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HMDA Data, Correspondent and Wholesale Products; Inflation and Rate Updates

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HMDA Data, Correspondent and Wholesale Products; Inflation and Rate Updates

By:
Rob Chrisman

Fri, Jul 12 2024, 11:37 AM

“I’m sorry, but you can’t always be ‘experiencing a higher volume of calls than average.’ That’s not how averages work.” The “average” person has a student loan, or a car loan, or credit card debt, or all three. Throw in mortgage interest rates around 7 percent, homeowner’s insurance of possibly thousands of dollars, utilities, property taxes, maintenance, mortgage insurance…you get the picture. Home affordability has deteriorated due to all those reasons, not the least of which is mortgage rates, sidelining many prospective buyers from entering the housing market. But even with tight credit standards and high interest rates continuing to constrain lending growth, most homeowners (67 percent) feel that purchasing a home is still attainable, especially as consumers become less downbeat about the effect of inflation on their household finances. Expert advice can help ease the stress of buying: about 40 percent of homeowners are unfamiliar with mortgage affordability/loan programs. Certainly that’s something that good originators can help with. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with Loan Atlas’ Tim Braheem on the best formal education platform for individuals in the mortgage space, covering sales, time management, customer service systems, marketing, leadership, and much more.)

Lender and Broker Software, Services, and Products

Empower self-employed borrowers by maximizing Bank Statement loans and unveiling market opportunities! With this program your borrowers can use up to 85 percent of deposits from business bank statements, without a CPA letter, helping them to qualify with no hassle! No tax returns or 4506C required! Why choose Kind for non-QM? “Our programs are equipped to meet complex finances with flexible terms to help a wider range of borrowers who fall outside conventional lending criteria. We understand that every client is unique and with the dedicated support of our seasoned mortgage professionals and streamlined broker technology, we ensure a smooth and simple process in every aspect of your deal.” Ready to learn more about Kind’s Bank Statement Loan program and how it can help your borrowers who don’t meet the requirements for standard mortgages? Connect with your Kind AE! If you’re not yet a partner with Kind, visit here.

Lenders are fighting to keep their businesses afloat. Advantage Credit gets it. Advantage truly values and appreciates the mortgage professionals out there who are grinding away to make it through this storm. Advantage simply wants everyone to know that they are here to listen and to help in any way that they can. Advantage offers a Services Review (for FREE) to see if they can identify ways to be more efficient and even save some money. It isn’t a silver bullet but it’s what they can do. If nothing else, they want you to know that they are here to listen if anyone just needs an ear to bend and commiserate with. Just fill out this form and let them know a good time to reach out to talk. “We are all in this together and are hopeful for an eventual positive outcome for everyone.”

Symmetry is extremely grateful for our partners! Service, Speed, & Simplicity. And now with better Piggyback HELOC Pricing & Comp options. Margins now as low as Prime +0 percent. Now offering 1 percent borrower paid comp option on their Piggybacks. 1.5 percent borrower paid comp still available on stand-alone HELOCs. Reach out to your Symmetry AE today.

OCMBC, Inc. acknowledges the dramatized lawsuit filed by Home Mortgage Alliance Corporation (HMAC) and firmly denies all allegations. The lawsuit, which lacks merit, is an attempt to engender fear and distract from the true motivations behind it. The FHFA order mandates an indefinite cessation of business relationships with various individuals that have been suspended by FHFA. (FHFA Document). OCMBC maintains that the transitions of employees were made independently and lawfully. All procedures are robustly followed to ensure compliance with legal and regulatory requirements. OCMBC’s strong industry reputation is evident, as it remains a top wholesale lender and a leading NonQM originator in the nation. This lawsuit is seen as a groundless attempt by a less reputable entity to extract financial gain. OCMBC is committed to defending itself vigorously and maintaining its stellar reputation. For more information and full press release, please visit www.OCMBC.com.

FHFA and Vantage Score 4.0

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) are making historical VantageScore® 4.0 credit scores available to approved users to support the transition to updated credit score and credit report requirements. The historical credit scores for each Enterprise are associated with single-family loans purchased by that Enterprise from April 2013 through March 2023. This comprehensive release reflects the period for which trended consumer credit data is reliably available across the three nationwide consumer reporting agencies. These scores will provide market participants the ability to better analyze and understand the new credit score models that have been validated and approved for use by the Enterprises. The historical credit scores are available for download at the Enterprises’ respective websites. “The release of historical credit scores on tens of millions of loans provides an extensive resource to help market participants prepare for this transition,” said Director Sandra L. Thompson. “The use of these modernized credit score models will enhance risk management while furthering sustainable access to credit for consumers.” In October 2022, FHFA announced the validation and approval of modernized credit score models for use by the Enterprises. At the same time, FHFA announced that the Enterprises would permit lenders to deliver loans with either tri-merge credit reporting, in which credit reports from each of the three nationwide consumer reporting agencies are used, or bi-merge credit reporting, in which credit reports from two of the nationwide consumer reporting agencies are used.

Mortgage QC Trends and Industry Insights

Don’t miss the latest QC webinar presented by ACES Quality Management’s President, Phillip McCall, and EVP, Nick Volpe on July 17th. In this highly anticipated webinar, these industry experts will cover an in-depth analysis of ACES’ recent Mortgage QC Industry Trends Report, deep dive into mortgage quality control trend reporting and how it aligns with the current state of the industry; and discuss how to best navigate through the volatile financial landscape. Walk away with a better understanding of what’s to come and how you can best prepare for the future. Register for the webinar.

You tell your borrowers that you’re different than the other guys, but then use the same software as everyone else to manage your borrower portal? Differentiate your borrower experience with LiteSpeed by LenderLogix. A+ borrower experience at a price tag your CFO will appreciate.

