Chrisman Commentary - Daily Mortgage News

8.28.24 Dedication to Mortgage; EarnUp’s Manish Garg on AI; Yield Curve Steepening

Thank you to EarnUp and its new AI Advisor tool. The industry’s first-ever context-aware conversation agent instantly analyzes users’ real-time banking and credit data to answer complex financial questions and provide tailored product recommendations. 

How dedicated are you to mortgages? This dedicated? I hope not. Owners and CEOs of smaller companies are certainly dedicated to our business, but are grappling with answering, “How does a smaller company, whether lender or vendor, compete with larger companies that can scale?” In addition, lenders and vendors are grappling with housing affordability, balancing customer and shareholder needs in their business model, regulatory threats, cybersecurity, and homeowner insurance costs. And handling the costs of all of those. Are we having fun yet? Let’s not forget the whole compliance thing, and tomorrow, on The Big Picture, Rich Swerbinsky & I are pleased to be joined by the CFPB’s Assistant Director, Mortgage Markets, Mark McArdle. Mark will take questions from the live audience and provide insight on what the Bureau is working on with the Presidential election fast approaching. You can click here to register for Thursday’s 3 PM ET show. (Today’s podcast is found here and this week’s is sponsored by EarnUp and its new AI Advisor tool. The industry’s first-ever context-aware conversation agent instantly analyzes users’ real-time banking and credit data to answer complex financial questions and provide tailored product recommendations. Hear an interview with EarnUp’s Manish Garg on the accuracy of machines versus the trustworthiness of humans.)


Business opportunity

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STRATMOR is looking for a Buyer for a title insurance company based in the Southeast. The company is currently a shell, but has been in business for 50+ years, so is well-seasoned and prepared to quickly expand nationally. This is a terrific opportunity for a lender or title agency looking to add an accretive fee-based business. If you have ever thought of owning a title company and increasing your revenue potential, then reach out to David Hrobon at STRATMOR for a mutual NDA and an introductory call.  


Lender and broker software, services, and loan programs

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Compass Mortgage finds a better way to save 60-80% on verifications. “In our first year with Truv we saved 60-80% on verifications. Cost savings are both obvious and significant from day one.” (Justin Venhousen.) See Truv in action.


Luxury Mortgage Corp.® is excited to introduce our new Prime Non-QM program, tailored to offer brokers exceptional pricing for their most qualified borrowers. This limited-time program provides our most competitive and lowest rates specifically for DSCR, 1099 Only, and Bank Statement loan types. Program parameters include loan amounts up to $2MM, options for interest-only terms over 30 or 40 years, DTI of up to 45%, a minimum credit score 740, and all occupancy types. Brokers can choose from various ARM options, including 5/6, 7/6, and 10/6, as well as 15, 30, and 40-year fixed-rate mortgages, with multiple properties and bank statement qualifications available. Don’t miss this opportunity to provide your clients with top-tier rates and added value. Click here to view Prime NOn-QM program descriptions. Contact an Account Executive today for more information.”


If you asked me why lenders should collect fees upfront and outside of closing with Fee Chaser, I'd tell you a couple of things. For starters, borrowers putting some skin in the game are likely to stick with you for financing rather than shopping around. Next, those loans that fall out aren't a complete loss. And a cherry on top, PCI compliance concerns are a thing of the past. Book a demo of Fee Chaser and simplify fee collection.


Mastering Mortgage Servicing Compliance Trends & Quality Insights! This insightful ACUMA Inside Track Webinar explores the latest trends and best practices shaping the mortgage industry. Learn how to proactively manage mortgage servicing with sound quality management, ensuring compliance and enhancing operational excellence. In this 60 min webinar, ACES’ industry experts EVP of Compliance Amanda Phillips and ACES Director of Business Development and Former CUSO Quality Control Manager, Brock Miller (CMQ/OE) explain how to stay ahead of regulatory changes and achieve superior mortgage servicing standards. Watch the webinar on demand.


Tappable equity (the amount a homeowner can borrow against while keeping a 20% equity stake) has grown by 100% since late 2019*. Many homeowners are “locked in” to their homes due to high interest rates and they need extra money to cover living expenses. The time for lenders to prepare is now. While the valuation process can be one of the most time-consuming and costly parts of home equity loan origination, ICE’s automated valuation models (AVMs) and digital valuation solutions can help change that and increase your success and profits. Download the new eBook, How to grow a successful home equity lending business, today to learn how ICE’s solutions can help you quickly gain an advantage in today’s home equity lending market.


