Housing, Rates, and the Economy
Following the NAR's recent report that existing home sales rebounded in May, Brad Walker, CEO of Income&, sent on note on the implications of the news for the future of the housing market and whether this trend can be expected to sustain. "The increase in existing single-family homes aligns with the recent report on housing starts. While the recent housing starts report showed an aggregate decrease, there was an increase in single family housing starts with a larger decrease in multi-family housing starts. This indicates builders are pivoting to single-family homes, believing demand is robust enough to continue for at least 18 to 24 months."
Many view pending home sales as a look into the near future, although plenty of things can cause a deal to fall through. So in not so good news, Pending Home Sales were -0.8% in May. Pending home sales fell to 108.5 in May, down from a downwardly revised 109.4 in April. The ongoing supply shortages that are propping up home prices in many metro areas caused pending home sales in May to slump for the third consecutive month, currently down 1.7% from a year ago.
With economic trends being what they are, builders are turning their attention to inventory homes to satisfy the demand for affordable, quick deliveries.
And regarding risk...Are builders, developers, investors, lenders, and home buyers ready to take it on? "A National Association of Realtors study on worrying U.S. homeownership trends estimates that if housing bounced back as it should have - i.e., without crushing overreach from regulators holding it back - the sector would have added $300 billion to the U.S. economy in 2016, with a GDP impact of 1.8%. And a new NAR study suggests that if a normal housing rebound had occurred, there would have been organically-driven starts of an additional 3.7 million homes across the past eight years, more than double what actually happened."
Looking at rates, which are kind of like the weather (we can talk about it, but you can't do anything about it), investors may have expected a significant shift in the bond market in the first half of 2017, as the Fed raised expectations for the number of interest rate hikes and began discussing possible balance sheet reductions. Most look for yields to slowly trend higher over time as the market focuses on a positive economic picture. The new federal fund target rate forecast increased to between 1.25 and 1.5 percent. Other increases include the 10-year and 30-year Treasury target ranges, both raising by 0.25 percent to 2.25-2.75 and 3.00-3.50 respectively. On the political side of things, President Trump will have the opportunity to fill three Fed governor positions this year, meaning he could meaningfully reshape the Federal Open Market Committee.
Significant change has come to the macroeconomic system this year as the era of quantitative monetary stimulus appears to be coming to an end in many markets. In its place will be an era more supportive of active management, where security selection will be paramount to portfolio performance. Broad-based improvement in hedge fund performance have been observed in the past year. As late-cycle volatility increases, Wells favors tactical, trading-oriented strategies such as Low-Net Equity and Relative Value. And finally, greater delineation in corporate credit quality could provide initial opportunities for both Long and Short Credit, and eventually even Distressed Credit.
As far as the actual bond market is concerned, Wednesday "the long end" of the yield curve sold off (prices went down, rates went up) and thus we had a curve steepening. Has the market over-reacted to European Central Bank head Draghi's comments on Tuesday where he was trying to strike a balance between economic improvement with the continuing need for accommodation? Regardless, the Fed continues to buy agency MBS to the tune of $1-2 billion a day, and given sagging apps coming in at many lenders, that is helping MBS prices relative to Treasuries. So yesterday the 10-year sank .250 in price (to close at 2.22%) while MBS prices worsened much less.
This morning we've had the final update (read: old news) on Q1 GDP (+1.4%, a shade above estimates) and weekly jobless claims (+2k to 244k). We start Thursday with rates higher versus last night: the 10-year is yielding 2.27% and agency 30-year MBS prices are worse a solid .125.
"Robster, can you find me one of those 1% down programs for a foreign national buying a condo in Florida using bitcoins?" Nope. Despite all the yammering about 1% or 3% down programs, there are other products popping up.
Parkside Lending, LLC, a national wholesale and correspondent lender, is pleased to announce that as of July 3, 2017, we will accept broker approval packages from brokers licensed under the California Finance Lenders Law (CFL). We look forward to doing business with CFL-licensed originators across the country. And in other Parkside news, we are offering Fannie Mae's Affordable LTV program and have adopted Fannie's guideline enhancements for Site Condos, both also taking effect July 3. For more information about any of the above or to inquire about doing business with Parkside Lending, please email firstname.lastname@example.org.
Stearns has a new product: The Stearns Smart Start. reduces monthly mortgage payments during the first 24 months of a customer's home loan without any additional upfront costs to the buyer. Temporarily buying down the interest rate and lowering monthly mortgage payments for a two-year period can be a good strategy for many homebuyers, especially for those who expect an income increase in the near future.
If you have borrowers the stability of a fixed mortgage but also the low rate of an adjustable mortgage, United Wholesale Mortgage has the "perfectly balanced" option: UWM 5/5 ARM. (Find out more detail by watching this video).
In its recent Product Update 17-24, PRMG advised that the CHFA Zero Percent 2nd Mortgage DPA now available for use with CHFA First Mortgages.
Indecomm Global Services and Lendsnap have entered into a partnership to offer Indecomm's industry leading income analysis software Income Genius within the Lendsnap platform. Lendsnap customers will soon be able to quickly and accurately calculate a borrower's qualifying income based on the automated borrower information Lendsnap collects. "The integration with Lendsnap's robust Point of Sale (PoS) solution represents a quantum leap for us. IncomeGenius clients will now be able to calculate income directly from the source tax and income documents and data." Rajan Nair, CEO - Financial Services at Indecomm Global Services. "We are excited to partner with such an exceptional company. Indecomm is built on 20+ years of leading technology and support for the mortgage industry, and we're looking forward to adding this valuable tool to our loan officer portal," Mike Romano, co-founder of Lendsnap.
