Subservicing, Cybersecurity, Demographic Products; Agency and Investor Changes; Jobs Driving Rates

Here in Philadelphia and many other parts of the nation, the weather is autumnal. But that doesn’t matter for the thousands upon thousands of uninsured houses hit by Hurricane Helene, or those in Milton’s path in Florida. Cities like Asheville, NC, which are receiving the lion’s share of publicity from Helene but there are scores of other communities in the area that are equally, if not harder, hit. My son Robbie participated in the college national mountain bike championships in Beech Mountain, NC, which was hard hit, for example. There are resources for information and giving. In other areas, the inventory of houses for sale varies based on geography and price point. The top reason sellers are selling in 2024 is due to some sort of life event. According to Zillow’s latest seller report, 78% of homeowners who list their homes for sale are motivated to sell due to major life events, such as changes in family size or job relocations. Most sellers take 3-4 months to decide, with 48% seeking a new location and others wanting more space or a different layout. 66% consider renting out their home before ultimately selling, with younger sellers more likely to consider it. (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. After 5:45AM PT today hear an interview with Usherpa's Chris Harrington on how companies can best enact change management and how vendors can differentiate themselves from one another.)

Lender and Broker Software, Services, and Loan Programs

Mortgage compliance is ever evolving, and servicers need top-tier technology to help them keep pace. Relying on overly manual processes to support these changes can cost servicers time and open them up to the risk of non-compliance. ICE offers the Actionable Intelligence Platform (AIP), an automated, mortgage-centric business intelligence solution to assist with strategic or operational decision-making and help address necessary changes. Featuring business logic that can be configured in-house, AIP gives servicers a way to easily check dozens of conditions on loans while supporting compliance without waiting on top-down software updates. Read ICE’s new blog here to learn more about how AIP helps servicers stay nimble in the face of changing regulations.

Did you know that 7.9 million Hispanic Americans under the age of 45 are mortgage-ready? That’s a huge opportunity to expand your reach and grow your business… If you know how to tap into the Hispanic market. Don’t miss out! 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!

“PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), focuses on relationship-driven business with long-term success; by-the-way, have you heard about our BTW Services? We are pleased to offer all customers our Broker-Dealer, Treasury Management, and Warehouse Lending (BTW) services. Our Broker-Dealers can help customers hedge their origination pipelines by buying and selling TBAs, specified pools and whole loan trading. Our Treasury Management team helps customers with escrow and cash management. Finally, the Warehouse Lending team provides customers confidence to meet their loan funding needs. If you attending the MBA Annual Conference in Denver and interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Deric Barnett or John White.

On average, cyber attackers spend 285 days living in a network before they are noticed. Do you have both prevention and detection processes? Do you have an incident response plan in place? And if so, have you tested it to make sure it's effective? If you’ve answered no to any of these questions, it’s time to strengthen your cybersecurity posture and create a culture of security. While prevention is important, turning your focus to detection and resilience will help you limit the impact of a cyber-attack and safeguard your future operations. Contact Richey May’s Cyber Team today to build your resilience today.

Looking for a committed subservicing partner that can help you build and retain a loyal portfolio? With leading technology, best-in-class customer experience, and complete transparency, Servbank is the ideal subservicing partner to help you meet your business goals and improve your bottom line. Integrity Home Mortgage Corporation shares their success story with Servbank Subservicing. "Servbank has been instrumental in helping us retain loans and build our portfolio, moving us closer to GNMA approval. With their SIME technology, we’ve gained unparalleled visibility into our loan data, making our Oversight Program effortless. Their ongoing enhancements keep us ahead of the curve, and the customer care team is always ready to address any training needs." – Christi Stevens, SVP, Systems Administration & Servicing, IHMC. At Servbank, we are more than just a subservicer—we are an extension of your team and your brand. Now is the time to make the switch and take your business to new heights. Learn more about the nation’s premier bank subservicer.

Agency, Wholesale, and Correspondent News

The Federal Reserve Board and the Consumer Financial Protection Bureau announced, in a Joint Press Release the dollar thresholds used to determine whether certain consumer credit and lease transactions in 2025 are subject to certain protections under Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing). Agencies announce dollar thresholds for applicability of truth in lending and consumer leasing rules for consumer credit and lease transactions.

The Consumer Financial Protection Bureau, the Federal Reserve Board, and the Office of the Comptroller of the Currency announced that the 2025 threshold for higher-priced mortgage loans that are subject to special appraisal requirements will increase from $32,400 to $33,500.

