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Cut Countdown & Satisfaction Stats
By Jeff Walton & Kelly Guest
Kelly Guest
July 29, 2024
July 29, 2024
FLAG-RAISING: MR. COOPER GROUP announced a deal to purchase Flagstar Bank’s TPO platform and $356B in servicing rights for $1.4B in cash, after reporting net income of $204 million (up from $181M in Q1). This made big news across all the trades last week, just as the latest public perception of the servicing industry came out.
CAR DEALERS AND AIRLINES MORE POPULAR THAN MORTGAGE SERVICERS – AGAIN. J.D. Power’s 2024 satisfaction results showed overall customer satisfaction with mortgage servicers rose to the meteoric height of 606 out of 1000. The highest individual scorers were Rocket Mortgage with a score of 713, Regions Mortgage is second with 678 and Chase is third at 676. But the best servicer scores are far below those of car dealers – the auto industry’s average is 854! And even with doors flying off midair, horrific travel delays, and lousy snacks, airlines also out-satisfy servicers: Delta got 743, JetBlue 736. Yikes.
CHATTER
KILLER Q2: CoStar Group announced Q2 revenue $678 million, up 12% y-o-y. The company’s release notes Homes.com hitting $55M in net new bookings, a milestone it took Apartments.com two years to achieve.
GINNIE MAE GETS THE GREEN: The Senate appropriations committee approved $67M in funding for salaries and operational expenses for the government-owned entity.
FOA STILL ON THE LIST: The reverse mortgage lender did a reverse stock split to stay on the NYSE.
PENNYMAC posted $2.67/share earnings in Q2, surpassing expectations.
WATERSTONE MORTGAGE has best quarter in two years, jumping from $298,000 in Q1 to $1.3M in Q2.
DUAL DENIALS: eXp Realty & Former CEO Deny Sexual Assault Allegations in Court Filings.
TRY, TRY AGAIN: A group of 14 state attorneys general led by Tennessee are calling on the Federal Housing Finance Agency to end the FNMA title waiver pilot program. The program was canceled in 2023 due to industry opposition, but the Biden Administration reintroduced it as a solution to the affordable housing crisis in this year’s State of the Union address. FHFA to the AGs: “We’ll get back to you.”
INTROS & INNOVATIONS
IT STILL HAS TO COME FROM SOMEWHERE: Payload announces “new payment tools designed specifically to help brokers and agents adapt to the new [commission lawsuit settlement] landscape by offering a seamless way to capture payments directly from buyers.” But buyers have to agree (and be able) to pay agents first.
MOVING & SHAKING
Cornerstone Capital Bank has expanded its leadership team with seven new hires. Mike Iorio, who has held executive roles at NewRez, Wells Fargo, CMG Financial, Citywide Home Loans, and Stearns Lending, will spearhead the national expansion of Cornerstone’s Homebuilder Partnership business.
ServisFirst Bank announced the appointment of Tammy Ehrle as VP/LO for its Alabama region.
Dunmor also announced two key appointments to bolster its operational team this week. Andy Thienkosol has been named Chief Operating Officer and Melissa Perez joins as Senior Vice President of Operations.
In better news beyond lawsuits, eXp scored the #87 team from KW in the Philadelphia market; but their Chief Growth Officer Michael Valdes departs for LPT Realty.
INGENIUS INTEL
FOR REAL THIS TIME FANNIE? Fannie Mae’s ESR Group said it out loud, “We [ ] now believe that the Federal Reserve is likely to cut rates in September and then again in December.” In the latest mortgage app survey, MBA’s VP and Deputy Chief Economist Joel Kan noted, “…the conventional refi index was at its highest level since September 2022.” If you’re wondering what the refi landscape will look like once rate cuts get underway, here’s a preview based on InGenius data as of June 20:
We also took a look at the broader economic scene. The chart below shows the inflation and wage growth rollercoaster, but consumer credit card debt has gone nowhere but up, nearly doubling from Q221 to Q124.
No doubt the debt situation will factor into and fuel whatever boom is on the horizon.
MARKET/INDUSTRY
MORTGAGE RATES SHOW LITTLE MOVEMENT: FREDDIE 7-25-24
Mortgage rates essentially remained flat from last week but have decreased nearly half a percent from their peak earlier this year. Despite these lower rates, buyers continue to pause, as reflected in tumbling new and existing home sales data.