As lenders continue their mission of increased efficiencies in the origination process, including shorter closing timelines, inspection-based appraisal waivers should be at the top of their implementation list. Thanks to innovations made across the industry, including programs and solutions put in place by the GSEs, inspection-based appraisal waivers are here to stay. When used accordingly, these can result in massive time savings for lenders. However, one hurdle continues to be some confusion around how they work. To help with this, Class Valuation will be hosting a webinar Tuesday, July 30th, titled “Inspection-Based Appraisal Waivers: Everything You Need to Know.” Expert panelists will provide a clear and actionable guide to understanding the options available to lenders and how to properly work them into your operations. You will learn the benefits of inspection-based appraisal waivers for lenders, when a loan is eligible, the ins and outs of property data collection, and much more. Register here

HMDA Data Released

The Federal Financial Institutions Examination Council published data on 2023 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by 5,113 U.S. financial institutions, including banks, savings associations, credit unions, and mortgage companies. The HMDA data are the most comprehensive source of publicly available information on mortgage market activity. The Snapshot National Loan-Level Dataset released contains the national HMDA datasets as of May 1, 2024. Key observations include: For 2023, the number of reporting institutions increased by about 14.6 percent from 4,460 in the previous year to 5,113. The 2023 data include information on 10 million home loan applications, a decrease from the 14.3 million reported in 2022. Among them, 7.7 million were closed-end (e.g., a home mortgage loan) and 2.1 million were open-end (e.g., a home equity line of credit). Another 266,000 records are from financial institutions making use of statutory partial exemptions and did not indicate whether they were closed-end or open-end.

The share of mortgages originated by non-depository, independent mortgage companies accounted for 68.8 percent of first lien, one- to four-family, site-built, owner-occupied home-purchase loans in 2023, up from 60.2 percent in 2022. In terms of borrower race and ethnicity, the share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose slightly from 8.1 percent in 2022 to 8.2 percent in 2023. The share made to Hispanic-White borrowers increased from 9.1 percent to 9.9 percent, and the share made to Asian borrowers increased slightly from 7.6 percent to 7.7 percent. In 2023, Black or African American and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans of 16.6 percent and 12.0 percent respectively. Denial rates for Asian and non-Hispanic-White applicants were 9.0 percent and 5.8 percent respectively.

Capital Markets

Warning, rate cuts may be coming soon, even if the Fed isn’t quite ready to admit it publicly. A drop in gasoline prices and housing costs led the way for inflation to cool broadly last month to the slowest pace since 2021. Yesterday morning’s CPI report, in which consumer prices declined by 0.1 percent month-over-month, is arguably the most encouraging inflation print that the FOMC has received since it began its fight against inflation nearly two and a half years ago. Excluding food and energy, the core CPI increased by just 0.06 percent (unrounded), the smallest increase since January 2021. Bonds rallied on the reading across the board to lows last seen in March.

With Fed Chair Powell expressing optimism that the uptick in inflation earlier this year was just a speed bump, this reading will likely go a long way toward giving the FOMC the confidence needed to cut rates, likely starting in September (93 percent implied certainty). Traders are pricing in another 25 basis point reduction of the fed funds rate in December. However, some people are skeptical, asking if the U.S. economy needs stimulation. Policymakers will have a chance to signal such moves after meeting later this month, especially with unemployment having risen for three consecutive months. Unemployment, while still low, is steadily moving higher; Job and wage growth are steadily moderating.

After the consumer price index report dominated headlines yesterday, it is producer prices’ turn today. Today’s economic calendar kicked off with June PPI coming in higher than expected (+0.2 percent month-over-month) and Core PPI (up 0.4 percent month-over-month) with upward revisions to previous months. The only other data point today is Preliminary July University of Michigan Consumer Sentiment, due out later this morning. Bank earnings also get under way with JP Morgan, Citigroup and Wells Fargo reporting before the open. We begin Friday with Agency MBS prices and the 10-year yielding 4.22 percent after closing yesterday at 4.19 percent; the 2-year is at 4.51 percent.

Employment

Evergreen Home Loans is excited to announce a leadership transition within its production team. Don Zender, a 30-year company veteran and President of Production for the past three years, has passed the baton to Robert Lipston, effective July 2, 2024. Robert joined Evergreen in 2022, bringing significant growth and a fresh perspective. Don Zender successfully led the team through challenging market conditions, supported by Todd Miles, Joe Moley, and Robert Lipston. Under their leadership, the team thrived, finding opportunities in adversity. Robert Lipston, with his extensive industry experience, is now poised to lead Evergreen’s next growth phase. Don will remain President of Production through 2024, aiding Robert in the transition and continuing to support Evergreen’s values of Integrity, Family, Fun, Growth, and Creativity. In 2025, Don will focus on the Bellevue Washington Region and drive new growth initiatives across the company. If you’re ready to grow with Evergreen, visit Careers.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

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High prices and elevated interest rates, combined with low inventory, are discouraging homebuyers in the Charleston region, as demonstrated by the double-digit percent decline in sales last month.

June should have been one of the busiest months for the residential market, but sales across the nation slumped for the third month in a row.

While Charleston tends to be insulated as a popular move-to destination, Berkeley, Charleston and Dorchester counties’ home sales fell 13.1 percent, according to preliminary data the Charleston Trident Association of Realtors released July 9. 

And much of that has to do with buyers struggling to sell their homes elsewhere to relocate to the Lowcountry, said Jarrett Hodson, banker with Sweetgrass Capital in Charleston.

“People were getting aggressive coming into summer wanting to move, but for a lot of people it didn’t work out,” Hodson said.

In June, 1,587 homes changed hands in the region, a notable drop from the 1,923 sales in June 2019, the year before the pandemic. Sales volume is still higher for the first six months of 2024 compared to the same period of 2023 but barely, by less than 1 percent. 

“What’s happening is if somebody can’t sell their house in Ohio, they can’t move to Charleston,” Hodson said. “There’s been a heavy, heavy movement from the Northeast, the West, but as those markets take a hit (so does Charleston).”

As a result, home sale contingencies — where a would-be buyer can walk away from a sale if they can’t sell their home by a certain date — are rising, he added.

While some can’t move, other potential sellers are unwilling give up their low-interest mortgages in the 3 percent range that they locked in during and before the pandemic, said Tara Bittl, an agent with Realty One Group Coastal in Mount Pleasant. 

“We used to say people moved every five to seven years; now we’re trending closer to 11 because of that interest rate change,” she said.

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The lack of movement contributed to the local inventory level rising for the fifth month in a row to 3,813 properties, which is still considered low. A balanced market would have about 7,000 listings.

Bittl said the reduced inventory has a number of impacts, from bidding wars in certain areas to casual buyers putting their moving plans on hold.

Without genuine motivation, they really need their “heart to swoon” to commit in this market and there aren’t enough options out there right now, she said.

