This morning I head to Kansas, greeted by the news that Southwest is raising drink fees for the holidays. Has the “Let’s circle back after the holidays” season officially begun in your office or in your meetings with vendors? Chortles aside, one of the discussion topics in KC will certainly be the impending move in credit prices as lenders everywhere move toward charging borrowers up front. Whether the cost change is driven by Fair Isacc or the credit bureaus, and then being passed along by the CRAs, it doesn’t matter. It’s coming, and the jungle drums are saying the price changes will impact soft credit pulls, which (or course) many lenders implemented to reduce their costs with the amount of credit reports run as it’s cheaper than the full hard credit pull. Some lenders may use Freddie or Fannie AUS. (Today’s podcast can be found here, sponsored by LoanCare, the mortgage subservicer known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with Polunsky Beitel Green’s Peter Idziak on the direction of mortgage interest rates in the months and year ahead, and what to make of the NAR case verdict’s impact on the home buying process.)

Lender and Broker Software, Products, and Services

Housing authorities rolled out 54 down payment assistance (DPA) programs in Q3 and are funding buydowns, and certain loan fees to offset the home affordability crisis. That’s according to Down Payment Resource’s (DPR) Q3 2023 HPI Report. In fact, 50 new agencies began offering programs last quarter alone. Prospective homebuyers are being hammered with news about affordability being in the dumps, but what they aren’t hearing is that there are thousands of DPA programs to help. With DPR, you can be the bearer of good news, while using DPA to salvage DTI ratios as interest rates go up. As the industry authority on DPA solutions, DPR tracks the eligibility, benefit, and guideline data of the nation’s 2,200+ assistance programs. Learn how DPR’s integrated toolset makes it easy to operationalize DPA across departments and geographies. Schedule a demo today.

Strength, stability, and proven performance are essential in the mortgage space. Flagstar Bank has been checking all the boxes for 35 years, leading the way with more than $111 billion in assets, diverse product offerings, and consistently delivering excellent service. As the nation’s second largest warehouse lender with a team of a dozen dedicated relationship managers, you can count on Flagstar to handle your business with care. They warehouse most loan types, including conventional, non-QM, and construction, with a platform designed for quick and easy funding solutions for their 400 warehouse clients. Flagstar’s expertise also covers MSR, servicer advance, and EBO financing solutions, all of which they can tailor to meet your business needs. Their specialized mortgage banking team can even help streamline your operations and maximize the value of your cash balances. Flagstar is the ultimate one-stop-mortgage shop for lenders of all sizes. Contact Patti Robins or Jeff Neufeld today to learn firsthand why Flagstar should be your top choice.

Don’t let inaccurate home values harm your customer experience! When Hitch, a digital HELOC provider, found that the AVM it used to assess the value of a client’s home and deliver an estimated HELOC limit was off by up to $100,000, it sought a better solution. Hitch upgraded to a lending-grade, industry-leading AVM and boosted valuation accuracy, enhanced customer experience, and approved 30 percent more loans. Discover how Hitch transformed their HELOC lending operation to improve customer experience and internal efficiencies with ClearAVM™. Read the full case study to learn more.

“Maximize your efficiency and lower costs with Richey May's RM Analyze. Our business intelligence solution will show you where you can make improvements and save money. Stay ahead of the competition by operating leaner and smarter. For the cost of half a full-time employee, you'll gain access to a team of experts with a wealth of experience in the mortgage industry and a wide range of reports, including up-to-the-minute benchmarking data. With this valuable knowledge, you can make informed decisions that will propel your business forward. Don't just survive… Thrive by learning how to operate leaner with Richey May.”

Equity is an untapped $18T (yes, trillion!) opportunity for mortgage lenders. That’s because most homeowners aren’t actively monitoring their equity level or making plans for how to use it. And, until now, the challenge for lenders has been identifying equity-rich contacts and engaging them with personalized communications that help them understand their options. Total Expert Customer Intelligence creates enriched contact profiles so loan officers can help homeowners understand their options for leveraging home equity and provide the guidance and support they need to reach their financial goals. Download our Equity Enrichment Guide to learn more.

