Category Archives for "Mortgage Industry News"
Inquiring about the status of a package through Alexa is quite common. Life tends to take us by surprise both positively and negatively, and similar to life, there are things the U.S. Federal Reserve can and can’t control. Inflation is one of these elements, and so are geo-politics. With their assigned duty to maintain economic stability in our nation, the Federal Reserve has no control over global politics.
Meanwhile, vendors and lenders hustle to cut down expenses and excess capacity. The buzz around capital markets is about investors who have expanded the $2,500 Freddie and Fannie HomeReady credit for a month, along with jumbo, co-issue, non-QM, and servicing buyers. The present topic of discussion across STRATMOR’s platforms is about the whereabouts of your servicing in 2024.
Engaging with capital markets, the TMC Rundown includes a special feature with Matt Nyman from Mutual of Omaha. This week’s podcast sponsored by Truv allows applicants to verify various aspects like income, employment, assets, insurance, and switch direct deposits, hence unlocking the power of open finance.
On the technology front, mortgage lenders who rely on Empower, the loan origination system from Dark Matter Technologies, have a reason to celebrate. With a partnership between TRUV and Dark Matter, VOI & VOE are brought consumer-permissioned to the Empower system, leading to a remarkable decrease in costs by 60-80% and an acceleration in loan cycles. This also results in a more satisfactory borrower experience as TRUV extends top-tier coverage and conversation from the source to your Empower LOS for income and employment confirmations. To experience this service upfront, request a demo of TRUV in Empower’s LOS.Continue reading
In recent days, minute changes to daily mortgage rates have been noted, though they are gradually mounting. Today’s slight increase on the previous day puts it as the highest rate in several months, even without any notable changes to the rates being offered to borrowers. It’s worth noting that until a major shift occurs, there isn’t much to comment on. A substantial change is most likely to be provoked by upcoming economic data. Such data is released almost daily, but only a tiny fraction of these reports have high-level significance. Currently, we are anticipating the next significant report, the significant employment data, which will be coming out in a little over two weeks on March 8th. Other notable reports will be released later next week. Thus, barring any unforeseen circumstances, the negligible rates fluctuations might just continue. This may not be thrilling news, but it’s the reality of the situation.Continue reading
The trading day commenced with bonds demonstrating moderate strength, although it’s also accurate to describe their movement as ‘sideways.’ The European bond market’s frailty did not make an impact on Treasuries until after 10AM. This led to yields rising a few basis points higher into the 20-year bond auction and reaching day’s peak post the mediocre auction results. Despite some turbulence related to the Federal Reserve Minutes’ release, the 4.32+ ceiling was unscathed. The Treasury volumes were notably higher post-auction than after the Fed minutes, which only provoked about 1bp movement. This indicates that the Fed Minutes didn’t hold any unexpected information.
Recap of Market Fluctuations
At 09:57 AM, there was minor strength overnight in the face of the European bond market’s frailty. The 10-year yield dropped by half a bp to 4.27. MBS increased by 2 ticks (.06).
By 12:06 PM, there were two small waves of selling into the afternoon. MBS dropped 5 ticks (.16) and 10-year yield rose by 2.8bps to 4.303.
At 01:07 PM, a rather disordered 20-year auction took place. The 10-year yield rose by 4.8bps to 4.323. MBS fell by a quarter point.