The Federal Reserve has yet to take action that would ease mortgage rates, which are making it more expensive for buyers to borrow at a time when real estate prices and home insurance premiums also are rising. 

The average 30-year-fixed mortgage rate sits at 6.95 percent and 15-year FMRs are 6.25 percent as of July 3, per Freddie Mac.

Median home prices in the Charleston area continued to rise in last month, increasing 4 percent to $425,000 and up 57 percent since mid-2019. Insurance runs about $3,400 on average in South Carolina, according to the National Association of Realtors.

“You have to consider the cost of everything, not just the interest rates,” said Stacy Smith, broker in charge of Smith Spencer Real Estate in Charleston. “A young person buying a home is now totally pushed and it’s daunting.”

Turnkey homes are selling quickly at every price point, she added.

Homes where sellers want top-of-the-market prices for even what they consider minimal work are sitting, pushing the average days on market in June to 35 days, up 25 percent year over year, according to the June sales report.

Homebuyers want houses they don’t have to fix up, Smith said. Borrowing money to replace a roof or refurbish floors comes at a higher cost, too.

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Our twice-weekly newsletter features all the business stories shaping Charleston and South Carolina. Get ahead with us – it’s free.

Source: postandcourier.com

Apache is functioning normally

Mortgage rates held steady over the past week despite recent signs of relief from the labor market, according to HousingWire’s Mortgage Rates Center. In large part because of the lack of clarity as to when the Federal Reserve will begin cutting the benchmark rate, mortgage rates remained above the 7% level. 

The average 30-year rate for conforming loans sat at 7.11% on Tuesday, unchanged from one week ago. At this year’s peak, the same loan type reached 7.57% in April. Meanwhile, the 15-year conforming rate ceased its steep rise and reached 6.93% on Tuesday from 6.99% the previous week.    

HousingWire Lead Analyst Logan Mohtashami said that mortgage rates historically move in connection with the 10-year yield, which “had a crazy move higher” two weeks ago but headed lower on Friday after the jobs report. 

“Bond yields did fall, and pricing has gotten just a tad better, but it’s nothing of note,” Mohtashami said. “The spreads have kept mortgage rates more stable.” 

According to Mohtashami, the spread between the 30-year mortgage rate and the 10-year yield has been an issue since 2022, and conditions worsened following the March 2023 banking crisis. He added, “If we took the worst levels of the spreads from 2023 and incorporated those today, mortgage rates would be 0.56% higher right now.”

Data from the U.S. Bureau of Labor Statistics released on Friday showed that total nonfarm payroll rose by 206,000 jobs in June, compared to 218,000 jobs in May (which was revised down from 272,000). Economists say it is good news for the Fed to start cutting rates, but there is uncertainty about when it will start. 

“We continue to see headlines and data points driving rate movement in the absence of concrete evidence of when the Fed will start the rate-cutting cycle in the face of sticky inflation,” said Sarah Alvarez, vice president of mortgage banking at William Raveis Mortgage. 

Fed Chairman Jerome Powell has stated that officials expect it will be appropriate to reduce the federal funds rate target range once they have gained greater confidence that inflation is moving sustainably toward the 2% target. And — stop us if you’ve heard this before — they are not there yet.

“Incoming data for the first quarter of this year did not support such greater confidence,” Powell said during the semiannual monetary policy report to the Congress on Tuesday morning. “The most recent inflation readings, however, have shown some modest further progress, and more good data would strengthen our confidence that inflation is moving sustainably toward 2%.”

Besides monetary policy, uncertainties related to the presidential election are also impacting the markets, according to Alvarez. 

“There is always a lot of uncertainty surrounding an election, and we saw the recent debate results push rates up more than expected,” Alvarez said. “However, as we continue to see data indicating that inflation and the economy are weakening, rates will start to come down more significantly. Anyone hoping for a straight ride down will be disappointed.”

Source: housingwire.com

Apache is functioning normally

As is often the case with internet headlines these days, the headline overstates the reality on the ground–or at least over-dramatizes it. 

Considering the last notable “ceiling” was seen less than a month ago and that the last short term ceiling, less than a week ago, the word “finally” probably doesn’t apply.  And then there’s the word “ceiling” itself.  In this case, it’s used only because there isn’t one convenient word to say “a day where mortgage rates moved at least slightly lower after 2 or more days spent moving noticeably higher.”  

In other words, that happened today.

It’s refreshing or reassuring any time rates stop moving higher after a somewhat abrupt jump remains in place for more than a day.  In the current case, the past two days merely look like slightly bigger continuations of a gentle uptrend in rates that’s been in place since mid June.

From here, economic data will take center stage with important reports on each of the remaining two mornings of this week (Thursday is closed for Independence Day). Of those, it’s Friday’s jobs report that has far more power to cause volatility.

Source: mortgagenewsdaily.com

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Paywatch secures USD 30 million in funding

Paywatch, an earned wage access (EWA) service provider, has secured USD 30 million from a mix of equity and credit facilities to bolster its growth.

Paywatch received over USD 14 million in Series A funding, in a round co-led by Third Prime and a consortium of US investors, including Vanderbilt University and University of Illinois Foundation, with participation from new investors Octagon Venture Partners and Wooshin Venture Investment. Additionally, Paywatch secured USD 16 million in credit facilities from global banks, including Citi, to fund its product expansion. This is the largest funding round closed by an EWA player in Southeast Asia.

Paywatch offers a debt-free EWA solution that allows workers to instantly access a part of their accumulated salary in real time. The company said this service decreases employees’ dependence on loans, alleviates household debt, and enhances financial management while boosting companies’ employee retention and productivity. Lotus, Jaya Grocer, and QSR Brands are among the brands to have partnered with Paywatch, collectively supporting the region’s financial well-being and economic growth.

Ai Palette snags USD 1.45 Million in Series A1 funding from InnoVen Capital

Ai Palette, a Singapore-headquartered tech startup specializing in using artificial intelligence and machine learning to enable consumer packaged goods (CPG) companies in product creation, has snagged an additional USD 1.45 million in its Series A1 funding round from InnoVen Capital.

The funds will deepen Ai Palette’s generative AI product stack for the CPG sector and strengthen its presence in the Americas.

According to Ai Palette, its platform utilizes advanced AI technologies, including text analytics, natural language processing, image recognition, predictive analytics, and reinforcement learning, to help brands track real-time trends, predict market changes, and quickly adapt. The company is said to specialize in aiding concept generation, portfolio optimization, localization, and credibility enhancement.

