Susan Toste writes to Ira Selwin who sends me (see how these things work?), “Can you believe it is 364 days until Christmas and people already have their lights up?” Goldman Sachs asks interviewees, "How many square feet of pizza are eaten in the U.S. each year?" (The trick is to work through the logic, not necessarily come up with the right answer.) Learning math is something that everyone does, to one degree or another, and doesn’t typically go onto a resume. (I learned math a whole different way than they do now in China or Japan.) What’s on your resume? How about Scapulothoracic Hypermobility? The Financial Times reports that “Banks (worldwide) shed 60,000 jobs in one of worst years for cuts since financial crisis.” I regularly receive questions about the number of LOs who have left our business. “Plenty” doesn’t ever satisfy the person asking the question, but I don’t know the exact number. Many LOs gradually scale back the number of states in which they’re licensed but continue originating: how do you count them? But a decent source is the NMLS site: knock yourself out. Anyone searching for a new company home can post their resume for free at where employers can view them for a nominal charge of $75. Today’s podcast can be found here, and this week’s is sponsored by Gallus Insights. Mortgage KPIs, automated at your fingertips. Gallus allows you to go from data to actionable insights. If you can use Google, you can use Gallus. Hear an interview with Gallus Insights’ Augie Del Rio on how lenders are benchmarking and leveraging data to make more informed analytical decisions.

Broker and Lender Programs, Software, and Products

Amazon was able to fulfill the one billion purchases made during its cyber deals event thanks to automated decision systems developed by its Supply Chain Optimization Technologies team. Much like Amazon, Dark Matter Technologies’ Empower LOS uses process automation to drive down costs and make loan production faster and more efficient. With solutions for retail, wholesale and correspondent lenders, Empower’s all-in-one functionality provides users with lights-out automation, unrivaled efficiency and exceptional borrower and user experiences in a new era of mortgage lending. Explore how Empower can transform your business.

“Did you know yesterday was National Thank You Note Day? At Optimal Blue, we couldn’t think of a better opportunity to express our sincere gratitude for our clients and partners across the industry. This includes 3,500+ originators, 1,200 lender companies (including 64 percent of the top 500 lenders), 2,400 broker companies, 260 investors, and 70+ industry vendors. While we didn’t drop handwritten cards in the mail, we are packaging up plenty of product innovations to send to you in 2024. In fact, we plan to bring you even more innovation in the coming year. And as a company that already averages 300+ product enhancement releases annually, this is not a commitment we make lightly. On behalf of the entire Optimal Blue team, we wish you a happy New Year. We can’t wait to tackle the year ahead as your trusted partner.”

“AFR Wholesale® is excited to present a unique opportunity that benefits you and your clients: the Jingle Bell Float Down. From now until 12/29/2023, lock your loans with us and enjoy the security of our special offer. With the Jingle Bell Float Down, you can lock your loan for up to 30 days. When the loan goes for final review, we’ll adjust to the current day’s rate, ensuring you get the best deal without falling below your locked price. This offer applies to all AFR's loan programs and is available through the Correspondent Non-Delegated, Correspondent Table Funded, and Brokered Channels. *Please note, some exclusions do apply. Ready to lock in your loans? Visit the AFR Loan Center now! To learn more about this exciting opportunity, connect with AFR: visit here, email us, or call: 1-800-375-6071. Don’t miss out on this special offer: Contact AFR today!”

Tired of high fixed costs and low retail volume? Thinking of adding a correspondent channel but not sure how to do it efficiently? Blue Water (“Blue Water Financial Technologies Services, LLC”) has a comprehensive Correspondent-as-a-Service (CAAS) solution that allows firms of any size to quickly go from 0-60… fast. NonQM, Seconds, Whole Loans and/or regular way agency loans and MSRs are ALL supported. Ingest multi-seller tapes, price different product types, access agency pricing + LLPAs and price them quickly and automatically! Manage AOT, manage investors, optimize for pools, and analyze commitments all within the same system. We’ll help you integrate with your LOS for point and click onboarding, and with integrated transfer and exceptions remediation tools operations have never been easier or more reliable. From pricing, valuations, transactions, transfer, QC, to boarding, Blue Water makes it easy to scale up your origination business. Connect with our expert Sales Team.

