Uncommon Knowledge
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Mortgage applications for new homes surged in January as a lack of existing homes continued to fuel the demand for new construction.
Mortgage applications for new home purchases rose 19.1% in January on a year-over-year basis, the 12th consecutive month with an annual increase. Applications were up 38% from the previous month, according to the Mortgage Bankers Association (MBA) Builder Application Survey for January.
According to MBA estimates, new single-family home sales were at a seasonally adjusted annual rate of 700,000 units in January, the highest pace since October 2023. The pace was up 16.9% from December’s rate of 599,000 units.
“Applications for new home purchases were strong in January, as newly built homes remained an attractive option for prospective homebuyers who looked to take advantage of lower mortgage rates during the month,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
In January, conventional loans accounted for 64.5% of loan applications for new homes. Federal Housing Administration (FHA) loans accounted for 24.8% of applications, U.S. Department of Veteran Affairs (VA) loans took a 10.3% share and U.S. Department of Agriculture (USDA) loans accounted for 0.4%.
The average loan size for new homes decreased to $401,282 in January, down from $405,368 in December.
Homebuilders are feeling optimistic about the spring buying season. Homebuilder confidence shot up to a five-month high in February, according to the National Association of Home Builders’ most recent survey.
MBA’s survey tracks new home mortgage application volume from mortgage subsidiaries of homebuilders across the country.
Source: housingwire.com
Mortgage demand was weaker last week as interest rates moved higher across the board.
Mortgage applications decreased by 2.3% on a seasonally adjusted basis during the week ending Feb. 9, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey.
“Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Refinance applications declined and remained depressed, with rates still higher than a year ago.”
Purchase applications decreased by 3% from one week earlier on a seasonally adjusted basis, while refinance applications fell by 2% in the same period. Last week, refis comprised 34.2% of all applications, down from 35.4% the previous week.
The 30-year fixed-rate mortgage averaged 6.64% as of Feb. 8, according to Freddie Mac’s Primary Mortgage Market Survey.
The MBA survey shows that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) increased to 6.87%, up from 6.80% the week before. Meanwhile, rates on jumbo loans (greater than $766,550) increased to 7%, up from 6.88%.
The Federal Housing Administration’s (FHA) share of total applications increased to 13.4% last week, down from 13.1% the week prior. The U.S. Department of Veterans Affairs (VA) share declined to 13.1%, down from 14.1% the week before. The U.S. Department of Agriculture (USDA) share remained unchanged at 0.4%.
The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.
Source: housingwire.com
The US housing market should experience a warm return this spring, thanks to calming economic data.
The average rate for a 30-year loan declined to 6.63% from 6.69% the week prior, according to Freddie Mac on Thursday. Mortgage rates dropped for the second time in 2024 and are expected to retreat further as inflation moderates, which could help spark a housing rebound.
As most indicators point to interest rate cuts this coming year, housing experts are predicting a busier spring buying season starting in the next couple of months as more supply and demand return to the housing market thanks to the mortgage rate drop.
“So long as core inflation and economic activity continue to moderate, mortgage rates aren’t expected to rise further,” said Orphe Divounguy, senior macroeconomist at Zillow. “If layoffs remain low, and mortgage rates ease, housing market activity should rebound modestly this spring — meaning more listings coming on the market and more sales.”
Read more: Mortgage rates below 7% — is this a good time to buy a house?
Mortgage applications fall
The likelihood of a bustling spring housing market will depend heavily on where mortgage rates head next. Homebuyers have proven again they are rate-sensitive amidst today’s elevated home prices. After last week’s slight rate increase, the volume of mortgage application activity retracted 7.2% on a weekly basis, according to an application survey tracked by the Mortgage Bankers Association (MBA) for the week ending Jan. 26.
“Low existing housing supply is limiting options for prospective buyers and is keeping home price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity,” said Joel Kan, MBA’s deputy chief economist.
Affordability challenges also worsened due to last week’s rate bump. The average loan size for purchase applications increased to $444,100, the largest since May 2022, according to the MBA.
Low application rates and hardship don’t mean homebuyers have disappeared, though. Redfin’s Homebuyer Demand Index — measuring buyers’ requests for home tours and other buying services on Redfin — showed that interest increased 6% over the last seven days in the week ending Jan. 28.
