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Today’s playbook was fairly straightforward with bonds being likely to move in the direction suggested by the jobs report.  The only challenge would have been the presence of mixed messages (i.e. a big beat in the job count paired with a big miss in the unemployment rate).  While there was indeed a beat in the job count, it wasn’t big.  It was also offset by much larger negative revisions.  Unemployment ticked slightly higher.  Wages hit their forecast of 0.3 vs 0.4 previously.  All told, it suggests more of normalizing labor market with a hint of softening as opposed to a surprisingly resilient labor market indicated by last month’s jobs report.  Bonds like it and have now erased all of the losses seen since last week’s presidential debate.

As a reminder, while there was a lot of attention on the presidential debate as scapegoat for last Friday’s bond sell-off, we were bigger fans of the month-end positioning explanation.

Source: mortgagenewsdaily.com

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Mortgage interest rates moved in different directions compared to last week, according to rate data compiled by Bankrate. See below for a detailed breakdown of how different loan types moved.

Inflation has cooled somewhat, but homebuyers are still feeling limited by high prices and rates. At the close of the Fed meeting on June 12, policymakers chose to hold rates at current levels.. The next Fed meeting concludes July 31.

“With [the June 12] announcement, the Fed confirms its higher-for-longer position on interest rates,” says Dr. Selma Hepp, chief economist at CoreLogic. “But the stance is looking more untenable as more American households continue to pull back on spending. As more economic indicators begin to confirm this and unemployment begins to rise, the Fed will then look to cut rates. What’s not clear yet is when exactly the disinflation signs will be consistent enough for the first rate cut — we hope it’s still this year.”

Often, though, the decision to buy a home isn’t based on what’s happening in the economy — it’s more personal. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than hoping for a future of more favorable rates and home prices that might not materialize.

Rates accurate as of July 9, 2024.

The rates listed here are marketplace averages based on the assumptions shown here. Actual rates listed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, July 9th, 2024 at 7:30 a.m. ET.

Current 30 year mortgage rate flat for the week

The average rate you’ll pay for a 30-year fixed mortgage today is 7.07 percent, unchanged over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.09 percent.

At the current average rate, you’ll pay principal and interest of $670.01 for every $100,000 you borrow.

Use the loan widgets on this page or head to our primary rates page to see what kind of rates are available in your situation. You just need to give us a little information about your finances and where you live. With that data, Bankrate can show you real-time estimates of mortgages available to you from a number of providers.

15-year fixed mortgage rate moves lower, -0.03%

The average 15-year fixed-mortgage rate is 6.56 percent, down 3 basis points over the last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $874 per $100,000 borrowed. That’s clearly much higher than the monthly payment would be on a 30-year mortgage at that rate, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.

5/1 ARM moves upward, +0.03%

The average rate on a 5/1 adjustable rate mortgage is 6.68 percent, rising 3 basis points over the last week.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for people who expect to sell or refinance before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.68 percent would cost about $644 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo loan interest rate moves up, +0.08%

The average rate for a jumbo mortgage is 7.23 percent, up 8 basis points since the same time last week. A month ago, the average rate on a jumbo mortgage was lower at 7.16 percent.

At today’s average rate, you’ll pay principal and interest of $680.82 for every $100,000 you borrow. That’s $5.41 higher compared with last week.

Refinance rates

30-year fixed-rate refinance eases, -0.03%

The average 30-year fixed-refinance rate is 7.03 percent, down 3 basis points over the last week. A month ago, the average rate on a 30-year fixed refinance was higher at 7.12 percent.

At the current average rate, you’ll pay $667.32 per month in principal and interest for every $100,000 you borrow. That’s down $2.02 from what it would have been last week.

Where are mortgage rates going?

The rates on 30-year mortgages mostly reflect the 10-year Treasury yield, which changes with the market. The yield curve is a tool used by investors to predict where interest rates could be headed.

“The yield curve remains inverted — no surprise here,” says Ken Johnson of Florida Atlantic University. “Until the yield curve reverts to its normal upward slope, we will not see significant downward pressure on mortgage rates.”

Besides bond yields, the Federal Reserve’s key benchmark rate also has an impact. The Fed has held this rate at a 23-year high since July 2023.

If and when the Fed cuts interest rates depends on evolving economic data, such as inflation and the jobs market. While inflation has fallen since its peak in 2022, it’s still well above the Fed’s target rate of 2 percent. Unemployment is still low, though in May it hit 4 percent for the first time since 2022.

“Much like that flight where departure keeps getting delayed 15 minutes at a time with no end in sight, the timetable for when the Fed begins to cut rates is equally uncertain,” says Greg McBride, CFA, Bankrate’s chief financial analyst.

While the Fed bases its decisions on rate changes due to broader economic factors, your rate is also affected by personal finances. Depending on your credit score, down payment, debts and income, you could be quoted a rate that’s higher or lower than the trend.

What today’s rates mean for you and your mortgage

Mortgage rates fluctuate daily, but it appears that, for now, they will remain above the historical lows of recent years. If you’re shopping for a mortgage, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at current market rates.

You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

More on current mortgage rates

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

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prasit2512 – stock.adobe.com

Generative artificial intelligence holds a wealth of potential — and risk — for the mortgage industry, but despite the challenges, the developing technology is finding its place within company workflows. 

Some of the greatest potential for adoption lies in marketing uses. 

