6.24.24 Home Insurance Costs; Move Concierge's Sajag Patel and Gabe Abshire on Home Setup; Economic Roundup

Today's podcast is sponsored by Candor. Candor’s authentic Expert System AI has powered more than 2 million flawless, hands off underwrites. Every credit risk decision Candor makes is backed by a Warranty, eliminating repurchase worries.

Transcript

“I saved a bunch of money on my car insurance by… switching to reverse and leaving the scene.” The word on the street is that Guaranteed Rate is changing its name to “Rate,” but of greater concern to lenders is insurance. Homeowner’s insurance costs are no joke, nor are insurance companies stopping business entirely in states and counties. If you have a current homeowner whose bill just went up by $500 per month, know that this is $500 a month that won’t be spent in the general economy buying meals, going to movies, going on vacation… Not only that, but LOs and AEs and capital markets staffs do their darndest to get the best rates for their clients, and saving $50 or $100 a month are a victory, only to have the deal blown out of the water by monthly insurance costs. Insurance, of course, is a state-level issue; certainly, the CFPB does not oversee it. Some state groups are doing something about it. For example, the California MBA would like to point to real-life examples of the consequences across California: Here is a link to a fillable form to enter any helpful information or examples.) Today’s podcast is found here and this week’s is sponsored by Candor. Candor’s authentic Expert System AI has powered more than 2 million flawless, hands off underwrites. Every credit risk decision Candor makes is backed by a warranty, eliminating repurchase worries. Hear an interview with Move Concierge’s Sajag Patel and Gabe Abshire on the home services set up industry.

Retail employment; a retirement

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loanDepot continues to demonstrate its commitment to growth with another key retail leadership hire in Justin Andrews, a 25-year veteran of home finance who most recently served as National Director of Branch Partnerships at another top IMB. Andrews is an Area Sales Manager who will focus on driving continued market share growth in and around Seattle. He was inspired by the company’s continued investments in its platform, saying “loanDepot has best-in-class systems that make life easier, faster and smoother for both the originator and the customer. That level of efficiency means I have more time to support our team and develop our people.” This is the third win for loanDepot in recent months, coming on the heels of two other significant additions: Jeff Wilkish as RVP for New England and David Rossiello as Area Sales Manager in the mid-Atlantic. Sales leaders who are interested in learning more can reach out to Shane Stanton. 

Congratulations to Radian’s Shelly Schwieso-Kramarczuk who, after 35 years in the biz, announced her retirement slated for the end of the month. “Wow, the changes we have seen. Costs just continue to rise to produce a loan, even with all the tech, AI, BOTs etc. I can’t wait to watch the future of mortgage banking. There is so much more to come! It’s been the people along the way that have made the difference. We have so many passionate professionals in our industry who truly care about the borrower, their journey, and moving the puck forward with technology and improving the customer experience. I have been fortunate to have spent my last 6+ years at Radian: Steady through the storm of late!”

(Remember: job seekers can post their resumes for free on www.lendernews.com where employers can view them for several months for a nominal charge.)

Software, products, and services for lenders and brokers

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On May 1, 2024, Fannie Mae and Freddie Mac, along with the FHFA, announced new requirements for reconsiderations of value (ROVs), which go into effect Aug. 29, 2024. The requirements help create uniform industry expectations for how lenders should manage ROVs. Now is the time to prepare and implement solutions to help streamline your ROV processes. With ValidateROV™ from ICE, you can provide your borrowers with a quick and transparent solution that helps guide them through the ROV process via a white-labeled mobile app. Learn more today.

“Looking for scalable Growth? We know the industry is slowly recovering from the challenges of 2023, but it's not quite smooth sailing yet. Every dollar spent on marketing counts, especially when it can make the difference between being in the red or turning a profit. And let's not forget, there's another green field opportunity on the horizon. We have a strategy that's booking 15 to 35 percent cheaper than usual plays. That's significant, even more in today's market. Want in on the action? Whether you're ready to reach out or prefer us to contact you, we're here to help.”