Photo of Himanshu Upreti (left) and Somsubhra GanChoudhuri, co-founders of Ai Palette. Photo from KrASIA’s archive.

Blibli operator acquires Dekoruma for IDR 1.16 trillion

PT Global Digital Niaga, which operates the e-commerce player Blibli, online travel agency Tiket.com, and supermarket chain Ranch Market, has acquired a 99.83% stake in the home decor startup Dekoruma for IDR 1.16 trillion (USD 70.7 million) with the backing of the local conglomerate Djarum Group.

Completed on June 20, this acquisition is expected to bolster Blibli’s home and living vertical and enable an integrated approach to online and offline trade. Dekoruma, established in 2015, connects consumers with home furnishing merchants, interior designers, contractors, and property developers. It has ostensibly served over one million customers and partnered with more than 5,000 designers and contractors. —DealStreetAsia

Okapi Technologies closes funding round and launches in Malaysia

Okapi Technologies, a fintech startup in the solar financing space, has closed its funding round and officially launched in Malaysia, starting with the residential solar vertical. The round was led by The Radical Fund with participation from angel investors including Lai Chang Wen and Shaun Chong, co-founders of regional logistics unicorn Ninja Van.

The funds will be used to develop solutions to democratize access to affordable solar energy and create a new asset class for environmental, social, and governance (ESG) investors globally. —TechNode Global

Carro secures SGD 75 million loan from HSBC

Carro, a Singapore-based used car marketplace, has signed a SGD 75 million (USD 55.4 million) multicurrency loan with HSBC to fund its fintech arm, Genie Financial Services.

Genie Financial Services currently operates in Singapore, Malaysia, Indonesia, and Thailand, leveraging data-driven lending to support its customers.

Carro is said to be the first client to tap into HSBC’s recently launched USD 1 billion ASEAN Growth Fund. —TechNode Global

Photo of Carro’s team in 2021. Photo from KrASIA’s archive.

Zepto bags USD 665 million at multibillion valuation

Zepto, an Indian quick commerce platform specializing in grocery deliveries, has raised USD 665 million in an investment round, increasing its valuation to USD 3.6 billion. The round saw participation from Avenir Growth Capital, Lightspeed Venture Partners, and Avra Capital.

Zepto, competing with Zomato’s Blinkit and Swiggy’s Instamart, plans to use the funds to double its dark stores to over 700 by March 2025. —Reuters

Recent deals completed in China:

  • Metis Pharmaceuticals, a biotechnology company, has raised USD 100 million in a Series C funding round. The round was led by CICC Capital, with participation from the Taiping HK I&T Fund under China Taiping Insurance Holdings. The funds will be used to advance the development of its AI-driven drug delivery platform and proprietary pipeline, supporting ongoing innovations in the drug delivery sector. Established in 2020, Metis focuses on leveraging AI for precise targeted drug delivery and drug discovery, aiming to develop innovative nanomaterials. —36Kr
  • TalentSec, a Shanghai-based cybersecurity firm, has raised tens of millions of RMB in a Series A funding round. The round was led by Eminence Ventures, with participation from existing investor Shunwei Capital and financial advisory by Cipher Capital. The new funds will be used to strengthen the company’s product capabilities and core competitiveness by creating value for more customers. Since its establishment in 2020, TalentSec has been specializing in solutions combining altered state machine (ASM) and AI technology. —36Kr
  • Tengyu Technology, a real-time interactive cloud service provider, has raised an undisclosed amount in a Series B funding round jointly led by Sealand Innovation and Fosun RZ Capital. The round also saw participation from Cornerstone Venture Capital, Zhongxiang Venture Capital, Guolian Shixun Information Technology, SCCI, 37 Interactive Entertainment, and Jiangxin Investment, with I&R Capital acting as the sole financial advisor. The funds will be used to further develop its solutions. —36Kr

Homa2u, Robo Co-op, VITG, and more led last Friday’s headlines:

  • Homa2u, a Malaysian platform for overstocked renovation and interior design materials, secured an additional USD 625,000 in its pre-Series A funding round from Asia Fund X (AFX), which is backed by MSW Ventures and Pavilion Capital.
  • Robo Co-op, a social enterprise focused on empowering refugees through digital learning, received a USD 700,000 investment from Ritsumeikan University’s Social Impact Fund (RSIF).
  • Virtual IT Group (VITG), an Australian IT services provider, signed a definitive agreement to secure investment from global mid-market private equity firm The Riverside Company. The financial details of this deal were not disclosed.

If there are any news or updates you’d like us to feature, get in touch with us at: [email protected].

Source: kr-asia.com

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Borrower Outreach, Subservicer Oversight, AVM Products; Agency News… Freddie’s Limited Foray Into 2nds

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Borrower Outreach, Subservicer Oversight, AVM Products; Agency News… Freddie’s Limited Foray Into 2nds

By:
Rob Chrisman

Wed, Jun 26 2024, 11:25 AM

“Don’t waste a good crisis.” Continuing data breaches constitute a crisis, the latest example being LendingTree Inc., cloud-based data analytics firm Snowflake Inc., and MBS loan-level data. Headlines that talk about a “crisis” or something “plummeting” in price should be viewed skeptically, regardless of the topic. Here’s “Home Prices are Falling Fast.” Really? I say, much ado about nothing. Dropping 1-2 percent… really… plummeting? Are people jumping out of windows? How about looking at those markets like Austin over the last 10 years: Most were bound to take a breather after getting ahead of themselves. There is something that has garnered a lot of headlines in recent weeks, and that is the FHFA authorizing a pilot program for Freddie Mac to buy as much as $2.5 billion in second mortgages over 18 months, a shift that could ultimately make it cheaper for households to borrow against the equity in their homes. There are those, however, who say that this is much ado about nothing: more below. Today’s podcast is found here and this week’s is sponsored by Candor. Candor’s authentic Expert System AI has powered more than 2 million flawless, hands off underwrites. Every credit risk decision Candor makes is backed by a warranty, eliminating repurchase worries. Hear an interview with Blue Sage’s Carmine Cacciavillani on his nearly four decades in the mortgage industry as a solutions provider creating complex software-based business solutions.

