True Stories: Hybrid, eNote and RON Implementation

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Spruce’s Patrick Burns on innovation in title technology

In the season finale of Housing News season 5, Spruce CEO discusses heightened investor interest in title tech, innovation and fintech adoption.

Top CFPB official “hates” QM rules, jeopardizing safe harbor

A top CFPB official in charge of the rule-making process has heavily criticized the agency's own qualifying mortgage rule, jeopardizing safe harbor.

Don’t sleep on non-QM products

Now is the perfect time for originators to consider expanding to non-QM products – to grow business, diversify their offerings and to ensure an opportunity to better serve their customers.

Mortgage

Mortgage rates jump to 2.81%

Rates begin mirroring those previously seen in November

After three weeks of unchanged rates, the average mortgage rate for a 30-year fixed loan jumped 8 basis points to 2.81%, reaching its highest point since mid-November, according to Freddie Mac’s Primary Mortgage Market Survey.

While economic spending has improved, due to the most recent stimulus, supply chain shortages are causing downstream inflation, leading to higher mortgage rates, said Sam Khater, Freddie Mac’s chief economist.

“While there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3 percent range for the year,” Khater said.

Recently, the 10-year yield has struggled to breach 1.20%. However, the uptrend in the bond market since the lows of August 2020 is intact. As vaccination data, COVID cases, and signs of inflation get better, the 10-year yield in time will likely rise, taking mortgage rates higher with it. 

As mortgage rates come off of their historic lows, mortgage applications followed suit, dropping for the second week, according to data from the Mortgage Bankers Association. Notably, the refinance share of activity dropped to 69.3% for the week ending Feb. 18, the first time it’s been below 70% since October.


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A modest rise in rates may just be what the market needs to cool down rampant price growth, according to HousingWire Lead Analyst Logan Mohtashami. Healthy gains in prices peak closer to 4.6%, but the market is hovering just above 9.5% per the S&P CoreLogic Case Shiller index, which is lagging current data now, Mohtashami said.

“For 2021, we need to root for a repeat of what happened in 2013-2014 and 2018-2019,” said Mohtashami. “Home prices have caught up to per capita income, just like what we saw in 2002. However, mortgage rates are lower today, and demographics better.”

Overall, 2020 is going to be a tough year to beat even if the market does balance itself out. Mortgage debt balances broached the $10 trillion mark in the fourth quarter of 2020, increasing by $182 billion from the third quarter to $10.04 trillion at the end of December, the Federal Reserve Bank of New York’s Center for Microeconomic Data said Wednesday.

New mortgage originations, driven by record-low interest rates that propelled refinancings, totaled $1.2 trillion in the fourth quarter, surpassing volumes seen during the historic refinance boom in the third quarter of 2003, the New York Fed said.

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