Selling Tools; Thoughts on 2025 Tax Bill; Non-QM and Jumbo News; Capital Markets

“To the paranoid people who check behind shower curtains for murderers: if you find one, what's your plan?” What’s the Fed’s plan? The Federal Reserve is approaching a critical inflection point in its monetary policy because Fed officials are increasingly indicating that interest rates may be near the upper end of the so-called “neutral rate” (i.e., the level at which monetary policy is neither stimulating nor restraining economic activity). And that means the plan of possibly slowing the pace of rate cuts or not changing them at all after the expected cut next week (following one in September and one in November). Today’s Capital Markets Wrap at 3PM ET, presented by Polly, will discuss this and what might happen to Freddie and Fannie in the Trump Administration. And credit union mortgage strategy will be the focus in today’s ACUMA discussion at 1PM CST, 2PM ET. (Today’s podcast can be found here and this week’s podcasts are sponsored by Bundle, the attorney-prepared legal documents company that is dedicated to the real estate, mortgage, and title industry. Save 20 percent all week with the code “Chrisman.” Hear an interview with MIAC Analytics’ Dan Libby on a deep dive into strategies, risks, and emerging best practices for hedging in the MSR market.)

Lender and Broker Software, Services, and Products

Imagine a future where your borrowers feel truly valued, informed, and connected to your services. This is more than just a nice-to-have. It’s a vital component of your success. No matter which direction you look, ensuring you achieve both borrower satisfaction and engagement is critical. The industry continues to use modernization and automation as the drivers for expanding borrower access to their mortgage servicer and gaining answers and results. It’s time to go beyond just answering the phone! Our blog, “Fresh Ideas for Borrower Communication Success in 2025,” helps you explore what you need to be ready to provide immediate access to expertise and activities that your borrowers are looking for, including real-time self-service. Kick off the new year by delivering the capabilities that both you and your borrowers are looking for with CLARIFIRE®, modern process automation, the future of our industry.

Leading execs discuss how to win the great mortgage reset in 2025! On 12/18 at 2 PM ET tune into HousingWire for an exclusive webinar featuring Sagent’s EVP, Servicing, Perry Hilzendeger along with industry experts David Sheeler (Freedom Mortgage), Earl Duhman (Gateway First Bank), and Liz Balce (Carrington Mortgage Services), where they’ll dive into essential strategies for success as we head into 1Q25. Topics that the panelists will cover include emerging servicing tech and the role of AI, unlocking the secret to refi retention, and more. Don’t miss this opportunity to build your 2025 playbook with expert insights. Register in the link here even if you can’t attend. You'll be the first with access to the recording.

Save $300 on underwriting fees with Maxwell Capital’s Winter Windfall Special. Looking for ways to pass savings on to your borrowers this holiday season? For a limited time, take advantage of Maxwell Capital’s reduced fees with the Maxwell Winter Windfall. This applies to all non-delegated conventional, jumbo, DSCR, and 2nd home loans. With Maxwell Capital, lenders can access competitive secondary market pricing on a wide array of products, including agency, jumbo and non-QM across wholesale, delegated and non-delegated delivery options. Schedule a call with the Maxwell team today and start doing more for your bottom line.

Thoughts on the 2025 Tax Bill

Have you checked out the thought leadership section on the new Chrisman Commentary website? Yesterday featured a piece from Morgan Wise, Chief Financial Officer at Atlantic Bay Mortgage Group, on what homebuyers need from the 2025 tax bill. Changes are part of broader efforts to address economic disparities and increase housing accessibility, but their final implementation will depend on legislative approval. Key proposals under discussion include new tax credits and adjustments that could make purchasing a home more accessible, especially for first-time buyers. Main takeaways include a first-time homebuyer tax credit (there's consideration for reinstating a significant tax credit to help offset rising housing costs, a move reminiscent of previous federal initiatives like the 2008-2010 tax credits), affordable housing investments (a focus on supporting housing development in underprivileged areas through incentives like the Low-Income Housing Tax Credit and the Neighborhood Homes Credit, aimed at boosting homeownership and community development), and an impact on 1031 exchanges (that would limit tax deferral benefits on real estate exchanges, potentially affecting higher-value transactions but freeing resources for other housing priorities).

Non-Agency, Correspondent, and Wholesale Notes

JMAC Lending offers two exceptional Non-QM programs for your borrowers to qualify on the cash-flow of the property; no tax records, personal income or paystubs are required. The products are great for borrowers who do not have sufficient funds to meet the reserve requirements with agency guidelines or meet the minimum FICO score of 720 for borrowers with ownership of 7 or more properties. Plus, experienced investor borrowers do not need to own a primary residence.