“Imagine if you Googled a topic, and then clicked through several links, and then summarized what you found in those links. Imagine if a machine could do that for you in 30 seconds,” said Adam O’Daniel, chief marketing officer at Guild Mortgage.

“It’s not delivering me any data that I couldn’t have probably found through Google search. It just saved me the time and in sorting through it and compiling the data.”

Across business segments, AI is demonstrating value as a tool that drives efficiency and even fuels inspiration among marketing professionals, even though widespread apprehension remains. Although mortgage and real estate companies have the same concerns around risks as others, their marketing teams and loan officers are testing the waters to varying degrees and learning to tailor AI for their specific needs.

“It’s a starting point for many, and it has been helpful if you’re, for instance, having a creative block,” said Whitney Blessington, chief marketing officer at Churchill Mortgage. “We call it like someone to brainstorm with, even though it’s not a person.”

Generative AI benefits also result from its ability to conduct quick research. “It can help you come up with good topics,” O’Daniel said.

A useful but still-developing technology opportunity
Mortgage companies, more than other types of companies, appear open to exploring how artificial intelligence might help their marketing efforts. 

While some forms of AI are already used in the underwriting context, especially for tasks related to data extraction and processing, concerns about enforcement of possible noncompliance leave some lenders wary about applying the technology in a customer-facing capacity. Marketing tasks, though, offer the opportunity to see how AI can improve efficiency within the appropriate guardrails. 

In 2024 research released by Arizent, 64% of mortgage industry professionals said they would be open to utilizing artificial intelligence for a majority of their marketing and promotional tasks in a hypothetical scenario where regulations did not exist. Interest in the mortgage industry far exceeded the percentage of similar responses in six other financial sectors, none of which surpassed 50%. 

At the same time, 55% within home lending said they would use it for most tasks associated with research and fact checking. 

Its use in advertising, though, still presents some risk of bias in outreach, according to recent guidelines issued by the U.S. Department of Housing and Urban Development. 

But despite the industry’s enthusiasm, the “A” in AI doesn’t stand for accuracy, and human marketing professionals will need to remain a fixture, mortgage leaders say. Even when used for research purposes, users have found themselves running into factually incorrect responses.

“You can’t count on it blindly,” Blessington said. “You still have to do your homework.” 

“I think the biggest thing is, today, it really helps someone streamline their workflows,” she added, comparing it to an intern who might conduct low-level administrative work, such as writing metadata descriptions or alternative text for images. 

“It helps you go from ideation to planning to actual content,” said O’Daniel. However, when generative AI “writes” any of its own content itself, it fails to perform to the standards the industry might want, he said.   

“It may use terminology that is more appropriate for a bank and not an independent mortgage lender, and so you have to adjust the terminology. Some of the more finer nuances of the business — it doesn’t fully deliver.”

Current use scenarios and risks
Use of artificial intelligence, particularly generative AI like ChatGPT or Microsoft Copilot, is still in its nascent stage within the mortgage industry; but with expectations of rapid expansion, it stands to change how future work can be done.

Entering AI waters may seem daunting, but the technology also offers customization that can facilitate ease of use, according to Ginger Bell, who regularly conducts seminars on artificial intelligence for real estate professionals. Bell is a co-host of the podcast AI Clubhouse and founder of housing industry video platform Edumarketing.com.

A loan officer or lender can customize their generative AI to home in on situations or guidelines it commonly addresses. “You can actually just type a scenario, and it reads the guidelines,” Bell said, while cautioning verification is still necessary.  

“You can also ask it to cite exactly where it’s pulling that information from, and a lot of it is just training it to be able to ask the questions correctly, telling it what you want in terms of the response and then how you want that response to look.” 

Bell commonly sees ChatGPT being used to assist in composing emails and social media posts, and some mortgage professionals also employ it to write video marketing scripts. Users can  tailor a gen AI tool by feeding it their previously written transcripts, articles or other work, eventually training it to sound more like their own voice, she said. 

But oversight and enhancements need to remain top of mind as well, said Jason Perkins, co-founder and president of Bonzo, a provider of communication engagement software and a mortgage customer-relationship management system. 

“I look at AI-generated content as a frame of your business, not the be-all,” he said. “Personalization is what drives conversations.”

Generative AI can also quickly build marketing campaigns through a series of prompts —  a set of instructions or steps to create messages with given parameters that might address a specific topic or target a borrowing segment. The prompts can also ensure that necessary disclosures and licensing information are included.

“A lot of companies need to realize this is a big compliance opportunity to make sure that your loan officers are providing their information in a compliant way,” Bell said.

However, while businesses have the capability to personalize their prompts and content via an open source generative AI platform, a number of companies are instead turning to enterprise versions that protect proprietary information and maintain compliance. Certain accounting firms go as far as requiring employees to use personalized generative AI under enterprise editions that remain closed sources, according to Bell. 

“There’s a lot of folks who use what’s available to consumers on ChatGPT and other platforms like that, and certainly, it’s a great tool, but we’re trying to be very thoughtful about how to use those platforms,” O’Daniel said.

“You use a public platform — the data that I upload to the model stays with that model to fuel future learnings, which is amazing; but we might want to share information from a product guide or some other company program that we don’t want to be out of our control,” Guild’s marketing leader added. 

When using a public platform “be aware as far as not putting any nonpublic information in there because it is open source,” Bell advised. In addition to potential noncompliance, it opens up businesses to cybersecurity risk. 

Reliance on public artificial intelligence platforms without proper vetting of the content they produce also carries risk of potential copyright infringement, according to Perkins. 