Software, Products, and Services for Lenders and Brokers

When generating non-QM loans, traditional marketing efforts simply don’t cut it anymore. A 3 percent click-through rate on your email campaigns might be the norm, but it won’t give your salespeople the necessary conversations. Privy offers something different, something better. A branded real estate search and investing platform. Privy lets lenders automate borrower acquisition and retention. You become present at every step of a borrower’s transaction, from when they are just browsing to when they are ready to close. You are just a button click away. Provide your existing borrowers with the technology to close more investment deals while you close more loans. Contact Brad Bieber to learn more about Privy’s Lender Enterprise Solutions.

Despite some positivity in the housing market, pressure persists among mortgage lenders. The Mortgage Bankers Association forecasts single-family mortgage originations to grow to $1.8T in 2024, driven by increased purchase demand and equity take-out products, while Goldman Sachs predicts a 16 percent increase in the non-agency market amidst a 1 percent decline in agency mortgage production. Given this, Verus Mortgage Capital, the leading non-agency investor, believes there is no better time for lenders to expand their footprints and offer non-QM mortgages. Check out the five key insights Verus shares about non-agency lending in its recent blog post here. And to learn more about the non-QM opportunity, contact Jeff Schaefer, EVP – National Sales (202-534-1821).

Ask yourself this question: when evaluating the current market value of a subject property, are you using the best AVM on the market? We understand that when making critical business decisions, accuracy and details matter. That’s why we’re highlighting First American Data& Analytics and its Procision AVM to have your back. Its Procision AVM updates and tests the subject property values daily to maintain performance on every residential property in the U.S. every day. And the best part? First American’s AVM is designed for your specific business need – so you get the best results and highest satisfaction. But don’t just take our word for it: The data speaks for itself. As a nationwide, single-source data provider, First American Data & Analytics will fuel your biggest ideas so you can focus on growing your bottom line. That’s big stuff. Learn more about the Procision AVM.

The “housing theory of everything” is a concept equating the housing shortage in the United States to a broad range of societal problems like substance abuse, unemployment, domestic violence and disease. The idea is that when people live in safe, affordable housing they are more secure, less stressed and more employable. Those steady incomes and stable minds would, in turn, positively impact families and communities. In the latest Spotlight podcast from Dark Matter Technologies, Kyla Scanlon, who coined the term vibecession (when people have a more negative perception of the economy than what economic data suggests) and author of “In This Economy? How Money and Markets Really Work” joins Wes Hortabuck for a wide-ranging discussion of consumer perceptions, the “missing middle” in housing stock, and how providing more affordable housing could positively impact people’s lives and the broader economy. Take a few minutes and listen to the episode today!

“Is a standing call with your servicer enough when it comes to proper oversight? Is there a specified cadence for how often a lender should be meeting with their servicer? Ultimately, it is your responsibility to oversee 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 leveraging a subservicer or navigating the general complexities of oversight, Richey May’s mortgage compliance experts can help. Contact us today for more information.”

“In today’s competitive purchase market, the lenders who stand out are providing excellent, personalized and consistent communication. This approach is key to attracting new business, keeping your current borrowers happy and retaining clients for life. In our new blog, we’re sharing how ICE Surefire can help you streamline and improve your borrower outreach even further, so you’re prepared to thrive in today’s competitive purchase market. And by leveraging both Surefire and Encompass®, you’re able to deliver targeted content to the right contacts at the right moment. Read the full blog to gain all the insights.”

Agency News: Freddie Mac’s New Program?

The Federal Housing Finance Agency (FHFA) announced its conditional approval for Freddie Mac to engage in a limited pilot to purchase certain single-family closed-end second mortgages. This conditional approval follows FHFA’s first publication of a proposed new product by either Freddie Mac or Fannie Mae (the Enterprises) for public comment under the new process mandated by the Prior Approval for Enterprise Products regulation, which became effective in April 2023. In an accompanying statement, Director Sandra Thompson further discussed FHFA’s analysis of the statutorily required criteria of Charter Act compliance, public interest, and safety and soundness. Upon the pilot’s conclusion, FHFA will analyze the data on Freddie Mac’s purchases of second mortgages to determine whether the objectives of the pilot were met. FHFA has determined that any increase to the volume or extension of the duration of the pilot, or a conversion of the pilot to a programmatic activity, would be treated as a new product that is subject to public notice and comment and FHFA approval. Any subsequent approval would be informed by the preliminary results of the pilot.

Seth Appleton, President of U.S. Mortgage Insurers (USMI), issued a statement on the Federal Housing Finance Agency’s (FHFA) decision to conditionally approve the proposed “Freddie Mac Single-Family Closed-End Second Mortgages” product as a limited pilot, pursuant to the Prior Approval for Enterprise Products Final Rule. In its comment letter, USMI raised certain aspects in urging FHFA to disapprove this proposed product and have Freddie Mac focus its efforts and resources on helping borrowers achieve homeownership.

In a press statement, MBA President and CEO Bob Broeksmit, CMB, responded to FHFA’s conditional approval of new product proposal allowing Freddie Mac to purchase certain closed-end second mortgages.

Compass Research and Trading was quick to point out that, “The FHFA would not have published the new product proposal for FMCC’s HEL product if it was not predisposed to approve it. Over 85 percent of the comment letters opposed the proposal, which included over 250 form letters in opposition. However, it did receive support from the National Fair Housing Alliance, Urban Institute, Community Home Lenders of America, and three credit union associations. Bank trade associations largely opposed the product, as did market trade associations.

Ed Groshans wrote, “We estimated that the potential tappable equity in Freddie’s portfolio to be $700 billion to $1.2 trillion. The FHFA addressed crowding out concerns by authorizing a pilot program for Freddie and limiting its HEL purchases to $2.5 billion. Our assessment is that the pilot program will have a negligible impact on consumer lenders. In addition, the FHFA capped the duration of the pilot at 18 months.

“Notably, the FHFA stated that any extension of the pilot or a conversion of the pilot to a programmatic activity would subject to another new product approval review. These limitations place the fate of any GSE HEL products in the outcome of the November election. We expect a Trump administration to cease the product on safety and soundness concerns, while a Biden administration could approve a larger scale product.”

The FHFA Director’s statement noted that the product is authorized by Freddie’s charter, in the public interest, and consistent with the safety and soundness of Freddie Mac or the mortgage finance system. The public interest section addressed crowding out. Sandra Thompson said that limitation on purchases and duration were in response to comments received and “intended to mitigate any concerns about potential inflationary impacts, extending the mortgage “lock-in” effect, or the “crowding out” of private capital.”

