Jumbo, Non-QM, Pricing, HELOC Tools; Disasters and Catastrophes, Florida's Insurance Woes; 10-year back to 4%
Yesterday I flew west to Philadelphia (“Philly”) to spend some time with the Spring EQ sales team. It is a well-known fact that the process of boarding a plane takes about twice as long as deplaning: predictably passengers take longer to find their seats and settle in versus grabbing their belongings and heading for the door. What isn’t so predictable are mortgage rates. Why have mortgage rates gone up when they were supposed to have gone down following the Fed’s move? Tune in tomorrow at noon PT to the Capital Markets Wrap, presented by Polly, to find out. Many people predicted a significant hurricane season with climate change, but there had only been one hurricane by mid-August causing some to revise their predictions. There was even talk that less damage would mean savings for insurance companies resulting in savings for us, instead of more dramatic price increases for consumers. But we are reminded that “Mother Nature bats last.” (Today’s podcast is found here and this week’s is sponsored by LoanCare. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. LoanCare is part of Fidelity National Financial, a Fortune 500 company and leading provider of services to real estate and mortgage industries. Today hear an interview with Megan Anderson on how young people can better carve out careers for themselves in the mortgage industry.)
Lender and Broker Software, Services, and Loan Programs
“While Arc Home is primarily known as a Top-10 Non-QM lender, HomeEQ, our new fully digitized Home Equity Line of Credit (HELOC) solution, is designed for all brokers, no matter their focus. HomeEQ offers a seamless, all-digital process, from application to funding in as little as 5 days. With the launch happening later this month, now is the perfect time to update your broker agreement or become a partner. HomeEQ provides a fast, flexible way to tap into the trillion-dollar U.S. home equity market and grow your business. For an inside look, visit our YouTube page, follow us on LinkedIn, or contact Shea Pallante directly to learn more. With HomeEQ, its equity made easy.”
With more than 400 flavors including such unique tastes as purple sweet potato, salted lemon, and wasabi, Kit Kat candy bars provide the perfect bite for anyone and everyone. Until purchase loan application volume rebounds, offering niche loan products that cater to a wide variety of borrowers could be the ideal way to maintain a competitive edge. LoanPASS is the only platform designed to price any product in any vertical with ease: no extra coding required. See for yourself how easy it can be to get started with non-QM, investor, and home-equity products when LoanPASS takes The HUB stage at MBA Annual. Interested, but not sure you’ll make it to the demo? Email Bill Mitchell to arrange a 1:1 or drop by booth #335 during the conference to taste the future of rules-based loan pricing and decisioning.
“Maxwell wants to meet you at MBA Annual in Denver. Maxwell powers all the ways you do mortgage with the only ecosystem of integrated software, services, and capital. From our fully customizable Point of Sale to our mortgage-focused Business Intelligence, fully-onshore Fulfillment services and competitive Secondary pricing, Maxwell is your partner for everything mortgage. If you’d like to set up a meeting at MBA Annual, please reach out to meetmax@himaxwell.com to set up a time or stop by booth #301 at the show. You can’t miss us. We look forward to seeing you there!”
Ready to roll the dice and raise the stakes for your business? VIBE 2024 is the must-attend event for brokers looking to gain a competitive edge in today’s market and hit the jackpot! Join Delfino “Del” Aguilar, Head of TPO Sales at Kind Lending, alongside top brokers like Ben Lemon of Direct Rate Home Loans, Eric Hines and Daniel Iskander of West Capital Lending, Thaun Nguyen of Loan Factory, Jessica Bennett of More Than a Mortgage LLC, and Tom Ahles of Edge Home Finance. This exclusive panel will reveal winning strategies to help you thrive! What’s more? You’ll hear from industry powerhouses like Glenn Stearns, Grant Cardone, and Barry Habib, completely free! Leave Las Vegas with sharper skills and a winning mindset. Contact your Kind Account Executive for your registration code, or email Vibe2024@kindlending.com if you're new to Kind Lending. This is your chance to win big… Don’t miss it!
“Load Up on Loans for Halloween instead of Candy! LoanStream has Spooktacular NON-QM, conventional and government price improvement specials! 25 BPS on All Conv/FHA/VA (all doc types including Streamline/IRRRLs) (Excludes CalHFA and DPA), Up to 65 BPS when combined with our Select Special (35 BPS on FHA/VA and 30 BPS on Conventional). 25 BPS on all Full/Alt-Doc Non-QM Loans, not available to be included with our Select Special. 50 BPS on all DSCR Loans (1-4 Units) with Min. 3 Yr Prepay Penalty, Min 1.0 DSCR and Min 650 FICO. Combine with our Select Specials for additional price improvement. Not valid on DSCR 5–8-unit program. 25 BPS on all Closed-End Seconds. Combine with our Select Specials for additional price improvement. Restrictions apply so check with your AE. LoanStream’s also got treats! Join our NEW DSCR 5-8 Unit Program Webinar to help you expand your non-QM offerings! Register now.”
