TPO, Correspondent, Compliance, UW, Accounting Products; Conventional News; Employment Drives Rates Higher

National MI turned heads yesterday by announcing its temporary increase to AUS conforming loan amounts, despite the official FHFA word not coming until the end of November. (More below on the amounts.) Our biz is filled with “numbers people,” good or bad. According to Curinos, September 2023 funded mortgage volume decreased 30 percent YoY and 14 percent MoM. The average 30-year conforming retail funded rate in September was 7.01 percent, 18bps higher than August and 146bps higher than the same month last year. (Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures.) Inventory and sales aren’t helping. Economist Dr. Elliot Eisenberg summed things up. “August data showed MoM housing starts down 11.3 percent to their lowest level since 6/20, the NAHB housing index down sharply M-o-M for the second month in a row, and new home sales weakening 8.7 percent MoM, the biggest decline since 9/22. Existing housing sales slipped to their lowest level since 1/23, and August pending home sales fell 7.1 percent.” (Today’s podcast can be found here and this week’s is sponsored by TRUE. TRUE creates accurate data that powers automation and optimizes every step of the lending lifecycle, helping lending organizations rapidly process loans, dramatically cut costs and risk, and radically improve the customer experience. Hear an interview with Ally Home’s Glenn Brunker on affordability across the nation and why potential homeowners should get off the sidelines.)

Lender and Broker Software and Services

Halcyon is the proud winner of the Innovation Challenge at Digital Mortgage 2023! Its API integration with the IRS provides tax transcripts for less than the average cost of traditional methods, with a quicker turnaround time, R&W from GSEs, and is delivered via PDF & digital format. Plus, with an option for online authorization by your borrower, ensure access to transcripts even if the government shuts down. Schedule time at MBA Annual to connect and learn more! Aren’t making it to MBA Annual this year? Contact them!

“The Loan Vision team is excited to attend the MBA Annual Convention! Stop by booth 1030 to learn how companies that run Loan Vision show a 25 percent reduction in OPEX/time to close, a 20 percent reduction in overall accounting headcount, complete LOS to G/L automation, and improved reporting and visibility that allow for better business decisions. Be sure book time with Carl Wooloff here to get an early introduction to our newest product that focuses on allowing our customers to be more profitable with less volume: LV-PAM – a modeling tool that provides actionable intelligence with consolidated loan data. Loan Vision’s innovation continues to provide you the ‘insights you need in the software you trust.’”

Ready to see what Borrower Surety in 90s looks like or full Credit Approval & Income Calculation in less than 15 minutes? Click the PreQual link to watch a video and see for yourself. Needs List, Credit Analysis & Borrower Surety… in 90 seconds! Income Calculations, Asset Verification & Credit Approval, in 15 minutes. 100 percent Loan Officer & Borrower Satisfaction!

“We know it’s tough and budgets tight, but you still have to comply. Would a free 2024 AML Module with cert tracking for your entire team help? Optimize Compliance (MtgEd) is dedicated to IMB Educational Compliance, org cost cutting, and audit preparedness. The Client Portal hosts the most robust Tracking and Audit Center, built directly from IMB Compliance team input. MLO CE is not enough to satisfy regulators: our solution solves for that. For the free AML promotion, contact Dave Olchek.”

TPO and Correspondent Loan Programs

“Are you attending the upcoming annual MBA Convention? The Citi Correspondent Lending Team will be there and we’re eager to meet with both current and prospective clients! Citi continues to focus on supporting underserved communities in diverse markets, with Correspondent Lending playing a significant role in creating opportunities for home ownership. As a reminder, earlier this year we launched our HomeRun program, a portfolio product with no MI requirement, up to 97 percent LTV and as little as 1 percent borrower down payment contribution. This was the just first in a series of planned Community lending initiatives. Schedule some time to talk with us at the MBA or complete our Prospective Correspondent Questionnaire. We’d welcome the opportunity to discuss Citi Correspondent Lending’s program offering and how we can help your business thrive.”