Switching gears to other updates…

Uniform Loan Delivery Dataset (ULDD) Phase 4a is implemented and the Phase 5 transition (optional delivery) has begun. Freddie Mac continues to enhance Loan Selling Advisor®. Sharing information about the customer test environment (CTE) for ULDD, plus additional news to help clients: Freddie Mac’s website.

Freddie Mac posted information on the new and updated UAD Redesign Documentation. The Uniform Appraisal Dataset (UAD) and Forms Redesign team has announced the release of additional documentation and updated one existing document to support ongoing implementation efforts. Fannie Mae’s Uniform Appraisal Dataset (UAD) and Forms Redesign team has released additional documentation and updated one existing document to support ongoing implementation efforts. These resources supplement prior documentation originally published in 2023 and subsequent releases throughout 2023 and 2024.

The publication of VantageScore® 4.0 historical credit scores is coming on July 10. For more information and to register for the session, visit Fannie Mae’s credit score models and reports initiative page.

Fannie Mae has approved the acquisition of Republic Mortgage Insurance Company and Republic Mortgage Insurance Company of North Carolina and its affiliates (RMIC) by Arch U.S. MI Holdings, Inc., a subsidiary of Arch Capital Group Ltd. RMIC is now an affiliate of our approved mortgage insurers Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company.

In the July Loan Product Advisor® (LPASM) release, Freddie Mac describes implementation of revised feedback messages related to the annual transition of LPA specification versions. Also included are reminders about collateral representation and warranty relief feedback messages and trended data.

As explained in Fannie Mae Release Notes, The Desktop Underwriter® (DU®) validation service will be updated the weekend of August 17 with enhancements intended to improve asset validation. Updates include asset validation up to the total balance of liquid accounts, consideration of net equity, evaluating assets when reported assets are not sufficient to cover closing costs, and more. View the integration impact memo for additional information.

At the Mortgage Industry Standards Maintenance Organization® (MISMO®) Summit, Fannie Mae shared significant progress on developing the Loan Boarding Data component of the Industry Transfer of Servicing Dataset. Help finalize both datasets by participating in the MISMO Servicing Transfers Development Workgroup.

Beginning July 1, all servicers can access the Liquidation Reconciliation Third Party Sales (TPS) application within Property 360™, which provides a simplified process for managing TPS cases from initial case creation to sale reconciliation. Servicers must onboard the application by no later than August 31. Details are available in the Fannie Mae release notes.

FHFA issued a Request for Input (RFI) on opportunities to improve the Federal Home Loan Banks’ (FHLBanks) processes for members and project sponsors to apply for Affordable Housing Program (AHP) funding. During FHFA’s FHLBank System at 100: Focusing on the Future review, many stakeholders encouraged FHFA to improve the efficiency of the application process. FHFA is seeking input on potential opportunities to improve the application process for the AHP competitive application programs. Each FHLBank develops user or reference guides and resources to assist FHLBank members and project sponsors apply for AHP competitive application funding. FHFA is providing these resources to assist stakeholders in providing feedback on the FHLBanks’ AHP competitive applications.

FHFA released its first quarter 2024 Foreclosure Prevention and Refinance Report. Fannie Mae and Freddie Mac (the Enterprises) completed 52,154 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to nearly 7 million since the start of conservatorships in September 2008. FHFA’s quarterly foreclosure prevention and refinance reports include data on the Enterprises’ mortgage performance, delinquencies, and active forbearance plans, as well as forfeiture actions and refinances by state. The data included in these reports are also available on FHFA’s website as an interactive Borrower Assistance Map.

Capital Markets

There were a few miscellaneous data points yesterday, none of which did much to change the overarching narrative that the U.S. economy is beginning to slow, and none of which had much effect on bond movement. Consumer Confidence edged modestly lower in June, demonstrating a hesitant, but not overly concerned, consumer. On the housing front, the FHFA Housing Price Index was up 0.2 percent month-over-month in April after increasing 0.1 percent in March, while the S&P Case-Shiller Home Price Index was up 7.2 percent year-over-year in April, slightly more than expected. Home prices continue to rise despite 30-year mortgage rates hovering around 7 percent as people are becoming used to rates at these levels.

Security pricing is largely a matter of supply and demand, and the U.S. Treasury kicked off this week’s quarterly refunding note auction slate with a solid sale of $69 billion in 2-year notes.

Mortgage applications from MBA kicked off today’s calendar, increasing 0.8 percent from one week earlier. This week’s results include an adjustment for the Juneteenth holiday. We learned last week that the Mortgage Bankers Association’s refinance index surged 28 percent in the latest release and is now at its highest level since the fall of 2022. This is a good sign that new mortgages are slowly replacing the record-low lending rates from the beginning of the pandemic. One year ago, 30-year conventional and Ginnie Mae mortgage bonds with 1.5 percent through 2.5 percent coupons made up 42 percent of the U.S. MBS index, but that figure has now dropped to 37.3 percent. Still, most mortgages remain out of the money, most by over 300 basis points.

Later today brings New Home Sales for May and several Treasury auctions that will be headlined by $28 billion reopened 2-year FRNs and $70 billion 5-year notes. We begin Hump Day with Agency MBS prices slightly worse than Tuesday’s close, the 10-year yielding 4.29 after closing yesterday at 4.24 percent, and the 2-year at 4.73.

Jobs

JMAC Lending is pleased to announce the addition of mortgage-industry leader Sabrina Lopez as Regional Vice President – TPO West. Sabrina brings more than 20 years of strategic leadership experience to JMAC. In her role, Sabrina will grow and scale a team of Sr. Account Executives throughout the company’s western region. “We want to empower our AEs to grow their business in this market,” JMAC’s President Christina Pham said. “Sabrina has a demonstrated record of success helping Account Executives become top producers in their markets. Her seasoned mortgage background, industry knowledge and relationship-driven mindset will be an essential component to JMAC’s continued growth and strategy. With Eric Yang as EVP of TPO and Bob Bordenet as Regional Vice President – TPO East, we are stronger than ever and well-positioned to take our team and business to the next level.” Elevate your lending capabilities this summer with your single source for solutions. Visit here and follow JMAC on LinkedIn, and contact Sabrina Lopez direct for Account Executive opportunities.