“Live today: MAXEX’s industry-leading Jumbo Express program gets its biggest update ever. Streamline your ops and turn your capital faster by using your AUS and underwriting to current Agency guides. Close more loans with a range of sought-after features including loan limits up to $3.5mm, non-warrantable condos, RSU income and higher DTIs. Get all of this with multiple premier buyers competing daily for your loans, all through MAXEX. Now available for select originators with a net worth as low as $2.5mm. Visit us online or meet with us at MBA Annual to learn more about the new Jumbo Express and other exciting developments (such as the upcoming addition of full doc to our MAXEX Non-QM program).”
Natural Disaster Updates
Lives lost or affected; housing stock wiped out. Coast to coast the increased severity of storms is being felt at the same time as homeowner’s insurance turmoil continues. In Florida, regulators approved proposals that would allow private insurers to take policies from the state's Citizens Property Insurance Corporation. Citizens, which was created by the Florida Legislature in 2002, provides insurance to eligible Florida property owners unable to find insurance coverage in the private market. It is the largest insurer in the state. “On August 2, insurance commissioner Michael Yaworsky signed an order allowing 10 private insurance carriers to take on 413,808 policies from Citizens beginning in late October. According to a report by Florida Politics, in the last two weeks, a further 235,035 were approved for removal beginning in November.” So, if a homeowner cannot obtain insurance of last resort, basically all home older than 20 yrs old, what does the lender do?
Fannie Mae issued a reminder to homeowners and renters impacted by natural disasters, including those affected by Hurricane Helene, of available mortgage assistance and disaster relief options. Mortgage servicers also are reminded of options to assist homeowners under Fannie Mae’s guidelines during these circumstances. “Our top priority is the safety and well-being of those affected by Hurricane Helene. Homeowners facing hardship due to the hurricane should contact their mortgage servicer to discuss relief options as soon as they’re able to do so,” said Cyndi Danko, Senior Vice President, and Chief Credit Officer, Single-Family, Fannie Mae. Homeowners and renters should call 855-HERE2HELP (855-437-3243) to access Fannie Mae’s disaster recovery counseling* or visit the Fannie Mae website for more information.
Freddie Mac is reminding homeowners and mortgage servicers of its immediate relief options for those impacted by Hurricane Helene. Freddie Mac’s forbearance program provides homeowners mortgage relief for up to 12 months without incurring late fees or penalties.
“For those impacted by Hurricane Helene throughout the Southeast, Freddie Mac and our partners stand ready to provide immediate assistance,” said Mike Reynolds, Freddie Mac Single-Family Vice President, and Head of Servicing. “Safety is the top priority and once out of harm’s way, we want homeowners and their families to know our mortgage relief options are available to help support their recovery.”
In the wake of the devastation caused by Hurricane Helene, the Federal Housing Administration (FHA) reminds mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations in the U.S. and its territories where the President has declared a Major Disaster under the Stafford Act. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond. Guidance serves as a reminder that applies to all Presidentially-Declared Major Disaster Areas (PDMDA) which can be found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).
USDA Rural Development (RD) remains committed to assisting borrowers impacted by disasters and understands that some may experience unique and unparalleled circumstances in their hardships. Due to the magnitude and devastation of Hurricane Helene, the USDA reminds servicers of guidance for servicing accounts when a county, parish or municipality has been identified as a Presidentially Declared Disaster (PDD) area. USDA Rural Development announcement outlines relief measures that holders and/or loan servicers of USDA RD mortgages should implement to assist USDA RD borrowers affected by PDDs. Homeowners impacted may be eligible for temporary relief. Servicers can immediately implement the following for borrowers in the designated areas.
The Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration, the Office of the Comptroller of the Currency, and state financial regulators, collectively the agencies, issued a Joint Press Release recognizing the serious impact of Hurricane Helene on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities. A complete list of the current disaster areas can be found at https://www.fema.gov/disaster/declarations.
Florida DR-4828 , Vermont DR-4826, Washington DR-4823, Georgia Tropical Storm Debby DR-4821, Louisianna DR-4817, Connecticut DR-4820, Illinois DR-4819, Georgia Hurricane Helene DR-4830, South Carolina DR-4829, Tennessee DR-4832, and Virginia DR-4831.
PHH Correspondent Lending posted disaster declaration announcements for the following States: Georgia DR-4830: additional counties declared. Florida DR-4828: additional county declared. Virginia DR-4831: new disaster declared. North Carolina DR-4827: new disaster declared. Tennessee DR-4832: New disaster declared. South Carolina DR-4829: Additional counties declared.
On 10/3/2024, with Amendment No. 2 to DR-4830, FEMA declared federal disaster aid with individual assistance to Effingham, Elbert, Rabun, and Tift counties affected by Hurricane Helene from 9/24/2024 and continuing. See AmeriHome Disaster Announcement 20241009-CL for inspection requirements.
On 10/2/2024, with Amendment No. 1 to DR-4829, three additional South Carolina counties, Edgefield, Laurens, and Union have been added to federal disaster aid with individual assistance. More information is available in AmeriHome Disaster Announcement 20241007-CL.
