Number progressions can be deceiving and surprising. Thank you to Eric D. who reminded me of “The Wheat and the Chessboard” example, guaranteed to surprise anyone. What is also surprising is that between 2022 and 2023, the Hispanic population accounted for nearly 71 percent of the overall growth of the United States population, driven primarily by Hispanic births, according to newly released Vintage 2023 Population Estimates from the U.S. Census Bureau. Hispanics of any race grew to just over 65 million, an increase of 1.16 million (1.8 percent) from the prior year. This growth significantly contributed to the nation's total population gain of 1.64 million in 2023. The annual increase of 1.8 percent was in sharp contrast to the 0.2 percent increase in the non-Hispanic population, whose growth was tempered by a decline among non-Hispanic Whites, the largest demographic within the non-Hispanic category and the only one to experience a population loss. By the way, we should celebrate our differences… vive la difference: The top racial or ethnic groups for the United States was the “White alone non-Hispanic” population (58%, down from 64% in 2010), “Hispanic or Latino” population (19% of the total population), and then “Black or African American alone non-Hispanic” population was the third-largest group at 12%. (Today’s podcast can be found here and this week’s podcasts are sponsored by Visio Lending. Visio, which has a top-notch broker program, is the nation's premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Hear an Interview with Garrett, McAuley & Co.'s Joe Garrett on GSE reform, the CFPB under Trump 2.0, and what it takes to run a profitable mortgage company in this environment.)

Lender and Broker Software, Services, and Products

Using the right end-to-end solutions to help automate and streamline workflows can help lenders save time and lower origination costs...and more importantly, enable them to better support their customers. ICE’s consumer-facing digital valuation solution, Validate, leverages computer-vision technology, a condition-adjusted AVM, up-to-date property data and borrower-supplied photos to determine property value, available equity and home condition in near real time. Catch HousingWire’s Demo Day on-demand to see how Validate can be utilized by lenders to help maximize efficiency and savings while delivering an overall better borrower experience.

On November 4th, ACES Quality Management held auditions to replace CEO, Trevor Gauthier, for the annual holiday video. WARNING: The video you are about to watch may cause uncontrollable laughter. Viewer discretion is advised. Watch the video. On behalf of the entire ACES team, we wish you a joyful holiday season and a New Year filled with new possibilities.

“With nearly 40 years of experience in mortgage banking, Richey May knows the industry from every angle. Many of our team members are credentialed industry experts who dedicate much time to building up other industry experts. From this expertise, Richey May has created a wealth of services and products to help lenders stay ahead: audit and tax services, cybersecurity solutions designed to protect company assets and sensitive borrower information, intelligent automation tools for streamlined operations...you name it! Whether you're leveraging our innovative platforms or having us work as your extended team for outsourced internal audit or accounting services, get ready to tackle challenges faster with some serious firepower on your side. Everything you need: contact our experts today!”

Following years of rate volatility, accurate pricing has become more important than ever for mortgage lenders and their capital market partners. So, how can lenders keep up? More importantly, how can lenders save time when pricing loans without missing any opportunities for recapture? The verdict is simple: Lenders can keep up or go home. Lenders must consider new advancements in artificial intelligence and automated engines to make accurate mortgage pricing quick, seamless, and nearly flawless. Download Polly’s Accurate Pricing in a Volatile Rate Environment white paper to discover how mortgage companies can enhance pricing efficiency, improve accuracy, and maximize recapture opportunities using advanced pricing engines.

Wholesale, Correspondent, and Subservicing Product News

Don’t wait until March to prepare for the spring homebuying season: get ready now to thrive in ’25. Click n’ Close’s SmartBuy™ Down Payment Assistance (DPA) product suite offers a range of flexible solutions to meet a myriad of borrower needs, including forgivable and repayable second liens and the innovative Shared Appreciation Mortgage (SAM). Unlike traditional programs, SmartBuy isn’t subject to budgetary shortfalls, enabling you to serve more customers with confidence. Click n’ Close has already provided over $2.8 billion in DPA-related financing to more than 10,000 borrowers, with an average of $12,500 in assistance per transaction. Whether you’re a broker, correspondent customer, or retail professional, now is the time to position yourself as a trusted resource for affordable lending solutions. Contact correspondent@clicknclose.com or wholesale.managers@clicknclose.com to learn more. Let’s Thrive in ’25 together!

“Servbank’s class-leading subservicing, delivered under your name and brand, ensures your customers stay loyal to you for life. We understand how critical it is for your business, both today and in the future, to retain every customer you have. When you partner with Servbank, we build on the great experience you created at the origination and further enhance their loyalty through every experience, ensuring that your customers remain your customers… for life. In addition, we leverage our leading technology to precisely target and maximize cross-selling opportunities at every turn. And we do this all under your name and brand. Learn more about Servbank, the nation’s premier bank subservicer.”