“Highlands Residential Mortgage is proud to announce that we have been ranked #1 by Experience.com for 2023 in their annual Top Performers in the Mortgage Industry rankings! This accolade is especially meaningful to us as it reflects the outstanding experiences and overall satisfaction of our customers and business colleagues. Brian Bennett, President of Highlands, shared, “While every award is a source of pride for us, being recognized in the #1 spot for 2023 is an incredible achievement for the Highlands team. It underscores how deeply our customers trust us and is truly a testament to our outstanding people that go above and beyond every day to provide a world class home financing experience. We are genuinely grateful for the recognition and will continue to serve all of our communities across the country at the highest level.” To learn more about the Highlands experience, reach out to Corey Caster, EVP-Chief Production Officer.”

Xactus announced today that Joseph Peterson has been named Chief Financial Officer.

(Remember: employers can view posted resumes for several months for a nominal charge and job seekers can post their resumes for free on www.lendernews.com.)

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

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After a rocky start to the year, things began to improve for rates and the inflation outlook in May. June took the improvement to the next level, but this week didn’t affect the bigger picture.

Ahead of Wednesday’s market closure for Juneteenth, the most relevant economic report was Retail Sales on Tuesday morning.  It came in slightly below forecast and the previous month was revised lower.   Rates responded by moving back toward recent lows, but not below them.

Some sources suggest mortgage rates are in fact at multi-month lows, but this relies on Freddie Mac’s weekly survey which is notorious for modest inconsistencies with reality due to the timing and methodology of the survey.  In both 10yr Treasury yields and mortgage rates, the reality has been more of a sideways fizzle as opposed to additional improvement.

Apart from Retail Sales, Friday’s PMI data from S&P Global caused the most notable market reaction after coming in at the strongest levels in more than 2 years–albeit, just barely.

Stronger economic data tends to coincide with rates moving up.  Using 10yr Treasury yields as a convenient intraday benchmark for mortgage rate momentum, we can see the impact relative to Retail Sales earlier in the week.  Neither were remotely on the scale of last week’s CPI data.  Additionally, they each argued opposite cases, thus helping the rate range remain subdued for now.

In other words, most of June’s progress was already in place before this week began.  It gets rates within striking distance of a longer term uptrend–one that will be hard to definitively break unless June’s forthcoming economic data paints a picture of economic weakness and lower inflation.  It will be several weeks before most of June’s data starts coming in.

While the rest of this week’s data didn’t necessarily move markets, much of it was housing-focused.  New Residential Construction is measured at several stages with building permits and housing starts (the start of the physical construction process) being the two main headlines.  Both have been trending gently lower (but remain elevated compared to the pre-pandemic levels) and this week’s update was no exception.

The National Association of Homebuilders (NAHB) also released its Housing Market Index which is essentially builder confidence.  In general, the high rate/low affordability environment continues weighing on builders, forcing them to cut prices and/or offer additional incentives.

Existing Home Sales are much more sensitive to the post-pandemic rate volatility and have been doing much worse than new construction as a result.  This week’s update did little to change that, but didn’t offer any fireworks relative to expectations.

The more interesting consideration for home sales is a potential future with another move toward lower rates.  The last notable rate rally resulted in a clear response from the housing market.  The upcoming data in early July will determine whether rates are able to challenge the bigger picture uptrend.  While that challenge could go either way, if it’s successful, it suggests a meaningful uptick in housing activity.

Source: mortgagenewsdaily.com

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Pacific Investment Management Co. expects more regional bank failures in the U.S. because of a “very high” concentration of troubled commercial real estate loans on their books. 

“The real wave of distress is just starting” for lenders to everything from malls to offices, John Murray, Pimco’s head of global private commercial real estate team, said in an interview. His division sits within Pimco’s $173 billion alternatives business.

Uncertainty over when the Federal Reserve may cut interest rates has exacerbated challenges faced by the commercial real estate sector, where high borrowing costs have hammered valuations and triggered defaults, leaving lenders stuck with assets that are tough to sell. Contrary to some market expectations, larger banks have been disposing of some of their higher quality assets first to avoid deeper losses, according to Murray.

“As stressed loans grow due to maturities, however, we expect that banks will start selling these more challenged loans to reduce their troubled loan exposures,” he said, adding his team has been snapping up CRE loans offloaded by some large US banks for the past 18 months. 

The turmoil has been particularly felt among regional banks, which boosted their CRE exposure that in many cases is now worth only a fraction of their value at their peak. Smaller banks have continued to worry investors ever since the collapse of a few last year. Earlier this year, US Bancorp, the largest regional bank by assets, increased its provisions for credit losses in the first quarter to $553 million.

Regional banks were also the only lenders that didn’t demand extra down payments from commercial-property borrowers in recent years, highlighting their vulnerability to falling values, according to a report released by MSCI Real Assets in March. Deposit-taking institutions face an estimated $441 billion wall of maturing property debt this year.

For larger banks, the property exposures aren’t expected to cause systemic failures as their CRE lending was curbed after the 2008 crisis, Murray said. But borrowers’ failure to repay means they’re lending even less compared with 2021 and 2022, he added. 

Meanwhile, many mortgage real estate investment trusts have become more sidelined as they deal with problems of their own. That’s limited their ability to underwrite new investments. Starwood Real Estate Income Trust tightened its shareholders’ ability to pull money last month in an effort to preserve liquidity and stave off asset sales, while Blackstone Inc.’s $59 billion property trust saw an uptick in withdrawal requests. 

Lending volumes for major public mortgage REITs have plunged 70% from 2021 levels, according to Murray.

While banks tend to hog most of the headlines, another area that needs close attention is the more than $200 billion of loans made by debt funds in the US that are set to mature through 2025, Murray said. Many of these loans were originated during the peak pricing era of 2021, often with a three-year term and a three-year rate cap. 

“The first catalyst for stress at the asset level is occurring right now, as assets will struggle to meet extension tests in this higher rate environment,” Murray said.

The Newport Beach, California-based asset manager is also keeping an eye on how German banks deal with their commercial real estate exposure. 

“The combination of rising rates plus recessionary pressures creates real challenges for commercial real estate, from both a capital markets and fundamentals perspective,” Murray said. 