On 10/2/2024, with DR-4832, FEMA declared federal disaster aid with individual assistance to 8 counties in Tennessee affected by Tropical Storm Helene from 9/26/2024 and continuing. See AmeriHome Disaster Announcement 20241006-CL for inspection requirements.
On 10/1/2024, with Amendment No. 1 to DR-4828, FEMA declared federal disaster aid with individual assistance to 5 Florida counties affected by Hurricane Helene from 9/23/2024 and continuing. See AmeriHome Mortgage Disaster Announcement 20241004-CL for inspection requirements.
On 10/3/2024, with Amendment No. 3 to DR-4828, FEMA declared federal disaster aid with individual assistance to Gulf county Florida affected by Hurricane Helene from 9/23/2024 and continuing. See AmeriHome Disaster Announcement 20241008-CL for inspection requirements.
On 10/1/2024, with DR-4831, FEMA declared federal disaster aid with individual assistance to 7 Virginia counties affected by Tropical Storm Helene from 9/25/2024 and continuing. See AmeriHome Disaster Announcement 20241003-CL for inspection requirements.
On 10/1/2024, with Amendment No. 1 to DR-4830, FEMA declared federal disaster aid with individual assistance to 30 additional Georgia counties affected by Hurricane Helene from 9/24/2024 and continuing. See the attached announcement for inspection requirements. AmeriHome Disaster Announcement 20241002-CL.
Capital Markets
Hey, just because the Federal Reserve and all the “experts” think that lower rates are ahead of us means it will be a straight line down, right? Not exactly. Last week’s nonfarm payrolls report for September (+254k) significantly exceeded market expectations, leading to a sharp selloff in bonds. This was further exacerbated by remarks from Fed Chairman Powell, who stated that the economy remains robust and that the Federal Open Market Committee (FOMC) would approach further interest rate cuts with patience.
Fed Chair Powell hasn’t conveyed any particular urgency to lower policy rates by more than 25-basis points next month, but the Fed has reserved the option to deliver another larger cut if the data deems such a move necessary. MBS spreads, which vary based on supply and demand of mortgages versus Treasury securities, have widened in the past couple of weeks, and should continue to do so given the notable strength in the economy and the absence of an imminent recession as investors gravitate toward riskier assets.
The strong job’s report, coupled with healthy demand for workers and low termination rates, is likely to assuage concerns regarding a deteriorating labor market, reducing the likelihood of another significant interest-rate cut by the Fed in November. With payrolls averaging a monthly increase of 186k over the past three months, up from the previous average of 116k, there is a strong foundation for continued economic growth this fall.
As a result, Treasuries declined as traders adjusted their expectations for the Fed’s next rate decision. This suggests that the moderation in the labor market observed in the second quarter may have temporarily eased. Consequently, the market adjusted its outlook, pricing in only two 25-basis-point cuts by year’s end as the Fed now has more leeway to move cautiously with rate cuts.
This week’s economic calendar gets under way later this morning with the Employment Trends Index for September. The only other data point is consumer credit for August, though we will receive remarks from three Fed speakers: Minneapolis President Kashkari, Atlanta President Bostic, and St. Louis President Musalem. We begin the week with Agency MBS prices worse a few ticks versus Monday, the 2-year yielding 3.98, and the 10-year yielding 4.00 (after closing last week up 13-basis points to 3.98 percent, up 23-basis points overall for the week).
Jobs
“Record quarter for ACC Mortgage! The oldest Non-QM lender continues to grow in controlled and methodical fashion. We are strategically looking for talent. Do you want to work with the leader in the Non-QM space and have stability? ACC is selectively looking to add three (3) new AEs to our sales team as well as seasoned underwriters. Does your company struggle with ITIN? ACC is a top ITIN lender. Here is a recent article about ITIN: Debunking the myths around ITIN lending. Send Resume for confidential interview.“
Commercial Lending is experiencing hyper growth due to $1.5 trillion in ballooning loans over the next 3-5 years. There is a shortage of commercial mortgage brokers, and with banks liquidity issues, a perfect storm is brewing for the secondary market that will create massive deal flow. Chris Perez, Envestion Commercial Lending, a 25-year veteran, is offering a broker partnership, turnkey with training, custom web site, tools, and marketing / leads. He is looking for 5-10 brokers per state where they are given the marketing and leads, take the application, and then turn the commercial loan over for processing, underwriting, and closing, all while continuing to do your normal residential business. Schedule an appointment
today to see if you qualify or join the free weekly seminar every Wednesday 1PM EST. Adding commercial to your book of business is a way to expand your current product line while substantially increasing revenue.
Aidium, a CRM and data platform for mortgage lenders, is excited to announce the appointment of Tony Farnsworth as VP of Sales where he will “drive Aidium's sales strategy and support the company's ambitious growth plans.”
(As a reminder, anyone searching for employment can post their resume at no charge at www.lendernews.com, and potential employers can view all resumes for several months for only $75.)