Correspondent, Renovation, Processing, QC Tools; Homeowner’s Insurance; Crypto as Collateral; Freddie Earnings

Capital markets participants around the world breathed a sigh of relief when Federal Reserve Chair Jerome Powell said Wednesday that President Donald Trump’s calls for lower interest rates won’t lead the central bank to change its rate decisions. “People can be confident that we’ll continue to keep our heads down, do our work, and make our decisions based on what’s happening in the economy.” In addition, lenders and investors took note of him saying, “There are going to be regions of the country where you can’t get a mortgage.” “Rob, I realize that insurance is regulated at the state level, not the federal level. Are you hearing anything about an arrangement, like mortgages, where insurance companies have a certain dollar exposure to properties, but past that, the Federal government steps in to cover homeowner losses?” Yes, there is some chatter about that, especially if the federal government has some concessions from the insurance companies not to exit certain states. The devil’s in the details, but storm severity and monetary losses are not lessening. Homeowner’s insurance issues are not just a California problem, or a Florida problem. (Today’s podcast can be found here and this week’s is sponsored by CoreLogic. Originators who leverage their Marketing Solutions as part of their customer retention practices have seen their pipelines increase by up to 4 times when compared to traditional lead generation methods. Hear an interview with Accunet’s David Wickert on taking over the family business from his father.)

Lender and Broker Services, Products, and Software

“Mortgage servicing is evolving at a record pace this year. Last week’s MBA Servicing Solutions Conference & Expo highlighted our industry’s evolving transformation. Servicing executives, operations gurus, technology experts, and policymakers gathered to discuss the latest challenges and opportunities shaping 2025. Our blog, “Transformation, Innovation, and the Future of Mortgage Servicing,” takes a deeper look at key topics, including executive strategy, AI, and the evolution of loss mitigation policy. The executive perspective session highlighted balancing complexity, cost, and efficiency with a proven solution, like CLARIFIRE®. A solution that, when augmented with AI, can significantly improve your loss mitigation efforts, helping deliver the best automation capabilities to solve today’s regulatory requirements, operational streamlining, and borrower demands. If we weren’t able to connect at MBA’s Servicing Solutions Conference & Expo, then reach out today. Learn how CLARIFIRE® delivers process automation, the answer for the future of our industry.”

Did you know leveraging mortgage technology could help you create up to 28% more opportunities for your loan officers? In today’s rapidly changing housing market, what may be an opportunity one day could be gone the next. To compete, it’s critical to have the tools and processes in place to nimbly react to and capitalize on market shifts as they happen. The independent research firm MarketWise Advisors, LLC, recently conducted an in-depth study to explore how ICE Mortgage Technology® solutions are helping clients lower customer acquisition costs, increase lead volume and boost conversion rates. Click here to see the results and discover how the right solutions can position your business for growth.

ACES Q3 2024 Mortgage QC Trends Report shows ‘sharp rise in insurance defects’ for second time this year: Fluctuations in key underwriting categories reinforce the need for quality control. “The drop in the overall critical defect rates this quarter is a welcome shift, but the underlying trends tell a more complex story. The sharp rise in insurance defects, combined with fluctuations in key underwriting categories, reinforces the need for lenders to stay agile in their quality control efforts,” said Nick Volpe, executive vice president of ACES Quality Management. Notable findings include: Overall critical defect rate declined from Q2 to Q3 by nearly 17%; Income/Employment was the leading category of defects at 25%, followed by Assets at 16.67%; Insurance defects increased more than four-fold to 3.03%; VA defect share increased significantly in Q3, though primarily driven by a temporary phenomenon. Read the full report.

Vin Diesel lives life a quarter-mile at a time, but your mortgage applications shouldn’t feel that slow. LiteSpeed moves things along with a sleek, mobile-friendly experience for both borrowers and lenders, real-time Encompass® by ICE Mortgage Technology sync, and an automated, customizable Needs List that keeps things simple. No bloat. No unnecessary steps. Just a seamless process that keeps your borrowers moving and your team focused on closing. Book a demo today.