“I believe this year’s market will launch in the spring, once 6% rates are even more entrenched in buyers’ psyches, and more homeowners list their houses,” said Hal Bennett, a Redfin Premier agent.
Wall Street banks and industry experts expect cuts. Wells Fargo said in its 2024 annual outlook that the economy will moderate by mid-2024, prompting the Fed to cut rates by 225 basis points by early 2025. Housing experts at Fannie Mae are predicting mortgage rates will decline below 6% by the end of 2024, leveling off at about 5.8%.
During yesterday’s Federal Open Market Committee meeting, the Fed announced it is keeping its benchmark rate steady in an effort to suppress inflation to 2%. Even so, Fed Chair Jerome Powell expressed optimism that rates have peaked and a cut could come soon. But any drop is not a guarantee.
“Inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain,” Powell said during the FOMC conference.
Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards
The latest Personal Consumption Expenditures (PCE) index — the Fed’s preferred inflation measurement — increased 2.6% annually in December, falling below 3% for the first time since March 2021. More importantly, though, is that an annualized PCE using data from the prior three to six months is now below 2%.
“The lower inflation readings over the second half of last year are welcome,” Powell added, “but we will need to see continuing evidence to build confidence that inflation is moving down sustainably toward our goal.”
Rebecca Chen is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).
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Source: finance.yahoo.com
In the current mortgage landscape, ensuring the highest standards of loan quality is paramount not only during the origination process but also over the life of the loan. As the mortgage industry grapples with a changing market and regulatory complexities, we sat down with Amanda Phillips, Executive Vice President of Compliance at ACES Quality Management, to discuss how lenders can foster long-term success through a robust servicing QC process.
HousingWire: What were some of the challenges faced by lenders in 2023, and what is the outlook for 2024?
Amanda Phillips: 2023 was a year of trials and tribulations for financial institutions. Mortgage applications hit their lowest level since 1996, and lenders were faced with the compounding challenges of dwindling origination volume, soaring home prices, rising interest rates and inadequate housing inventory.
Thankfully, the tune of the housing industry has changed over the last few weeks. Analysts predict 2024 will bring a rise in mortgage origination volume and, potentially, several cuts to interest rate. While the challenge of low housing inventory persists across the country, I have a feeling loan officers will be busier. While the industry basks in the much-needed optimism for 2024, one thing is for certain, quality control (QC) and compliance are still important and worthy of lenders’ attention. An uptick in origination volume tends to bring an uptick in QC defects.
HW: Why is quality control (QC) crucial for lenders in the mortgage industry, and how can lenders maintain QC effectively?
AP: QC is crucial for lenders to ensure loan quality and mitigate risk. A well-rounded QC program can catch loan defects before regulators arrive for exam or investors send loans back for re-purchase. Operational capacity and the staggering cost to originate are challenges lenders will continue to face, leading many lenders to offset this hurdle by maintaining mortgage servicing rights (MSR). To maintain profitability through MSR, lenders also needa robust servicing QC program.
Maintaining QC begins with regularly assessing the integrity of both servicing portfolios and staff to ensure they adhere to all relevant servicing rules, guidelines and regulations. Fortunately, QC is a crucial area where lenders can see immediate returns from easy-to-implement audit and compliance technology. Lenders are advised to regularly review and update operational/compliance procedures and quality control frameworks, conduct self-assessments to test those updates, and, of course, remediate findings.
To mitigate and manage inherent servicing risks, your risk management team must identify your institution’s specific risk areas. From there, your internal audit team should ensure the proper processes and procedures are in place to address those risks. Subsequently, the QC team is responsible for verifying, from a transactional perspective, that your organization aligns its actions with its declarations and takes necessary measures regarding associated risks. Traditional methods, such as manual tracking and spreadsheets, make this process all the more prone to mistakes. This is why utilizing audit technology is so powerful; mistakes are significantly reduced, and efficiencies gained through less manual entry needed from the QC team.
The CFPB’s priorities signal the importance of self-assessment and remediation. Dot your I’s and cross your T’s with a paper trail. Lenders should review their in-house practices to ensure they meet the standard and compare with the recommendations from regulators.
