The talk here in Missoula is about general inflation, and continued reductions & cutbacks as our biz hunkers down. Yet a mortgage publication just raised its subscription prices, only telling readers, “Good news, you don’t need to take any action,” then something about “auto renew… we’ll simply charge the payment method on file…” We all try to save money wherever possible. And price changes are wide-ranging… think global. Yesterday I flew into Montana and enjoyed, in my seat at 22D, a can of Minute Maid Apple Juice, produced by the Coca Cola Company. What could be more American?! Think again. A glance at the ingredients showed the can contained apple juice from the U.S.A, Argentina, Chile, China, Turkey, Hungary, Austria, Poland, and Italy. I kid you not. No wonder world events impact the price of goods here. Looking for less amenities and a higher monthly payment in your next home search? Well, Lending Tree recently released a report on just how costly buying a house in a town can get, "micropolitan" style. Of towns with populations between 10,000 and 50,000, the most expensive median home values were in Vineyard Haven, MA, Jackson, WY, and Breckenridge, CO. (Today’s podcast can be found here, 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.)

Lender and Broker Software, Products, and Services

HELOCs, HELOCs, HELOCs! In this market, if you’re a loan originator and not fully dialed in to them, what are you waiting for? Especially when you have a lender like The Loan Store paying you 200 bps per loan. The kids trick-or-treated earlier this week, but 200 bps for a HELOC is like candy for adults, on a regular basis. Conveniently enough, The Loan Store is hosting a webinar next week to teach LOs how to best sell HELOCs and explain how HELOCs tie into the new TLS Consumer Rewards Program. Sign up for the webinar here.

“At Usherpa we have a saying, ‘Born in a branch. Forged in a meltdown.’ Most of our team, including myself, Dan, and Chris Harrington, have been in the mortgage industry since the mid-nineties in a branch where I originated loans and Chris processed them. We started a department in 1995 for CTX Mortgage where our sole purpose was to provide opportunities for loan officers to do more loans. In the mortgage meltdown of 2008, we were laid off like so many others, and started Usherpa. Today, our purpose is the same: Provide opportunities for loan officers to do more loans. In this unprecedented market, we are humbled and grateful to be partnered with so many wonderful loan officers, helping them close more deals and strengthen their repeat and refer business relationships. We will get through this together. Thank you all for allowing us to serve.”

Freddie Mac Checks In

Freddie Mac (OTCQB: FMCC) reported its Third Quarter 2023 financial results and filed its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission. The company’s Form 10-Q and earnings press release, along with the Third Quarter 2023 financial results supplement are available now on the Investor Relations page of the company’s website.

Freddie reported $2.7 billion in profits, a 104 percent year-over-year increase in net income in the third quarter. That boost in earnings came at the same time as a 30 percent decline in new business activity, attributed to Freddie’s credit loss reserve activity. In the third quarter of 2022, Freddie booked a $1.78 billion provision for credit losses versus a $263 million benefit for the three months ending Sept. 30.

FHA, VA, and Government Program News

October 27th, the Federal Housing Administration (FHA) began implementing security enhancements that will require the use of multi-factor authentication (MFA) to access certain of its websites and systems. View FHA INFO 2023-83 for details on the systems MFA will be implemented.

FHA published a Federal Register (FR) Notice, Home Equity Conversion Mortgage (HECM) for Purchase - Acceptable Monetary Investment Funding Sources and Interested Party Contributions [Docket No. FR-6382-N-01], for public comment. This FR Notice serves to inform the public of FHA’s changes to the HECM for Purchase program by expanding the list of acceptable funding sources, including premium pricing, and permitting additional interested party contributions to satisfy a HECM borrower’s monetary investment requirement.

USDA Rural Development issued a bulletin announcing The Single-Family Housing Guaranteed Loan Program (SFHGLP) revisions to technical Handbook-1-3555, Chapter 8, Applicant Characteristics; Chapter 14, Funding; Appendix 3, Review and Appeals; and Appendix 5, Income Limits. These changes became effective upon the recent issuance of a Procedure Notice (PN).

Get “Back to Basics” with the Single-Family Housing Guaranteed Loan Program. 100 percent financing with zero down payment? Why, yes you CAN! Learn about the USDA Single Family Housing Guaranteed Loan Program and how it can expand your loan portfolio…It's as easy as 1-2-3!

