DPA, Shared Appreciation, Loss Mit, Insurance, Subservicer Oversight Products; Conforming Loan Limit Changes

Does it give you a sense of permanency if you think about how you’re looking at the same moon as pirates did 300-400 years ago? There’s a lunar eclipse across North American tonight, and Talk Like a Pirate Day is Thursday, both in the same week! But, of course, little is permanent. The world morns the death of Tito Jackson, made famous by Eddie Murphy’s standup comedy and this video. (Let’s see folks do that number on the dance floor at the next mortgage conference!) Middle management and loan officer pay isn’t set in stone either, and is always changing. If you want to see who’s making what, the current STRATMOR blog is titled, “Lenders and Vendors Must Pay to Play.” Interest rates aren’t permanent either. Though the headlines may be telling potential borrowers something else, the Federal Reserve’s expected rate cuts this week probably won’t provide much relief to homebuyers hoping for much lower mortgage rates. Most in our biz believe those rates have already priced in what the Fed is going to do, and don’t see a major impact to the mortgage market or credit-card financing or anything else by the Fed starting to drop rates this week. (Today’s podcast is found here and this week’s is sponsored by Visio Lending. Visio has a top-notch broker program and 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 real estate agent Kamyar Rezaie on what he is seeing from the NAR settlement as well as housing demand in his local Los Angeles market.)

Lender and Broker Software, Services, and Loan Programs

Did you know that Latinos were responsible for a quarter of new household formations in 2023? The Hispanic market just keeps growing, along with opportunities to be a key partner to this key demographic. MGIC can help you develop your cultural competency and reach Hispanic first-time homebuyers with Spanish-language materials and more. Check out MGIC’s Hispanic marketing resources today!

Tired of appraisal delays and unresponsive support? Brokers know the frustration of missed deadlines and endless phone tag. It's time for a change. Class Valuation has raised the bar with its Dedicated Account Executive program. No more generic call centers or slow responses. You get a direct line to an expert who understands your business and is ready to help, even after 5 PM. It's about time someone put brokers first. Check out Class Valuation and see how it is changing the game.

“Is a standing call with your servicer enough for proper oversight? Is there a specified cadence for how often a lender should meet with their servicer? Ultimately, you are responsible for overseeing your subservicer, so you must understand what is expected of you and the key actions you need to take to maintain oversight and comply with regulations. Tune in to this video, where the experts at Richey May answer the most frequently asked questions about subservicer oversight requirements. Whether you’re considering a subservicer or navigating the general complexities of oversight, Richey May’s mortgage compliance experts can help. Contact us today for more information.”

Home insurance pricing and availability continue to challenge homebuyers and existing homeowners in 2024. Matic, an insurance platform built for the mortgage industry, helps your borrowers find the best price and policy options through a network of 40+ A-rated insurance carriers, right within the loan closing or servicing experience. Seamlessly integrating into your existing processes, Matic saves time and reduces administrative burdens for processors, automating tasks like insurance document delivery. Our platform also enhances the borrower experience while opening up a new revenue stream for your business. Learn how mortgage enterprises can deliver automated, personalized insurance offers to your borrowers today. Book a demo!

“What do you get if you mix pineapple rum, rooftop views and 250+ mortgage professionals together in Dallas? You get the hottest reception at Five Star! Join Covius Tuesday night (9/24) at the Waterproof rooftop lounge at the Statler Hotel as we connect at the Five Star Conference & Expo. Be sure to also schedule a meeting to talk with our team while at the conference to learn more about our solutions that are designed to help servicers control risk and assure compliance, including default title, loss mitigation, title curative, REO & auction, doc prep and more. RSVP while there’s still space!“

“Celebrate Hispanic Homeownership Month with Click n’ Close! (CNC). In honor of Hispanic Homeownership Month, CNC is committed to providing tools that help more families achieve the dream of homeownership and offering its new two-track webinar series. These webinars offer customized product training to meet your needs. With CNC's SmartBuy™ Down Payment Assistance (DPA) options, lenders can access a simplified, nationwide program offering borrowers forgivable and repayable second lien options. Its newly expanded DPA program now includes a proprietary Shared Appreciation mortgage, which combines a below-market interest rate with down payment assistance. The two-track webinar series includes one session for prospective correspondents covering CNC’s innovative lending products and another for current correspondents to maximize the benefits of our DPA program. Email us to learn more. And more importantly, join us in making homeownership a reality for more families!”

