UWM’s Exact Rate Lets Borrowers Choose Exact Mortgage Rates

Last updated on August 3rd, 2020

The mortgage industry can be a little bit old school. Similar to how the stock market used to operate in sixteenths, and later eighths, mortgage rates are mostly offered in eighths.

Before 2001, the stock market only allowed price movements as small as one-sixteenths, an archaic method that gave way to the introduction of decimals.

The issue was that big traders were losing out when trading millions of shares, because as we all know, those little fractions can add up. The rest of the world was also using decimals, so it was time to evolve.

Today, you can buy and sell stocks for prices like $73.805 as opposed to just $73 3/4. That matters if we’re talking about a large purchase or a massive sell order.

Now it’s probably not going to be as impactful with a mortgage, but in this day and age, every little bit seems to matter.

Do You Want a Really Specific Mortgage Rate?

  • UWM Exact Rate allows custom rates to the thousandth decimal point
  • Mortgage brokers can “create the unshoppable loan”
  • Pricing better matches closing costs on the loan and can be used to avoid principal reductions
  • Even a fractional improvement may be enough to win a borrower’s business

Typically, you’ll see that your mortgage rate is either a whole number, such as 3%, or an eighth of a number, such as 3.125%.

Some lenders and credit unions also offer promotional rates below key thresholds, such as 2.99%, to make their offer appear lower than the competition.

After all, it looks a lot better to hang a big banner with a price that ends in .99% than it does .125%.

Now one lender is going a step further by allowing its mortgage broker partners to offer mortgage rates in all types of endless crazy combinations.

United Wholesale Mortgage (UWM), the largest wholesale mortgage lender in the country, recently launched “Exact Rate.”

As the name implies, it lets borrowers obtain very specific mortgage rates, instead of being stuck with a whole number or an eighth of a percent.

In fact, you can get a mortgage rate priced to the thousandth decimal point in virtually any combination near that main eighth of a percentage point.

Mortgage Rate Quotes You Can’t Get Elsewhere

  • Brokers can price their loans just below those of its competitors
  • Simple way to differentiate in a market that is very homogeneous
  • May usher in new era of more exact mortgage rates in the industry
  • But borrowers will likely still pay for the fractionally lower rates and barely benefit

UWM President and CEO Mat Ishbia says you can “create the unshoppable loan with Exact Rate.”

And that it is “harder for that borrower to go get a quote from someone else.” Because let’s be honest, who else is offering a 30-year fixed at 2.541%?

Ishbia says, “there shouldn’t be a loan that you ever quote on the eighths.”

He notes that the max rate on its new Conquest 30-year fixed loan program is 2.875%, but that brokers shouldn’t quote that rate. Instead, “use 2.873%, 2.871%, 2.799%.”

By doing so, mortgage brokers can differentiate their offerings, effectively creating something out of nothing in the very boring world of vanilla mortgages.

And Exact Rate can be used when locking a conventional home loan or even a government loan, such as an FHA loan or VA loan.

It’s certainly an interesting concept, and could usher in more exact pricing on mortgages going forward.

Of course, you might still pay for that fractional price improvement, so don’t get too excited.

Also note that you probably won’t even notice the difference in both monthly payment or total interest paid when we’re talking about thousandths of a decimal point.

Lastly, when shopping a mortgage from lender to lender, pay attention to the mortgage APR, not the mortgage rate. It matters how much you’re paying to obtain said rate.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

Homepoint COO Lisa Patterson to speak at Spring Summit

Lisa Patterson, chief originations officer at Homepoint, will speak on a panel titled Operational Strategies in the Current Market at HousingWire’s Spring Summit on March 4.

Patterson will be joined on the panel by Dave Vermillion, founder and CEO of Mortgage Champions, and Fred Bolstad, executive vice president of retail lending at U.S. Bank Home Mortgage.

Patterson has led Homepoint’s third-party originations business since 2015. She has also led the development of Homepoint’s Customer For Life program, which was designed to empower the company’s mortgage broker and correspondent partners to improve customer retention.

Patterson has more than 25 years of experience in the mortgage industry, including previous stints at CitiMortgage (formerly ABN AMRO) and Cole Taylor Mortgage.