HELOC Borrowers can now PAYOFF DEBT TO QUALIFY and still close in as little as 1 day! NFTY and Homebridge Financial have deployed the “Debt Eliminator” enhancement to their EQUITY ACCESS Digital HELOC. Debt Eliminator allows borrowers to select which debts they to pay off as part of the user-friendly automated application process. With loan amounts up to $400k, Equity Access is designed for fast easy closings. Highlights include: instant income verification for most W-2 borrowers, automated analysis of bank statements to determine Income for both W-2 and Self-employed borrowers, AVMs up to $400k, and a banker or broker portal with robust functionality and real-time loan status. Minimum FICO 640 and CLTV up to 80 percent. The hybrid platform is digitally fast with a full staff of customer service professionals to solve real-life complexities and close more loans. Ultra-fast fee payout utilizing ACH. Correspondent white label and broker solutions are available with full branding capabilities to showcase your company/MLO. For more information, contact your Account Executive at REMN or Homebridge Wholesale, or email Joe Sheridan.

“LoanStream wants you to Make a Splash this Summer by closing more Non-QM Bank Statement loans. Join the upcoming webinar on Bank Statement & P&L! Plus, we’ll dive into the intricacies of calculating income to qualify borrowers! Register now. Don’t Miss Summer Specials! Includes Specials on Prime, Non-QM and Closed End Seconds now through 6/30/24. Includes 25 BPS Price Improvement on FHA/VA loans 620+ FICO (excludes DPA and CalHFA) and a 25 BPS Price Improvement on all Non-QM loans (excluding our 'Select' credit grade). Get another 25 BPS Price Improvement on Closed-End Seconds. Restrictions apply - contact your LoanStream AE to learn more. Specials valid for loans locked 6/1/2024 through 6/30/2024. Offers subject to change at any time, terms and conditions apply. Non-QM Specials also available through our Correspondent lending channel, Home - LoanStream Mortgage Correspondent (lscorrespondent.com) now through 6/30/24, contact your Regional Sales Executive for more information.”

“Webinar: Thriving in a new market: How banks are shifting their mortgage strategy to succeed. Join us for an exclusive webinar presented by Maxwell on Wednesday, June 26 at 12:00 p.m. CT. In this session, you'll discover powerful tactics to leverage your mortgage platform that retain and increase consumer deposits, enhance transaction speed by aligning delivery channels with your customer segments, and bring cutting-edge technology to your customers and loan officers without lengthy, costly projects. Plus, you’ll learn how our variable cost model can help you generate profit on every loan you originate. Click here to save your seat today, and if you can’t make the live event, you can still register for the on-demand recording!”

Summer, winter, autumn, spring… Disaster news continues

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The current STRATMOR blog is titled, “Catastrophe and Climate Risk Is Only Increasing”.

FEMA’s Disaster Declarations set the stage for servicers, lenders, and investors to change policies and procedures for loans in process or for existing borrowers in those areas. In the last week or two we’ve had Iowa (DR-4784-IA), Florida (DR-4794-FL), and New Mexico (DR-4795-NM).

Waters in the tropical portion of the Atlantic Ocean, around the Caribbean, are hotter than they have been for any other late May on record. The area is averaging around 84.7 degrees Fahrenheit, a temperature the waters usually don't hit until August and September after a summer of warming up. This is bad for a lot of reasons, including the future of coral reefs, which are already experiencing a fourth global bleaching event this year, according to NOAA. The previous record-breaking May for sea temperatures in the area was in 2005, a notorious year that brought one of the most destructive and active hurricane seasons ever for the U.S.

The USDA recently released a new plant hardiness zone map as much of the country has, on average, gotten warmer. The new 30-year minimum temperature average was 2.7 degrees Fahrenheit warmer than the previous average. The map classifies the U.S. into zones based on an area’s average annual minimum temperature and is most useful for knowing which perennial outdoor plants will possibly not die in your area if you keep them outside. You can and will still kill your plants even if you plant according to the map, since it does not factor in how wet, dry, or volatile your area’s climate is. It also won’t tell you if your plants can actually survive the extreme heat of summer.

On 6/14/2024, with Amendment No. 1 to DR-4784, FEMA revised the Incident Period End Date to May 31, 2024, for Iowa counties affected by severe storms, tornadoes, and flooding from 5/20/2024 to 5/31/2024. See AmeriHome Mortgage disaster announcement 20240614-CL for inspection requirements.

