Second only to the excitement of the new phone book coming, the new conforming loan limit is $548,250 for 2021, up from $510,400 in 2020, and some investors reacted. (More below.) The limit will impact home buyers in a positive way. The spread of COVID-19 (based on 2 things, how dense the population is, and how dense the population is) has led to an entirely new home life for many, and a shift in demand and features in a home. Millennials and Generation Xers are extremely or very interested in certain amenities in a new home like high-speed fiber-to-the-home/broadband internet for remote work, online classes, and high-definition movie streaming, wireless connectivity in common areas like the outdoors, in clubhouses, or near pools, and built-in, ready-to-use smart devices, such as thermostats, cameras, light switches, and refrigerators that can be controlled through mobile apps. (Builders are wiring homes with Category 6A or fiber cables to support wired and wireless technology.) Home design is changing as well, perhaps due more to the pandemic than to demographics. When this whole virus thing is over… I still want some of you to stay away from me.

Employment & transitions

Home Point Financial has had 96% of its associates working from home since mid-March. While growing loan volume and building capacity have been focal points, the company’s top priority is the care and well-being of its associates and their families. With many people pulling double-duty (working remotely while supporting young virtual learners) Home Point committed to providing laptops, tablets, or Chromebooks to all associates with children (kindergarten through age 22) that are attending school virtually from home. If you want to be part of a team that makes your career, and your family, a priority, apply for an open position on Home Point’s careers page.

REMN WHOLESALE (REMN) offers the products you need, the pricing you want, and the service you expect! Already recognized nationally for its industry-leading turn times, REMN is now synonymous with providing highly competitive pricing through the launch and expansion of its Platinum Products which incorporates Conventional and Government loan options for Purchases and Refinances (accessible through Loansifter and Lender Price). Mortgage Brokers and emerging Bankers choose REMN WHOLESALE because of its perpetual commitment to quality and its customer-centric approach toward providing exceptional service, support, and consistency. Providing a full array of loan programs from Conventional to Government; Jumbo to High Balance; 203(k) to HELOC, and the recent return of Non-QM, REMN is now more READY than ever to earn your business. Are you a seasoned Account Executive with one eye and ear on exceptional new opportunities? REMN Wholesale continues to recruit “top tier” Account Executives nationwide. For immediate consideration, please send your resume to [email protected].

“Shamrock Home Loans is thankful. Thankful for its clients, referral partners and company partners who enable us to close loans more effectively and efficiently than our industry peers. But, most of all, we are grateful for our employees. Mortgage professionals are inquiring and joining Shamrock for the award-winning culture because they subscribe to our Core Purpose: Everyone Deserves to Live in a Home they Love. Our culture is not a marketing talking point. It is experienced in our operations when we onboard new LOs and branches, how we support new staff members who have questions and how we invest in the growth of every branch who joins us. Dean Harrington, founder of Shamrock Home Loans, touches upon the power of gratitude in our families, friends and as important, our coworkers. Watch our weekly video-cast the Morning Huddle. Join Shamrock, an award-winning lender. Sales Teams, LOs, and Branch Managers, aim for something greater by contacting [email protected].”

ServiceLink is expanding and welcomes Ryan Vogt, VP, National Sales Representative for both Origination and Default clients. ServiceLink is a respected leader providing tech-enabled services for all phases of the home lending lifecycle from origination through default. Starting in the mortgage industry in 2007, Ryan brings over 13 years of client-centered sales and default industry experience. He has been instrumental in developing marketing strategies and business opportunities with new and existing clients, ultimately, improving the client experience. Ryan holds a BA in Business from the University of Florida. He resides in Jacksonville, FL, with his wife Melissa and twin boys.

Union Home Mortgage announced that Victor Guerrero has been named Area Manager of the Pacific Southwest, responsible for the growth and management of new and existing UHM branches in CA, AZ, and NV.

Lender and broker products & services

“No matter how you process your Final Docs, your confidential information needs to be protected at all times. At DocProbe, our SOC-2 compliance accreditation is a testament to our commitment and proactive sense of duty to ensure a robust and secure environment for our clients’ final documents and information. Strict security measures follow each document from retrieval to processing to auditing and through final delivery.  From upload to storage, we designed our environment to secure and protect your data and documents to prevent data breaches or loss, and implemented rigorous standards of security, privacy, and integrity at every stage. With dozens of new lenders and investors joining DocProbe’s roster of clients just over the last few months, these security steps complement our robust, proprietary technology platform in guaranteeing the successful retrieval, processing, and delivery of millions of trailing documents a year. Email Nick Erlanger or visit us to learn more.”