VA and USDA News

Despite historical challenges, Native Americans have served and boast the highest per capita representation in the military. For their sacrifice, the Department of Veterans Affairs (VA) offers benefits and programs that are specifically reserved for Native Americans. One such benefit is VA’s Native American Direct Loan (NADL) program, which helps Native American Veterans buy, build, or refinance a home on federal trust land.

Did you know that mortgage lenders or brokers are not permitted to obtain reimbursement from a VA borrower if the lender/broker pays the appraisal fee upfront in relation to a VA loan transaction? On September 13, 2024, the Department of Veterans Affairs (VA) published Circular 26-24-19: Invoice Requirements for Itemized Fees and Charges and Updates to the State Fees & Charges Deviations List, which is effective January 1, 2025. The Circular clarifies when a lender needs to provide an invoice to support itemized fees charged to or paid by the borrower for VA loan transactions. Specifically, the Circular states, “Lenders must support the amount charged to, or paid by, the VA borrower with an invoice or other documentation that clearly identifies the transaction and verifies the fee and associated charge (example: a recorded deed that displays the cost of recordation). If the lender is unable to support the charge with an invoice, a refund must be provided to the VA borrower. Lenders may not charge the VA borrower for services already paid for by another party. This means if the lender or mortgage broker paid for a VA appraisal, the borrower cannot reimburse the lender or mortgage broker at any time, whether at closing or prior to closing. VA may authorize local fee variances for additional fees and charges that may be charged to and paid by the VA borrower based on the location of the subject property. VA publishes a State Fees and Charges Deviations List on its website. Effective immediately, VA will no longer publish maximum dollar amounts for most fees and charges on this list. Note, the Circular does not address, or apply to, the lender’s one percent allowable fee.

USDA issued a notice regarding the subject pilot program was published in the Federal Register on December 2, 2024. The pilot program allows participants to use Section 504 loan or grant funds for the payment of construction materials prior to site delivery and without the need for the contractor to provide a surety bond. Pilot states include Alabama, Alaska, American Samoa, Arizona, California, Florida, Georgia, Kansas, Kentucky, Minnesota, Mississippi, Montana, Nevada, North Carolina, North Dakota, Nebraska, New Mexico, New York, Puerto Rico, South Dakota, Tennessee, Texas, Washington, West Virginia, and Wisconsin.

Pennymac posted VA updates in Announcement 24-128.

Capital Markets

It was a quiet day yesterday, though we did receive a preliminary “December S&P Global US Services PMI” report that reflected an acceleration in activity in the country's largest sector. As the Commentary mentioned yesterday, the week will be dominated by the FOMC meeting today and tomorrow. We will also get housing data (both housing starts and existing home sales) and the PCE inflation data on Friday, though it won't matter much after the Fed decision. With Christmas and New Years landing mid-week the next two weeks, respectively, that makes this the last full week of trading before the holiday season.

This last busy week of 2024, all eyes are on global central banks as key data and policy decisions are set to unfold before the year-end holidays. In the U.S., that means the Federal Reserve, which is expected to signal a slower pace of monetary easing. While markets anticipate a 25-basis point rate cut on Wednesday, economists suggest the Fed may skip further cuts next month. Inflation progress appears to have stalled, with Core CPI at 2.7 percent, its highest since July, and the Chicago Fed’s Financial Conditions Index indicating highly accommodative conditions. With unemployment at 4.2 percent, a historically low level, the justification for additional easing remains thin, particularly as inflation remains above target. Even some policymakers, like former Boston Fed President Eric Rosengren, have voiced opposition to further cuts.

Investors will closely scrutinize the Fed’s updated dot plot and policy projections for 2025, alongside Chair Powell’s post-meeting remarks. Markets are currently pricing in three rate cuts for next year. Beyond the Fed, global attention will turn to Thursday’s decisions from the Bank of England and the Bank of Japan, which could provide further insight into global monetary policy trajectories.

The combination of stalled inflation progress, ongoing labor market strength, and differing views among Fed officials has fueled speculation that the central bank may pause or significantly slow its rate-cutting plans, making this week’s developments crucial for shaping economic expectations into 2025. Investors anticipating another calm year in 2025 should be on guard for more shocks from uncertainty around President Trump’s tax and tariff policies. Additionally, with interest rates higher than they were during Trump’s first term, tensions between Trump and the Federal Reserve could escalate.

Retail sales for November, the last important data point on the economic calendar before tomorrow’s Fed decision, kicked off today’s calendar (+.7, ex-auto +.2, ex-auto & gas +.2 percent). Expectations were for an increase in the headline by 0.5 percent month-over-month versus 0.4 percent previously. Later today brings Redbook same store sales, November industrial production and capacity utilization, business inventories for October, and the NAHB Housing Market Index for December. The treasury then conducts several auctions that will be headlined by $13 billion reopened 20-year bonds and a buyback, for liquidity support, in 7.5- to 30-year TIPS for up to $500 million. We begin the day with Agency MBS prices worse a few ticks (32nds) from last night, the 2-year at 4.25, and the 10-year yielding 4.41 after closing yesterday at 4.38 percent.