On 6/17/2024, with DR-4794, FEMA declared federal disaster aid with individual assistance to Florida county, Leon. See AmeriHome Mortgage disaster announcement 20240616-CL for inspection requirements.

With DR-4795, FEMA declared federal disaster aid with individual assistance to New Mexico’s Lincoln County affected by the South Fork Fire and Salt Fire from 6/17/2024 and continuing. See AmeriHome Mortgage disaster announcement 20240618-CL for inspection requirements.

Capital Markets

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Last week’s economic releases didn’t pack the same market moving punch as data released earlier in June but did point to a gradual softening in certain areas. Retail sales moderated in May to 0.1 percent, lower than market expectations of a 0.2 percent increase. Additionally, the prior month’s data was revised lower. A frugal U.S. consumer is a helpful development for the Federal Reserve. Consumers kept spending through the pandemic but are now pinching pennies. Industrial production rose more than market expectations and was driven by a surge in manufacturing output; however, the interest rate environment and credit conditions remain restrictive. Housing continues to struggle as housing starts fell to their lowest annualized pace in four years in May. Both housing starts and building permits were expected to be higher in May, continuing their recovery after a big dip in the spring months. Builder confidence fell to its lowest reading since mortgage rates peaked in December.

Speaking of the tight housing market, we all know that high mortgage rates are keeping people from giving up mortgages they secured before or during the early days of the pandemic. Existing-home sales slipped 0.7 percent in May, as expected, to a seasonally adjusted annual rate of 4.11 million. Sales descended 2.8 percent from one year ago. However, the median existing-home sales price jumped 5.8 percent from May 2023 to $419,300, the highest price ever recorded and the eleventh consecutive month of year-over-year price gains.

The inventory of unsold existing homes grew 6.7 percent from the previous month to 1.28 million at the end of May, or the equivalent of 3.7 months’ supply at the current monthly sales pace versus 3.5 months’ supply in April and 3.1 months from a year ago. The market is not likely to see any meaningful relief in both supply and affordability until mortgage rates subside.

Inflation will take the spotlight in this final week of June, with market participants looking ahead to Friday's U.S. personal income and outlays data for May. That report contains a reading on the core personal consumption expenditures (PCE) price index, which is widely seen as the Federal Reserve's preferred inflation gauge. Economists expect core PCE to rise 0.1 percent month-over-month and 2.6 percent year-over-year, marking a deceleration on both counts from April. The bulk of the week’s economic releases are tomorrow (Philly Fed services for June, House Price Indices for April, consumer confidence for June, Richmond Fed manufacturing & services for June, and Dallas Fed services for June), though other highlights this week include new home sales for May, advance economic indicators for May, durable goods for May, final Q1 GDP, Chicago PMI for June, final June consumer sentiment, and the aforementioned core PCE price deflator for May. There is also the $183 billion mini-Refunding consisting of $69 billion 2-year notes on Tuesday, $70 billion 3-year notes on Wednesday, and $44 billion 7-year notes on Thursday.

This week has a quiet start today, with the sole economic release due out later this morning being Dallas Fed manufacturing for June. Markets will also receive Fed remarks from San Francisco President Daly and Governor Waller. We begin the week with Agency MBS prices unchanged from Friday’s close, the 10-year yielding 4.26 after closing Friday at 4.26 percent, and the 2-year at 4.74.

Three older male golfers are walking down the fairway.

"Sixty is the worst age to be," said the 60-year-old, "You always feel like you have to piddle. And most of the time nothing happens."

"Ah, that's nothing," said the 70-year-old. "When you're 70, you don't have a bowel movement anymore. You take laxatives, eat bran, you sit on the toilet all day, and nothing happens."

"Actually," said the 80-year-old, "Eighty is the worst age of all."

"Do you have trouble urinating too?" asked the 60-year-old.

"No, I pee every morning at 6.00 am. I pee like a racehorse; no problem at all."

"Do you have trouble having a bowel movement?"

"No, I have one every morning at 6.30 AM."

Puzzled with this the 60-year-old said, "Let's get this straight. You piddle every morning at 6.00 AM and do #2 every morning at 6.30 AM. So, what's so tough about being 80?"

"I don't wake up until seven."

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Catastrophe and Climate Risk Is Only Increasing”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2024 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)