“Would $180M in additional applications help? ‘In the first 4 months we took in $180M in applications and we have about 100 LOs. That is a significant impact to our business. My top performing LO attributes 25% of her business to Sales Boomerang alerts.’ (Katherine Campbell, Assurance Financial) Our clients are the smartest lenders in the industry. They are the smartest because they have automated their borrower retention strategy which multiplied their repeat and referral business. These lenders have also firmed up their LO retention and LO recruitment process by using the #1 borrower retention system as one of the leading reasons to stay or join the lender. If any of these three items is on your list for 2021 then click here and schedule a demo.”

Stearns Wholesale continues to simplify and enhance business processes to increase productivity and efficiency. This month, Stearns is releasing a pilot for Single Disclosure Packages, which will help streamline the current eSign and eConsent process for broker and lender disclosures out of SNAP. Sending Broker and Lender disclosures in one package, will also allow automatic compliance checks prior to registration. If you want to learn more about the benefits of the single disclosure package or partner with Stearns, click here to be contacted.

Conventional conforming news

Talk of ending the GSE (Government Sponsored Enterprise, e.g., Freddie & Fannie) conservatorships in the next two months may fade away, barring some controversial consent order move. The Structured Finance Association (SFA) reassured Treasury chief Steven Mnuchin, “SFA reiterates our support for the ultimate goal of releasing the GSEs from conservatorship and to increase the role of private capital in our nation’s housing finance system in a responsible manner… “a hastily thrown together exit from conservatorship based on the political calendar risks undoing the positive work that has been accomplished and is currently underway,” wrote SFA CEO Michael Bright.

The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limits be adjusted each year for F&F to reflect the change in the average U.S. home price. Yesterday the FHFA published its third quarter 2020 FHFA House Price Index report, which includes estimates for the increase in the average U.S. home value over the last four quarters. Per the seasonally adjusted, expanded data FHFA HPI, house prices increased 7.42 percent, on average, between the third quarters of 2019 and 2020, thus the baseline maximum CLL will increase by the same percentage. For areas in which 115 percent of the local median home value exceeds the baseline number, the maximum loan limit will be higher. HERA establishes the maximum loan limit in those areas as a multiple of the area median home value while setting a “ceiling” on that limit of 150 percent of the baseline loan limit. The new ceiling loan limit for one-unit properties in most high-cost areas will be $822,375, or 150 percent of $548,250

Several investors and lenders reacted quickly to the new loan limits from Freddie and Fannie. Plaza Home Mortgage “is accepting the new loan limits for new conventional conforming and high balance commitments effective immediately. Loans locked under the new limits may be purchased prior to January 1, 2021.” PRMG “is pleased to begin allowing conventional loans with the increased standard and high balance limits to be submitted, locked and funded immediately.”

Don’t forget that the FHFA announced the extension (12/31) of several loan origination guidelines put in place to assist borrowers during the Covid-19 pandemic. Check out the information on alternative appraisal requirements on purchase and rate term refinance loans, alternative methods for documenting income and verifying employment before loan closing, and expanding the use of power of attorney to assist with loan closings.

The extensions are implemented in updates to Fannie Mae Lender Letters LL-2020-03, LL 2020-04, and Freddie Mac Guide Bulletin 2020-44.

Fannie Mae updated Lender Letter 2020-07 to clarify the requirement for reporting a delinquency status code for a Covid-19 payment deferral. In the month the Covid-19 payment deferral is completed, and the mortgage loan is reflected as current, the servicer is not required to report delinquency status information to Fannie Mae so long as no other delinquency status code is applicable.

Of course lenders and investors react to Agency changes. For example, due to the ongoing impact of COVID-19, Flagstar Bank is implementing temporary eligibility requirements for self-employed borrowers based on the announcements made by Fannie Mae and Freddie Mac and will remain in effect until further notice.

Interim appraisal guidance for Conventional transactions meeting Fannie Mae and Freddie Mac expressed tolerances are being implemented. The tolerances expressed in Memo 20030 will be accepted by Flagstar Bank as alternatives to the requirements listed in the Conventional Underwriting Guidelines. These temporary flexibilities are effective for all loans in process and remain in place for loans with applications dates on or before December 31, 2020 for which an appraisal has not already been obtained.

