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Election Angst & Paper-Thin Policy?
By Jeff Walton & Kelly Guest
Kelly Guest
August 05, 2024
August 5, 2024
With the 2024 election just 92 days away, NMN wonders "How a Kamala Harris Presidency Could Affect Housing," and HW mulls "Divergent Paths: Housing market policies under a Trump or Harris administration." While the trades proffer journalistic insights, average Americans are taking pause: Veterans United Home Loans’ recent Veteran Homebuying report shows more people want to wait until after the election to purchase a home. Veterans are more bullish on moving forward now, with 35% saying they’ll wait, compared to 43% of civilians. Regardless, 77% of veteran would-be buyers say inflation and prices of everyday goods are their top election issue, in concurrence with 78% of civilians.
Whatever your stance on the Fed printing money, what do you think of the government printing housing? HUD granted $600K to the city of Nome, AK, who allocated the money for partners Penn State University and nonprofit research firm Xtreme Habitats Institute (XHI) to conduct the “design, engineering, materials research, development, planning, and analysis” that is required for 3D printing of “high-quality, affordable, energy-efficient, and sustainable housing for communities in sub-arctic regions of Alaska.” We’ll see if the affordability crisis can be tackled with all the housing that’s fit to print.
CHATTER
STEP AWAY FROM THE LAWSUIIT: loanDepot dismisses year-long poaching suit against Movement Mortgage. Dismissal is with prejudice and everyone's covering their own attorneys' fees.
SURE ABOUT THAT? Freedom Mortgage asks appeals court to review $22M settlement to LoanCare.
NEW VERSION, NEW VISION: Liberty Reverse Mortgage parent Ocwen became Onity; enters agreement to buy Mortgage Assets Management in hopes of expanding its successful efforts in reverse arena.
JERSEY SHORING UP: OceanFirst Bank is acquiring Garden State Home Loans, which will become a new division for the regional depositary bank.
FIRM FANNIE: Fannie Mae reported $4.5B in net income for Q224, up from $4.3B in Q1.
MAC DADDY: Freddie Mac's net revenues were $6.0 billion in Q224, an increase of 12% year-over-year; net income was $2.8 billion, a decrease of 6% year-over-year, primarily driven by a credit reserve build in the current period compared to a credit reserve release in the prior year.
ROCKET doubled home equity loan volume y-o-y in Q2, posted $178M in net income.
ICE posts 8th loss in nine quarters in Q2, says Black Knight acquisition is showing desired results.
SLOWER RITHM: Rithm Capital reported net income of $213.2 million, or $0.43 per share for the second quarter, lower than $261.6 million or $0.54 per share in the previous quarter.
ANNNALY's MSR portfolio grew 19% q-o-q to $2.2B, posted a slight decline in its residential credit portfolio to $4.9B, and saw a 20% q-o-q increase in loan lock volume in its correspondent channel.
INTROS & INNOVATIONS
A PIECE OF YOUR (MORTGAGE) MIND: MBA wants industry pros to bend elected officials' ears while they're in their home districts. The association set up "Advocacy in August" for mortgage professionals to sign up and engage with their Congressional reps on various topics affecting the industry. It's an opportunity that MBA makes easy for anyone who's ever been frustrated with legislation that is ignorant to actual consumer needs and the way the market and industry work.
THE ELEPHANT IS STILL IN THE ROOM: THE BIG AGENT arrives on scene as NAR settlement rules approach. Touted on its site as “Agency. Made. Easy.,” Mortgage Automation Technologies deploys similar loan origination system solutions that helped lenders navigate Dodd-Frank mandates in a consumer-agent-broker collaboration portal, giving users access to various transaction-related forms and tools. While streamlining the process may be helpful and appealing, agents still have a big money problem to solve.
AUTOMATING AUTOMATION?
It's been years since the internet obliterated the stranglehold real estate brokers had on property information, allowing consumers to get previously unavailable information from multiple sites. Property.com wants to push the concept further, bundling everything from property searches and value info, home improvement professionals and services to real estate referrals. The site also offers a "personal AI assistant" named Revana, so you can get emails from a robot.
MOVING & SHAKING
NYSE MOVE: Current NYSE VP John Tuttle trades the Big Apple for Grand Rapids, MI to become ACRISURE president starting September 1.