A&D Mortgage announced the launch of the AI Guideline Assistant within the A&D Bot platform designed to revolutionize how partners access and navigate Non-QM guidelines. This tool delivers accurate, real-time responses to guideline queries, saving partners valuable time and speeding up their workflows. The AI Guideline Assistant is specifically built for Non-QM partners who need instant access to complex guideline information without the hassle of manual searches. Whether clarifying eligibility requirements or confirming underwriting standards, the tool leverages smart technology to analyze queries and provide precise, up-to-date answers instantly. Leveraging data insights from a diverse underwriting data set, the AI Guideline Assistant quickly evaluates key loan criteria, helping brokers better understand eligibility and potential risk factors for both conventional and Non-QM loans. With advanced analysis capabilities, the chatbot can assess borrower profiles, analyze financial data patterns, and identify potential red flags, all in real time.

Contents included in Citi Correspondent Lending Bulletin 2024-11 includes hazard insurance updates, IRS Tax installments, New York CEMA: E-Note Closings & Splitter Agreement, Single Source Validation (SSV) - DU Pilot, and unacceptable Collateral – Illegal Units. Also, monthly list updates on depreciating markets and disaster policy. Limited review clarification for Condo Projects and SPCP Community Lending terminology.

UWM fans are interested in the latest “3 points video” with Mat Ishbia where he discusses credit report costs increasing by 40%, a new study finding borrowers need just a 50-75bps improvement to refinance, and how rising housing stock inventories lessening impact of slowdown in construction.

For your next December Presence win, Rocket Pro TPO extended its 24-bps credit offer through December 15th. Plus, get an extra 20 bps bonus credit on VA and FHA loans.1 Hear from Fawaz about how partners are using 24 Takeoff to elevate year-end deals and maximize client savings, especially for larger loan amounts.

AmeriHome Mortgage General Announcement 20241108-CL summarizes previously published changes made during November, additional changes made with this announcement, and recent Agency and regulatory news.

HomeLend has launched Prime and Non-QM Jumbo Loan programs on its platform. This new product roll-out “offers lenders liquidity in a mortgage product arena that has been lacking in the past several years due to the instability of a rising interest rate environment. Investors and securitizers of Jumbo loans may utilize HomeLend to help ramp production and increase volumes in a timely manner. Lenders and investors may sell and purchase jumbo loans on a flow basis and engage in real-time pricing via the HomeLend technology platform.” Loan programs include full Documentation 12 and 24 month, bank Statement and 1099 Options 12- and 24-Month Options. Loan products include 15 Year & 30 Year Fixed Rate, and 5/6 ARM, 7/6 ARM, 10/6 ARM. Max Loan Amount: Up to $5mm. Min Loan Amount: $600k. FICO options as low as 620. Max LTV/ CLTV 80%. Primary Occupancy Only. Cash Out options up to $1mm, Primary Occupancy. (Loan features noted above vary by loan product and other factors.)

Deephaven Mortgage has a new home equity solution: Equity Advantage HELOC. Loan amounts from $25,000 up to $400,000. DTI 50% • Maximum CLTV 85% for primary. Maximum CLTV 70% for secondary. Owner-occupied, second homes and investment properties. Full doc, bank statements, and assets allowed for income verification. SFR, townhomes, condos, second homes and investment properties. Open-ended loan with a term of 5, 10, 15 or 30-years. Available on 1st and 2nd liens. 100% drawn at time of origination with a 100% draw feature.

Capital Markets

What to look forward to this week: inflation reports, more Treasury debt, and heightened geopolitical risk (from France, Syria, South Korea, Iran, Ukraine, etc. the list is seemingly endless). Chinese manufacturers are said to have recently begun limiting sales to the U.S. and Europe of key components used to build unmanned aerial vehicles. Oh, and the country’s government announced new stimulus measures yesterday. Like I said… As the market weighs the fallout from all of this, bond yields somehow rose yesterday. Normally, in periods of uncertainty these yields drop, as investors drive the price up due to the less risky nature of the asset class. But normal seems to be a thing of the rose-tinted past.

Following last month’s solid jobs report that was released on Friday, financial markets this week will focus on inflation releases (CPI and PPI), the last major data points ahead of the Fed’s December interest rate decision next week, when a 25-basis points cut is priced in as a near-certainty. Today’s economic calendar kicked off with the NFIB Small Business Optimism Survey for November rising in November to 101.7, up from 93.7 in October and well ahead of the 94.2 level expected by analysts. (This was the first time in nearly three years that the indicator has broken the 50-year average of 98, and marked the highest reading since June 2021.) We’ve also received the final look at Q3 productivity (+2.2 percent) and unit labor costs (+.8 percent, lower than expected). Later today brings Redbook same store sales, and several Treasury auctions that will be headlined by $58 billion 3-year notes and a buyback in 1-month to 2-year coupons for up to $7.5 billion. Overnight, the RBA was out with its latest monetary policy decision, where the cash target rate was held steady at 4.35 percent. We begin the day with Agency MBS prices a few ticks (32nds) worse than Monday’s close, the 2-year yielding 4.14, and the 10-year yielding 4.23 after closing yesterday at 4.20 percent.