HW: What role does the Consumer Financial Protection Bureau (CFPB) play in the mortgage servicing landscape, especially concerning compliance with the CARES Act and servicing regulations?
AP: The CFPB continues to emphasize compliance with the CARES Act and other servicing regulations, particularly in areas like fair lending, fair servicing, and forbearance. Over the last several years, they have clearly stated the priorities of fair lending and achieving equitable and fair housing programs. The CFPB has actively stated that strictly relying on artificial intelligence (AI) and automated complex credit models will not be tolerated. If a borrower was denied, the lender needs to be able to accurately speak to and explain why and how the decision was made.
This is just another area of how implementing a robust QC process can help lenders avoid these regulatory pitfalls. With audit technology, lenders will have this process documented and ready to pull up in the event of a regulatory audit or discrepancy.
HW: What steps should servicers take to identify and manage inherent servicing risks?
AP: Servicers should identify specific risk areas, establish proper processes, and conduct audits against policies and procedures. An example of a process improvement could be a Call Monitoring program. Consumer telephone interactions are an essential aspect of servicing that is easy to overlook from a quality perspective. No matter how many controls are in place, the need for human interaction, especially as it relates to collections and loss mitigation efforts, can result in an increased risk of non-compliance. Lenders can leverage a robust Call Monitoring program to identify where improvements are needed to protect the organization from regulatory and reputational risk. ACES Quality Management has a pre-built, configurable Call Monitoring audit pack that enables servicers to establish an additional layer of protection quickly and seamlessly within your QC program.
As financial institutions navigate the intricate web of compliance requirements and market fluctuations, ACES not only enables adherence to regulatory standards but it elevates the entire loan quality paradigm. By fostering a culture of continuous improvement while equipping professionals with powerful data-driven insights, ACES becomes an invaluable ally in mitigating risks and enhancing operational efficiency.
The significance of robust quality control and management in the mortgage sector cannot be overstated. In an environment where precision and compliance are non-negotiable, ACES stands as a testament to innovation and adaptability. For more tactical ways to improve QC, download ACES’ free playbook: Three Lines of Defense for Maintaining Servicing Loan Quality.
Source: housingwire.com
Refinancing activity rebounded for the week ending February 2 after declining the previous week, as mortgage rates stabilize in the under-7 percent level, contributing to a rise in home loans application, the Mortgage Bankers Association (MBA) said on Wednesday.
The Refinance Index jumped 12 percent from the week before February and also rose by a percent compared to one year ago, according to MBA. Meanwhile, mortgage applications jumped by nearly 4 percent in the same time span.
The average cost of a 30-year fixed rate mortgage for a loan of $766,550 ticked up slightly to 6.80 percent compared to 6.78 the previous week.
“Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market,” Joel Kan, MBA’s deputy chief economist, said in a statement shared with Newsweek. “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates.”
Mortgage rates peaked at about 8 percent in the fall of 2023, making the cost of a home loan the highest it had been since the turn of the century. The elevated rate environment discouraged both buyers and sellers to step into the housing market who were reluctant to incur higher monthly payments of their housing loan.
Part of the reason rates jumped so high was due to the Federal Reserve’s hiking of its funds rate to battle soaring inflation. The rise in prices is cooling giving confidence that policymakers will slash rates but a strong jobs market is creating uncertainty on how quickly those cuts will happen.
But to begin the year, there is evidence that buyers are showing interest in dipping into the housing market, according to real estate platform Redfin, as rates have fallen over the last few weeks.
Redfin’s Homebuyer Demand Index, which tracks requests for tours, went up 6 percent for the week ending January 28, the platform said. Real estate agents say, however, that that increase in interest has yet to translate to a substantial jump in sales.
MBA experts are seeing a similar bubbling up of buyer interest.
“Purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply,” MBA’s Kan said.
Supply of homes is a huge challenge for the housing market. Housing economists have told Newsweek in the past that the market is 4 million homes short of demand, contributing to a jump in prices.
Some economists suggest that as mortgage rates fall, the used homes market may pick-up as sellers would begin to come out of the sidelines and finally put their homes in the market.
