- InGeniusly Speaking
- Posts
- Big 4 in 2024
Big 4 in 2024
By Jeff Walton & Kelly Guest
December 30, 2024
Suit Buttoned Up? The National Association of Realtors' $418M Settlement
Brokerages, experts, coaches, and NAR itself cluttered the internet, podwaves, and trades with cheery takes on how the inability of sellers to publish buyers' agent compensation on multiple listing services isn't a roadblock to agents getting paid for their work, but rather an "opportunity for Realtors to communicate their value to consumers." There is still a giant, wide-open can of worms in spite of practice changes that went into effect last August and a judge's approval of the massive settlement. Additional suits remain, and objections (including one from the DOJ) to the settlement continue to accumulate in various courts.
Dastardly Depository: TD Bank to Pay Handsomely
In a historic first for the nation's 10th largest bank, TD Bank will pay $3B to the U.S. Justice Department to settle allegations that the institution's lax practices facilitated massive money laundering. In announcing the settlement, U.S. Attorney General Merrick Garland said, “TD Bank created an environment that allowed financial crime to flourish. By making its services convenient for criminals, it became one.”
Rocket Launches Counteroffensive, Sues HUD & DOJ
Rocket filed suit in Federal Court against the United States Department of Housing and Urban Development (HUD), calling out conflicts between the government’s regulations requiring appraiser independence and its enforcement actions seeking to hold lenders liable for the conduct of independent licensed appraisers. Rocket also filed a motion to dismiss the claim the DOJ brought against the company, citing "misplaced blame for work done by an independent appraisal management company." Rocket Companies President Bill Emerson didn't mince words in a press release about the legal action: “It is notable that, in a case about the alleged actions of an independent appraiser that was contracted through an unaffiliated third party, Rocket Mortgage is listed first in the DOJ’s filing and is the only company mentioned by name in the headline of the government’s press release announcing the DOJ’s lawsuit. Rocket Mortgage has thousands of passionate team members who focus every day on doing the right thing. It would be an offense to our workforce if we let the DOJ’s and HUD’s wrongful actions go unchecked.”
TMI: Too Much for Insurance?
How much homeowners insurance rates have increased in recent years depends on the source; but no one needs to look further than their escrow statement for confirmation that premiums are up. Carriers point to hurricanes, wildfires, and hail as major contributing factors, and they're pulling up stakes where they're not raising rates. The pocketbook pinch is a nuisance for current homeowners; but rising insurance costs are piling on in an era when affordability challenges abound, making the hurdles to homeownership even harder to overcome.
CHATTER
CEO VS. CFPB: JMG Founder Jason Mitchell Passes on Settlement
Accused of engaging in an illegal kickback scheme to steer business to Rocket Mortgage and Amrock (Rocket's settlement company), Mitchell was going to settle with the bureau for $200K to end 3+ years of "back and forth." Mitchell changed his mind, saying in a video he posted on LinkedIn that he did nothing wrong and that his company was being strong-armed by the regulator in an effort to get him to provide information on Rocket.
MARKET/INDUSTRY
MORTGAGE RATES CONTINUE TO RISE: Freddie 12-26-24
Mortgage rates increased for the second straight week, rebounding after a decline from earlier this month. While a slight improvement in new and existing home sales is encouraging, the market remains plagued by an overwhelming undersupply of homes. A strong economy can help build momentum heading into the new year and potentially boost purchase activity.
HOLDING THROUGH THE HOLIDAYS: In the latest Master the Markets segment, Bill Bodnar notes that in previous years, the 10-yr note has closed the year at 3.85, but this year 4.60. There’s some optimism, but very little commitment to his prediction that the market will improve and rates will “be lower” in 2025.
CALL TO ARMS: Adjustable Rate Mortgages Tick Up in Q3
Originations of adjustable-rate mortgages increased a smidge during the third quarter, according to a new ranking and analysis by Inside Nonconforming Markets.
An estimated $60.00 billion of ARMs were originated in the third quarter, a 1.7% increase from the previous three-month period. The ARM share of total first-lien originations declined from 13.6% in the second quarter to 12.9% in the third quarter.
Banks dominate ARM lending as hybrid loans are traditionally held in portfolio. That trend held true in the third quarter with the top three ARM producers being depositories.
Rocket Mortgage was the largest nonbank producer of ARMs, with an estimated $1.23 billion of originations in the third quarter. That was up 3.3% from the previous quarter.
For more details, see the new issue of Inside Nonconforming Markets.
WHAT THE HECM? Reverse Mortgages Flat in Q3, Down 12% YTD
Residential lenders originated $3.42 billion of FHA-backed home equity conversion mortgages in the third quarter, just about flat with 2Q24, according to a new ranking and analysis from Inside FHA/VA Lending.
Year-to-date, HECM endorsements are down 12.3%.
Mutual of Omaha Mortgage remained the top “reverse” lender in the third quarter with $611M of production, down 7.6% from 2Q24. Second-ranked Finance of America Mortgage posted an even larger decline, down 14.7% to $468.2M of endorsements in 3Q24.
Among the top producers, all are nonbanks.
SHARE OF LOANS IN FOREBEARANCE INCHES UP: MBA
Key Findings of MBA's Loan Monitoring Survey – November 1 to November 30, 2024:
Total loans in forbearance increased by 3 basis points in November 2024 relative to October 2024: from 0.47% to 0.50%.
By reason, 51.3% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability. Another 46.0% are in forbearance because of a natural disaster. Less than 2.8% of borrowers are still in forbearance because of COVID-19.
PHOENIX FIGHT: HousingWire on NAR Seeking to Revoke Phoenix Area Realtors’ Charter
NAR notified its leadership and members that it had made the decision to initiate the charter revocation process against PAR.
This came after PAR informed NAR that it would not withdraw or end the MLS Choice membership program.
Through the MLS Choice membership option, real estate licensees are able to become members of PAR and access the local MLS without becoming members of the Arizona Association of Realtors or NAR.
SPEAKEASY: Zillow Publishes Top ’24 Search Terms After Release of “AI Natural Language” Feature
Users seem to be able to just make stuff up: “Barndominium” - what does that even mean? If you want or need a barn, are you the homeowners’ association type?
Ranch (ranch style)
Lake
Duplex (duplexes)
Cabin (cabins)
Farms
Acreage
Garage
Loft
Luxury
Furnished
Some of the other “creative” search terms include “Huge, huge mansion,” “Laser tag,” “rollercoaster,” and “spooky.”