First American: Fitch Weighs In

As reported last week in this Commentary and continuing yesterday, on Dec. 22, FAF announced via an 8K SEC filing that on Dec. 20 it had experienced a cybersecurity incident and decided to isolate certain systems. The company is actively working to restore operations and has retained outside third parties and notified law enforcement and regulatory authorities.

Last week’s cyber incident is supposedly unrelated to the May 2019 cyber incident where FAF reached a $1 million settlement with the New York Department of Financial Services in late November 2023. Four years!? Title insurance companies routinely work with sensitive personal information including bank records, and therefore data protection is critical to their operational success. The same, of course, can be said for mortgage banks, credit unions, and banks.

Gerry Glombicki, CPA, CISSP, CCSP, CISA, ARM, and a Senior Director at Fitch Ratings, writes, “First American Financial Corporation’s (FAF) recently disclosed cybersecurity incident is unlikely to affect the company’s ratings in the near term due to the significant headroom in the ratings, according to Fitch Ratings. However, the ratings could be impacted the longer business operations remain constrained, if the investigation shows weak corporate governance or risk management, or material adverse information is disclosed.

“Fitch does not believe that the recent cyber incident will materially affect FAF’s capital position or financial performance because the company is the second largest U.S. residential title insurer and a leader in the commercial title market. However, future rating actions cannot be completely ruled out until the incident is resolved and all relevant information is disclosed.

“Fitch affirmed the ratings of FAF’s senior debt ratings at ‘BBB’ and the company’s title insurance operating subsidiaries Insurer Financial Strength (IFS) ratings at ‘A’, all with a Stable Rating Outlook, on Aug. 24, 2023.”

Fannie and Freddie’s Thoughts on 2024

Many will say that economic forecasting is like driving a car blindfolded and getting instruction from a person looking out the rear window. But that doesn’t stop people and companies from taking periodic stabs at it.

If you’re hoping that lower borrowing costs will boost activity, Fannie Mae’s right there with you. But home sales will only marginally rise higher. Mortgage rates will average 6.7 percent next year, close to levels seen this summer. The housing market will see some upside in the coming years, but persistent challenges will limit a bigger shift, according to Fannie Mae's latest forecast. “Total home sales in 2024 will come in at about 4.8 million, largely flat compared to this year's expected level, followed by a jump to 5.4 million in 2025.

"The drivers of slow sales are well known at this point: unaffordability, lock-in effects, and a lack of existing inventories freezing much of the housing market. While we believe these dynamics will slowly dissipate over time, they will remain obstacles in 2024. Still, existing home sales will undergo a slow recovery starting next year, after they hit a likely low point in October, at a seasonally adjusted annualized rate of 3.79 million. Meanwhile, sales of new homes have also continued benefiting from the housing shortage, as well as builders' willingness to provide mortgage buydowns.

"This trend continues into our 2024 forecast, in which we expect new home sales to decline from current levels only slightly due to a modest economic contraction," according to the report.

While the shift in monetary policy has spurred a sharp drop mortgage rates this quarter, Fannie Mae noted a limit to how far these rates will fall: it projects that the 30-year fixed rate will average 6.7 percent in 2024, before falling to 6.2 percent in 2025. That's down from the current level of just below 7 percent, after they soared close to 8 percent earlier this year.”

Fannie’s somewhat friendly competitor also sent out its outlook. If you don’t want to take the time to click on the link: economic growth lower than 2023, unemployment higher (stop me if you’ve heard this before), mortgage rates are expected to be in the 6-7 percent range during the year, and Freddie thinks that home prices will rise more than 6 percent. For the tens of millions of Millennials who don’t own a home yet, for-sale inventory is expected to remain depressed, and Freddie sees a slight increase in dollar volume for purchase originations while refinancing is stagnant. Lastly, Freddie believes that the U.S. Federal Reserve will start cutting rates. All pretty safe bets.