“Once they start moving, and I suspect we’ll see more and more of those folks moving in the coming year, they’ll have to become somewhat aggressive on pricing, they’re going to have to lower their price,” Mark Zandi, chief economist at Moody’s Analytics, told Newsweek last week.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
Mortgage application volume rose modestly during the week as mortgage rates marked time. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, increased 3.7 percent on a seasonally adjusted basis compared to the previous period, a week in which the data contained an adjustment to account for the MLK holiday. On an unadjusted basis, the Index increased 8.0 percent week-over-week.
The Refinance Index gained 12.0 percent from the previous week and was 1.0 percent higher than the same week in 2023. Refinancing accounted for 35.4 percent of the week’s volume, up from 34.2 percent the previous week.
The seasonally adjusted Purchase Index ticked down 1.0 percent and was 6.0 percent higher before adjustment. Volume was 19 percent below its level during the same week one year ago.
“Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market. The 30-year fixed mortgage rate was 6.8 percent, a slight increase from last week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates. However, purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply.”
Other Data from MBA’s Weekly Mortgage Applications Survey
Source: mortgagenewsdaily.com
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Wed, Feb 7 2024, 11:11 AM
When this commentary gig gets old, I think I’ll take up… throwing needles? But so far so good, putting this out six days a week. Yesterday I glanced at the calendar, and we’re 10 percent of the way through 2024 already! Still raining here in Northern California, and the flooding has caused a lot of concern in the mortgage industry, especially among companies servicing loans on any houses that are damaged, as well as owners of MBS with loans in them on any potentially damaged homes. At least the days are seeing more sunlight in the Northern Hemisphere. Daylight Savings kicks in on Sunday, March 10, just a little over a month away, and goes on until November. (Hawai’i, American Samoa, Guam, Puerto Rico, the U.S. Virgin Islands, and most of Arizona blow off this clock changing stuff.) Today’s Commentary podcast can be found here and this week’s is sponsored by Vesta, the new, modern Loan Origination System (LOS) which helps lenders reduce their costs to originate and improve their ability to integrate with new technologies in the ecosystem. Hear an interview with Vesta’s Mike Yu on LOS innovations and market demands for technology in a digitized space.
Lender and Broker Software, Products, and Services
Fair Lending: Get Ready for 2024! Fair Lending enforcement actions are at an all-time high and fair lending litigation is on the rise. Meanwhile, there’s been a slew of new guidance on AI, appraisal bias, immigration status, and other areas. In this latest webinar, Ncontracts discusses what financial institutions need to know about Fair Lending in 2024, including where regulators are focusing scrutiny, what new guidance means for your Fair Lending program, how Fair Lending has evolved over the past year, and how to prepare your lending compliance management program for 2024. Watch the full webinar for more.
Compliance Experts Report on 2024 Mortgage Servicing Outlook! Join ACES’ EVP of Compliance, Amanda Phillips, and Reid Herlihy of Ballard Spahr on February 14th at 11:00AM PDT as they discuss the most recent mortgage servicing news, CFPB Supervisory Highlights, and expectations and predictions for 2024 and beyond. Reserve your spot.
Make the ultimate connection with ICE + Black Knight at the MBA Servicing Solutions Conference & Expo. The ICE Mortgage Technology team will be on-site from Feb. 20-23 to help you unlock new efficiencies in your servicing operations. Stop by our meeting room to grab one-on-one time and learn about how our solutions can help bolster your business, then make sure to attend one of several informative sessions featuring ICE’s servicing experts. Whether you’re looking for the latest advancements in digital and automation or want to learn more about how we can help you address compliance requirements, ICE has you covered. Click here for the full conference schedule. We look forward to seeing you in Orlando.
Today’s lending environment is a tough market all around, not just for your production teams. Your marketing teams are also likely spread thinner, frequently asked to do more with less, with increased pressure to not only create compliant marketing, but content that is targeted, localized, and on-brand, all while meeting demanding deadlines. Thankfully, Usherpa is here to help! Partnering with Usherpa will give your sales team access to our award-winning Done-for-You automated content, while providing your marketing team with all the tools they need to efficiently help loan officers make the most of today’s market. Marketing teams can utilize Usherpa’s Launch Pad email engine to create and manage collateral aligned with your unique vision and brand strategies. And our boutique customer service is there every step of the way. What’s more, wouldn’t it be refreshing having monthly local content automatically deployed for your loan officers every month? Check out the current Local Housing Market Video. And schedule a demo today.
