Last Week's Podcast Recaps

Housing Insiders

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Housing Insiders Co-Hosts Jonathan Lawless & Jeremy Potter recap what they learned about the housing industry in 2024 and share their predictions for 2025 in the housing industry.

●????? insurance premiums have been increasing, even in areas considered low-risk, due to the nationwide insurance pool. This is affecting homeowners across the country, not just in high-risk areas.

●????? the increase in insurance costs can impact a homeowner's fixed-rate mortgage, even though the mortgage rate itself is fixed. The total monthly payment can still go up significantly due to rising taxes and insurance.

●????? The speakers expressed concern about the potential for insurance companies to stop covering certain high-risk areas altogether, such as coastal California or Florida.

●????? There is a need for innovative solutions, whether from the private market or the government, to address the rising insurance costs and their impact on homeownership. This included ideas around improving home efficiency, resiliency, and exploring new financing models.

●????? Pitch for an Integrated platform: ?? - The idea is to have a single platform that integrates real estate, mortgage, and title insurance services, rather than having these as separate handoffs.

●????? Transparency and choice: ?? - The goal would be to provide consumers with full transparency into their options and allow them to easily compare rates and services across different providers.

●????? Avoiding steering: ?? - One of the motivations behind this model is to prevent issues like RESPA violations, where brokers may steer consumers towards certain lenders due to incentives or relationships.

●????? Leveraging technology: ?? - The speakers suggested that technology and AI could be leveraged within this all-in-one platform to improve efficiency, reduce costs, and provide a better consumer experience.

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Lykken on Lending

●????? Host David Lykken

●????? Higher yields since mid-December have been supported by economic data, and the market is waiting to see if downbeat data can provide a counter-attack to the recent bond market weakness.

●????? Higher bond yields directly translate to higher mortgage rates, putting pressure on affordability and mortgage demand.

●????? The group acknowledged that bond market volatility and rising rates would likely make the first half of 2025 challenging for the mortgage industry.

●????? As bond yields have risen, there was compression on higher coupon mortgages as borrowers would be more likely to refinance those loans.

●????? Speakers emphasized the importance of lenders looking beyond their typical "sweet spot" pricing and being aware of the day-to-day and week-to-week swings in premium versus discount pricing.

●????? Speakers highlighted the importance of the upcoming jobs report and CPI data in shaping market expectations around the Federal Reserve's policy path and its impact on bond yields.

●????? Podcast sponsored by Transformational Mortgage Services

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HousingWire Podcast

●????? Host: Sarah Wheeler

●????? On today’s episode, Editor in Chief Sarah Wheeler talks with Mike Simonsen , president of Altos Research, about the two big housing market trends to watch in 2025.

1. More sellers are expected to enter the market. Mike Simonsen notes that in 2024, new listings each week were about 8-10% higher than the prior year. They expect to see another 10% increase in new sellers entering the market in 2025. This increase in sellers is generally seen as a positive, as it will provide more options for buyers and help ease some of the upward pressure on home prices.
2. If mortgage rates can come down to the low 6% range for a sustained period, this would improve affordability. The speaker remains optimistic that if there is good economic data, rates could come down to the low 6% range, which would provide some relief on the affordability front.
3. The compression of mortgage rate spreads could also help keep rates more manageable for most of 2025. The speaker notes that as there is less volatility, the spreads will continue to compress, which should help keep mortgage rates lower.
4. Mike Simonsen notes that if inflation numbers and job market data remain stubbornly strong, it could keep the Federal Reserve from cutting rates and push the 10-year Treasury higher.

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Fintech Fridays

●????? Host: Brian Vieaux

●????? Matt Jones, MBA from the Mortgage Bankers Association

●????? There is a timing mismatch between when IMB servicers have to advance principal, interest, taxes, and insurance (PITI) payments to investors, and when they get reimbursed, especially for government loans like FHA and VA.

●????? This creates a significant liquidity strain for IMB servicers, as they have to advance these payments for potentially years until the loan is foreclosed or resolved, even if the borrower is not making payments.

●????? The issue has become more pronounced with the increased use of long-term forbearance programs, where borrowers may not be making payments for an extended period.

●????? MBA has proposed several administrative solutions to address this, including: ? 1. Allowing for more frequent partial reimbursements of the PITI advances (e.g. every 6 months) rather than waiting until the end.

●????? ??2. Exploring an "EBO securitization" approach where servicers can buy delinquent loans out of the pool and re-securitize them in a different structure that doesn't require monthly remittances.

●????? Resolving the servicing liquidity issue could help bring more banks back into the government servicing space, increasing competition and potentially lowering costs for consumers.

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Fintech Hunting

●????? Host: Michael Hammond JD, CMT ??

●????? Guest: Michael Vough Head of Corporate Strategy at Optimal Blue

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Mike Vough noted that retention is becoming a bigger part of the servicing world, as there are many homes with significant equity appreciation that were not previously considered for retention efforts.

Optimal Blue has introduced a new tradable security, designed to help lenders hedge primary rates.

The mortgage rate future was developed in partnership with the Chicago Mercantile Exchange (CME). Here's why it can be helpful:

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1. Hedging the primary mortgage rate: Traditionally, mortgage lenders have been able to hedge the secondary market mortgage rate, but not the primary rate that consumers see. The mortgage rate future allows lenders to hedge the difference between the primary and secondary rates.
2. Managing interest rate risk: Fluctuations in the spread between primary and secondary mortgage rates can significantly impact a lender's profitability. The mortgage rate future provides a tool to better manage this interest rate risk.
3. Helping with long-dated loans: Lenders who hold on to long-dated loans, such as those from builders or those with long-term float downs, can use the mortgage rate future to hedge the interest rate exposure on those assets.

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