⏱ THE MORTGAGE MINUTE

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It’s time for your five minute mortgage-related news of the week! 

You can either read it yourself, or have someone else read it to you. (We won’t judge.)

Market Sentiment & Economic Calendar

Time to take a sneak peek into the crystal ball, because while you’re standing still the markets be makin’ moves. It definitely feels like we've made a solid bottom in the market and that rates will continue their downward trajectory from here. 

What to Watch This Week:

• June 3rd - May ISM Manufacturing PMI - This read came in soft, picking up 29 basis points on the day.

• June 5th - ISM Non-Manufacturing PMI - Comes in higher than expected, leading to a continued sell-off in the 10-year treasury, breaking an important floor of support. Interest rates are responding favorably. ISM Non-Manufacturing PMI

• June 7th - May Non-Farm Payrolls and Unemployment Rate at 8:30 AM EST. 

Why it matters: These data points can indicate economic health, influencing interest rates and loan locking decisions. This is crucial for predicting mortgage interest rate movements.  If you have any tight files in your pipeline, consider locking them before the June 7th data release, as this could be a big market mover. 

Pipeline Save of the Week

You know the saying “a day late and a dollar short?” Well, we had an LO recently write in that they had a purchase client that was flat out of qualifying money. Period. On the day of opening escrow!

The borrower was changing jobs, only had an offer letter, had contingencies that were going to take weeks to satisfy, and - well - you can probably guess what happened next.

Underwriting purgatory.

But, as the saying goes: There’s always money in the banana stand.

Or, in this case, in a large IRA account. Luckily, the borrower turned 59 ½ just the week prior. Talk about the stars aligning. Hallelujah! That was close! Amazeballs. [Add your euphemism here. You can do it. We believe in you.]

There was enough money in the IRA to meet the 36-month continuance rule, the deal closed, and all was once again right in Loan Officer World™.

Have you had any recent pipeline saves? Tell us about them and your very own Pipeline Save of the Week might be profiled in the next issue!

Shoutout of the Week

Don’t call it a comeback, but zero percent down mortgages seem to be making one. The latest coming from United Wholesale Mortgage (UWM), their 0% Down Purchase plan allows qualified first-time borrowers up to $15,000 or up to 3% of the purchase price (whichever is less) for a down payment assistance loan. 

This acts as a silent second, allowing for no monthly payment and no interest accrual on that balance. This program is also available to borrowers who fall at or below 80% of their area’s median income, even if it’s not their first time. (First time buying a home, you guys. Not the other first time thing. Come on!)

FICO of 620 and up for the 80% threshold, and FICO of 700 for first-time home buyers.

Other mortgage lenders may be rolling out similar programs, but UWM plans to invest tens of millions of dollars on the program, so they seem to be in it for the long haul.

NEXA Level

If you heard some screaming from rooftops last week, it was probably loan officers at NEXA Mortgage, the largest mortgage brokerage firm in the U.S., as they announced they will pay their loan officer’s 100% of commission splits “without any per-file fees or other hidden fees,” per NEXA’s co-founder and CEO Mike Kortas. 

There’s a new program in town, the NEXA100, allowing loan officers to access the full 275 basis points (bps) on most of NEXA’s loans. That’s a full 55 bps more than the prior 220 bps. If you struggle with math, we at The Mortgage Minute double checked for you and that does, in fact, equal one hundred percent. You’re welcome.

Continued historic lows for U.S. mortgage delinquency rates

While delinquency rates have upticked slightly year over year since last March, overall early-stage, adverse, and serious delinquencies are showing some serious strength since the 2008 mortgage crisis. This is in stark contrast to the teenagers in our neighborhoods who are absolutely upticking in delinquency. The “get off my lawn” vibes are strong at TMM headquarters. 

Loophole Spotlight

Retirement Account Income

If you’re a loan officer, you're probably always looking for more income. For clients! We’re talking about looking for more income for your clients! What did you think we were talking about? 

Anyway, here’s a great reminder for finding some extra couch cushion money to beef up that debt-to-income ratio: retirement income! 

As long as your borrower is 59 ½ or older and has at least three years of continuance, you can include retirement accounts like IRAs and 401(k)s as income. Make sure the first distribution date is set up to start prior to the first loan payment date, or underwriting is sending it back, and that loan in the pipeline just rolled over to next month – ouch!

This applies to Gov, Conv, and Jumbos!

Loan, loan, where did you go?

We’ve all signed new borrowers only to have them turn around and cancel on us before you can blink. Did you know that you (yes, you!) might be part of the problem?

See, when you pull a borrower’s credit, a giant flare with their contact info goes up in the sky that only other loan officers can see. But you can help prevent those other loan officers from descending on your borrower like a pack of wolves on a sheep by sending them to optoutprescreen.com. This will opt them out of trigger leads and keep the competition at bay.

Have your borrower sign up right away, because it may take 3 to 5 days to process. We’ve found pulling credit and opting out the same day oftentimes will reduce solicitation calls to zero. Forget and wait a couple of days? Well, maybe you can make a nice sheepskin coat out of whatever’s left. (Sorry, vegans. It’s a metaphor.)

Seriously, though. Your borrower might get up to 50 calls within a week of pulling credit, and we all know they may never pick up the phone again after going through that!

The Mortgage Minute has no affiliation with optoutprescreen.com, but we thought it would be mean if we didn’t share this life-saver.

Stay Connected

See! We told you! Five minutes or less!

Crazy how much we packed in there, right?

Thank you for being a part of The Mortgage Minute community. Stay tuned for next week’s insights and tips!