“Want to escape to old Havana, just for the night? Here’s your chance at MBA Servicing! RSVP to the Covius Kickoff Reception at the Cuba Libre Restaurant & Rum Bar on Tuesday, Feb 20th. We’re unwinding with hand-crafted cocktails, Cuban fare and Latin and Afro-Cuban rhythms. Join us there! Be sure to also schedule a meeting to talk with the Covius team while at the conference and stop by the Covius booth (#708) to learn more about our solutions designed to help servicers control risk and assure compliance, including default title, loss mitigation, title curative, REO & auction, doc prep, compliance solutions and more. While at the Covius booth, be sure to catch a demo of the newly redesigned and enhanced RealtyBid auction website or a demo of the Covius Technology Solutions team’s Low-Code Automation solution that interfaces easily with other industry standards and legacy systems.”
Broker and Correspondent TPO Products
“Stairs Financial is the leading mortgage marketplace focused on 1st-time homebuyers, matching them with lenders who understand the unique needs of that borrower demographic. With a successful launch in Texas and having sent hundreds of first-time homebuyer leads to our lender partners, Stairs is excited to announce we are expanding to other states. We are actively seeking additional lender partners who are passionate about helping first-time buyers and supporting local, state, and national Down Payment Assistance (DPA) programs. Stairs specializes in connecting lenders with high-intent mortgage leads, many of which are CRA-eligible, that are ready to buy their first homes. Our platform is focused on the customer experience resulting in exceptionally high contact rates because of our approach. By partnering with Stairs, lenders can fill their pipelines with reliable leads that have the financial resources and intent to close quickly. Please reach out to Mike Romano.”
“For the fourteenth consecutive year, U.S. Bank has been recognized by Fortune magazine as one of the 2024 World’s Most Admired Companies, placing #1 in the Superregional Banks industry category. Additionally, U.S. Bank is pleased to announce the start of the migration of our Housing Finance Agencies (HFAs) and HFA lenders to our new technology platform, U.S. Bank Lender Portal that provides housing finance agencies and lenders with features to simplify loan delivery and funding, including pipeline, conditions, and document management, lender workflow, and user communications. By offering industry leading technology, U.S. Bank continues to demonstrate a continued investment in our business and in yours. Interested in partnering with U.S. Bank? Contact us for more information.”
People Like Lists
Can you “cut your way to prosperity”? Certainly distributed retail lenders are slicing and dicing regional manager positions, or at least moving their pay from basis points of production to basis points of profitability. But lenders and vendors can only cut so much, right? Would a lender rather do ten loans at breakeven, or one loan at a nice profit?
Mortgage banking, although people talk a lot about dollar volume, is a game of units, of which our industry funded roughly 4.5 million last year. Put another way, units keep companies busy, like three loans for $150k each or one loan for $450k. And would you rather do those three loans and breakeven on them or fund one profitable loan for the same total dollar amount?
With that in mind, here are the “Top 100” lenders in 2023 based on units. The data here shows who the actual lender is, e.g., these are the lenders of the money such as it is with HMDA. This data is a blend of deed data, HMDA data, NMLS consumer direct data, census data, and mix of other sources to create the accuracy of the data overall. A big thank you to InGenius CEO Jeff Walton for this information, and questions about the InGenius product should be addressed to him! So here you go, for bragging rights on the number of units in 2023.