Rural Development announced that Housing Assistance Corporation has expanded its service area to include South Carolina. An updated intermediary coverage map has been posted on the Direct Loan Application Packagers page.

PRMG posted updates and clarifications in PRMG Product Update 23-49: Product Profile Updates including its alignment with the changes to FHA Standard and High Balance announced by HUD in Mortgage Letter 2023-17. Updated Onyx Jumbo requirements for rental income from current principal residence that is being converted to an investment property. Loan Level Price Adjustments (LLPAs) clarification on Expanded Access and Investor Solution. CO CHFA Conventional. Regardless of condo approval option used, a current condo budget must be provided and reviewed by the condo team for CO CHFA Conventional product.

In addition to agency loans, Plaza Home Mortgage® now offers the option to eClose for FHA, VA and USDA loan. Provide the best experience for borrowers with the convenience to review and sign all closing documents online; including the loans which require a notary with Remote Online Notarization (where available).

Plaza Home Mortgage recently launched new FHA 100 percent CLTV Combo Loan Program. This new program offers 100 percent financing by combining a FHA first lien at 96.5 percent and a concurrent second lien of up to 3.5 percent to assist with down payment and/or closing costs. Additional highlights include a minimum 600 FICO, a 30-year fixed-rate FHA first lien, no income limits, and eligibility in most states (except for NY and WA.).

Capital Markets

For the third time in the past four policy meetings, the Federal Open Market Committee (FOMC) yesterday unsurprisingly kept steady on interest rates. Even with the Committee keeping the door open to hiking again, investors reading Fed Chair Powell’s tea leaves are leaning toward a potential end to further hikes, and it appears to us that the bar for further rate increases is getting increasingly higher. The Fed acknowledged tighter credit conditions from high interest rates and tighter financial conditions from a steepening yield curve with the expectation being that it will eventually weigh on economic growth. In the wake of the meeting, the market sees even lower odds of another hike and is now pricing in a potential cut a bit earlier than it had previously.

We also learned that, according to the ADP Employment Report, after the economy posted the weakest advance in jobs in two years during September, it added 113k jobs in October, fewer jobs than forecast. Though we will receive more clarity from tomorrow’s payrolls report where 183k jobs are expected to have been created in October, this report suggests that demand for workers in a robust labor market may be starting to wane. Separately, the U.S. Treasury announced its plans for upcoming auction sizes, revealing that the total size of next week's note and bond sales will be a bit smaller than what the market had expected. Treasury noted that it expects to increase auction sizes again next quarter to meet higher funding needs.

Today’s calendar kicked off overseas with both Norges Bank and the Bank of England releasing its latest decisions, holding rates steady at 4.25 percent and 5.25 percent, respectively. Domestically, Challenger, Gray & Christmas released job cuts for October: U.S.-based employers announced 36,836 cuts in October, a 22 percent decrease from the 47,457 cuts announced one month prior but 9 percent higher than the 33,843 cuts announced in the same month last year. We’ve also received weekly jobless claims (217k, up from 212k last week), and preliminary Q3 productivity and unit labor costs (+4.7 percent and -.8 percent, respectively). Later today brings September factory orders, Freddie Mac’s latest Primary Mortgage Market Survey, and remarks from interim St. Louis Fed President Paese. We begin the day with Agency MBS prices better than Wednesday evening by .250-.375, the 10-year yielding 4.67 after closing yesterday at 4.79 percent, and the 2-year down to 4.93.

Jobs

Planet’s multi-channel business model gives our MLOs the stability to meet any market head on. Planet’s team has access to exclusive creative product solutions such as Purchase EDGE. These novel products are attracting more MLOs and Branches eager for a secure future in the mortgage industry. Advance your career, and your market position, by moving to a top lender that values professionalism and innovative thinking. Contact VP of Talent Peter Briggs or 949-202-8213. All inquiries are held in strict confidence.

“At Fairway Independent Mortgage Corporation, customer service is a way of life. #FairwayNation mortgage loan officers are dedicated to finding great rates and loan options for our customers while offering some of the fastest turn times in the industry. Our goal is to act as a trusted mortgage advisor, providing highly personalized service and helping you through every step of the loan process, from application to closing and beyond.”

Don’t forget that private mortgage insurance companies are hiring: MGIC, National MI, Arch MI, Radian, Essent, and Enact (in no particular order). And while’s we’re at it, Fannie Mae and Freddie Mac. And my cat Myrtle’s friend the CFPB has career opportunities.