadership to navigate the current market and drive future growth? This executive has extensive sales leadership experience in all production channels (TPO, Retail, and DTC) and is an expert in all product types (Agency, Non-QM, and Private Money Lending). They also have deep knowledge of the vendor and technology space. Please send inquiries to Rob Chrisman to pass along to the candidate and specify the listing.
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