Disaster news

On November 12, with Amendment No. 10, FEMA granted Individual Assistance to 2 additional California counties, Mendocino, and Stanislaus, affected by wildfires.

Carrington Correspondent posted Announcement 20-0072: Updated FEMA Disaster Declaration for California. And posted Announcement 20-0071: Updated FEMA Disaster Declaration for Louisiana Hurricane Delta.

Flagstar posted Memo 20106 regarding Hurricane Delta requirements for satisfactory re-inspections in the affected counties.

loanDepot Wholesale is monitoring the impacts of Hurricane Delta and will provide updates as additional information becomes available. Refer to loanDepot Wholesale’s Disaster Center for more details.

This loanDepot weekly Announcement discusses Post-Close AVMs on VA IRRRLs and FHA Streamlines Government and a California Disaster Update.

Mortgage Solutions Financial posted Announcement 23-20C regarding FEMA Disaster Declaration for the State of Louisiana.

Arecibo County in Puerto Rico has been declared a major disaster area by FEMA. Sun West will require an interior and exterior inspection prior-to-funding or purchase of any loans with subject properties that are determined to be at risk. Refer to its Seller Guide for details.

Capital markets

If there’s one area of the economy the coronavirus has been able to not slow, it’s housing. Single family housing starts jump 6.4 percent in October to a 1.179-million-unit pace; the highest pace for single-family starts since April 2007 and slightly above the 70-year monthly average unit pace off 1.014 million. The National Association of Homebuilders’ index hit a record high in November as strong builder optimism was buoyed by robust sales and low inventory. With much of the new construction occurring in warmer climates, builder activity may remain a boost for the economy through the winter months which are historically plagued by weather related work stoppages. Existing homes are also enjoying vigorous demand as they jumped 4.3 percent in October to a 6.85-million-unit pace. Such strong demand has caused inventories to plummet 19.8 percent below their levels 12 months ago to a record low 2.5 months’ supply. This has also driven the average sale price to $348,700. Despite the low interest rates, home prices may soon begin to limit potential buyers seeking more space.

Yesterday also saw more positive housing data: the FHFA Housing Price Index rose 1.7% in September and the S&P Case-Shiller 20-City Home Price Index rose 6.6% year-over-year. The FHFA announced that the new conforming limit for 2021 would be $548,250 (+7.4%) compared with $510,400.

Looking at rates, MBS prices track 3-5-year Treasuries more than they do the 30-year bond due to their expected shelf-life, but longer-dated Treasuries pulled back during yesterday’s session, steepening the yield curve while the MBS basis ended mostly tighter amid over $8.4 billion in Fed support. Why? The Trump administration retreated from its refusal to formally begin President-elect Biden’s transition, which caused money to shift to a “risk on” stance.

If you’re out of work, you’re trying not to spend money. Today’s busy economic calendar is already underway with a slew of releases. The Weekly MBA Mortgage Index showed mortgage applications for the week ending November 20 increased 3.9 percent from one week earlier. We’ve also had Weekly Initial Claims (bad news, up 30k to 778k!), Q3 GDP, second estimate (33.1%, no change to the bounce), October Durable Orders (+1.3 percent, higher than expected), Durable Orders -ex transportation (+1.3%), a $80.3 billion trade deficit in October. The next batch of data later this morning includes October New Home Sales, October Personal Income and Spending, PCE Prices, Core PCE Prices, the Final Michigan Consumer Sentiment Survey, as well as the Primary Mortgage Market Survey from Freddie Mac following last week’s survey lows in the 15- and 30-year rates of 2.28% and 2.72%, respectively. The November 4/5 FOMC minutes will be released in the afternoon ahead of a regular close before the Thanksgiving holiday tomorrow. We begin today with Agency MBS prices unchanged from Tuesday’s close and the 10-year yielding .87 percent after closing yesterday at 0.88% after the initial salvo of data.

A turkey walks into a bar, the bartender asks, “What are you?”

The turkey replies, “I’m a wild turkey.”

The bartender chuckles and replies, “Hey, we have a drink named after you.”

The wild turkey, incredulous, asks, “You have a drink named Kevin?!”

(No commentary tomorrow, obviously, but back Friday. Happy Thanksgiving!)

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Time to Call the Landlord?”.

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)