“They’re just aggregating data off of the internet,” he said. “Businesses and companies are going to put fences around their data,” meaning companies need to be aware of how loan officers and staff use AI-generated content in social posts or advertising. 

Future potential and customer trust 
While marketing content crafted from AI has primarily appeared in written form, artificial intelligence is taking hold in other creative outlets. “Now there’s so many new technologies that are being built around this,” Bell said.

Advanced generative AI tools that alter photographs already exist, alongside emerging businesses that produce original imagery and videos based on an individual’s likeness and voice from a single recording.

However, while AI-generated imagery video represents one of the next growth phases for automation, it also brings with it a potential for misuse by fraudsters and a conundrum for businesses of all types who want to use technology to their advantage without eroding relationships with clients. 

“I think there’s a number of questions around how that affects your brand,” O’Daniel said. 

“It can go both ways. There are people who would appreciate more frequent informational updates from their lender and from their loan officer. So if the technology can help us deliver more frequent helpful information, that can build trust; but if the customer feels as if they’ve been misled and that this avatar is not really their loan officer, that can destroy trust. So I think we have to be very cautious.”

Source: nationalmortgagenews.com

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Social Media Compliance, Client Retention; Freddie/Fannie Changes; Square Footage Stats

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Social Media Compliance, Client Retention; Freddie/Fannie Changes; Square Footage Stats

By:
Rob Chrisman

Mon, Jul 8 2024, 11:48 AM

During a recent password audit, it was found that a blonde was using the following password: “MickeyMinniePlutoHueyLouieDeweyDonaldGoofySacramento”. When asked why such a long password, she said she was told that it had to be at least 8 characters long and include at least one capital. What’s today? It’s “change every password you have” day. Money is the focus of a lot of evil activity on the internet (look at credit union Patelco), but what about useful, constructive monetary activities? Location, location, location. What new home buyers get for their money varies by region. The median price and square footage of new single-family homes sold in 2023, according to the Census Bureau, was $760,700 and 2,430 square feet in the Northeast, $396,300 and 2,172 square feet in the Midwest, $388,800 and 2,335 square feet in the South, and $536,200 and 2,170 square feet in the West. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with Candor’s Mark Hinshaw on expectation versus reality when it comes to AI in the mortgage industry.)

Lender and Broker Software, Services, and Products

With high interest rates keeping more people in their homes, new revenue opportunities will come from places that don’t fit the typical servicer playbook. ICE has identified four key areas where technology can help set servicers up for success in today’s low-movement housing market. Explore how you can retain customers, capitalize on your existing portfolio, and streamline your back office in ICE’s complimentary new white paper, Technology helps servicers find opportunities in unusual places.

ActiveComply is excited to be part of the Mortgage Bankers Association’s RegTech Demo Day event on Thursday, July 11th at 12:00pm ET. Register to see the latest technologies, services, and insights from leading technology providers in the industry. This session is specifically for compliance professionals, legal counsel, and risk officers, among others. See high-level overviews of vendor technology that may provide value to your organization and help you succeed in an increasingly complex and competitive environment. See how ActiveComply identifies other language advertising as part of your LEP initiatives, consumer complaints on social media, & brand reputation concerns current events and political movements (just in time for an election year). Don’t miss these power-hour sessions designed to help decision-makers clarify the rapidly changing mortgage tech ecosystem. This event, normally priced at $399.00, is free to MBA members. Register today!

Winning Agent Business: The lender’s guide to building a strong referral network updated for 2024. The new rules mandated by the NAR settlement go into effect August 17th. That means agents are more incentivized than ever to show their clients value—and they’re actively looking to partner with top-tier lenders in their market. Want to take advantage and grow your referral business? Maxwell just updated its Winning Agent Business eBook with new tips straight from agents to help you better network to create a strong funnel of referral leads. Download your free copy to learn qualities agents value in their lending partners, networking dos and don’ts, ways to become a go-to lender, and more.

Agency News and Updates

Freddie Mac published the company’s annual Sustainability Report, which provides details about the company’s 2023 sustainability strategy, activities and performance. The report also includes the company’s Sustainability Accounting Standards Board (SASB) Index and Metrics for the years 2021-2023, as well as a Taskforce on Climate-Related Financial Disclosures (TCFD) Index.

Many families are looking into properties with ADUs for multi-generational living to offset rising housing expenses. Others are seeking a balance between caregiving for aging parents and providing a space for privacy and independence. Whatever the reason, ADUs have been on the rise. Many borrowers are looking to purchase or refinance homes with these units or build one on their existing property. Approximately one quarter of borrowers and homeowners that show interest in ADUs are caregivers or anticipate being a caregiver. Learn more about the benefits Freddie Mac offers for financing ADUs.

In recognition of National Homeownership Month, Freddie Mac is encouraging borrowers to benefit from CreditSmart® Homebuyer U, a free course within Freddie Mac’s CreditSmart ® suite of educational resources. It’s designed to empower them with skills and knowledge.

Freddie Mac updated Stable Monthly Income FAQ for Employed Income Calculation with a new question (Q5) concerning calculating the income average for fluctuating hourly earnings and/or additional employed earnings (e.g., bonus, overtime, tips) if there is an occurrence that prevented the borrower from working and/or earning full income for a period of time.

Freddie Mac Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-9 announces updates pertaining to rental income requirements to provide additional flexibility. Shared amenities requirements for residential projects. Aligning the Guide with treatment of documentation provided, but was not required, in Freddie Mac’s quality control review.