By 02:49 PM, it was steadying post the Federal Reserve minutes but lost some additional ground into the 3PM close. The 10-year yield increased by 5.4bps to 4.329. MBS plummeted 9 ticks (.28).Continue reading
For the moment, mortgage rates haven’t shown any drastic changes since the beginning of the month, however, a gradual accumulation of minor increases is becoming noticeable. By last Friday, the standard 30-year fixed rate reached its peak since the end of November. A slight improvement was observed yesterday, but with today’s market trends, it has once again dwindled. Essentially, the usual lender is now matching the rates seen last Friday- the steepest since November 30th, 2023. That’s the downside. On the bright side, these rates remain nearly a full percentage point below the maximum highs of October. Regardless of its appeal, our future direction is more captivating than our previous journey. This path continually transforms in accordance with fresh economic intelligence and other occurrences. The most impactful factors are yet to be encountered several weeks from now. In the meanwhile, we are merely observing minor calibration adjustments.Continue reading
In the mortgage industry, a well-known saying advises clients to purchase a home with a significant other who has a solid credit score. This humor intends to highlight the value of property ownership as a means of wealth accumulation. Despite the current unpredictable economic climate, coupled with high inflation and unyielding mortgage rates, venturing into the housing market may not seem opportune. However, experienced loan officers understand that inflation could potentially propel homeownership, suggesting those experiencing the current economic climate may be more inclined to buy a house in the future – a useful point when a loan officer is conversing with a potential client. Coincidentally, recent podcasts sponsored by Truv feature interviews with Uday Devalla and Perry Hilzendeger from Sagent, discussing new servicing platforms and technology. Truv offers a range of features allowing applicants to verify income, employment, assets, and insurance, as well as changing direct deposits. In another significant development, ICE’s team of dedicated technology experts successfully aided 92 mortgage and home equity clients in completing their month-end, quarter-end, and year-end processing on January 1, 2024. This included the servicing of nearly 52 million active and inactive loans using the industry-leading MSP® loan servicing system, all within 24 hours. Further details on this annual regulatory process and its benefits to clients can be obtained from the mortgage technology experts at ICE.Continue reading
Yesterday began a promising week for bonds, with yields rallying in the morning before dipping a bit in the afternoon, but still closing with minor advances. The same momentum seemed to carry into today, but stronger selling pressure appeared earlier than anticipated. This shift in tide could primarily be attributed to the escalated selling pressure in Europe, where Bund yields experienced a significant rise.
Jumping to possible explanations, some hesitancy could be due to the impending release of the Federal Reserve Minutes this afternoon. However, it’s unlikely that any groundbreaking revelations will emerge from these documents. Regardless, the fluctuations of the day hold no substantial bearing on the broader scenario as long as we stay within the “triangle” identified by the highs of 4.32 and the optimistic trend witnessed over the last fortnight.Continue reading
As interest rates continue to rise, the number of mortgage applications has seen a considerable decrease. The rise in interest rates has particularly affected application volume in the week ending on February 16, with the Market Composite Index, which tracks this data, showing a 10.6 percent decrease on a seasonally adjusted basis. Before the adjustment, the volume had gone down by 8.0 percent. The fall was reflected in the Refinance Index as well, which shows an 11.0 percent decrease from the preceding week, but still managed a slight 0.1 percent increase compared to the same period a year ago. Refinancing applications made up 32.6 percent of all applications, down from 34.0 percent the week before.
The seasonally adjusted Purchase Index also experienced a downturn, but of 10 percent. Before any adjustments, the Index was down by 6 percent. Compared to the same week in 2023, however, Purchase applications were down by 13.0 percent.
This downward trend is attributed to mortgage interest rates that are once again exceeding 7 percent, after news in January suggested inflation was on the rise. This has diminished expectations of an imminent rate cut. As a result, there has been a significant decrease in mortgage applications, and this has been especially noticeable in the area of refinance applications. Growing worries about affordability have also arisen due to these changes in rate, as well as the increased cost of homes in a market that is seeing a supply shortage.
Yet, the size of the loans changed very little, with the average of all submissions being $381,800 and the average for purchase mortgages being $440,700. Similarly, the proportion of applications backed by the Federal Housing Administration (FHA) decreased slightly to 13.2 percent, and those guaranteed by the Veterans Affairs (VA) dropped to 12.1 percent, with USDA applications making up 0.5 percent of total applications.
In the same week, the average contract interest rate for 30-year fixed-rate mortgages experienced an increase to 7.06 percent. Meanwhile, the rate for FHA-supported 30-year fixed-rate mortgages grew to 6.91 percent. The rate for 15-year fixed-rate mortgages saw an 8-point boost to an average rate of 6.61 percent. Bearing witness to a similar rise was the average contract interest rate for 5/1 adjustable-rate mortgages, whose rate now stands at 6.37 percent. As for 30-year fixed-rate mortgages with jumbo loan balances, they now have a rate of 7.16 percent and 0.45 point. The ARM share of mortgage application activity has also grown, from 7.0 to 7.4 of the overall total applications.Continue reading
After the pause in activity due to the federal holiday, mortgage lenders established their rates for the first time this week on Tuesday. As banks were also closed for the holiday, there was no movement in the financial market sectors that influence mortgage pricing. However, while the majority of the American financial system was on a break, the rest of the world was in operation, which can occasionally cause fluctuations in the rates post a three-day weekend. Fortunately, no such volatility was observed today, and the market was relatively steady. Compared to last Friday, we noticed a slight improvement in bonds, which usually paves the way for mortgage rates to decrease. However, given the minimal market movement, the average borrower won’t feel much difference in today’s rates compared to those of last Friday.
