HMDA Data, Correspondent and Wholesale Products; Inflation and Rate Updates

“I’m sorry, but you can’t always be ‘experiencing a higher volume of calls than average.’ That’s not how averages work.” The “average” person has a student loan, or a car loan, or credit card debt, or all three. Throw in mortgage interest rates around 7 percent, homeowner’s insurance of possibly thousands of dollars, utilities, property taxes, maintenance, mortgage insurance…you get the picture. Home affordability has deteriorated due to all those reasons, not the least of which is mortgage rates, sidelining many prospective buyers from entering the housing market. But even with tight credit standards and high interest rates continuing to constrain lending growth, most homeowners (67 percent) feel that purchasing a home is still attainable, especially as consumers become less downbeat about the effect of inflation on their household finances. Expert advice can help ease the stress of buying: about 40 percent of homeowners are unfamiliar with mortgage affordability/loan programs. Certainly that’s something that good originators can help with. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with Loan Atlas’ Tim Braheem on the best formal education platform for individuals in the mortgage space, covering sales, time management, customer service systems, marketing, leadership, and much more.)

Lender and Broker Software, Services, and Products

Empower self-employed borrowers by maximizing Bank Statement loans and unveiling market opportunities! With this program your borrowers can use up to 85 percent of deposits from business bank statements, without a CPA letter, helping them to qualify with no hassle! No tax returns or 4506C required! Why choose Kind for non-QM? “Our programs are equipped to meet complex finances with flexible terms to help a wider range of borrowers who fall outside conventional lending criteria. We understand that every client is unique and with the dedicated support of our seasoned mortgage professionals and streamlined broker technology, we ensure a smooth and simple process in every aspect of your deal.” Ready to learn more about Kind's Bank Statement Loan program and how it can help your borrowers who don't meet the requirements for standard mortgages? Connect with your Kind AE! If you're not yet a partner with Kind, visit here.

Lenders are fighting to keep their businesses afloat. Advantage Credit gets it. Advantage truly values and appreciates the mortgage professionals out there who are grinding away to make it through this storm. Advantage simply wants everyone to know that they are here to listen and to help in any way that they can. Advantage offers a Services Review (for FREE) to see if they can identify ways to be more efficient and even save some money. It isn’t a silver bullet but it’s what they can do. If nothing else, they want you to know that they are here to listen if anyone just needs an ear to bend and commiserate with. Just fill out this form and let them know a good time to reach out to talk. “We are all in this together and are hopeful for an eventual positive outcome for everyone.”

Symmetry is extremely grateful for our partners! Service, Speed, & Simplicity. And now with better Piggyback HELOC Pricing & Comp options. Margins now as low as Prime +0 percent. Now offering 1 percent borrower paid comp option on their Piggybacks. 1.5 percent borrower paid comp still available on stand-alone HELOCs. Reach out to your Symmetry AE today.

OCMBC, Inc. acknowledges the dramatized lawsuit filed by Home Mortgage Alliance Corporation (HMAC) and firmly denies all allegations. The lawsuit, which lacks merit, is an attempt to engender fear and distract from the true motivations behind it. The FHFA order mandates an indefinite cessation of business relationships with various individuals that have been suspended by FHFA. (FHFA Document). OCMBC maintains that the transitions of employees were made independently and lawfully. All procedures are robustly followed to ensure compliance with legal and regulatory requirements. OCMBC's strong industry reputation is evident, as it remains a top wholesale lender and a leading NonQM originator in the nation. This lawsuit is seen as a groundless attempt by a less reputable entity to extract financial gain. OCMBC is committed to defending itself vigorously and maintaining its stellar reputation. For more information and full press release, please visit www.OCMBC.com.

FHFA and Vantage Score 4.0

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) are making historical VantageScore® 4.0 credit scores available to approved users to support the transition to updated credit score and credit report requirements. The historical credit scores for each Enterprise are associated with single-family loans purchased by that Enterprise from April 2013 through March 2023. This comprehensive release reflects the period for which trended consumer credit data is reliably available across the three nationwide consumer reporting agencies. These scores will provide market participants the ability to better analyze and understand the new credit score models that have been validated and approved for use by the Enterprises. The historical credit scores are available for download at the Enterprises’ respective websites. “The release of historical credit scores on tens of millions of loans provides an extensive resource to help market participants prepare for this transition,” said Director Sandra L. Thompson. “The use of these modernized credit score models will enhance risk management while furthering sustainable access to credit for consumers.” In October 2022, FHFA announced the validation and approval of modernized credit score models for use by the Enterprises. At the same time, FHFA announced that the Enterprises would permit lenders to deliver loans with either tri-merge credit reporting, in which credit reports from each of the three nationwide consumer reporting agencies are used, or bi-merge credit reporting, in which credit reports from two of the nationwide consumer reporting agencies are used.

Mortgage QC Trends and Industry Insights

Don't miss the latest QC webinar presented by ACES Quality Management's President, Phillip McCall, and EVP, Nick Volpe on July 17th. In this highly anticipated webinar, these industry experts will cover an in-depth analysis of ACES’ recent Mortgage QC Industry Trends Report, deep dive into mortgage quality control trend reporting and how it aligns with the current state of the industry; and discuss how to best navigate through the volatile financial landscape. Walk away with a better understanding of what’s to come and how you can best prepare for the future. Register for the webinar.