(1) Quicken Loans/Rocket Mortgage (267k), United Wholesale Mortgage, CrossCountry Mortgage, Fairway Independent Mortgage, LoanDepot, Pennymac Loan Services, Mortgage Research Center, Guaranteed Rate, Movement Mortgage, DHI Mortgage, (11) JPMorgan Chase Bank, Navy FCU, Wells Fargo Bank, US Bank, Guild Mortgage, Lennar/Eagle Home Mortgage, CMG Mortgage, NewRez LLC, State Employees Credit Union, New American Funding, (21) Discover Bank, Nationstar Mortgage, Bank of America, The Huntington National Bank, TD Bank NA, Fifth Third Bank, Cardinal Financial, Citizens Bank, NA, American Pacific Mortgage, Primelending, (31) Prosperity Home Mortgage, Freedom Mortgage, “Other” Lenders, Union Home Mortgage, Paramount Residential Mortgage Group, Regions Bank, Mutual of Omaha Mortgage, Everett Financial, Pulte Mortgage, NFM Inc., (41) Academy Mortgage, Guaranteed Rate Affinity, PNC Bank, Truist Bank, Amerisave Mortgage, NVR Mortgage Finance, Ark-La-Tex Financial Services, Flagstar Bank, Citibank NA, Provident Funding (11k),
(51) Atlantic Bay Mortgage Group, Caliber Home Loans, Pentagon FCU, USAA Federal Savings Bank, American Financial Network, Carrington Mortgage Services, Flat Branch Home Loans, Lake Michigan Credit Union, Ameris Bank, Equity Prime Mortgage, (61) Primary Residential Mortgage, Bay Equity, The Federal Savings Bank, Northpointe Bank, Annie Mac, Plaza Home Mortgage, Morgan Stanley Private Bank, Cornerstone Home Lending, Gateway Mortgage Group, OCMB Inc., (71) Plains Commerce Bank, Kind Lending, KBHS Home Loans, Bell Bank, Homebridge Financial, Sierra Pacific Mortgage, AmCap Mortgage LTD, First National Bank of Pennsylvania, Luminate Home Loans, Wintrust Mortgage, (81) Change Lending, Taylor Morrison Home Funding, First Republic Bank, South State Bank, First Citizens Bank & Trust, PMAC Lending Services, First United Bank & Trust, VIP Mortgage Inc., Finance of America Reverse, Cadence Bank, (91) First Home Mortgage Corp., MERS, HomeAmerican Mortgage, First Horizon Bank, Bank of the West, BMO Harris Bank, East West Bank, Longbridge Financial, UBS Bank, and HSBC Bank (2k).
Capital Markets
The Fed’s policymakers are in less of a rush to cut rates than what you’re probably hoping for. Cleveland President Mester said the Fed will probably gain confidence to cut rates “later this year” if the economy performs as expected, while Minneapolis President Kashkari noted that the central bank has not yet reached its goal.
Despite the hawkish Fed rhetoric, markets yesterday took a breather following a selloff that began with Friday’s stronger than anticipated January payrolls report. Separately, the U.S. Treasury started this week’s note and bond auction slate with a strong $54 billion 3-year note offering.
Today’s economic calendar kicked off with mortgage applications increasing 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending February 2. Yields were volatile during the reporting period following the latest FOMC decision as well as the stronger than expected January payrolls report. We’ve also received the December trade deficit ($63.2 billion previously). Later today brings consumer credit for December, Treasury auctions headlined by $42 billion 10-year notes, and several Fed speakers. We begin the day with Agency MBS prices worse about .125 from Tuesday night, the 10-year yielding 4.12 after closing yesterday at 4.09, and the 2-year yielding 4.42 percent.
Jobs and Transitions
New Jersey-based NJ Lenders Corp., a residential mortgage origination company, is seeking a full time individual to join its accounting department. Position can either be in the office or remote. The Candidate must have experience in Loan Vision and Encompass. Responsibilities include extensive accounts payable and general ledger expertise in the system.
Good communication skills and a working knowledge of Excel is a must. Confidential inquiries and resumes should be directed to Kathi Chudzik.
Tired of working for a jack of all trades, but master of none? Ready to elevate your mortgage origination career as an expert in the rapidly growing market for financing long- and short-term single-family rentals? Visio Lending, a trailblazer in the world of DSCR loans with over 10,000 DSCR loans funded, is on the lookout for passionate and driven Account Executives to join its outstanding team. Visio is built, top to bottom, to do one thing: provide real estate investors and their brokers an unparalleled experience financing their investment properties. Top performers earn upwards of $400k. Learn more here.
Embrace Home Loans has promoted Ryan “Buddy” Hardiman from senior vice president of retail and direct sales to president where he will oversee the company’s lending operations and fulfillment areas, as well as continue to head Embrace’s financial services division.
Northern California’s Summit Funding, Inc. announced the appointment of Thomas Yoon as the head of Lead+ Wholesale Lending. “With a storied career and a visionary approach, Yoon brings unparalleled expertise and a fresh perspective to Summit’s dedicated non-QM division.”