Fannie Mae is continuing its work with Freddie Mac to create standardized subordinate documents, publishing documents for Ohio, New Jersey, and Pennsylvania. Learn about efforts to expand access to down payment assistance.

Fannie Mae issued a Request for Proposal (RFP) to evaluate qualified interested industry participants for potential inclusion in its Title Acceptance pilot and other suppliers that have viable solutions to reduce borrowers’ closing costs. Vendors can respond to the RFP in ProcureOne. The RFP market interest period closes on July 26, 2024.

Fannie Mae posted the June Appraiser Quality Monitoring (AQM) list to Fannie Mae Connect™. The monthly list will also be available on the AQM page through July 30, 2024, when Fannie Mae Connect will be required for viewing.

FHFA published updated aggregate statistics from the National Mortgage Database (NMDB®) and launched the NMDB Aggregate Statistics Dashboard, a new data visualization tool for the NMDB Outstanding Residential Mortgage Statistics. The release describes outstanding residential mortgage debt at the end of the first quarter of 2024. FHFA Releases Data Visualization Dashboard for NMDB Outstanding Residential Mortgage Statistics has been posted.

Capital Markets

There was plenty of economic data released over last week’s holiday-shortened week. The U.S. economy is based on jobs and housing, and last week it was jobs’ turn to be center stage. The focus was on employment stats for June which saw nonfarm payrolls increase by 206k in June. Despite the increase, the previous two months were revised down by a combined 111k which brought the average increase over the second quarter to 176k per month. The unemployment rate rose from 3.96 percent to 4.05, the first time above 4 percent since January 2022. Labor force participation also increased slightly.

As the labor market continues to become more balanced the upwards pressure on wages has eased and average hourly earnings were down 0.2 percentage points on a year-over-year basis to 3.9 percent. The other major data out last week was the Institute of Supply Management indices which both came in below economists’ expectations. The Personal Consumption Expenditure deflator eased to 2.6 percent over the last twelve months in May as well. Sustained easing of inflation as well as a looser job market bode well for a potential rate cut in September. Following last week’s data, the odds of a cut in September are nearly three-in-four.

This week’s economic calendar includes some Treasury auctions of notable duration (3-year, 10-year, 30-year), May Wholesale Inventories, CPI and PPI, as well as preliminary July University of Michigan Consumer Sentiment. The only data point on today’s calendar is May Consumer Credit, due out this afternoon. We begin the 5-day work week with Agency MBS prices little changed from Friday, the 10-year yielding 4.29 after closing Friday at 4.27 percent, and the 2-year at 4.62.

Jobs

Seeking growth capital, equity, debt, or strategic alternatives? An IMB consultant with 34 years of executive management experience in the mortgage space is available to support your efforts! E-mail industry veteran Steve Landes for more information on helping you grow your business.

Top Producing Loan Officer Alex Rayner Partners with Service First Mortgage to Launch Haymaker Home Loan! Alex Rayner has partnered with Service First Mortgage to launch Haymaker Home Loans, a company dedicated to supporting top producers. “This collaboration provides access to cutting-edge technology, products and services, ensuring loan officers thrive in a competitive industry,” Rayner said. Earning an MBA from the University of Houston, Alex is dedicated to providing exceptional service. His industry acumen and skill with client relations set him apart. For loan officers looking to start their own mortgage company, Rayner advises exploring options with Service First Mortgage. “Starting a mortgage company from scratch is a daunting task,” Rayner said. “By partnering with Service First Mortgage, you gain immediate access to essential resources, advanced technology, and a support team. This allows you to focus on what you do best, e.g., originating loans and serving clients, without the overhead and operational challenges of building a company from the ground up.” Inquiries should be directed to James Wallace!

“ACC Mortgage is coming off its 2nd best month in its 25-year history. 2024 is shaping up to be our best year ever! How many mortgage companies can claim that? Are you planning for your next 25 years? ACC is seeking four (4) well-qualified Account Executives or a team that is looking for support, pricing, culture and stability. ACC makes Non-QM easy. Recent articles discuss ACC’s vision. For example, ACC’s Senko talks non-QM outlook! Send a resume for confidential interview.“

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Source: mortgagenewsdaily.com

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tough housing market but one that’s not impossible to navigate, experts say.

There are still many ways to maximize a budget if you’re a buyer or ensure you earn top dollar and trim your costs if you’re a seller. Strategies include knowing what fees might be negotiable, what home features to invest in, what kind of lender to look for, what types of mortgages are available and what tax benefits there are to selling and buying another home, experts say.

Can I still get a 3% mortgage rate?

Yes, if a seller has a so-called assumable mortgage at a lower rate, you can take it over.

Best mortgage lenders

About 12 million, or 23% of, active mortgages are assumable, according to data and technology firm Intercontinental Exchange. Of those, 7.2 million, or 14%, are assumable at interest rates below 4%, which can save buyers thousands of dollars and generate more bids for sellers. Current loan rates hover around 6-7%.

Arizona, Georgia, Colorado, Florida, Illinois and Texas, you can check assumable listings site Roam, which launched last September.

Real estate agent commissions. If you’re a seller and don’t want to negotiate your own agent’s commissions, ListWise will connect you with agents willing to work under an incentive-based commission, instead of the current flat percentage structure.  Basically, agents agree with you on a minimum price they think they can get for your home. If the sale price exceeds that, agents get paid 0.75% of the final price plus the incentive pay of 20% of each dollar over the agreed price. This approach “focuses attention on what is most important, getting the highest price for your home,” said founder Nic Johnson.