You tell your borrowers that you’re different than the other guys, but then use the same software as everyone else to manage your borrower portal? Differentiate your borrower experience with LiteSpeed by LenderLogix. A+ borrower experience at a price tag your CFO will appreciate.

As lenders continue their mission of increased efficiencies in the origination process, including shorter closing timelines, inspection-based appraisal waivers should be at the top of their implementation list. Thanks to innovations made across the industry, including programs and solutions put in place by the GSEs, inspection-based appraisal waivers are here to stay. When used accordingly, these can result in massive time savings for lenders. However, one hurdle continues to be some confusion around how they work. To help with this, Class Valuation will be hosting a webinar Tuesday, July 30th, titled “Inspection-Based Appraisal Waivers: Everything You Need to Know.” Expert panelists will provide a clear and actionable guide to understanding the options available to lenders and how to properly work them into your operations. You will learn the benefits of inspection-based appraisal waivers for lenders, when a loan is eligible, the ins and outs of property data collection, and much more. Register here

HMDA Data Released

The Federal Financial Institutions Examination Council published data on 2023 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by 5,113 U.S. financial institutions, including banks, savings associations, credit unions, and mortgage companies. The HMDA data are the most comprehensive source of publicly available information on mortgage market activity. The Snapshot National Loan-Level Dataset released contains the national HMDA datasets as of May 1, 2024. Key observations include: For 2023, the number of reporting institutions increased by about 14.6 percent from 4,460 in the previous year to 5,113. The 2023 data include information on 10 million home loan applications, a decrease from the 14.3 million reported in 2022. Among them, 7.7 million were closed-end (e.g., a home mortgage loan) and 2.1 million were open-end (e.g., a home equity line of credit). Another 266,000 records are from financial institutions making use of statutory partial exemptions and did not indicate whether they were closed-end or open-end.

The share of mortgages originated by non-depository, independent mortgage companies accounted for 68.8 percent of first lien, one- to four-family, site-built, owner-occupied home-purchase loans in 2023, up from 60.2 percent in 2022. In terms of borrower race and ethnicity, the share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose slightly from 8.1 percent in 2022 to 8.2 percent in 2023. The share made to Hispanic-White borrowers increased from 9.1 percent to 9.9 percent, and the share made to Asian borrowers increased slightly from 7.6 percent to 7.7 percent. In 2023, Black or African American and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans of 16.6 percent and 12.0 percent respectively. Denial rates for Asian and non-Hispanic-White applicants were 9.0 percent and 5.8 percent respectively.

Capital Markets

Warning, rate cuts may be coming soon, even if the Fed isn’t quite ready to admit it publicly. A drop in gasoline prices and housing costs led the way for inflation to cool broadly last month to the slowest pace since 2021. Yesterday morning's CPI report, in which consumer prices declined by 0.1 percent month-over-month, is arguably the most encouraging inflation print that the FOMC has received since it began its fight against inflation nearly two and a half years ago. Excluding food and energy, the core CPI increased by just 0.06 percent (unrounded), the smallest increase since January 2021. Bonds rallied on the reading across the board to lows last seen in March.

With Fed Chair Powell expressing optimism that the uptick in inflation earlier this year was just a speed bump, this reading will likely go a long way toward giving the FOMC the confidence needed to cut rates, likely starting in September (93 percent implied certainty). Traders are pricing in another 25 basis point reduction of the fed funds rate in December. However, some people are skeptical, asking if the U.S. economy needs stimulation. Policymakers will have a chance to signal such moves after meeting later this month, especially with unemployment having risen for three consecutive months. Unemployment, while still low, is steadily moving higher; Job and wage growth are steadily moderating.

After the consumer price index report dominated headlines yesterday, it is producer prices’ turn today. Today’s economic calendar kicked off with June PPI coming in higher than expected (+0.2 percent month-over-month) and Core PPI (up 0.4 percent month-over-month) with upward revisions to previous months. The only other data point today is Preliminary July University of Michigan Consumer Sentiment, due out later this morning. Bank earnings also get under way with JP Morgan, Citigroup and Wells Fargo reporting before the open. We begin Friday with Agency MBS prices and the 10-year yielding 4.22 percent after closing yesterday at 4.19 percent; the 2-year is at 4.51 percent.

Employment

Evergreen Home Loans is excited to announce a leadership transition within its production team. Don Zender, a 30-year company veteran and President of Production for the past three years, has passed the baton to Robert Lipston, effective July 2, 2024. Robert joined Evergreen in 2022, bringing significant growth and a fresh perspective. Don Zender successfully led the team through challenging market conditions, supported by Todd Miles, Joe Moley, and Robert Lipston. Under their leadership, the team thrived, finding opportunities in adversity. Robert Lipston, with his extensive industry experience, is now poised to lead Evergreen's next growth phase. Don will remain President of Production through 2024, aiding Robert in the transition and continuing to support Evergreen’s values of Integrity, Family, Fun, Growth, and Creativity. In 2025, Don will focus on the Bellevue Washington Region and drive new growth initiatives across the company. If you’re ready to grow with Evergreen, visit Careers.