Now is about the time when you stop saying “Happy New Year,” either because it is no longer relevant, or you’ve forgotten who you’ve said it to. Lenders and vendors know that the “ability to repay” rules are both relevant and should not be forgotten, and attorney and Mortgage Musing blog author Brian Levy’s latest Musing’s discusses the importance of the Dodd Frank Act’s Ability to Repay Rule and how that keeps both lenders and borrowers from giving the housing industry the kind of hangover it had starting in 2008. Levy also discusses the CFPB’s recent Colony Ridge enforcement action involving, among other things, fair lending, LEP language exploitation, and violations of the Interstate Land Sales and Full Disclosure Act of 1968. Talk about mission-creep! While we’re on the CFPB, it’s HMDA season! 4-6,000 lenders out there have begun filling out paperwork: more below. (Today’s podcast can be found here, and this week’s is sponsored by the STRATMOR Group, the data-driven mortgage advisory. At STRATMOR, insights and knowledge are applied to guide mortgage clients to make sound strategic decisions and take actions that improve their success.) Broker and Lender Services, Programs, and Software Kick off the new year strong and join Rocket Pro TPO’s IGNITE Live on Monday, January 8th at 4pm ET with EVP, Mike Fawaz. He will cover new products and technology – including one big announcement that you don’t want to miss to take your business to the next level. On top of that, Rocket Pro TPO has just announced an upgrade to their innovative ONE+ by Rocket Mortgage product, now expanded to include Freddie Mac’s LPA which could mean a 16 percent increase in client eligibility! The lender will continue to cover 2 percent of the client’s purchase price as a down payment, now with a minimum of $2,000. Speak with your Account Executive about other updates. Rocket Pro TPO has also introduced a new 1 percent LLPA credit for Fannie Mae HomeReady and Freddie Mac Home Possible loans at or below $350,000. For lower loan amounts, the credit will provide no less than a $2,000 benefit. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

The former Airbnb executive Jonathan Mildenhall steps into a newly created role, overseeing communications for all business lines at the Detroit-based company.

If convicted, spouses Noreen Khan and Chistopher Mayberry face five years in prison and a fine of up to $250,000 as well as forfeiture of their home.

Alberto Musalem, a finance professor with experience in both the public and private sectors, will take over the reins at the regional reserve bank in April.

Consumer delinquencies Vantagescore tracked during November generally were above pre-pandemic levels as shopping season began. Mortgages remained the exception.

Federal Reserve officials point to overnight reverse repurchase agreement activity as an indication of excess liquidity, which the central bank is working to reduce. But some analysts say that excess liquidity may be drying up faster than expected, with important implications for banks.

Wednesday saw mortgage rates recover toward the lower recent levels in response to economic data that wasn’t as upbeat as recent examples.  That’s important because the Fed’s treatment of rates and rate momentum itself is repeatedly characterized as “data dependent.” We have no reason to doubt the Fed or the market, and today’s trading session sent the same message.  Unfortunately, the tone of today’s data was quite different than yesterday’s with Jobless Claims coming in much lower than expected.  Even in the overnight session European economic data was already pushing bond yields (which correlated with interest rates) higher. By the time mortgage lenders published rates for the day, the average lender was noticeably higher than yesterday’s latest levels, but not quite as high as Tuesday’s levels.  All of the above may end up looking like much ado about nothing depending on the outcome of Friday’s big jobs report.  It is one of the economic reports with the most potential to cause volatility for interest rates… in either direction.

Lots at Stake With Friday’s Jobs Report

Thursday’s trading session provided an unpleasant but worthwhile reminder that “data dependence” cuts both ways in terms of its impact on the bond market.  Yesterday’s session saw weaker data help rates avoid a break above 4% while today’s data arguably did the opposite.  None of the above was a very big deal in the bigger picture, but Friday’s jobs report certainly has the power to change the tone if it falls far enough from forecast.

Econ Data / Events

ADP Employment

164k vs 115k f’cast, 101k prev

Jobless Claims

202k vs 216k f’cast, 220k prev

Market Movement Recap

08:34 AM Weaker overnight, led by Europe.  More selling after data.  10yr up 7bps at 3.989.  MBS down 10 ticks (.31).

12:20 PM Slightly choppy, but mostly sideways all morning.  MBS down 9 ticks (.28).  10yr up 7.3bps at 3.993.

02:19 PM MBS are now down to the weakest levels of the day with 5.5 coupons down 3/8ths in total. 10yr yields are near their highs, up 8.1bps at 4.001.

Wednesday’s data was helpful for the bond market–even if only modestly.  Today’s is the opposite.  The weakness began in Europe with a swath of PMI reports that were in line with expectations or better. It has continued in the domestic hours with Jobless Claims and ADP both beating expectations handily.  Trading levels aren’t any worse than they were yesterday morning, but it’s a reminder that data dependence goes both ways (and a warning that Friday’s jobs report reaction could go big in either direction).

“My dad always said to me, ‘Work until your bank account looks like a phone number’ so I did. Account balance: $9.11.” You can work harder, or you can work smarter. (I have severe doubts about the validity of this clip; it gave me the willies watching it.) Swimming is certainly a competitive sport. Do you have competitors? Most businesses do. Which is a reason that hotels offer free ice, thanks to a hotel chain that began in Memphis, TN. If the Mortgage Bankers Association is right, and volume does pick up some in 2024, that doesn’t mean the competition to do that business is going to go away. Numbers game. 5 calls, 25 a week, one closed loan $4k, two loans $8k. At these rates, less competition. If rates come down, competition for inventory just increases. (Today’s podcast can be found here, and this week’s is sponsored by the STRATMOR Group, the data-driven mortgage advisory. At STRATMOR, insights and knowledge are applied to guide mortgage clients to make sound strategic decisions and take actions that improve their success. Hear an interview with the STRATMOR Group’s Garth Graham on if industry forecasts for a better market should lead to industry optimism.) Broker and Lender Programs and Software Servicers know how much work it takes to release a lien once a mortgage has been paid off. That’s why they’re turning to the new Automated Lien ReleaseSM (ALR) capability in the ICE MSP® servicing system to help lighten the load at the end of a loan. ALR combines document creation and automated workflows to streamline the lien release process. It helps with eSigning and eRecording where available (and prints the release package for wet sign where it’s not) to help servicers cut through the delays and release liens faster. Read the press release to see how you can start releasing fully paid liens in days instead of weeks.