  • State and local government recording fees, usually paid for by either the buyer or seller

    • comparison shop lenders, experts say.

    “Get estimates and see the variance,” said Darren Tooley, senior loan officer at Cornerstone Financial Services. “That gives you some knowledge and basis to say, ‘I’ve got quotes from other lenders and will you work with me?’”

    What kind of lender should I hire?

    Find a lender who “has a variety of loan products and can coach you to maximize financing with credit improvement, cheaper PMI (private mortgage insurance) options depending on your down payment, paying points or temporary buy downs,” Tooley said.

    PMI can be required to buy if your down payment’s less than 20% of the purchase price, and points are a form of prepaid interest you can choose to pay up front in exchange for a lower interest rate and monthly payments.

    Temporary buy downs are prepaid interest that gets you a lower interest rate for a short period. “It’s been a way to help bridge the period (before rates fall),” he said. “People can afford a loan at 5-6% even if it’s a year or two and (then, they) refinance.”

    Best mortgage lenders of June 2024

    What are tax benefits of selling and buying a home?

    • If you sell your primary residence, you can exclude from federal income tax up to $250,000 of the profit as an individual or $500,000 as a couple filing jointly. That applies if you lived there for at least two of the last five years and haven’t sold another home in the last two years, the IRS said.

    State tax rules vary, so you need to check local laws, said Mike Zovistoski, partner at professional services firm UHY.

    Since home prices have appreciated so much over the last five years, many people selling could probably use this exclusion, he said. If you’re thinking about downsizing, you could sell your house, buy a smaller less expensive home in cash and pocket any difference without paying tax on it.

    Also, if you itemize, you can deduct mortgage interest you paid during the tax year on the first $750,000 of your mortgage debt. If you’re married filing separately, the limit drops to $375,000, the IRS said.

    What are the types of mortgages?

    The main types of mortgages are:

    • Conventional loans, typically used by those with good credit
    • Government-backed loans, best for those with lower credit scores and smaller down payments
    • Jumbo loans, usually for those with good credit who want to buy expensive homes
    • Fixed-rate loans which have fixed interest rates and steady monthly payments
    • Adjustable-rate loans which have interest rates that periodically move in line with changes in a specific benchmark

    subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.   

    Source: usatoday.com

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    Banc of California Inc., a regional bank, is selling about $2 billion of business-purpose mortgage loans in a process led by Morgan Stanley, according to people with knowledge of the matter.

    Banc of California picked up the loans after its acquisition late last year of PacWest Bancorp in a rescue deal, not long after fears of bank failures caused a run on deposits at regional lenders.

    By the time of the acquisition PacWest had already sold the lending unit that made the loans, Civic Financial Services, but it held on to the pool of business-purpose loans. Bids for the loans were due on June 28, one of the people said.

    Spokespeople for Banc of California and Morgan Stanley declined to comment.

    In its first quarter earnings call, Banc of California’s chief executive officer, Jared Wolff, said that it had already sold some of the Civic-originated loans it acquired from PacWest. Wolff added that the bank may look to sell larger portions of the portfolio in the coming quarter as part of the bank’s push to boost its profits.

    A number of regional banks have looked to trim their balance sheets ahead of the implementation of revamped bank-capital regulations known as Basel III Endgame. Many of the assets being shed by banks are ending up with private credit lenders, who don’t have to worry about risk-capital requirements.

    The loans being sold are known as debt-service coverage loans, which are given to landlords who rent out properties. They’re underwritten based on expected rental revenue rather than bank statements or personal income.

    Source: nationalmortgagenews.com

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    Warehouse, Fee Collection, Broker AVM Tools; Violation Tracker; Lender and Investor Changes

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    Warehouse, Fee Collection, Broker AVM Tools; Violation Tracker; Lender and Investor Changes

    By:
    Rob Chrisman

    Wed, Jul 3 2024, 11:43 AM

    Did you know that there were 2.5 million estimated people living in the newly independent nation of the United States in July 1776? Per the Census Bureau, that figure has now risen to around 335 million. 56 individuals of those 2.5 million people were signers of the Declaration of Independence, with John Hancock, a merchant by trade, being the first signer. Benjamin Franklin, who represented Pennsylvania, was the oldest signer at age 70; Edward Rutledge of South Carolina was the youngest signer at age 26. Speaking of numbers, if you like them, although the FHFA and the CFPB would like you to believe that they are part of the fabric of the United States, they aren’t. But the FHFA and the CFPB Release Updated Data from the National Survey of Mortgage Originations for Public Use. Hey, I only know what I read in the newspapers. But there is some interesting real-time information out there, and if you want to see who’s paying what in violations, here you go. (Today’s podcast is found here and this week’s is sponsored by Bundle, the attorney-prepared legal documents company that is dedicated to the real estate, mortgage, and title industries. Fuel your operations and execution of documents from deeds to subordinations to assignments, and everything you need for any order, in one bundled price; receive 20 percent off using the code “Chrisman” at checkout. Hear an interview with Atlas Real Estate’s Tony Julianelle on the recent single family rental market transformation and why individuals in the mortgage industry should care about property management.)