Correspondent and Wholesale Program News

Discover your path to performance with Planet Home Lending Correspondent, your trusted partner for end-to-end solutions. From renovation and manufactured home loans to USDA and co-issue for consistent MSR pricing and fast funding, our comprehensive product lineup includes best effort, mandatory AOT, delegated, and non-delegated delivery options. To connect with Planet at CMBA’s Northeast Mortgage Summit, Feb. 26-27, book a meeting with SVP Correspondent Sales Jason Mac Gloan (843-625-6869), VP National Renovation Lending Jim Bopp (518-369-8242), or Regional Sales Manager Danny Hughes (203-981-5743). Did you miss us at TMBA’s Southern Secondary? Reach out to Regional Sales Manager Stuart Blend (469-939-9055). Not attending? Explore Planet’s product highlights and see how we can help you grow in 2025. Put Planet to work for you!

After a challenging month in Southern California, headquarters to AmeriHome Mortgage, its team is thriving and pushing out value add products and information for its clients, partners, and industry participants. AmeriHome just had its first webinar of 2025 alongside Freddie Mac, reviewing the state of the economy with Deputy Chief Economist Leonard Kiefer. (If you couldn’t attend the webinar, click here to see what you missed.) AmeriHome is preparing to launch its Non-QM suite of products: DSCR, Expanded with Bank Statements and Asset Qualifier. Check with your sales rep to learn more about the new product roadmap. The company is also in the pilot phase of making eNotes eligible for purchase! Follow AmerHome on LinkedIn to stay connected, catch the team later this month at the Northeast Mortgage Summit, email them to schedule a meeting with a member of their sales team, or check here to see which conferences AmeriHome will be at in the coming months.

New Programs and Guidelines

Our industry is estimated to do about $2 trillion in 2025. And while the lion’s share continues to be loans underwritten, processed, and sold per Agency guidelines, there is continued interest by lenders and originators in “off the beaten path” programs and developments. No one wants to say, “I can’t help you” to a borrower. Non-Agency loans (think jumbo, non-QM, bond, and portfolio programs) will account for 10-15 percent of that, who’s doing what out there with these and more?

(That all said, this morning, Freddie Mac reported its Fourth Quarter and Full-Year 2024 financial results. The company’s Form 10-K and earnings press release, along with the Fourth Quarter 2024 financial results supplement are available now on the Investor Relations page of the company’s website.)

Cornerstone Capital Bank launched a Community Lending Division to expand homeownership opportunities for underserved communities across the nation. Based in Arlington, Texas, the new division aims to close racial and economic gaps in homeownership and help families achieve their dream of owning a home. With Cornerstone’s mortgage lending footprint extending across 45 states and Washington, D.C., the initiative will serve communities throughout these markets.

From California comes news that Propy has launched a new mortgage product that allows borrowers to use cryptocurrency as collateral for a home purchase. The loan can be underwritten using Bitcoin or Ethereum as collateral and processed instantly and allow buyers to reclaim their crypto assets after paying off the loan. Being processed instantly eliminates the standard 30-day escrow period and allows buyers to quickly fund their purchase securely on the blockchain.

Better Mortgage is offering a rewards program for borrowers that received a mortgage from the lender in 2019 or later. The lender will waive origination fees for certain subsequent first-lien originations.

Citi Correspondent Lending has begun validating calculation of bona fide discount points. An updated Exhibit 44-Discount Verification Form is already available in AllRegs.

United Wholesale Mortgage (UWM) announced it has extended its “60bps for 60 Days” program, providing independent mortgage brokers with a significant 60 basis points pricing advantage on loans. Originally scheduled to conclude on January 31, the program has now been extended through March 31 due to its strong success and the substantial competitive edge it’s offered independent mortgage brokers in today’s market. This pricing incentive remains applicable to eligible conventional or government loans for borrowers with a FICO score of 720 or higher.

Cardinal Financial Wholesale has launched a new Non-QM product suite offering four flexible lending options to help brokers meet the diverse needs of their clients, including those with non-traditional financial profiles. Non-QM Prime: Flexible documentation for creditworthy borrowers. Non-QM Prime Plus: Higher loan limits for borrowers with strong credit. Non-QM Foreign DSCR: Financing for international investors without U.S. credit history. Non-QM Investor Solutions DSCR: Loans based on property cash flow for U.S.-based real estate investors. Cardinal Financial Wholesale Leverages Octane, an advanced loan origination technology platform, to streamline and enhance the loan process, including non-QM loans.