Mortgage Cadence, a subsidiary of Accenture (NYSE: ACN), has announced that George Morales will join the company’s sales team and “will use not only his industry knowledge but the connections he has built to help the sales team bring Mortgage Cadence technology to new lenders.”
Download our mobile app to get alerts for Rob Chrisman’s Commentary.
Source: mortgagenewsdaily.com
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Homebuyer demand for mortgages fell for the second week in a row last week as firming rates put a damper on the surge in mortgage applications seen in January, a weekly survey of lenders by the Mortgage Bankers Association (MBA) shows.
The MBA’s Weekly Mortgage Applications Survey showed applications for purchase loans fell by a seasonally adjusted 1 percent last week when compared to the week before and were down 19 percent from a year ago. Requests to refinance were up 12 percent week over week but only 1 percent from a year ago.
“Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market,” MBA Deputy Chief Economist Joel Kan said in a statement.
At 6.68 percent Tuesday, rates on 30-year fixed-rate conforming mortgages were up 12 basis points from a recent low of 6.56 percent registered on Dec. 27, according to loan lock data collected by Optimal Blue.
That’s still a 1.15 percentage point drop from last year’s peak of 7.83 percent, seen on Oct. 25. However, a record number of Americans polled by Fannie Mae in January — many of whom have been priced out of markets where listings remain scarce — said they’re expecting mortgage rates to come down even more in the year ahead.
“Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates,” Kan said. “Purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply.”
Applications for purchase mortgages picked up during the first three weeks of January after rates pulled back from 2023 highs. But with mortgage rates now slightly higher than they were at the end of the year, the MBA’s surveys show demand for purchase loans contracting during the weeks ending Jan. 26 and Feb. 2.
Bond market investors’ bets that the Federal Reserve would begin cutting rates in March had been helping bring rates down. But at the central bank’s first meeting of the year, Fed Chairman Jerome Powell warned that a March rate cut was unlikely, and Fed policymakers indicated they intend to continue “quantitative tightening” that’s trimmed $1.3 trillion from the Fed’s balance sheet.
A blowout jobs report released Feb. 2 seemed to validate the Fed’s cautious approach to fighting inflation, showing U.S. businesses and government agencies added close to twice as many jobs as expected in January.
(A survey by the National Federation of Independent Business (NFIB) that’s considered to be a leading indicator of future employment trends points to slower job growth in the second quarter of this year, economists at Pantheon Macroeconomics said Tuesday in a note to clients.)
In an interview with the CBS News program 60 Minutes that aired Sunday, Powell reiterated that while almost all 19 members of the Federal Open Market Committee expect to cut rates this year, the first cut isn’t likely to come until the middle of the year.
Inflation “has been falling steadily for 11 months,” 60 Minutes reporter Scott Pelley pointed out to Powell. “You’ve avoided a recession. Why not cut the rates now?”
Powell said that with the economy still on strong footing, “we feel like we can approach the question of when to begin to reduce interest rates carefully.”
The Fed wants to see “more evidence that inflation is moving sustainably down to 2 percent,” Powell said. “We have some confidence in that. Our confidence is rising. We just want some more confidence before we take that very important step of beginning to cut interest rates.”
At 7.29 percent, rates on jumbo mortgages that exceed Fannie Mae and Freddie Mac’s $766,550 conforming loan limit are up 73 basis points from a recent low of 6.56 percent registered by Optimal Blue on Dec. 29.
The growing “spread” between conforming and jumbo mortgage rates coincides with renewed worries that falling commercial real estate values could lead to problems for regional banks that have traditionally been a leading provider of jumbo loans.
Asked by 60 Minutes about the likelihood of real estate sparking a banking crisis on the magnitude of the 2008 financial crisis, Powell said he doesn’t think that’s likely.
“We’ve looked at the larger banks’ balance sheets, and it appears to be a manageable problem,” Powell said. “There are some smaller and regional banks that have concentrated exposures in these areas that are challenged. And, you know, we’re working with them.”
While he doesn’t see a repeat of the 2008 financial crisis, Powell does expect “there will be some banks that have to be closed or merged out of existence because of this. That’ll be smaller banks, I suspect, for the most part.”
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Source: inman.com