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Criminal Commission
By Jeff Walton & Kelly Guest
November 18, 2024
Commission KGB? HW's Jeff Andrews writes about Multiple Listing Services using AI to catch National Association of Realtors settlement violations. Andrews explores whether three apples on a kitchen counter in a listing photo is a signal that the seller will pay a 3% commission to a buyer's agent and other alleged workarounds to new comp rules. “If you mess up today, it’s not just a slap on the wrist from NAR. It’s a certified letter from the Department of Justice,” according to Ocusell CMO John Heithaus, quoted in Andrews' piece. MLSs are understandably seeking compliance solutions to avoid legal exposure, but agents must be wondering if staging for photos and showings now must include a sweep of tchotchkes, nooks, counters, and rooms to make sure nothing adds up to a potential commission offer amount. Committing real estate is getting scary.
In other news, MBA said mortgage apps increased for the first time in seven weeks, and NAR's Chief Economist predicts existing and new home sales will go up 9% and 11% respectively in 2025.
CHATTER
IMBS BE HAPPY: Pre-Tax Net Profit Up QoQ
Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a pre-tax net profit of $701 on each loan they originated in the third quarter of 2024, an increase from the reported net profit of $693 per loan in the second quarter of 2024, according to MBA’s newly released Quarterly Mortgage Bankers Performance Report.
NO PARTY PREFERENCE: NAR’s Lawrence Yun on Post-Election Home Sales
“We’ve seen after presidential elections—and it doesn’t matter who wins—that there’s usually a slight boost in home sales. It removes some uncertainty. Now you know it’s the policy [of President Trump], and you can make predictions about what will happen and make a decision based on that.”
GROUND ZERO: Urban Institute Makes Case for 0% Down FHA Loans
Planet Home Lending grew retail volume 28% in Q3 to $251M, increased servicing portfolio to $110B, and raised sub-servicing assets under management to $12.8B.
loanDepot announced JV with nation's 36th-largets builder Smith Douglas Homes: "Ridgeland Mortgage" will operate in GA, AL, TN, TX, and NC.
Rocket Mortgage reported $481M in net loss for Q3, along with a 43% YoY increase in rate lock volume, and a 28% YoY increase in closed loan origination volume.
Better Home & Finance Holding Company reported $54.1M loss in Q3, down from $353.9M in Q323. Better also reported funded loan volume of $1.035B in Q3, up 42% YoY and 8% QoQ.
MOVING & SHAKING
CrossCountry Mortgage added 3 to its C-suite: Vandad Fartaj as Chief Investment Officer, William Chang as Chief Capital Markets Officer, and Tom Rettinger as Chief Portfolio Risk Officer.
Movement Mortgage named Steve Smith President and CEO.
Provident Bank named Mohamed Najam as Vice President, Sr. Relationship Manager for its warehouse lending team.
NewFed Mortgage hired Rick Scherer to be their Chief Strategy Officer.
Fathom Holdings appointed Jon Gwin Chief Revenue Officer, named Samantha Giuggio President of Fathom Realty and Chief Operations Officer of Fathom Holdings.
MARKET/INDUSTRY
After Elections Results and Fed Rate Cut, Mortgage Rates Stall: Freddie 11-14-24
After a six-week climb, rates have leveled off, but overall affordability continues to be an issue for potential homebuyers. Freddie Mac’s latest research shows that mortgage payments compared to rents on the same homes are elevated relative to most of the last three decades.
In his latest Master the Markets segment, Bill Bodnar reflects on a rough week, where good news was bad news for the bond market.
Mortgage Applications Increased 0.5% From One Week Earlier: MBA Weekly Survey for the week ending 11-8-24. (First Increase In 7 Weeks)
House Proud: 66% of Homeowners Say Home is Source of Generational Wealth (TD Bank)
Rate-lock effect is biggest reason that 60% of respondents are keeping their homes and using it as a wealth-building tool. Other findings: The percentage of homeowners who are not planning to sell in the near future and are waiting for housing inventory to increase before making a move has doubled YoY from 9% in 2023 to 18% for this year.
Preaching To The Choir: NAR Chief Econ Issues Forecast at Agent Conference
2025 sales projection: Existing home sales to rise 9% year-over-year; New home sales to jump by 11%.
2026 sales projection: Existing-home sales to rise 13% year-over-year; new home sales to increase by 8%.
The average 30-year FRM has ranged from 6.08% to 7.44% over the past 52 weeks. Yun says the rates should stabilize at the low end of that range for 2025 and 2026.
Yes & No: Redfin Survey Finds About Same Number of People Will and Won’t Move After the Election
22% of U.S. residents are more likely to move now that election Is over, with many considering a different country or state.
Nearly the same share, 21%, say they are less likely to consider moving now that the election is over.
Of those who say they are likely to move, 36% are considering moving to another country, and 26% are thinking of moving to a different state.
29% of renters are more likely to consider moving now that the election is over, compared to 15% of homeowners.
4-Point Plan: Urban Institute’s Ideas to Make 0% Down FHA Loans Viable and Available
For many years, four in five FHA borrowers have been first-time borrowers. Rather than designing a zero-down FHA program for first time homebuyers from scratch, the FHA and Congress can build and improve upon a 2004 bipartisan House measure that would authorize the FHA to “offer a new 100 percent financing mortgage product to help first-time homebuyers purchase a home by allowing zero downpayment loans and financing of the settlement costs.” The brief has four suggestions to help the idea succeed:
Add a surcharge to the mortgage insurance premium.
Cap the volume.
Implement guardrails.
Manage risk through housing counseling and standard underwriting.
Based on related FHA performance data, the report estimates average losses from a portfolio of zero–down payment loans would be 0.44 percent of their initial principal value, or less than $1,500 per loan.
Odd Message From a Company Trying To Sell Homes: "Real Cost of Buying a Home"
In addition to their down payment, Americans report spending $31,975 on upfront home-buying expenses — an amount that surprised 48% of buyers, according to Clever Real Estate’s new survey. NOTE: Almost $20k of that is on renovations and furniture/appliances.