    Lender and Broker Services, Products, and Software

    “Leadership is crucial for organizational success and culture. Recognizing the differences between strong and weak leadership will directly impact your team’s success. Inspired by ‘Good to Great’ by Jim Collins, this upcoming webinar features Laura J. Brandao (Equity Prime Mortgage), Keith Canter (First Community Mortgage), and Richard Grieser (Truv) sharing insights from their many years of mortgage leadership experience. You’ll leave this July 10th session with strategies to effect change in your organization, attract and maintain the right talent, understand team needs to advance shared goals, maintain a disciplined yet happy culture, and leverage technology as an accelerator. Come join us!”

    Rocket Pro TPO offers Home Equity Loans powered with AVM (Automated Valuation Model), providing faster and more cost-effective appraisals. With AVM, valuations are delivered in seconds, nearly five days faster than traditional methods, saving clients time and money. Interested? Price a loan today.

    Lenders across the country are still looking for ways to cut costs without sacrificing revenue. Start off easy by collecting fees upfront. Fee Chaser by LenderLogix makes it as easy as clicking a button… literally. Book a 15-minute demo and get started in a few weeks.

    PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE:HTH), offers funding for multiple mortgage products and programs with little to no additional requirements: FNMA HomeStyle, FHA 203K Full, Limited, and USDA Rural Housing renovation loans. Mortgage Revenue Bond and DPA loans with extended dwell times. Sub Limits for lower FICO scores, manufactured homes, renovation, construction and other unique mortgage products and programs. With over 30 years’ experience and a well-capitalized diversified financial holding company we provide our customers with confidence to meet their loan funding needs. If you are interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Deric Barnett, (469)955-6786.

    Agency, Lender, and Investor Changes

    FHA posted to its Single Family Housing Draft ML proposing changes that would update FHA’s Defect Taxonomy to include fraud or material misrepresentation involving a Third-Party Originator (TPO) as a Tier 1 severity defect. FHA’s Defect Taxonomy is its quality assurance framework for all Title II loan reviews. It provides a consistent methodology for identifying defects at the loan level, useful data, feedback through structured categorization of defects, and balance between FHA’s risk management and quality assurance business processes. Interested stakeholders are encouraged to thoroughly review the Draft ML and provide feedback through June 24, 2024.

    FHA published Mortgagee Letter (ML) 2024-12 implementing the provisions of the final rule, Revision of Investing Lenders and Investing Mortgagees Requirements and Expansion of Government-Sponsored Enterprises Definition, announced April 23, 2024, in FHA INFO 2024-21. The final rule revised and clarified requirements for investing lenders and mortgagees to gain or maintain status as an FHA-approved lender or mortgagee, separately defines Government-Sponsored Enterprises (GSE), including the Federal Home Loan Banks (FHLB), from other governmental entities and aligned general FHA approval standards with current industry business practices.

    Ginnie Mae announced a term-sheet for its proposed Home Equity Conversion Mortgage (HECM) Mortgage-Backed Securities (HMBS) 2.0 program, initiating a comment period ending July 31st. The proposed program aims to enhance liquidity access for HMBS Issuers by allowing the re-pooling of active and non-active buyouts into new custom, single-Issuer pools. The new HMBS 2.0 program, described in more depth in our blog Ginnie Mae Announces New Pool Type to Improve HECM MBS Liquidity,​ seeks to address liquidity constraints in the reverse mortgage sector by providing a new capital markets execution for older vintage HECMs.

    Ginnie Mae mortgage-backed securities (MBS) portfolio outstanding grew to $2.59 trillion in May, including $36.9 billion of total MBS issuance, leading to $14.3 billion of net growth. May’s new MBS issuance supports the financing of more than 116,000 households, including more than 58,000 first-time homebuyers. Approximately 74 percent of the May MBS issuance reflects new mortgages that support home purchases because refinance activity remained low due to higher interest rates. More information is available in Ginnie Mae’s Press Release.

    USDA Rural Development posted a bulletin on June 21 announcing an interest rate increase for SFH programs.

    Don’t limit your borrower’s buying potential if they require a loan amount beyond conventional limits. Loan Stream Mortgage Jumbo ONE loan programs empower you to give your clients more options all while helping you close more loans. With four Jumbo ONE programs available for Purchase, Cash-Out, and Rate & Term Refinance.

    Citi Correspondent Lending updated Trailing Outstanding Document requirements. Changes include updated timelines for submission of missing documents and remediation of deficient documents, additional impacts when missing/deficient document issues are not resolved in a timely manner, and reporting changes. View the complete Outstanding Document Updates Announcement, which provides effective dates and outlines details for all of the changes.

    Sellers in Carrington’s Non-Delegated Correspondent channel are now able to select who they want to generate the closing docs during loan submission. The cost for Carrington to generate the closing docs is a low $350.

    Newrez approved correspondent clients, don’t forget that loans containing an ACE + PDR appraisal method must submit a PDF report that uses the Uniform Property Dataset report (UPD) and includes the required certifications, floor plan and photographs to Freddie Mac using the Beyond ACE application programming interface (bACE API). Details are available in Newrez Bulletin 2024-040.

    Eliminate mortgage headaches for your borrowers with Kind Lending’s Written VOE (Verification of Employment) program. This non-QM product uses a written VOE for qualification purposes versus traditional documentation such as W2s and paystubs.

    National residential lender PrimeLending, a PlainsCapital Company, now offers a new home equity loan product giving homeowners the ability to convert home equity into cash. With a PrimeLending home equity loan, homeowners can access a portion of their home’s value without having to sell it. Simply put, homeowners can borrow money using their home equity as collateral and repay the loan at a fixed-rate over a 30-year term. Homeowners receive the cash as a lump sum upfront to use however they choose, such as consolidating debt, making home improvements, or covering tuition, medical or unplanned expenses.