Provident Funding has released FHA loans in IL, IN, MD, OH, VA and WA. Its Jumbo products have been updated to include CONDOS and attached PUD's and it has updated max DTI for Super Conforming products.
AmeriHome announced the rollout of Correspondent Connect, its new loan delivery and pipeline management platform. Each Seller will be invited to attend a transition call during which a demonstration of the new system will be provided.
P&L is not required on business bank statement loans thru Angel Oak Mortgage Solutions. Visit its website for details.
In a Mountain West Financial recent bulletin, it posted that Super-conforming loan limits (by County) are now allowed on Freddie Mac HFA Advantage Loans through the GSFA Platinum Program. Super conforming mortgages are NOT permitted to be run as HFA Preferred through DU, however. Underwriting must be run through LPA. Also posted, regarding Manufactured Homes, effective immediately, any FHA Manufactured Home transaction (Purchase or Refinance), manufactured home must be installed on a permanent foundation for 12 months prior to the case number assignment. HUD has confirmed that the manufactured unit must be installed on a permanent foundation for 12+ months for the transaction to be eligible for FHA financing. New Construction guides must be followed when the simultaneous purchase of the land and the manufactured unit are taking place.
Pacific Union Financial has expanded its PacificPlus to include the following 30 Year Fixed Rate products: Pacific Preferred, Conventional Conforming High Balance, FHA Specialty and FHA Specialty High Balance and FHA Standard High Balance. In addition, the minimum 80% LTV/CLTV restriction is no longer applicable.
Jobs, Personnel, and Channel News
"Acopia, LLC is seeking a VP of Compliance to join our management team in Goodlettsville, TN. Candidates must possess a working knowledge of consumer laws and regulations impacting the mortgage industry, including but not limited to the Truth-In-Lending Act (TILA) and Regulation Z (including experience with loan originator compensation rules), TRID, Qualified Mortgage Rules, Real Estate Settlement Procedures Act (RESPA), Equal Credit Opportunity Act (ECOA) and Regulation B, Home Mortgage Disclosure Act (HMDA), Fair Lending, Fair Credit Reporting Act (FCRA), Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act, and Privacy of Consumer Financial Information (Gramm-Leach-Bliley Act). A comprehensive understanding of the mortgage loan origination process and retail, wholesale and correspondent channels is also necessary. It's imperative that you can apply the necessary business maturity and judgement while communicating appropriately throughout the process to implement effective, compliant business solutions and/or process changes, in a manner consistent with the organization's mission and values. For consideration, please contact Kristi Bible."
Radian has a great growth opportunity in the central region. The Director, Credit Union National Account Manager is responsible for managing relationships with top credit unions in their region most being multi- state, multi-billion dollar originators, with multi lender mortgage type operations. In addition, they support Tier 4 Credit Union growth. This role reports to the Divisional VP who will coordinate the activities required to execute on the CU business plan. They work closely with business development on new relationships, account managers on larger opportunities, and inside sales on smaller non-assigned credit unions, attending national and regional credit union conferences. Candidates can be located anywhere within the territory which spans from New Mexico, to Louisiana, up to the Dakotas; travel is up to 75%, mostly overnight. Interested candidates should send resume to Kim Martin.
A fast-growing multinational company is looking to setup a mortgage processing business unit to provide services to lenders across all 50 states. The company is seeking a licensed mortgage professional to serve as the Qualified Individual. If you are an NMLS licensed mortgage broker or loan officer with at least 3 years of loan origination experience, this is your opportunity. The position will require licensing (either existing or a willingness to apply) for NY, NJ, PA and other states. No relocation is necessary. Please contact George Huang for more information.
Planet Home Lending, LLC welcomes James Matarazzo as Area Sales Manager. Matarazzo is responsible for nationwide branch acquisition and is actively seeking branches with >$30 MM annual volume. Matarazzo joins Planet with 29 years of mortgage experience, including prior positions at PRMG, MetLife, Countrywide, and Washington Mutual. For branch opportunities, contact James Matarazzo (954-648-7848).
The Military & Veteran community faces unique challenges navigating through the mortgage process-and Caliber Home Loans is committed to helping these heroes realize the dream of homeownership. Caliber's loan officers go the extra mile to help this community realize the dream of homeownership. We have a dedicated team, solely focused on meeting military personnel and veterans' unique needs. At Caliber, we understand that a military family can move 8-10 times in the span of 20 years. To simplify the loan application process for these families, Caliber created an industry-first document retrieval process that digitally locates misplaced military documents. Recently, we were honored to use this program to help a Purple Heart recipient obtain a Certificate of Eligibility in just 7 days. To find out more about how Caliber can support military families' unique needs, reach out to us at email@example.com. We especially wish all military and veterans a Happy Fourth of July!
In personnel news, Castle & Cooke Mortgage, LLC, an independent mortgage lender with locations across the U.S., welcomed the newest member of its executive team, Candice Pitcher. Candice joins the company's corporate headquarters in Draper, Utah as the Director of Compliance, and will be overseeing enterprise compliance management and legal affairs.