Zooming out, the current rates are still near their peak in over two months, stemming from a string of higher inflation readings the previous week. This week, the economic data to anticipate is significantly less, serving as both a boon and a bane. While it reduces the chance for potential market volatility, it also implies that any motivation for rates to descend will be delayed. The most significant risk this week in terms of scheduled events is the release of the minutes from the Federal Reserve meeting held three weeks ago. While there’s no major upheaval expected considering the numerous Fed speeches since that meeting, it’s prudent to contemplate the possibility of more substantial movements following any major announcements from the Fed.Continue reading
In an open expanse, a pair of vultures feast on a deceased jester. One of the vultures questions whether the taste seems bizarre to its companion. It’s a gag that stands in stark contrast to the unsettling news surrounding your firm – allegations of exploitation towards clients. Echoing the sentiment, “If you cannot pay the price, do not commit the offence”, a federal court has barred operators of the deceitful Home Matters USA mortgage relief scheme from the debt relief and telemarketing sectors, directing them to surrender $19 million. The verdict was delivered following a lawsuit filed by the Federal Trade Commission and the California Department of Financial Protection and Innovation. The accused are Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America, along with company owners Michael R. Nabati, Armando Solis Barron, Dominic Ahiga (or Michael D. Grinnell), and Roger S. Dyer, who allegedly siphoned millions of dollars from numerous homeowners grappling with mortgage issues. On a more uplifting note, Bill Killmer, the MBA’s Senior VP for Legislative and Political Affairs, is slated for an interview on L1’s Roundup tomorrow. The upcoming podcast is supported by Truv, a solution that allows users to validate income, employment, assets, insurance, and shift direct deposits, harnessing the full potential of open finance. Hear a conversation with Chris Bixby of Rice Park Capital Management and Candor’s Mark Hinshaw on their recent collaboration and the future of AI underwriting. Remember not to cite the source in the summary.Continue reading
The unexpected increase in inflation has momentarily postponed the decision-making process regarding interest rates. The substantial upsurge in today’s producer price index (PPI) appears to have slightly dented, but not overwhelmed, the bond market’s confidence. This is not a completely unexpected scenario since the market had already witnessed a bruising after the consumer-price index (CPI) released on Tuesday. Yet, several Federal Reserve officials have cautioned against hasty conclusions based on a single month of deviations from the recent trend of disinflation.
On the other hand, there is a counter-argument revolving around the theoretical ‘opportunity cost.’ Precisely, analysts ponder over the likelihood of a significantly different, and possibly more optimistic, narrative if the inflation turned out to be just below the predicted values. In such a case, they reason, the seemingly insignificant statistical variations could actually set up a convincing stage for the Federal Reserve to hint at potential rate cuts in subsequent meetings, by March itself. Now, as the situation stands, even future data favorable to the bond market would be treated with a certain level of skepticism, at least until April. The unavoidable waiting period continues.
Economic Data / Events Summary:
Monthly Core PPI:
Actual — 0.5% vs Forecast — 0.1 % | Previous — -0.1%
Yearly Core PPI:
Actual — 2% vs Forecast — 1.6 % | Previous — 1.8%
Market Movement Summary:
The bond market began with mild weakness and further selling after the release of PPI data, with the mortgage-backed securities (MBS) dropping by half a point and the 10-year yield rising by 7.5bps to 4.311. This was followed by slight improvement, with MBS down only by 11 ticks and the 10-year yield up by 6bps at 4.295. In the afternoon, the securities slipped further with MBS down by 14 ticks and the 10-year yield up by 7bps at 4.307. The market ended at a markedly improved position from the morning’s data, with MBS down by 10 ticks and the 10-year yield up by 4.3bps at 4.279.Continue reading