Profitable Mortgage Companies are focused on the long-term value of the customer relationship. Essex Mortgage’s partners enjoy greater customer retention, GNMA pass-thru pricing, no overlays, no LLPAs, NO EPOs, and NO EPDs. They also receive Tax Deferred asset growth and a long-term cash flow stream without having to be a GNMA issuer themselves. Please contact us to discuss how the Essex GNMA Excess MSR program can help retain and enhance your customer relationship, broaden guidelines, and expand into new markets. Please contact Kimberly Schenck.

“AFR Wholesale® (AFR) Strong! In recent weeks, AFR has achieved record high OTC volume, successfully launched FHA OTC for Site-Built, and been honored as the “Top Employer 2023” by MPA. Our clients have always counted on AFR for superior service, a wide range of program offerings, and a dedicated team of experts guiding them at every step. MPA has recognized us for our commitment to Diversity, Equity, and Inclusion, and highlighting our sustainable product offerings. At AFR Wholesale, we’re constantly evolving and refining our processes to provide the financing solutions our clients and borrowers truly need. Our mission? To help bring more families home. Ready to partner with a leader? Partner Today! And you can always visit us at afrwholesale.com, email us or call 1-800-375-6071.”

Despite the headwinds facing our industry, AmeriHome Correspondent continues to find ways to add value to its partners, prospects, and industry participants. Join its quarterly conversation with Freddie Mac on October 11 at 10 am PDT and hear from Freddie Mac Senior Property Valuation executives alongside AmeriHome’s Head of Credit Operations as they discuss the latest trends and challenges with appraisals, provide guidance for avoiding appraisal bias, and go over the tools you’ll need to navigate changes to the UCDP requirements. Register here and have your questions ready for the Q&A session! AmeriHome will also be releasing its ability to purchase Construction-to-Perm Conversion loans later this month. Contact your sales rep or click here for more information. Don’t miss the AmeriHome team in Philadelphia during the MBA Annual Convention Oct 15-18. Check out the Upcoming Events, find your sales rep here, or send them an email to learn more about partnering with AmeriHome!

Conventional Conforming News

The FHFA is proposing to amend its regulation that restricts its regulated entities, Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from purchasing, investing in, accepting as collateral, or otherwise dealing in mortgages on properties encumbered by certain types of private transfer fee covenants (PTFCs), and in related securities, subject to certain exceptions (PTFC Regulation).

The Uniform Appraisal Dataset (UAD) and Forms Redesign team has released additional documentation to support ongoing implementation efforts. This resource supplements the initial documentation released in March 2023, which kicked off industry development and preparation for the new appraisal dataset and report. This update includes the UAD Compliance Rules for the Uniform Residential Appraisal Report (URAR) which helps lenders and vendors deliver the XML in compliance with the UAD Delivery Specification. These rules verify data completeness, validity (format and data type), and reasonableness. Details are available on Freddie Mac UAD Webpage.

Fannie Mae announced new resources and programs to provide responsible access to housing and long-term sustainable homeownership opportunities across the country for Latino communities unveiling HomeView en Español, a Spanish-language digital consumer education platform providing 24/7 end-to-end access to information about financial literacy and homeownership. To address upfront housing costs, another housing obstacle that disproportionately impacts Latino renters and first-time homebuyers, Fannie Mae this month expanded access to its Special Purpose Credit Program (SPCP) pilot, which now can provide down-payment assistance to eligible first-time homebuyers living in majority-Latino communities located in Atlanta, Baltimore, Chicago, Detroit, Memphis, and Philadelphia. Fannie Mae plans to further expand the program to additional cities, to include those with large Latino populations early next year. Additional resources are available to learn more about Fannie Mae’s approach to providing equitable and sustainable access to housing opportunities for the Latino community.

For AUS loans, National MI has temporarily increased the conforming loan amounts as follows: 1 unit: $750,000, Alaska & Hawaii $1,125,000. 2 units $960,300, AK & HI $1,440,450. “Other than the AUS being ineligible due to the increased conforming loan amount, the loan must comply with National MI’s TrueGuide® AUS Conforming Loans or AUS Affordable Lending Eligibility Matrices. At this time, there is no change to National MI’s TrueGuide® AUS Conforming High Balance Loans Eligibility Matrix requirements…” Talk to your National MI rep for full details.

