“What do you call James Bond having a bath? Bubble 07.” In different bond matters, mortgage rates will always be higher than Treasury rates, in part because of the prepayment risk in mortgages that doesn’t exist with Treasury bonds. With the drop in rates, sales management personnel at lenders are busy figuring out how best to remind the staff about EPO (early payoff) penalties levied by investors while at the same time working on ways to save money besides furloughing, cutting staff, outsourcing, and re-doing vendor contracts. The recent decline in rates and increase in applications is welcome: According to Curinos, November 2023 funded mortgage volume decreased 11 percent YoY and 10 percent MoM. In the Retail channel, funded volume was down 22 percent YoY and 10% MoM. The average 30-year conforming retail funded rate in November was 7.45 percent, 25bps higher than October and 85bps higher than the same month last year. (Curinos sources a statistically significant
“If you have no interest in banking, you are not a loan.” (Best said out loud to a 6th grader.) Cutting edge humor aside, this morning I head to Orlando for the FAMP event, in a state where there are a total of 186 banks operating with 4162 branches. Some of the conversation will be about Freddie Mac earning $2.9 billion in the 2nd quarter (how’d your company do?). Banks… Last Friday we saw something we haven’t seen for a while: a bank closure. “Heartland Tri-State Bank of Elkhart, Kansas, was closed by the Kansas Office of the State Bank Commissioner, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver… the FDIC entered into a purchase and assumption agreement with Dream First Bank, National Association, of Syracuse, Kansas…” While we’re on Agency and government news, the Federal Reserve's quarterly Senior Loan Officer Opinion Survey found that banks have tightened credit standards f
Denver’s airport has the longest runway in the U.S. at 16,000 feet (3 miles). As thousands of vendors, with some lenders thrown in for good measure, and me, head to Nashville for the MBA’s conference this weekend through next Wednesday, I am reminded of a bit of air travel trivia. Namely, if a commercial pilot seems to land quickly and taxi off the runway as soon as possible, generally that pilot’s background is Navy. If the pilot lands gently and taxis for a bit, that pilot was trained in the Air Force. The reasoning? Many Navy pilots were trained to land abruptly on carriers. The economic backdrop for this year’s event is not pretty. And in our biz, concerns about a potential recession and other issues are prompting some investors to sell mortgage securities known as credit-risk transfers that are packaged by Fannie Mae and Freddie Mac. The trend has sent the securities' prices lower and widened the yield spread when compared with Treasury bonds. T
My cat Myrtle has a certain amount of “girth,” as they say. But I tell her that she carries it well as the calories from line-caught halibut have far outweighed her time working out to burn them off. In fact, I’d be hard-pressed to remember her ever pumping iron. Turning to humans, it’s a proven fact that during the pandemic 87 percent of gym members didn’t even know that their gym was closed. Okay, maybe not proven, but it makes sense. Something else that makes sense is the non-QM product channel, there to help LOs help borrowers, but that segment continues to face an uphill battle. What are borrowers supposed to think when even Yahoo comes out with a sensationalist headline like, “U.S. mortgage lenders are starting to go bankrupt: how non-QM loans could be triggering the worst surge of failures since 2008.” Really? Other product development continues. One wonders about reverse discrimination, but if you’re Black or Latino in Dal
In Florida there are approximately 3,000 lakes, not enough to make it onto the leader board of states with the most named lakes (Minnesota, Wisconsin, Michigan, and Alaska are up there). (Here’s a bit of trivia: what is the only state without a naturally occurring body of water large enough to have a name?) Nebraska has the most rivers. I mention this, not to make you thirsty for a glass of clean, cold water, but to bring up that Nevada and Arizona may have their water allotment from the Colorado River cut. What might that do to property values? Florida has its share of rivers, despite the lack of elevation change (its highest point is only 345 feet above sea level). Here in Florida they’re not talking about water, but at the Florida Association of Mortgage Professionals attendees are talking comp, and the current STRATMOR blog is titled, “Lenders are Eying Compensation and Ops Trends.” In addition, don’t be too slow to right-size your company in toug