“Exploring The Latest Mortgage Trends and Updates: A Review of Policies, Events and Market Influences”

With nearly 39 million inhabitants, California hosts about an eighth of the entire U.S. population, a number exceeding that of Canada. It’s notable that a considerable percentage of Californians are from ethnic minority groups, and one in every four was not originally born in the U.S. Particularly in Northern California, many are involved in real estate and lending industries, making Federal Reserve forecasts a keen interest.

Primary dealer banks have now shifted their projections for the Federal Reserve to conclude its quantitative easing to the fourth quarter, a trend noted in a New York Federal Reserve Bank survey. If this happens as predicted, the Fed’s portfolio will decrease from the existing $7.764 trillion to $6.75 trillion. This could occur through maturing securities, early repayment of mortgage loans, or by the Fed liquidating those securities. The market has anticipated this change, a highly favourable development.

Be sure to catch our latest podcast, supported by Truework this week. Truework streamlines processes by consolidating all verification methods into a single platform which benefits lenders by minimizing process interruptions, sustaining competitive borrower experience and reducing the costs associated with income verification. This episode includes an interview with Richard J. Traub from Smith, Gambrell & Russell about the commercial real estate industry and its relevance to the residential sector.

Let’s delve into Broker and Lender Services, Programs, and Software.

“Optimizing the Housing Market: Regulatory Measures for Cost Reduction and Equity Enhancement”

In order to sustain the growth of creativity within the industry and improve service to homeowners, it is crucial for authorities to pinpoint and confront one of the biggest hurdles to invention: monopolies.

“Unpacking the Shifts in Bond Market and Mortgage Rates: A Recap of January 5, 2024”

In a somewhat rare occurrence, Friday saw market shifts prompted by the jobs report and ISM Non-Manufacturing Index, only for these movements to be nullified by the day’s end. The ISM Non-Manufacturing Index had the more notable impact, perhaps due to the jobs report’s lackluster strength and the Index revealing the lowest employment figures since July 2020. Nonetheless, the impact on bonds was minimal, particularly beneficial for Mortgage Backed Securities (MBS) that are not subject to the auction cycle concerns of Treasuries.

Key data and events included:

The nonfarm payrolls posted 216k versus a forecast of 170k and previous figure of 173k. The unemployment rate was 3.7%, better than the forecasted 3.8%. However, the participation rate dropped by 0.3%, which suggests a rise in unemployment. The ISM Services PMI was 50.6, lower than the forecasted 52.6 and the previous 52.7. The ISM Service employment was at its lowest since July 2020, and Service Prices were 57.4 against a previous 58.3.

Examining market movements, by 08:57 AM, there was additional selling after the jobs report resulting in MBS decreasing a quarter point on the day, and a 5bps rise in 10yr to 4.055. The ISM data brought more gains at 10:11 AM. But by 12:35 PM, the post-ISM growth began to fade. At 02:14 PM, a level of stability was recorded, although the end of the trading day saw MBS levels back to their starting point and Treasuries up to 4.051. This might be due to apprehension over the upcoming auction cycle and curve steepening favoring shorter durations.

“Legal Battle Erupts: G-Rate Accuses NAF of Employee Poaching and LO Compensation Rule Violation”

G-Rate claims that NAF has successfully enticed a minimum of 30 employees by employing illicit compensation procedures for loan officers. These include actions like tampering with lead sources.

“Keeping Pace with the Ebb and Flow: A Close Analysis of Mortgage Rates in 2024”

The notable employment report that usually releases on the first Friday of every month plays a crucial role in influencing interest rate instability. Today was no different, but it is worth noticing that the potential magnitude of the impact doesn’t always match its real effect. Initially, it gave an impression of justifying its influence when the report indicated a surprising increase in job creations, which typically leads to higher interest rates. Consequently, the bonds correlated with mortgage rates started to escalate after the release of these figures. However, other data facets in the report helped to counterbalance this effect in no time.

Moreover, other relevant economic indicators contributed to managing the initial reaction. According to the Institute for Supply Management, the ISM Services index, an extensive measure of the service sector’s wellbeing, dropped to levels signaling negligible growth. The employment element of the index, which carries more significance, reached its lowest since the covid restrictions, making the bond market react more readily than to the jobs report.

Despite a slight dip in the afternoon, the overall impact was reasonably favorable for mortgage rates with the bond market ending virtually unaltered. The day concluded with the average mortgage lending rates being slightly lower than the previous day.

“Projecting the Future of FHA: A Loss of $7 Billion and the Potential Impact on Reverse Mortgages”

The Congressional Budget Office raises an alarm that the Federal Housing Administration is at risk of a multi-billion dollar deficit come 2024. Furthermore, delays in legislative actions could potentially lead to mandated budget cuts.

“Former Citizens Bank Executive Joins Pennymac TPO: A Strategic Move in Mortgage Lending Industry”

Pennymac has announced Kristy Dickey as the newest FVP of TPO sales. Furthermore, the company has boosted its team with the addition of five senior account executives, who were previously part of Citizens until it made the decision to withdraw from its wholesale channel.

“Revolutionizing Homeownership: Innovations and Updates in Rocket Pro TPO Mortgage Products”

The expansion of the wholesale division of Rocket Mortgage now includes an enlargened ONE+ program, in addition to incorporating Fannie Mae HomeReady and Freddie Mac Home Possible loans into their range of services.

“Insights into the Mortgage Backed Security Market Dynamics: An Overview of January 5, 2024”

The week concluded with contrasting performances from the jobs report and the ISM Services data. While the former created some disruptions, the latter managed to offset them, suggesting that the vibe is more nuanced than it appears.

Could it be that the ISM Services data wielded more influence over market movements and volumes than the jobs report did? Surprisingly, the answer is affirmative, although there are some justifications. It’s fair to classify the jobs report as two-edged today. It surpassed predictions at surface level. Nevertheless, revisions sent the figures of preceding months downward. While the jobless rate stuck to 3.7%, a 0.3% drop in the participation rate effectively pushed the net increase to 4.0%. Hence, today’s jobs report didn’t really grab the headlines, which is apparent in the chart showing the bond market completely overturning the trade just before ISM came into play.

The weight of the ISM data was more noticeable. It turned out to be the feeblest report of the past few years in several aspects, principally concerning the employment factor. This piqued the market’s interest more than anything else, but it fell short of establishing a durable motivational source for bond bulls.

“Maximizing Your Profit: A Guide to No-Closing-Cost Refinancing”

Refinancing your mortgage under a no closing cost scheme means that the lender assumes responsibility for all initial closing costs. For the borrower, this entails having a somewhat increased interest rate on their fresh loan.