According to the ICE First Look at November mortgage performance data report, mortgage delinquencies remained historically low in November, despite a seasonal rise. While default rates remain low overall, past-due FHA loans hit a 9-year high in November (excluding a surge at the start of the pandemic) and early-stage VA delinquencies reached their highest non-pandemic level since 2009; both segments bear close watching in the months ahead. Fewer serious delinquencies, combined with low foreclosure referral rates, contributed to Foreclosure starts and active foreclosures running 23 percent and 24 percent below 2019 levels, respectively. Prepayments fell again amid the usual seasonal pullback in home purchases, combined with the residual effects of elevated interest rates.

Capital Markets

As expected, this week began with a quiet start in the bond markets. There isn’t a whole lot to report, aside from the U.S. Treasury completing a solid $57 billion 2-year note sale in the early afternoon yesterday. Additionally, the FHFA Housing Price Index was up 0.3 percent month-over-month in October after increasing a revised 0.7 percent in September. The S&P Case-Shiller Home Price Index was up 4.9 percent year-over-year in October after increasing 3.9 percent in September.

Forecasts by “the smartest guys in the room” about a housing price collapse have proven to be entirely wrong. The S&P 10-city composite rose 5.7 percent, up from a 4.8 percent increase in the previous month, and as noted above the 20-city composite rose 4.9 percent. Sure, some over-inflated markets, like San Francisco, saw a small decline, but the strength in home prices came despite a sharp rise in mortgage interest rates in October. We all know that the average rate on the 30-year fixed loan crossed 8 percent before Halloween, the highest level in more than two decades. Rates, however, dropped steadily through November and more sharply in December, with the 30-year fixed rate now hovering around 6.7. That should help prices.

Much like yesterday, the domestic highlight of today’s calendar once again will be Treasury supply, headlined by $26 billion reopened 2-year FRNs and $58 billion 5-year notes. As for economic news, it consists of just Richmond Fed’s manufacturing and services indexes and Dallas Fed Texas services, both for December, and both due out later this morning. The MBA’s mortgage application survey won’t be published but will be back next Wednesday morning and will consist of two weeks’ worth of stats. We begin the day with Agency MBS prices a touch better/higher than Tuesday’s close and the 10-year yielding 3.86 after closing yesterday at 3.89 percent.

Employment for AEs

Logan Finance Bucks Mortgage Industry Trends with Strong Q4 Growth! As the year-end fast approaches, Logan Finance finds itself in a thriving environment sparking growth that has more than doubled over the last two years. “There’s a great need for Non-QM lending and we are positioned well to handle the influx of new business,” says Aaron Samples, Logan’s Chief Revenue Officer. TPO partners, if you missed the year-end pricing special announcement, see our LinkedIn profile at Logan Finance Corporation. Mortgage broker clients can get rate discounts of up to .375 on select loan products through the end of December, so bring your deals to Logan! Logan’s growth is also fueling several new hires including Wholesale and Correspondent industry veterans Nick Pabarcus and Dave Weatherford, who will focus on recruiting and growing our network. And speaking of hiring, Logan Finance is looking for Non-QM superstar AEs, so contact Aaron Samples for hiring information. Learn more about Logan’s growth at and

“Spring EQ’s TPO division continues to experience rapid growth as demand for home equity solutions accelerates. To meet this demand, Spring EQ is excited to announce a new second lien program designed for Correspondent partners. Eligible delegated and non-delegated sellers will now have the opportunity to take advantage of Spring EQ’s competitive suite of products, including fixed-rate second mortgages and adjustable-rate HELOCs. Explore Spring EQ job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages. So, think of us first for all your seconds. Want to become a Spring EQ Correspondent partner? Click here to get started.”