Conventional Conforming Updates

The Wall Street Journal ran a story noting that the Trump team is working on plans to end the Fannie Mae/Freddie Mac conservatorships, if the ex-president regains the presidency. No details on the plan were revealed. Recall that F&F were taken over by the federal government during the 2008 financial crisis. They began earning a profit in 2012, and during the previous Trump presidency began retaining their earnings and are now worth north of $100 billion.

“U.S. home-price growth is predicted to finish this year at 4.7% before slowing to 3.1% in 2025, according to a quarterly survey of housing experts conducted by government-sponsored enterprise (GSE) Fannie Mae. And zoning reforms, while promising, are no silver bullet.”

Official Freddie & Fannie loan limits aren’t traditionally announced until Thanksgiving, but…

Rocket Pro TPO announced that it will increase the national conforming loan limit for 2025. As of Sept. 13, Bokers working with Rocket Pro TPO can loan up to $802,650. For Alaska and Hawaii, the limit increased to $1,203,975.

Pennymac TPO announced the raising of its Broker Conventional loan limits to $802,6501, effective 09/16/2024. View Pennymac Announcement #24-48 for details.

Per Pennymac Announcement 24-93, Pennymac will update Conventional LLPAs effective for all Best Efforts Commitments taken on or after Tuesday, September 10, 2024.

Freddie Mac Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-12 announced the following updates: Fraud and Suspicious Activity, Requirements for tracking and reporting suspected and confirmed fraud, Introduction of the Tip Referral Tool (TRTSM), Revised requirements for reporting findings within 30 days, OFAC compliance program requirements, Quality Control and Condo Project Advisor® Project Assessment Request (PAR).

Starting October 13, 2024, Freddie Mac’s enhanced Loan Product Advisor® (LPASM) feedback messages will deliver unprecedented, actionable information – so, you don’t miss opportunities to turn Cautions into Accepts. The new LPA Choice feedback messages give your loan originators valuable information to make faster, informed decisions about how to proceed on certain loans receiving a Caution risk class. The messages use dynamic data points for three specific loan characteristics: Debt-to-income (DTI) ratio, Loan-to-value (LTV) ratio, and Reserves. Learn how LPA Choice can help you Run with opportunity and turn Cautions to Accepts.

Fannie Mae September Servicing Guide update, SVC-2024-05, clarifies servicer responsibilities related to the charge-off and second lien consideration processes and submission requirements.

Exciting news from Plaza Home Mortgage®, improved state adjusted Loan Level Price Adjustments (LLPAs) for agency conventional loans to most states.

Capital Markets

Just how much will the Fed cut? Amid renewed speculation about the potential for a 50-basis point rate cut tomorrow afternoon, that question has divided investors ahead of the Federal Open Market Committee’s two-day meeting that kicks off today. Bond traders haven’t been this divided two days before a non-emergency Fed meeting since 2007, with the implied likelihood of a 50-basis point rate cut rising to 61 percent yesterday from 50 percent on Friday and just 30 percent a week ago. Treasuries rallied to open the week as former Fed official Bill Dudley said there’s “a strong case” for a 50-basis point rate cut.

Outside of the Fed, the economic calendar for this week will be chock full of housing data, kicking off with the NAHB housing market index today (expected to remain muted), housing starts and building permits tomorrow (the former expected to rebound about 6 percent from the previous release) and existing home sales on Thursday, which is expected to register at only a 3.9 million annualized pace).

Retail sales for August led off today’s calendar (+.1 percent, ex-auto +.1 percent, both stronger than expected as they were expected to have declined 0.3 percent in August on the back of a fall in auto sales and gasoline prices.) Later today brings Redbook same store sales, August industrial production and capacity utilization, and the NAHB Housing Market Index for September. The treasury will be active, with notable actions including the auction of $13 billion reopened 20-year bonds and a buyback in 7.5- to 30-year TIPS for up to $500 million. After the retail sales figures, Agency MBS prices are little changed from Monday’s close, the 10-year yielding 3.61 after closing yesterday at 3.62 percent, and the 2-year at 3.57.