Tim Lucas with ThisIsMortgage.com writes, “Fannie Mae has dropped the down payment requirement for 2-4 unit properties from 15-25 percent down to 5 percent. Huge change for homebuyers.”

PRMG TPO Resource Center Updates 23-10 includes various PRMG Policies, Procedures, and Information updates. Appraisal Fee Schedule, Credit Standards Policy, Fannie Mae Condo Project Manager (CPM) Access, PRMG Insurance Requirements and TPO Polly Product and Pricing.

PRMG Product Update 23-44: Product Profile Updates: Freddie Mac Conventional Products, Agency Freddie Mac, FHA, VA and USDA products, Onyx Jumbo, Ruby Express, Symmetry HELOCS, and Expanded Access and Investor Solution.

A new resource document is now available regarding the upcoming change to SLS for Conventional Loans, view AmeriHome Mortgage Announcement Number 20230913-CL.

AmeriHome Mortgage General Announcement 20230912-CL summarizes previously published changes made during September, additional changes made with this announcement, and recent Agency and regulatory news. See the attached announcement for details.

PHH updated its Product Descriptions and Product Codes effective 9/20 for both Delegated and Non-Delegated loans. Visit the PHH company library for details.

Pennymac will update Conventional LLPAs effective for all Best-Efforts Commitments taken on or after Monday, October 2nd. For details, view Pennymac Announcement 23-65: Updates to Conventional LLPAs.

Capital Markets

The 10-year Treasury yield continues to trend toward 5 percent, a milestone not seen since right before the 2008 financial crisis. Concerns are mounting that the high cost of borrowing will further tighten global financial conditions, even without further action from policymakers.

The big data event of this week was always going to be today’s jobs report, where analysts anticipate the U.S. economy adding 170k jobs throughout the month of September, while the unemployment number is expected to slip by a tenth of a percent to 3.7 percent, and annualized average hourly earnings are expected to remain unchanged at 4.3 percent. As a reminder, ADP reported earlier this week that the economy added 89k jobs in September following an upwardly revised 180k in August, while Challenger reported that job cuts are back up to pre-pandemic levels after historically low figures in 2021 and 2022.

Some are calling September payrolls the most important job report of the year, and with positions squared (rates normally don’t move much before big events), continued stronger numbers from a robust jobs market could push bond yields back up and stocks down. A sustained slump in equities that revives the appeal of fixed-income assets is one scenario that could cause bonds to rally materially and rates to drop.

But there isn’t a magic level of bond yields that, when reached, will entice enough buyers to spark a sustained bond rally. The Freddie Mac 30-year rate is at nearly 7.5 percent, which is a long way from the 2.65 percent record-low from January 2021 during QE4. The average percentage of conventional 30-year borrowers with incentive to refinance (at least 50 basis points) sits at 0.03 percent and has averaged just 0.3 percent for the whole of 2023. Around 75 percent of Americans are at least 300 basis points away from having any refinance incentive.

Today, like other first Fridays of the month, brought the payrolls report, this time for September. We learned that non-farm payrolls increased 336k versus 170k expectations and 179k previously. The unemployment rate was 3.8 percent when it was seen ticking down to 3.7 percent from 3.8 percent, and average hourly earnings increased (+.2 percent) versus 0.3 percent MoM expectations and 0.2 percent previously. Later today brings August consumer credit and remarks from Fed Governor Waller. In the wake of the September payrolls report, we begin the day with Agency MBS prices worse .375-.5 and the 10-year yielding 4.81 after closing yesterday at 4.71 percent.

Employment

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“Evergreen Home Loans showcases its StepUp Program, enabling clients to buy a new property without immediately selling their existing home. The offering streamlines the buying process, allowing a smooth transition and refined mortgage options tailored to financial aspirations. Evergreen is not only a pillar of customer satisfaction but also a nurturing ground for meaningful and rewarding career paths. We create a dynamic environment where each member is a vital part of our mission to innovate and enhance the homebuying experience. If you value collaboration, innovation, and a customer-centric approach, consider joining our team. Discover the exciting opportunities waiting for you on our careers page.”