In mortgage lending, speed matters. Consumers are more likely to buy from the company that responds to their inquiry first. ICE helps lenders answer the demand for instant availability with Surefire℠ CRM and Mortgage Marketing Engine Power Messaging. The feature sets LOs up to win by instantly responding to any lead, from any source, via text message. Here’s another stat for you: text messages enjoy a whopping 97 percent open rate within 15 minutes of being delivered, far surpassing the performance of email marketing. To discover how Surefire automated multichannel marketing campaigns can help you convert more leads to closed loans, schedule a demo with the ICE team today.

“Expiring Soon! Earn Up to 125bps bonus on DSCR loans! LendingOne is offering a Volume Incentive Bonus for Mortgage Brokers available until December 31st, 2023. Join the Preferred Broker Pricing Program and have access to Bronze, Silver, and Gold tiers with volume incentive bonuses based on funded loan production or number of loans funded. Earn 50bps, 100bps, or 125bps at each production level on DSCR Loans. LendingOne’s Third-Party Originations Channel is committed to providing mortgage brokers opportunities to increase their revenue and grow their bottom line in the DSCR market. Call us today to learn more: 866-794-0937 or visit our website.”

Reflecting on her decision to adopt Polly’s cloud-native, high-performance PPE, Kristin Ankeny Bickenbach, SVP of Secondary Marketing at New American Funding, said: "Back in the second half of last year, we knew the mortgage industry was in for a challenging 2023. I was asking myself: 'How can we maximize our responsiveness? How can we be creative and position ourselves for success in an incredibly challenging market?' As a sales-focused organization, I knew we needed a sharp PPE to enable us to act decisively and with precision, which is ultimately what led me to Polly." NAF partnered with Polly as they sought to navigate the complexities of an increasingly dynamic market using a modern and proven engine that would grant access to the most sophisticated data science and machine learning tools available. Click here to read the press release. Looking for even more detail?! Request the NAF case study: hello@polly.io.

Listings!

Want some good news? Altos Research reports that as of November 10th, inventory was at 567,000. Meanwhile, the St. Louis Fed, the source of some great information, pegs the active listing count at 737,000 and it is rising. This is still only about 7 listings for every real estate brokerage firm out there. I am too lazy to figure out the difference between the two stats.

Government Program Updates

FHA Press Release, HUD No. 23-257, describes FHA’s proposal to allow assignment of the HECM when its due and payable status is based on the death of all borrowers and non-borrowing spouses. HECMs that are due and payable are not eligible for assignment to the Secretary unless there is a non-borrowing spouse in a deferral period. FHA posted a draft Mortgagee Letter (ML), Updates to Home Equity Conversion Mortgage (HECM) Assignment Eligibility, on its Single-Family Housing Drafting Table (Drafting Table) web page for public feedback.

On October 16, 2023, FHA published Mortgagee Letter (ML) 2023-17, Revisions to Rental Income Policies, Property Eligibility, and Appraisal Protocols for Accessory Dwelling Units, which provided expanded financing options for borrowers seeking to purchase properties with an existing accessory dwelling unit (ADU), rehabilitate existing structures to add ADUs, or construct new homes with ADUs. To support changes announced in the ML, FHA is enhancing its FHA Connection (FHAC) system.

FHA published extensions to its temporary regulatory waiver and related Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) waiver, which allow mortgagees to utilize alternative methods for conducting meetings with borrowers in accordance with FHA’s early default intervention requirements. These alternatives provide practical and useful methods for conducting non-contact interviews with borrowers while ensuring they still receive needed information directly from their mortgage servicer. FHA initially published temporary partial waivers of these requirements on March 13, 2020, and previously extended them through December 31, 2023. FHA is now extending the waivers through May 31, 2024. For the details, read the temporary regulatory waiver and Handbook 4000.1 waiver.