The Summit’s packed agenda has 14 sessions, with topics including:

  • Mortgage disruption outlook
  • Servicing challenges in a pandemic period
  • eClosing/RON update
  • A new regulatory regime
  • Lessons from local markets

The summit also features sessions on an economic update, increasing minority homeownership and more.

As with all HousingWire events, we’re bringing together some of the brightest and most successful people in mortgage, real estate, compliance, technology and regulation to offer their insights on what’s happening right now and what’s coming next.

In addition to Patterson, we’re featuring UWM CEO Mat Ishbia,  Figure Technologies CEO and co-founder Mike Cagney, MBA’s Lisa Haynes, Blend CEO Nima Ghamsari, Mortgage Champions CEO Dale Vermillion and many more.

The 2021 Spring Summit is designed for our HW+ premium members, who get access to all HousingWire virtual events, long-form digital content published weekly, an exclusive Slack community and more. Sign up for HW+ membership and register for the summit here, or get event-only access for your company or team here.

Source: housingwire.com

UWM CEO Mat Ishbia to headline Spring Summit

United Wholesale Mortgage CEO Mat Ishbia will be featured in the keynote session at HousingWire’s Spring Summit on March 4. In a one-on-one discussion with HousingWire CEO Clayton Collins, Ishbia will discuss the way UWM responded to the COVID crisis, the decision to take his company public and the future of the mortgage broker model.

UWM is the second-largest mortgage originator in the U.S. and the largest wholesale lender, originating $54.2 billion in closed loans during the third quarter. The company made its public debut on Jan. 22 through a merger with a special purpose acquisition company, which injected $925 million back into the company. UWM had already raised $800 million in a debt offering in November.

Ishbia, who has been working for years to increase the mortgage broker channel, said UWM will use the cash infusion to educate consumers and grow its tech stack to make the mortgage process faster, easier and cheaper for brokers and customers.

The focus of the Spring Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, and with a demographic tsunami of Millennial homebuyers entering the housing market, this year is expected to be just as incredible.

We’re bringing together experts who can speak to the topics that are critical to your success at this year’s Spring Summit, including:

  • What mortgage tech is solving now
  • Servicing challenges in a pandemic period
  • Operational strategies in the current market
  • The brave new world of valuations
  • eClosing/RON update
  • Mortgage disruption outlook
  • A new regulatory regime

We’ve also got sessions on increasing minority homeownership, the economic outlook, lessons from local markets and more.

As with all our events, we’re bringing together some of the brightest and most successful people in mortgage, real estate, compliance, security, technology and regulation to offer their insights on what’s happening right now and what’s coming next.

The 2021 Spring Summit is designed for our HW+ premium members, who get access to all HousingWire virtual events, long-form digital content published weekly, an exclusive Slack community and more. Sign up for HW+ membership here, or get event-only access for your company or team here.

Source: housingwire.com

Mortgage rates settle near historic lows as the purchase market begins to pick up – The Washington Post

Freddie Mac, the federally chartered mortgage investor, aggregates rates from 125 lenders across the country to come up with national average mortgage rates. It uses rates for borrowers with flawless credit scores. These rates are not available to every borrower.

The 15-year fixed-rate average slipped to 2.72 percent with an average 0.7 point. It was 2.73 percent a week ago and 3.53 percent a year ago. The five-year adjustable rate average ticked up to 3.18 percent with an average 0.3 point. It was 3.17 percent a week ago and 3.66 percent a year ago.

“Mortgage rates held steady near historically low levels this week,” said Danielle Hale, chief economist at Realtor.com. “While purchase mortgage data showed week-to-week improvement — a possible sign of home buyer confidence gaining ground — [Federal Reserve] Chair [Jerome H.] Powell ignited fresh concerns with his comments about the potential for a long and slow road to economic recovery.”

Speaking in a video conference with the Peterson Institute for International Economics, Powell warned of a long, painful economic downturn if Congress and the White House do not act to stem the fallout from the novel coronavirus pandemic. U.S. financial markets sank after Powell’s remarks, with the Dow Jones industrial average shedding 517 points Wednesday.

Treasury yields also fell. The yield on the 10-year Treasury dropped back to 0.64 percent, the same place it started at in May. Mortgage rates typically follow the same path as long-term bonds, but that hasn’t been the case lately.

