Category Archives for "Technology"

“Exploring the Future of the Mortgage Industry: A Comprehensive Review and Opinion on Pipeline Press”

Did you hear about “National Margarita Day”? Perfect timing, indeed, amidst considerations of a possibly stagnant lending and rates environment for months ahead by stakeholders and financial lenders, including adjustments in personnel and compensation. In the year 2023, the US topped the charts in receiving the largest export of tequila from Mexico, with an impressive 84.8 million gallons imported. Although this may not directly impact residential loaning, it sure brings a smile to tequila lovers in the industry. Interestingly, a recent joke about how vultures find clowns\’ funny taste created an unexpected invitation for Attorney Brian Levy to add his own humour to the topic. His recent edition, titled “LO Comp, Bozo Buckets and ‘P&L Branches'” provides a lively dialogue surrounding LO Comp’s issues recently in the news. This week’s podcast is fueled by Truv, giving users the power to verify income, job position, assets, insurance, and shift direct deposits. It includes a conversation with PRMG’s Kevin Peranio and Truv’s Richard Grieser. On another note, the reduction in rates in January saw an increase in warehouse costs and dwell-time for Independent Mortgage Banks (IMBs). The average dwell-time increased by 3 days from the 15-day average. Even though rates dipped for borrowers, the overnight SOFR rates averaged at 5.32 percent. This resulted in an increase in the average IMB cost by nearly $70 per loan funded, up by 170 percent compared to December. Thanks to complete automation by OptiFunder, from loan funding to Purchase Advice reconciliation and paydown actions, the most comprehensive Warehouse Management System is now available. This aids lenders in swiftly moving loans from primary to secondary markets. Top IMB’s are leveraging funding automation to save both time and capital. Check us out either at Lenders One Summit or the ICE Experience to discover ways of streamlining funding to reduce dwell and warehouse costs. Also, sign up for our monthly newsletter to stay updated on warehouse trends.

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“Exploring the Dynamics of Mortgage Market: Updates and Trends for February 16, 2024”

Compared to the Consumer Price Index (CPI), often a full 10/10 when it comes to influencing bond market movements, the Producer Price Index (PPI) generally has only half that impact. It’s fortunate, considering we’ve already seen the effects of a minimal CPI discrepancy from expectations – a mere 0.1% difference has caused bond yields to surge over 15 basis points. In contrast, a significant deviation of 0.4% in PPI (or a monthly core PPI of 0.5, against an anticipated 0.1 median forecast) didn’t cause similar upheaval. Should such variance have occurred with CPI, a likely leap of 30+ basis points in 10yr yields would have ensued, provided the data was deemed credible. Such disparity is typically unheard of concerning CPI. Conversely, the PPI has a historical tendency towards greater volatility.

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“Comprehensive Roundup on Mortgage Market: An Analysis of the MBS Activity – February, 14 2024”

In the face of a significant, data-driven market sell-off, it was encouraging to see the financial market bounce back the following day. Despite these sell-offs typically leading to a second day of momentum, the recovery suggested a temporary setback in the grand scheme of things. Market conditions were positively influenced by the input of central bankers, particularly comments made by Goolsbee that projected inflation rises as temporary and aligned with the process of returning to target. His speech, timed at 9:30am, interestingly coincided with the moment bonds started gravitating towards lower yields. A peculiar detail was the stronger rally of European bonds at 10am, following remarks from a Bank of England representative. The more substantial recovery of Treasuries at the closing of the EU market suggests that the BOE remarks warranted greater acknowledgment. However, it remains uncertain if these gains would have been achieved without the central bankers’ intervention. This continuous need for supportive measures leaves potential for future uncertainty. Hence, there is anticipation for a weaker economic output on Thursday intending to witness another day of moderate market improvement.

Market Movement Brief

At 09:44 AM there was a 2-way market volatility with modest gains. Mortgage-Backed Securities (MBS) rose by 1/8 while the 10-year yield fell by three basis points to settle at 4.295. By 12:38 PM the market continued to be promising with the 10-year yield dropping seven basis points to 4.255 and MBS rose to 3/8. The momentum shifted at 02:34 PM with MBS down by 1/8 from the day’s peak but still up by one-quarter point. The 10-year yield was down by 6.1 basis points, settling at 4.265. By the closing at 05:16 PM, the market stood robust with MBS rising just under 3/8 and the 10-year yield dropping 8.5 basis points to 4.245.

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“Exploring the Latest Trends and Policies in Mortgage and Housing Industry”

The New York Community Bancorp, known for its acquisitions of Flagstar in 2022 and Signature Bank in 2023, is currently facing a severe financial setback. This sudden downturn became evident with their shock earnings release and a drastic 70 percent cut in dividend, prompted by a sharp uptick in credit provisions. The bank’s stock price has taken a nosedive as investors fear a looming banking crisis similar to that of the previous year. NYCB, the proprietor of Flagstar Bank, increased its reserves and slashed its dividends, triggered by the surpassing of assets over the $100B benchmark and escalated worries over commercial real estate. The coming days are expected to see escalated scrutiny from investors, analysts, and rating agencies. This week, our Commentary podcast, sponsored by Vesta, will revolve around an intuitive Loan Origination System (LOS) that reduces origination costs for lenders and promotes technology integration. The podcast will feature a segment of an interview with Curinos’ John Sayre discussing Q4 origination trends and statistics. Lender and Broker Software, Products, and Services is urging you not to neglect your automation strategy this February. They are offering a webinar to help streamline your underwriting procedures, featuring expert opinions, start points, priority areas, and strategies to garner team support.

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“Unmasking the Hidden Factors Decreasing the Value of US Homes”

A significant number of U.S. homeowners are finding their home insurance policies are not being renewed. Prominent insurance providers including State Farm and Allstate have halted the distribution of new policies in California. The escalating risk of wildfires, along with inflation and various regional difficulties, have been cited by State Farm as reasons behind this decision. In similar vein, homeowners in Louisiana and Florida are confronting related problems driven by the threat of flooding. To understand these non-renewal notifications and their implications on the U.S. housing market, be sure to check out the video on the subject.

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“Deciphering the Dynamic Landscape of Mortgage Rates for 2024”

In the last two months, there has been a significant increase in conjecture regarding potential federal rate cuts in 2024. The upcoming Fed meeting is the first to fall under such anticipation. Some experts have even posited the possibility of rate cuts occurring as soon as the meeting in January. However, the market is skeptical about the mentioned January rate cut. For a few days, there were indications from Fed Funds Futures trades for a probable January rate cut, but the market has since discarded this possibility.

Changes in the market’s view of the Fed’s position were evident during November and December. The Fed’s favorable rate announcement on December 13th compounded this shift in sentiment. Still, the necessary economic data to initiate a Fed rate cut cycle hasn’t surfaced yet. This doesn’t mean a rate cut in 2024 is off the table; it is simply too early to make a judgment since the needed conditions are yet to be met.

One of the factors talked about is the return of core inflation to 2%, which is the Fed’s target. The latest GDP statistics do indicate a 2% quarterly increase in core PCE. However, it’s critical to recognize that the 2% inflation target is a yearly metric. As per the graph above, based on the data of the fourth quarter of 2023, there is hope. Now, it’s essential to ensure that the 2% inflation rate remains constant so that the annual graph can match the quarterly one.

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