Ginnie Mae’s APM 23-12 provides information on the December 1, 2023 deadline for the complete transition of all Single Family and Manufactured Housing Program pooling to the new Single Family Pool Delivery Module (SFPDM) and the establishment of SFPDM as the sole application for this type of pooling going forward, As part of this transition and further modernization of the Mortgage-Backed Securities (MBS) programs, the APM also outlines the discontinuation of paper pooling options for Single Family and Manufactured Housing Issuers. The MBS Guide has been revised to incorporate these updated policies and operational requirements.

For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 520,000 first-time homebuyer loans. According to Ginnie Mae Press Releases post,

Ginnie Mae Mortgage-Backed Securities Portfolio reached $2.492 Trillion in October. For more information on monthly MBS issuance, Unpaid Principal Balance (UPB), real estate investment conduit (REMIC) monthly issuance, and global market analysis, visit Ginnie Mae Disclosure.

On October 16, 2023, FHA published ML-2023-17, establishing guidelines for consideration of rental income in underwriting and protocols for the Appraiser’s analysis and reporting of Accessory Dwelling Unit (ADU) market rent on appraisals. Applicability to AmeriHome requirements are posted in AmeriHome Mortgage Announcement Number: 20231101-CL.

Capital Markets

Recall that last week closed with investors digesting “hawkish” rhetoric from Fed Chair Powell, though MBS and Treasuries rebounded on Friday from Thursday's auction-driven slide. Even with Fed Chair Powell once again dashing investor hopes of the Fed easing policy in the near term, stating that the FOMC would leave the door open for additional rate hikes should economic data show inflation remains elevated, it’s safe to say that the U.S. economy has entered a “wait-and-see” period.

Ahead of today’s highly anticipated October CPI report, the New York Fed's Survey of Consumer Expectations yesterday showed a decline in one-year and five-year ahead inflation expectations, which conflicted with Friday’s UMich Sentiment Survey showing increasing inflation expectations amongst consumers. Regardless, Treasuries also digested a Moody's downgrade of the U.S. credit outlook to negative from stable reasonably well. Moody’s on Friday cited the mounting debt and the rising cost of servicing that debt. With several Federal Reserve officials warning investors last week that additional rate hikes may lay ahead, investors opened the week looking ahead to today’s October CPI report, where analysts anticipated that the annualized headline reading would drop to 3.3 percent from 3.7 percent previously.

Today’s economic calendar kicked off with NFIB small business optimism for October before the all-important October CPI report. Headline CPI was flat, up 3.2 percent year over year. The core rate, ex food and energy, was up .2 percent for the month and +4.0 percent year over year. Several Fed speakers are also scheduled, including Vice Chair Jefferson, Vice Chair of Supervision Barr, Cleveland President Mester, and Chicago President Goolsbee. We begin the day with Agency MBS prices better from Friday by .250-.375 and the 10-year yielding 4.49 after closing Friday at 4.63 percent after a stellar CPI number.

Employment

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Movement Mortgage has experienced a 300 percent year over year growth in reverse mortgage business in 2023! Earlier this year Movement brought in the most experienced reverse mortgage team in the nation who have dedicated their careers to reverse sales and operations. Plus, Movement has set its loan officers up for success with a reverse-eligible borrower dashboard in MORE, Movement’s new sales and marketing platform powered by Salesforce. Movement LOs can now identify reverse-eligible borrowers from their previous and current loans to offer this incredibly powerful product. Click here to learn more about reverse mortgages at Movement.

A veteran group of mortgage bankers is interested in purchasing a small wholesaler in good standing and that has its “tickets” with Fannie, Freddie, and Ginnie. Loan production volume is not a priority. Interested parties should send me a confidential note for forwarding.

Mobility Market Intelligence (MMI) announced Brian McKray has been promoted to Vice President of Product. DepthPR writes, “His efforts in spearheading the development and implementation of MMI’s user insights tool and custom dashboard hub have fueled this promotion. Using these customer insights, MMI is actively building improved in-app onboarding and support tools.”