⏱ THE MORTGAGE MINUTE

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If you’ve been feeling a bit jittery lately, it may be more than your morning coffee. There seems to be some unease out there in the land of the free. This is typical this time of year as the euphoria of summer begins to settle into the coziness of fall. The impending presidential election doesn’t help matters, as there seems to be a bit of a market holding pattern going on. 

But fear not! We’ve got some tips and tricks to get you through the drought and get you sailing into calmer waters soon enough. 

Market Sentiment & Economic Calendar

We got hit with a double whammy Thursday morning as jobless claims came in low, and retail sales came in high. As a result, we’ve seen a bond market selloff, which will continue the trend of rates pushing higher as we’ve seen since it bottomed September 16th.

Looking to next week, we have a key economic report coming on October 24th that could influence mortgage rates and market sentiment.

The S&P Global Services PMI for October is scheduled to release mid-morning and will provide valuable insights into the health of the services sector, which makes up a large part of the U.S. economy.

This report is closely watched because it reflects business activity and demand in services, which can influence inflation expectations—and, by extension, mortgage rates.

Thursday, October 24, 9:45 AM ET — S&P Global Services PMI for October

This monthly index measures expansion or contraction in the services sector. It's a critical pulse check on broader economic activity.

Impact on Mortgage Rates: If the PMI shows strong growth, rates could rise as inflation concerns mount. A weaker reading could ease rate pressures, providing a window for better pricing.

Bottom Line

This PMI report will shed light on economic strength and inflation risks, both of which directly affect mortgage rates. A stronger-than-expected result may keep rates elevated, while a weaker reading might offer temporary rate relief. Keep a close eye on the data to fine-tune your rate lock strategy, and be ready to act based on how the market reacts.

Pipeline Save of the Week

This week’s Pipeline Save is a reminder of the importance of communication, contract terms, and legal protections during the home-buying process with your borrowers.

We had a loan officer write in to us about a purchase deal they had in escrow. At the last minute, they had to switch lenders and request an extension of escrow. The sellers and listing agent were understandably not very happy about this, but agreed to extend under the condition that the buyer increase their earnest money deposit from $10,000 to $20,000. 

The loan is fast-tracked with the new lender and nearly at the finish line, but then the listing agent throws a wrench in the whole deal. They threaten the buyer that if they do not close on the exact date of the contract with the new closing date, the seller has the right to cancel escrow and keep the $20,000 earnest money. This, rightfully, made the buyer freak out.

We’ve seen this from time to time when, during escrow, the seller receives a cash offer at the same price or higher. Frustrated at the initial delay, a cash deal seems so much simpler in their eyes, and oftentimes they (mistakenly) think they can both capture the earnest money and close all cash with no contingencies. But that is exactly why there are laws and guidelines in place to prevent such a thing from happening. 

Nevertheless, it made the client extremely anxious on the insistence from the listing agent that they would lose their deposit if they didn’t close on the exact date. 

Per the LO, explaining to the client that there is due process before a seller can be entitled to the deposit was key. A Notice to Perform must be issued, giving the buyer 48 hours from the date of the notice to perform on the contract. This gives a bit of a buffer to protect their earnest money and get the deal closed. The one exception to be aware of is if it’s explicitly written in the contract that the deposit will be released on a certain date.

This deal closed on time on the day of the extended close. It’s unfortunate that the seller’s agent created this unnecessary anxiety, but that’s why it’s important to prep your clients ahead of time about what protections are in place for their benefit. 

Even though homeowners buy and sell a lot more frequently than they did a generation or two ago, we still have to keep in mind that most are not going to be aware of the nuances involved in a major transaction like a home purchase. Knowing the details of the contract and maintaining clear communication can prevent misunderstandings and help avoid unnecessary stress. 

Thanks to the loan officer who wrote in this week and congrats on the $30 gift card!

We’re continuing our offer, so write in to [email protected] with your Pipeline Save for your chance to be featured in a future newsletter! 

If you choose, the details and names of all parties, including yourself, can remain confidential.

Don’t Call Us, We’ll Call You

Here’s some news to brighten your day. Starting April 2025, new FCC regulations will make it easier for consumers to opt out of unwanted robocalls and texts! Companies that use these communication methods to reach customers—including those that use mortgage trigger leads—will need to comply with the new rules.

This is huge as currently the only way to stop these robocalls once you pull a borrower’s credit is to have them go to the opt out prescreen websites that we’ve discussed in previous newsletters. Relying on the borrower to do this in a timely manner was always a struggle.

Mortgage trigger leads have especially been challenging in this ever-growing digital landscape. Many view the practice as deceptive and harassing, and the FCC’s new rules are part of a wider move to regulate it. 

We see this as a solid step toward better consumer privacy, and, in turn, will lead to stronger relationships formed with new clients.

Big Banks Sleeping on the Job

There’s been a dip in mortgage production at big-box banks like Bank of America, but for those of us in the trenches it’s really no surprise as the shift towards mortgage brokers picks up steam. 

And it’s no surprise why! Better pricing, superior service, faster turn times. Why would a borrower want to go anywhere else?

The big banks’ cumbersome processes are no match for the customer-first mentality of mortgage brokers. 

The tide is turning, and the big banks are struggling to keep up. 

Let’s keep them around, though. They make you look good.

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!