GSE (Government sponsored enterprise) news abounds

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Per the MBA statistics, loan bound for Freddie Mac and Fannie Mac continue to account for the lion’s share of residential mortgage applications every week. So changes that either make in terms of policies, procedures, and underwriting guidelines have a ripple effect through the industry. So what’s going on out there with conventional conforming loans?


In Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-7, Freddie Mac announced that when a flood insurance policy on a mortgaged premises shows both a full risk premium and a discounted premium, the full risk premium plus any fees and surcharges must be used to calculate the housing expense-to-income and debt payment-to-income ratios. To give Sellers additional time to implement this change, Freddie Mac is extending the effective date from note dates on or after September 5, 2024, to note dates on or after April 1, 2025. The Guide will be updated with this change in the September 4 Guide Bulletin.


Freddie Mac announced an upcoming change to the cash wire remittance process. Effective September 20, 2024, Freddie Mac is updating the information required for certain outgoing cash wires sent by Freddie Mac. For Loan Selling Advisor® outgoing cash wires, they are consolidating the information required in the 6400 (Beneficiary Information), the 6410 (Beneficiary Advice Information) and the 6500 fields (FI to FI Information) into the 6000 field (Originator to Beneficiary Info).


Fannie Mae posted the August Appraiser Quality Monitoring List to Fannie Mae Connect.


Citi Correspondent Lending Bulletin 2024-08 content includes credit policy updates on Agency loan credit reports and Texas refinance programs manual. Clarification on liabilities paid by others, monthly depreciating markets list updates and FHA updates. Also, a reminder on outstanding trailing document and lien perfection policy.


Effective with applications on or after August 22, 2024, Newrez SmartEdge and SmartSelf Product Summaries have been enhanced to include an 85% LTV Tier to the Eligibility Matrix. In addition, the Reserves Section of the SmartVest Product Summary has been updated and the Underwriting Guide has been updated. To view the complete bulletin, click here.


Capital markets: yield curve inversion continues to lessen

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I always stress to people that it is about “the overall picture” when it comes to movement in the capital markets, which in turn influence bond prices and therefore interest rates. And there is a lot to digest currently. Yesterday’s commentary cited tensions in the Middle East and Fed Chair Powell’s latest remarks as driving movement over the past couple of trading days. Yesterday's market action after the Commentary was released brought supply ($69 billion of 2-year U.S. Treasury notes were auctioned to solid demand), the latest consumer confidence report (that exceeded expectations, but also contained concerns about labor market conditions), and house price indices (the FHFA Housing Price Index was down 0.1 percent month-over-month in June and 5.4 percent year-over-year while the S&P Case-Shiller Home Price Index rose 6.5 percent year-over-year in June).


Looking ahead, this week still contains $114 billion of 5-year and 7-year Treasury note auctions, consumer prices as measured by the Fed’s preferred measure (the PCE Price Index), pending home sales, and personal income and spending. Be wary that the labor market angst outlined in the consumer confidence report could lead to deferred discretionary spending decisions and translate into lower consumer spending activity. The Fed has implied that the magnitude of easing at next month’s Federal Open Market Committee meeting will be based on upcoming data releases, putting markets in wait-and-see mode ahead of that latest inflation data this Friday and (the now seemingly unreliable) August Nonfarm Payrolls next Friday.


Mortgage applications from MBA increased 0.5 percent from one week earlier, to kick off today’s economic calendar. Treasury will conduct several auctions that will be headlined by $28 billion reopened 2-year FRNs and $70 billion 5-year notes before conducting a buyback for up to $2 billion in 10-year to 20-year coupons. Two Fed speakers are scheduled: Governor Waller and Atlanta President Bostic. We begin Hump Day with Agency MBS prices slightly better than Tuesday’s close, the 10-year yielding 3.80 after closing yesterday at 3.83 percent, and the 2-year is down to 3.85. The yield curve, measured in this case by the difference between 2- and 10-year yields, has been inverted for some years. So far, signs of a recession, which is often foretold by an inverted yield curve, are few and far between.



“OLD” IS WHEN....

Your sweetie says, "Let's go upstairs and make love," and you answer, "Pick one; I can't do both!"

Your friends compliment you on your new alligator shoes, and you're barefoot.

A sexy babe or hunk catches your fancy, and your pacemaker opens the garage door.

Going braless pulls all the wrinkles out of your face.

You don't care where your spouse goes, just as long as you don't have to go along.

You are cautioned to slow down by the doctor, instead of by the police.

"Getting a little action" means you don't need to take any fiber today.

"Getting lucky" means you find your car in the parking lot.

An "all-nighter" means not getting up to use the bathroom.

AND 'OLD' IS WHEN...

You are not sure these are jokes!!



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, “Hiring: Do You Remember How to Do That?” 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. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)