Source: nationalmortgagenews.com

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Enjoy complimentary access to top ideas and insights — selected by our editors.

Consider yourself a scholar of the latest mortgage servicing litigation and Fannie Mae announcements? In this week’s National Mortgage News quiz, test your knowledge on articles covering the “zombie property apocalypse,” fraud, and more!

Click here to try out last week’s test.

Source: nationalmortgagenews.com

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If you sell your home after the middle of August, cheers: You could end up pocketing the money that previously would have gone to the buyer’s agent.

But before you celebrate, consider the downside of waiting until late summer to list your home for sale: House prices tend to fall after August. The price drop might surpass the money you save on commission.

New policies governing real estate commissions are set to go into effect Aug. 17 as a result of the settlement of an antitrust lawsuit. The amended policies give home sellers more room to negotiate what to do about the buyer’s commission — whether they want to use it to induce competitive bids or keep it to themselves entirely.

The choices complicate this season more than usual, for both buyers and sellers. Here’s what to know to help you and your agent come up with the best strategy for you.

What, exactly, is changing?

Starting Aug. 17, sellers will no longer set the commissions for real estate agents who represent buyers. Buyers will decide how much their agents will be paid. Even when sellers are willing to pay some or all of the commission for the buyer’s agent, the amount will no longer appear on the multiple listing service.

For decades, and up to Aug. 17, MLS listings have been required to advertise how much commission the seller is offering to buyer’s agents. The information wasn’t visible to home buyers but could be viewed in agent-only fields of the MLS.

When sellers set commissions for buyer’s agents, they’re sometimes advised that offering a low commission will attract fewer buyer’s agents — and therefore fewer competing offers. The plaintiffs in the antitrust suit argued that the policy of requiring commission info on the MLS was designed to discourage them from negotiating lower commissions for buyer’s agents.

Can sellers start offering 0% to buyer’s agents today?

Technically, sellers have always had the option of offering zero or minimal commission to the buyer’s agent. But most sellers have offered such commissions to motivate buyer’s agents.

  • The money may come directly out of the seller’s pocket, as has been the norm.

  • The money may come directly out of the buyer’s pocket.

  • The buyer and seller may split the payment.

  • The buyer may pay indirectly, by adding their agent’s commission to the price of the house when they make an offer.

Here’s an example of how an indirect payment might work for a buyer who is paying a 3% commission. The buyer finds a house costing $400,000. The 3% commission is $12,000. The buyer offers $412,000 and asks the seller to transfer $12,000 to the buyer’s agent at closing.

Keep in mind that sellers, having equity, tend to have more access to cash than first-time home buyers, who accounted for 33% of buyers in April. A seller who’s willing to pay all or some of the buyer’s commission may end up with more offers, and a higher final price, than one who flatly takes that commission off the table.

How much money could sellers keep, though?

As a home seller, you stand to save thousands of dollars on commissions if the buyer pays their agent directly or indirectly.

Let’s say the agents in your town typically collect 2.5% on each side of the transaction, and you sell your house for $400,000. Each agent earns $10,000. If you pay both agents, you’ll shell out $20,000 and end up with $380,000.

But if the buyer pays their agent, you would pay your agent $10,000 and walk away with $390,000. That’s $10,000 more.

On the other hand, buyers might request bigger closing cost credits, subtracting from the seller’s bottom line, Chuck Vander Stelt, a real estate agent in Valparaiso, Indiana, said in an email. Or buyers might offer less because they will bear the expense of paying their own agents.

Even after Aug. 17, sellers might keep offering commissions to buyer’s agents as motivation, Vander Stelt added. These offers could remain standard in many markets, multiple agents said. Offering commissions to buyer’s agents will still be permissible under the new policies, but those offers will no longer appear on the MLS. Listing agents can communicate the information on brokerage websites, or in phone calls, emails and texts.

What would be the cost of waiting?

You might be tempted to keep your home off the market until the new policy goes into effect. But waiting might not be a wise move, because it would mean sitting out homebuying season.

Home prices peak from May through August, then drop off. In 2023, the median existing home cost $410,100 in June, $405,600 in July, $404,200 in August — and $392,700 in September, according to the National Association of Realtors. If you list your house after mid-August, you probably won’t close until October or later, when prices are even lower.

With house prices peaking in summer, you might come out ahead by selling during the busiest time of the year, even if you end up paying the buyer’s agent’s commission.

“I don’t really have anybody holding off until after August to list their house because they want to save a couple bucks,” says Michelle Doherty, an agent in northern Virginia with RLAH Real Estate. She says her clients will be ready to sell in June or July, “depending on how things progress with prepping the house.”

Can I negotiate the listing agent’s commission too?

You might save money if you don’t pay the buyer’s agent’s commission. But what about the commission that you pay the listing agent for selling your home? You might not see an immediate reduction. If a cut in commissions from 3% to 2% is your hope, you’ll probably mope.

“First of all, nothing’s going to change quickly, OK?” says Stephen Brobeck, senior fellow for the Consumer Federation of America. “The industry will resist, and consumers don’t really focus on this much.”

Vander Stelt said that he sees headlines that proclaim “the end of the 6% commission.” That’s a mistaken belief, he said. “Overall, the average commission costs per transaction on a percentage is likely to come down over the coming years,” he said. But not instantly.

What if I list before Aug. 17 but sell after?

Months can pass between the day you put your home on the market and the day you hand over the house keys at closing. What if the Aug. 17 policy change happens in the middle of this period? The National Association of Realtors provides guidance for two scenarios:

  • Your home’s MLS listing offers to pay the buyer’s agent’s commission, and you sign the contract accepting the purchase offer before Aug. 17: You’ll pay the commission, even if the closing occurs on Aug. 17 or after.

  • Your home’s MLS listing offers to pay the buyer’s agent’s commission. But in accordance with the new policy, that offer is removed from the MLS on Aug. 17. Sometime after that date, you accept the purchase offer: That defunct commission offer on the MLS is no longer valid. You and the buyer will negotiate how to take care of the buyer’s agent’s commission.

When you put up your home for sale, you’ll sign a listing agreement with your agent. NAR says that listing agreement might have to be amended if it says that an offer to pay the buyer’s agent must be made “on the MLS.” As of Aug. 17, that clause in the listing agreement will conflict with the new policy. Your agent might ask you to sign an amended listing agreement before that date.

Source: nerdwallet.com