    Capital Markets

    Fed Chair Powell knows Halloween is nearly four months away. The head of the Fed refrained from spooking markets yesterday at the European Central Bank’s annual forum, citing progress on inflation, which helped to bolster bets that the Fed will be able to cut rates this year. He added that the risks between price pressures and the labor market are coming into better balance, though predictably declined to foretell of a September reduction. In the wake of President Biden’s poor debate performance last week, many investors are preparing for higher-for-longer interest rates from the increased likelihood of a second Trump term and additional inflation-stoking tariffs. Conversely, Chicago Fed President Goolsbee said yesterday that the Fed should prepare for rate cuts.

    The Job Openings and Labor Turnover Survey (JOLTS) is conducted by the Bureau of Labor Statistics of the U.S. Department of Labor. Looking for signs that the labor market is softening? May’s JOLTS report showed a labor market that in many ways looks like its pre-pandemic self. The number of job openings per unemployed worker remained unchanged, back at its 2019 average. Job openings unexpectedly rebounded in May from the three-year low hit in April, increasing to 8.140 million from 7.919 million in April, interrupting a downward trend. Fed Chair Powell yesterday described the job market as cooling off appropriately.

    Due to the Independence Holiday tomorrow, some usual economic releases and supply are moved up to today’s calendar. The calendar kicked off with mortgage applications decreasing 2.6 percent from one week earlier, according to data from MBA’s Weekly Applications Survey. Keep in mind that we have had three straight weeks of gains, including during the prior holiday-adjusted week.

    Markets have also received Challenger job cuts for June: 48,786 cuts, down 24 percent from the 63,816 cuts announced one month prior but 20 percent higher than the 40,709 cuts announced in the same month in 2023. We’ve had ADP employment for June (150k private-sector jobs were created, the lowest gain in five months but still a gain), and jobless claims (238k, as expected; continuing claims 1.858 million). Other releases today include the May trade deficit, Final S&P Global services PMI for June, ISM services PMI for June, factory orders for May, and Treasury releasing details of the mini-Refunding consisting of $58 billion new 3-year notes and $39 billion and $22 billion reopened 10-year notes and 30-year bonds.

    The latest Fed Minutes (from the June 11-12 Federal Open Market Committee meeting) will be released today and should give us some further hints of the Fed’s thinking, though Fed messaging has been clear that inflation remains too high, and patience is needed to allow more time for the current rate target to bring it back down. Futures settlement close is at 1:00pm ET with SIFMA recommending a 2:00pm ET close for cash bonds.

    Looming after tomorrow’s 4th of July Holiday is the June nonfarm payrolls report on Friday, where estimates anticipate the economy added nearly 200k jobs throughout the month, while they anticipate the unemployment rate will remain near historic lows at 4 percent. We begin the day before the holiday with Agency MBS prices a few 32nds better from Tuesday’s close, the 10-year yielding 4.41 after closing yesterday at 4.44 percent, and the 2-year is yielding 4.75.

    Jobs

    “After 50 remarkable years in mortgage lending, Planet Home Lending Senior Vice President, Correspondent Lending Jim Loving is retiring. Jim is an industry icon who’s built a remarkable culture focused on partnership since he joined Planet in 2014. Jim’s legacy at Planet and in the industry is a lasting one. From inventing Best-Efforts Delivery to building Planet Home Lending into a top-tier correspondent lender, he’s been a mentor and partner to many in our industry. As Jim moves on to the next chapter, our experienced Regional Managers will continue to serve as expert guides, helping you navigate today’s market challenges. We hope you’ll join us as Planet extends its deepest gratitude to Jim for his exceptional contributions.”

    “Loan officers! Discover the radius advantage. Are you navigating a market that’s forgotten the value of loyalty? At radius financial group, we’re rewriting the script with our MLO Partnership-Proposition (MPP). We understand the industry’s pulse and the need for a genuine partnership—not just a platform to process loans. As lenders focus on consumers, we concentrate on you, the heartbeat of our business. You’re not just a number here; you’re the face of our brand, co-branded for success. We’re committed to investing in you, providing a stable home where your talents are nurtured and your book of business flourishes. For confidential inquires please contact Carla Herrera (781-742-6500).”

    Retirements… Can our biz survive losing 123 years of experience in one fell swoop? Of course it can. How ‘bout 32-year vet Max Cocetti retiring after 19 years with MGIC? Or 41-year vet Donna Miller retiring from Truist? And after only 50 years in the biz, as noted above short-timer Jim Loving is calling it a career leaving his 10-year post as SVP of Correspondent Lending at Planet Home, with hopefully more Corvettes in his future. We wish them all the best!

     Download our mobile app to get alerts for Rob Chrisman’s Commentary.

    Source: mortgagenewsdaily.com

    Apache is functioning normally

    LOS ANGELES — The average rate on a 30-year mortgage rose this week, pushing up borrowing costs on a home loan for the first time since late May.

    The rate rose to 6.95% from 6.86% last week, mortgage buyer Freddie Mac said Wednesday. A year ago, the rate averaged 6.81%.

    The uptick follows a four-week pullback in the average rate, which has mostly hovered around 7% this year.

    When rates rise they can add hundreds of dollars a month in costs for borrowers. The elevated mortgage rates have been a major drag on home sales, which remain in a slump dating back to 2022.

    Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing the average rate to 6.25% from 6.16% last week. A year ago, it averaged 6.24%, Freddie Mac said.

    Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

    The yield, which topped 4.7% in late April, has been generally declining since then on hopes that inflation is slowing enough to get the Fed to lower its main interest rate from the highest level in more than two decades.

    Fed officials have said that inflation has moved closer to the Fed’s target level of 2% in recent months and signaled that they expect to cut the central bank’s benchmark rate once this year.

    But until the Fed begins lowering its short-term rate, long-term mortgage rates are unlikely to budge from where they are now.

    Most economists think the Fed’s first rate cut will occur in September, with potentially another cut by year’s end. But mortgage rates could begin easing in coming weeks, if bond yields move lower in anticipation of a Fed rate cut, said Lisa Sturtevant, chief economist at Bright MLS.

    “While today’s report is not what homebuyers were hoping for, we may actually start to see rates fall sooner than expected,” she said.

    Mortgage rates fell to historic lows during the pandemic, setting off a homebuying frenzy that sent home prices soaring. Between 2019 and 2023, the median national sales price of previously occupied U.S. homes jumped more than 43%. And despite declining sales this year, home prices hit an all-time high in May of $419,300.

    High home loan borrowing costs and record-high home prices discouraged many would-be homebuyers this spring, traditionally the busiest period of the year for the housing market.

    Sales of previously occupied U.S. homes fell in May for the third month in a row, and indications are that June saw a pullback as well.

    Most economists’ projections call for the average rate on a 30-year home loan to remain above 6% this year. That’s still double what the average rate was just three years ago.

    “We are still expecting rates to moderately decrease in the second half of the year and given additional inventory, price growth should temper, boding well for interested homebuyers,” said Sam Khater, Freddie Mac’s chief economist.

    Source: abcnews.go.com

    Apache is functioning normally

    Rider University, a small private college outside of Trenton, New Jersey, is trying to raise additional funds to help an ongoing liquidity crunch. 

    College officials asked bondholders for permission to borrow against the mortgage on the school’s main campus in Lawrenceville, New Jersey, according to a disclosure notice dated June 28 posted on the Municipal Securities Rulemaking Board’s EMMA website. If approved, the move would free up much-needed cash for Rider in the short-term. 

    “In the spirit of good partnership with our current bondholders, we have been in discussion with them regarding this, and we understand that a majority of them are willing to consent to the amendment,” said Kristine Brown, a spokesperson for the school. 

    Rider University in New Jersey asked bondholders to approve additional borrowing to fund a financial turnaround plan.

    Rider University

    The proposal underscores the mounting challenges small schools face to make ends meet as they contend with declining enrollments and rising costs. Those pressures have driven colleges across the U.S. to close or merge, while pushing others into new lines of business like online education, adult learning and monetizing real estate. 

    Real estate is typically the largest asset a school owns. Rider’s primary campus, for instance, was appraised at more than $230 million, according to Moody’s Ratings. The school is proposing an amendment to a current loan and mortgage agreement that would allow it to borrow an additional $15 million of debt on parity with liens on the mortgage. 

    That amount would rise to $20 million if the school is able to sell its Princeton campus, which once housed its renowned choir program. Efforts to offload that real estate have been mired in litigation, though the school is working toward a settlement, Brown said.

    Selling campuses can be tricky as a school’s closure can devalue real estate, and it can take time to find a buyer. After Cazenovia College shut its doors in upstate New York in mid-2023, its campus was leased to the state, which used the facilities to train police cadets while it searched for a buyer. The campus was still up for sale as of early July.

    Additionally, the amendment would allow Rider to borrow $25 million of debt subordinate to the mortgage liens. Utilizing the new borrowing capacity could drastically increase the school’s debt. Rider currently has about $109 million of municipal bonds outstanding, according to data compiled by Bloomberg.

    Moody’s rates its existing bonds Caa1, seven steps below investment grade. The ratings firm cited ongoing operating deficits, which are expected to continue through at least 2025, and “severely” limited liquidity in their rationale, according to a January report. S&P Global Ratings rates the university’s bonds, issued through the Wisconsin-based Public Finance Authority and New Jersey Educational Facilities Authority, BB with a negative outlook. 

    Rider’s plan to return to budget surpluses lays out some steps the school is taking to rightsize its finances. This ranges from efforts to improve student recruitment, retention and career readiness to new parking fees. In an April call with bondholders, school leadership said the plan is on track, and that applications and admissions improved year over year. 

    The school had a full-time equivalent enrollment of 3,731 in 2024, according to S&P.

    Source: nationalmortgagenews.com

    Apache is functioning normally

    “Data dependent” is one of the most common phrases heard from the Federal Reserve these days when it comes to rate-setting policy.  And while the Fed doesn’t directly dictate mortgage rates, the bond market tends to trade the same data that the Fed cares about.

    Today’s key report, the ISM Services index, isn’t quite at the top of the Fed’s list, but it’s a longstanding market mover when it comes to bonds and, thus, rates. Today’s installment was much weaker than expected.  Weak data correlates with lower rates, all other things being equal.

    Bonds improved immediately after the release.  This allowed mortgage lenders to set lower rates today.  Some lenders had already published their initial rates for the day and several of them ended up issuing positive reprices before the end of the day.

    The bond market is closed tomorrow for the holiday, but will be back to digest an even more important economic report on Friday morning: the big jobs report.

    Source: mortgagenewsdaily.com