MORTGAGE APPLICATIONS DECREASED 2.2% FROM ONE WEEK EARLIER: MBA survey for the week ending 7-19-24.
The Market Composite Index decreased 2.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2% compared with the previous week.
The Refinance Index increased 0.3% from the previous week and was 38% higher than the same week one year ago.
The seasonally adjusted Purchase Index decreased 4% from one week earlier. The unadjusted Purchase Index decreased 4% compared with the previous week and was 15% lower than the same week one year ago.
“Mortgage rates continued to ease, with the 30-year fixed rate dipping to 6.82%, the lowest level since February 2024. Refinance applications were up, driven by conventional and FHA application activity, as some borrowers took the opportunity to act.” -Joel Kan, MBA’s VP and Deputy Chief Economist.
GOSH DARN PRICKLY: Fratantoni's Q2 GDP Commentary
"The economy grew at a faster pace in the second quarter of this year, rising to 2.8% from 1.4%. Both an increase in consumer spending on durable goods and business spending on inventories accounted for a substantial part of last quarter’s expansion. Weaker net exports reflect a global economy that continues to operate in a lower gear as well as a stronger dollar. While top line growth is above the pace needed to keep the unemployment rate from rising further, the components do suggest the economy may slow from here. The inflation data is consistent with recent news showing a downward trend, which should provide enough confidence for the Federal Reserve to cut rates in September.” MBA Chief Econ Mike Fratantoni
WHO’S YOUR DADDY? NAR NOTES SHIFT FROM SELLER’S TO BUYER’S MARKET
"We're seeing a slow shift from a seller's market to a buyer's market. Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis." - NAR Chief Economist Lawrence Yun.
Existing-home sales faded 5.4% in June to a seasonally adjusted annual rate of 3.89 million. Sales also slumped 5.4% from one year ago.
The median existing-home sales price bounced 4.1% from June 2023 to $426,900 – the second straight month it reached an all-time high and the twelfth consecutive month of year-over-year price gains.
The inventory of unsold existing homes rose 3.1% from the previous month to 1.32 million at the end of June, or the equivalent of 4.1 months' supply at the current monthly sales pace.
NEW HOME SALES SLUMP: HUD/CENSUS BUREAU
The drop is .06% below the M-O-M estimate and 7.4% below the Y-O-Y forecast.
PAPI’s BETTER! HOMEBUYER AFFORDABILITY IMPROVED IN JUNE: with the national median payment applied for by purchase applicants decreasing to $2,167 from $2,219 in May. This is according to the MBA’s Purchase Applications Payment Index (PAPI).
BIG NUMBERS, LITTLE EXCITEMENT: ATTOM Data's Q224 US Home Sales Report
The latest price and profit numbers reflect a period when the national median home value shot up 9% quarterly and 6 percent annually.
Home sellers earned a 55.8% profit margin on typical single-family home and condo sales in the United States during the second quarter.
Typical raw profits for sellers were over $130,000.
“The second-quarter profit report offers a mixed bag of plusses and minuses that added up to an overall picture of not much change for sellers. Prices jumped back upward, which was great news for owners. So did raw profits. Profit margins also remained historically elevated. But the bottom-line profit-margin trend didn’t move much at all because soaring prices are far from a new thing. Even greater price improvements will be needed to kick margins up over the rest of the year.” - ATTOM CEO Rob Barber
FANNIE’S FEELINGS: FNMA ADJUSTS FORECAST
“We've made only modest revisions to our economic growth outlook this month; our expectation for real Gross Domestic Product (GDP) growth in 2024 is unchanged at 1.6%, while our outlook for 2025 was revised upward one-tenth to 2.0%. More notably, given the two softer-than-expected Consumer Price Index (CPI) reports in May and June, we have revised downward our inflation forecast. We now expect the CPI to end 2024 at 2.9% (previously 3.2%), and the Federal Reserve’s preferred core Personal Consumption Expenditures (PCE) price measure to be 2.5% (previously 2.7%).”
PITI PITA?? WHAT SERVICERS TOLD AUCTION.COM
Asked about the risk factors for potentially triggering higher mortgage delinquencies for the rest of this year, loan servicers ranked their concerns in Auction.com’s 2024 Home Seller Insights Survey:
37% say “hidden” homeownership costs (homeowners’ insurance and property taxes)
32% said rising consumer debt delinquencies
15% said rising unemployment
The survey does not address the fact that thinking the “T” and the “I” in PITI are “hidden” could be the actual risk.