The threshold amount will be effective January 1, 2025, and is based on the 3.4 percent annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, as of June 1, 2024.

Fiscal Year (FY) 2025 funding for Rural Development’s Single-Family Housing Guaranteed Loan Program is available. Guidance for Loan Submissions available in USDA Rural Development Bulletin.

The Single-Family Housing Guaranteed Loan Program (SFHGLP) is seeking input on proposed revisions to Form RD 3555-21, Request for Single Family Housing Loan Guarantee, and several chapters of technical Handbook 1-3555. The proposed revisions have been posted to the SFHGLP Policy Desk, accepting comments through November 3, 2024. USDA Rural Development Bulletin highlighted proposed revisions.

As described in this Fannie Mae Announcement, Fannie Mae and Freddie Mac published the Uniform Closing Dataset v2.0 Specification (UCD v2.0) and supporting resources to provide additional clarity on UCD XML file requirements to help sellers improve data quality. Be sure to review UCD v2.0 and prepare for any necessary system updates and testing.

Fannie Mae Revised LL-2024-02 to clarify that when determining the final Fannie Mae Flex Modification terms, the servicer must use the same interest rate as established when determining the terms for the Trial Period Plan.

United Wholesale Mortgage (UWM) unveiled significant enhancements to its AI-powered technology, ChatUWM, designed to provide brokers with faster, easier, and more comprehensive loan assistance. Available immediately, the new enhancements include Chatting With a Document, Start A Scenario, Calculate Income, and Import a Loan.

Starting January 1, 2025, Pennymac is raising the required Tangible Net Worth (“TNW”) for all delegated correspondent Clients to $2.5 million. For details, view Pennymac Announcement 24-107.

Effective for all Best-Efforts Commitments taken on or after Wednesday, October 2, 2024 Pennymac 24-108 announced updates to Jumbo LLPAs.

Available immediately but effective with mortgage applications dated on and after October 7, 2024, Fannie Mae added guidance clarifying requirements specific to rent-back credits paid by the property seller to the borrower in exchange for allowing the seller to stay in the home for a specified period of time after closing. Pennymac is aligning with the changes, more information available in Pennymac Announcement 24-106.

Effective with new Best Efforts locks completed on/after Tuesday, October 1, 2024, Citi Correspondent Lending is making changes to the following: Agency Conforming state geographic adjusters, Non-Agency state geographic adjusters, and Non-Agency CRA premiums.

AmeriHome Mortgage General Announcement 20240916-CL summarizes previously published changes made during September, additional changes made with this announcement, and recent Agency and regulatory news.

Capital Markets

The morning of September 18th, the day the Federal Reserve’s Open Market Committee cut overnight rates by 50 basis points, the U.S. 10-year Treasury was yielding 3.68. It closed last night above 4 percent (where it hasn’t been since August), largely on the back of Friday's stronger-than-expected September jobs report. Now, mortgage rates don’t track the 10-year in lockstep, but there is a correlation, even as risk-off sentiment has swept through the markets with tensions rising in the Middle East.

In the lead-up to the November 7 FOMC meeting, both investors and the Fed will have multiple payroll reports and the full set of September inflation data to consider. This data will provide ample opportunity to reshape market perceptions of the economy’s trajectory before the meeting. The strong U.S. jobs data from September has revived expectations of a "no-landing" scenario, where the economy continues to grow, limiting the Fed's capacity for interest rate cuts. Keep in mind that the Fed does not want to “stall” the economy. Fed Chair Jerome Powell has indicated that maintaining a strong labor market played a role in the Fed’s decision to initiate its easing cycle with a larger cut at its latest meeting.

The week ahead will be filled with inflation data, featuring the Consumer Price Index on Thursday and Producer Price Index on Friday. The CPI and PPI won’t matter a lot unless there is a sizable miss to the upside. Analysts expect headline CPI to decline by 0.2 percent, resulting in a 2.3 percent annualized rate, while core CPI is anticipated to hold steady at 3.2 percent. If the Fed opts for two additional 25-basis-point cuts by year-end, those moves may already be priced in.

NFIB small business optimism for September kicks off today’s calendar and will be followed by the August trade deficit, Redbook same store sales, several Treasury auctions that will be headlined by $58 billion 3-year notes, and remarks from Fed Governor Kugler, Atlanta President Bostic, Boston President Collins, and Vice Chair Jefferson. In the very early going (due to travel) we begin the day with Agency MBS prices roughly unchanged from Monday’s close, the 2-year at 3.96, and the 10-year yielding 4.01 after closing yesterday at 4.03 percent.