“No one knows where to invest their money because of the massive uncertainty generated by covid-19,” said Dick Lepre, senior loan adviser at RPM Mortgage in Alamo, Calif. “What we could see in the coming week is equity selling with money moving to Treasury and [mortgage-backed security] debt, which could lower mortgage rates.”

Although rates have been wandering upward lately, Hale predicts they will move lower in the future.

“Looking forward, while rates may rise from week to week, we expect the overall trend to be downward, with rates sliding below 3 percent by the end of 2020,” she said.

Some lenders are already offering sub-3 percent rates. HousingWire reported earlier this week that United Wholesale Mortgage, the nation’s largest wholesale lender, is offering rates as low as 2.5 percent. UWM doesn’t lend directly to borrowers but works with mortgage brokers who pass along the rate to their customers.

“Some people said we’d never see interest rates drop below 3 [percent] on a 30-year mortgage, but it’s now available when borrowers work with an independent mortgage broker,” UWM president and CEO Mat Ishbia told HousingWire.

“Mortgage bonds seem to have found a bottom and are making a slight bounce higher off a critical support level,” said Elizabeth Rose, a certified mortgage planning specialist with AmCap Home Loans in Plano, Tex. Powell’s “comments of uncertainty and prolonged recession are helping bonds recover. Despite the market being flooded with new bond supply this week, [Tuesday’s] auction was met with renewed demand — a good sign for interest rates.”

Meanwhile, mortgage applications were flat last week even as purchase activity continued to pick up. According to the latest data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — increased 0.3 percent from a week earlier. The purchase index rose 11 percent but was 10 percent lower than it was a year ago. The refinance index fell 3 percent but was 201 percent higher than it was the same time last year. The refinance share of mortgage activity accounted for 67 percent of applications.

“Mortgage applications increased for the second consecutive week, as states across the country gradually reopen and more prospective borrowers take advantage of record-low mortgage rates,” said Bob Broeksmit, MBA president and CEO. “The ongoing pandemic and subsequent decline in economic activity are impacting the housing market, but with purchase activity now up for the fourth straight week, home buyer demand is stabilizing.”

Source: washingtonpost.com

HousingWire launches Spring Summit on March 4

The volume of homes sold or refinanced in 2020 was incredible, with total origination volume expected to top $4 trillion for the year once all the numbers are in. Wanting to take advantage of record low mortgage rates to gain more space in a pandemic, consumers didn’t follow traditional seasonal buying patterns, fueling a non-stop race to find and buy a house.

That dynamic is driving home sales this year too, which is why we’re hosting our virtual Spring Summit focused on The Year-Round Purchase Market.

The lingering pandemic, uncertainty about rates and a demographic tsunami of buyers means those in real estate and mortgage have to be as smart and agile as ever. We’re bringing together experts who can speak to the topics that are critical to your success at this year’s Spring Summit, including:

  • What mortgage tech is solving now
  • Servicing challenges in a pandemic period
  • Operational strategies in the current market
  • The brave new world of valuations
  • eClosing/RON update
  • Mortgage disruption outlook
  • A new regulatory regime

Our keynote session is a one-on-one interview with UWM President and CEO Mat Ishbia. In January, UWM completed the largest SPAC deal in history to become a publicly traded company valued at $16 billion, raising $925 million in cash in the process, with an opportunity to elevate mortgage brokers nationwide.

In this session, HousingWire CEO Clayton Collins will interview Ishbia about the way the company responded to the COVID crisis, the decision to go public and the future of the mortgage broker model.

We’ve also got sessions on increasing minority homeownership, the economic outlook, lessons from local markets and more.

As with all our events, we’re bringing together some of the brightest and most successful people in mortgage, real estate, compliance, security, technology and regulation to speak at our Spring Summit. These experts will provide insights and a holistic view of what’s happening right now in real estate and mortgage, as well as what’s coming next.

The 2021 Spring Summit is designed for our HW+ premium members, who get access to all HousingWire virtual events, long-form digital content published weekly, an exclusive Slack community and more. Sign up for HW+ membership here, or get event-only access for your company or team here.

Source: housingwire.com