Pennymac launched NonDel+, its full service Non-Delegated solution, as a part of its Pennymac TPO offerings. An intuitive, end-to-end loan experience within the dynamic POWER+ portal that is specifically tailored to banker partners who value control over their loans, but desire support with disclosures, loan documents and additional services. NonDel+ leverages Pennymac’s expertise and technology in underwriting and compliance, while also delivering speed and fluidity in the loan process. The platform also facilitates the full end-to-end lending process, from loan setup and pricing through closing and delivery of closed loans for expedient purchase.

The Single-Family Housing Guaranteed Loan Program (SFHGLP) published a Final Rule on August 15, 2024, making changes to the use of special servicing options for non-performing loans and adjusting the Mortgage Recovery Advance (MRA) process. The Final Rule can be viewed in the Federal Register. Due to Presidential Executive Order, Regulatory Freeze Pending Review, the effective date of February 11, 2025, for the Final Rule has been postponed. Further guidance will be issued when it is available.

Ready to learn more about Citi’s HomeRun program? Now is the perfect time to do so. Citi Correspondent Lending is introducing a new document that consolidates the most frequently asked questions received about this program and the answers to those questions. Click here to view the new HomeRun FAQ. This document is also available under Portal’s Resources / Correspondent Resources / Training tab under the Community Lending category.

Capital Markets

Have you registered for the upcoming webinar: MCT’s AI Blueprint for the Future of Mortgage Capital Markets Technology? On February 20th, MCT’s Phil Rasori, Andrew Rhodes, and Paul Yarbrough will discuss MCT’s Generative AI journey over the last 12 months, the pros and cons of LLMs, and MCT’s rollout of AI workflows that focus on data security. Learn how MCT is extending its legacy of innovation and technology stewardship with this new revolutionary technology. Register for the webinar to learn more.

January’s Consumer Price Index (CPI) report came in hotter than expected yesterday, the wrong direction for the Fed’s policy comfort (and that’s before any possible impact from tariff actions), with a 0.5 percent monthly increase that surpassed the 0.3 percent forecast. This pushed the year-over-year inflation rate to 3.0 percent from 2.9 percent, while core CPI, which excludes food and energy, rose 0.4 percent with an annual increase of 3.3 percent. The data led markets to push back expectations for Federal Reserve rate cuts from July to September and there is now chatter that the FOMC may have to keep a rate hike on its policy deliberation table.

Fed Chair Powell, speaking before Congress, cautioned against overreacting to a single inflation reading, reiterating that the Fed primarily evaluates the Personal Consumption Expenditures (PCE) Index. Despite the Fed’s rate cuts since September, mortgage rates have remained stubbornly high, reflecting ongoing inflation pressures. The shelter index, a key component of inflation, increased 4.4 percent year-over-year. That is the slowest rise in three years and suggests that new housing supply could help ease inflationary pressures in the coming months.

The unexpected inflation spike weighed on the bond market, triggering a selloff that sent the 10-year Treasury yield up by 10 basis points. Bond market sentiment remains pessimistic, with concerns over global inflation trends and trade tariffs adding to uncertainty. While housing costs showed some signs of moderation, sustained progress on mortgage rates will depend on inflation continuing to cool. Mortgage rates were initially expected to decline in 2025, but persistent inflation and shifting economic conditions suggest otherwise.

While the Federal Reserve had previously anticipated multiple rate cuts this year, Chair Powell signaled a cautious approach, stating that policy restraint could be maintained if inflation remains elevated. Fannie Mae now forecasts only a modest decline in 30-year mortgage rates, from 6.7 percent to 6.5 percent by year-end, a stark contrast to earlier predictions of sub-six percent rates in 2025. Potential policy changes from the Trump administration, such as tariffs and tax cuts, may further fuel inflation, making mortgage rate relief even less likely. Given this uncertainty, prospective homebuyers should focus on factors they can control, such as securing multiple lender quotes and exploring down payment assistance programs to find the best mortgage terms available.

Today’s economic calendar kicked off with PPI (+.4 percent for the month, +3.5 percent year-over-year, core +3.6 percent year-over-year) and weekly jobless claims (213k). PPI was expected to increase 0.3 percent month-over-month and 3.2 percent year-over-year in January compared with 0.2 percent and 3.3 percent previously. We then have some Treasury activity (highlighted by 20-year bonds, 30-year bonds, and 30-year TIPS), and Freddie Mac’s Primary Mortgage Market Survey. We begin the day with Agency MBS prices better than Wednesday night by about .125, the 10-year yielding 4.60 after closing yesterday at 4.64 percent, and the 2-year at unchanged at 4.34.