COACH THEM UP: After dropping "Guaranteed," Rate announced an executive sales coaching program, and is bringing 35-year coaching vet and author Dan Manginelli to lead it.
MMI taps former Rocket-man Dan Jones as new Chief Data Officer.
MARKET/INDUSTRY
MORTGAGE RATES DIP TO LOWEST LEVEL SINCE FEBRUARY: Freddie 8-1-24
Mortgage rates declined to their lowest level since early February. Expectations of a Fed rate cut coupled with signs of cooling inflation bode well for the market, but apprehension in consumer confidence may prevent an immediate uptick as affordability challenges remain top of mind. Despite this, a recent moderation in home price growth and increases in housing inventory are a welcoming sign for potential homebuyers.
PROOF IN THE PENDING? NAR Chief Economist Lawrence Yun says the tide is turning for buyers: "The rise in housing inventory is beginning to lead to more contract signings. Multiple offers are less intense, and buyers are in a more favorable position." Pending home sales were up 4.8% in June, contract signings increased in all four U.S. regions, and pending home sales declined in 3 of 4 regions, but improved in the West.
UP, UP & (AFFORDABILITY) AWAY: First American Chief Econ Mark Fleming blogs that nominal house prices are up 5.6% and mortgage rates are up .02% y-o-y, making affordability 4% lower than one year ago. Fleming notes that affordability HAS improved "modestly" m-o-m due to slightly lower rates and "positive income growth."
CORELOGIC/CASE-SHILLER'S TAKE ON PRICES: A TAD MORE AGGRESSIVE THAN FIRST AM’S
The index marks the 11th consecutive month of annual appreciation, but the second consecutive month of slowing gains, home prices hit new highs on the CoreLogic S&P Case-Shiller Index in May, rising 5.9% from the year before.
The CoreLogic S&P Case-Shiller Index peaked in May at 6.5% in both February and March of this year.
ASSISTANCE EXPANDS: Down Payment Resource’s (DPR’s) Q2 2024 Homeownership Program Index Report, reveals there are now more programs than ever with 2,415 currently on their radar. DPA says 29 programs were added in Q2, bringing the total programs to 213 y-o-y.
LANDLORDS, LOOK OUT: Candidate Harris on Housing Costs (HW)
Harris says she'll take on "corporate landlords" and cap "unfair rent increases."
MOTIVES ARE SHIFTING FROM IMPROVEMENTS TO DEBT: MBA’s 2024 Home Equity Lending Study
Total originations of open-ended Home Equity Lines of Credit (HELOCs) and closed-end home equity loans increased to $2.13 billion per company in 2023, from $2.10 billion in 2022.
By known borrower usage, home renovations slowed to 56% of volume in 2023, from 65% in 2022. Debt consolidation grew to 33% of volume in 2023, from 25% in 2022.
In 2023, over 75% of total originations were subject to an Automated Valuation Model (AVM) or Desktop Valuation (DV), with most of both categories entailing an exterior/drive-by inspection or no inspection at all. Conversely, 22% of originations required a full appraisal with the majority entailing both an interior and exterior inspection.
GET AHEAD OF THE PROBLEM: MBA releases new RIHA Report, challenges industry to develop new "intervention policies" for distressed borrowers. "Creating solutions for distressed borrowers will greatly improve the efficiency in the housing market as well as provide additional ways to make sure distressed borrowers stay in their homes." - Edward Seiler, MBA's AVP of Housing Economics and Executive Director, Research Institute for Housing America.
THAT'Z ZCARY: $1M "STARTER HOMES"
A Zillow analysis found that the number of cities where a starter home (defined as properties in the lowest third of values in a particular area) has more than doubled - going from 84 to 237 in five years. About half of those cities are in CA; NY and NJ come in next, followed by FL and MA - in that order.
SUBPRIME SOLAR? A report from the Center for Responsible Lending reveals some gut-wrenching stats about financing for green energy adoption. The Shady Side of Solar System Financing says five companies control 80% of the residential solar loan market, and "Elements of solar financing products and sales processes are identical to those used by predatory subprime lenders in 2007 to target low- and moderate-income and minority borrowers."