When asked whether loan buybacks were a more significant issue last year than now, Freddie Mac executive Sonu Mittal says emphatically, “It depends on who you ask.”Freddie Mac has seen a nearly 55% reduction in repurchase requests from its peak in the first quarter of 2023 and a decline of 20% in actual buybacks of performing loans quarter over quarter in Q3 2024. But public filings analyzed by Inside Mortgage Finance, which considers repurchase requests and actual repurchases of performing and non-performing loans, revealed an increase to $430 million in Q2 2024 — up 29% from the previous quarter. This context frames the recent announcement from the Federal Housing Finance Agency (FHFA), the enterprise’s regulator, that all approved lenders will be able to access a fee-based alternative for repurchasing Freddie Mac performing loans with defects. This expands upon a pilot program launched earlier this year.In an exclusive interview with HousingWire, Mittal — the head of single-family acquisitions at Freddie Mac — said that the fee-based alternative will remain relevant in any mortgage rate environment as the enterprise “wants to incent lenders to improve their manufacturing quality.” The new model also provides economic benefits to lenders, according to Mittal.“If you are not a depository or a bank, you typically don’t have a balance sheet, so you have to sell that loan in the scratch-and-dent market, which was costing last year 15 to 20 points — and even now it’s still costing anywhere between 5 to 8.5 points,” Mittal said. “In a $200,000 house, it could mean up to $17,000. That’s very relevant.” Mittal spoke to HousingWire this week during the Mortgage Bankers Association (MBA)’s Annual Conference and Expo in Denver. According to the program rules, instead of repurchasing defective — but performing — loans within the first 36 months after origination, lenders pay a fee based on the defect rate of their performing loan deliveries to Freddie Mac on that quarter’s aggregate loan balance.Mittal explained that lenders can opt into the program for 2025. In this case, the fee is applied to their overall quarterly unpaid principal balance (UPB) production delivered to Freddie, varying according to their non-acceptable quality (NAQ) rate.“If you deliver $2 billion in a quarter, we look at your non-acceptable quality rate, and wherever your NAQ rate is, we determine the tier on how much of a fee you will need to pay. This will all be disclosed to lenders,” Mittal said. ”If the NAQ is less than 2%, there’s no fee.” If lenders opt out, a new fee-only option will be applied on the loan level, but in a way that benefits lenders in comparison to repurchasing the loan and selling it on the scratch-and-dent market with a large discount, according to Mittal. “Our goal is, how do we allow the lenders to focus on the borrower or serving the needs of the borrowers or homeowners, while also having them not deal with the dynamics of the scratch-and-dent market, in which the cost could be much higher for the lenders?” he said. Other initiativesRegarding another initiative announced Monday — the extension of appraisal waiver methods for higher loan-to-value (LTV) purchase loans — Mittal clarified that Freddie Mac is not “taking undue risk” but is maintaining the system’s “safety and soundness” and “leveraging data responsibly.” In a social media post, former FHFA Director Mark Calabria called the decision “truly dumb & irresponsible.” The changes raise the maximum LTV ratio from 80% to 90% for appraisal waivers, and from 80% to 97% for inspection-based appraisal waivers on purchase loans, consistent with refinance guidelines. When asked about differing risk levels between purchase and refinance transactions, Mittal said that “it all depends on the overall characteristics of the loan,” meaning “collateral or appraisal value is only one variable within the whole equation.” “Another thing to keep in mind is that we’ve been doing appraisal waivers for years across Fannie and Freddie; we have a lot of data that shows us how the performance is for loans with appraisal waivers versus those which don’t have appraisal waivers. So, we went through a massive amount of diligence before we decided to expand it.” According to Mittal, the changes will go into effect by the end of the first-quarter 2025.  Freddie Mac estimates that its automated collateral evaluation (ACE) program has saved borrowers $1.63 billion in appraisal fees to date.Feedback for LOsFreddie Mac is also enhancing its Loan Product Advisor (LPA) automated underwriting system with LPA Choice. Through the new tool, loan officers have access to tailored information about purchase requirements, which is expected to reduce the number of resubmissions, save time and improve the acceptance rate of qualified borrowers. “What this enhancement does is specific to three areas: debt-to-income ratio, reserves and loan amount. Those are the three areas that we are giving a more prescriptive message to the loan officers,” Mittal said. “This is what could potentially help you get this borrower from caution to accept or qualify. We are not expanding our credit box; it’s just allowing you to have more insight on how to help borrowers or homeowners.” Previously, Freddie Mac had included on-time rent payments, cash-flow information and trended credit data as part of the risk assessment process. Mittal said the idea is to allow “credit-invisible borrowers” to have access to mortgages. According to Mittal, the solution helps because “there are a lot of funds that go unused.” He added that “there are loans that we are willing to buy, but that are not structured in a way that we can.”

Vice President Kamala Harris is the favored presidential candidate when it comes to addressing the lack of affordability in U.S. housing, while former President Donald Trump is seen as more favorable for stock market and cryptocurrency investors. This is according to the results of a recent survey conducted by Bloomberg.Less than a week from Election Day, the presidential race remains too close to call. But if the economy continues to be the “north star” for voters, drilling down into economic sentiments shows some nuance in their perspectives.“The stock market, up about 22% so far in 2024, is more likely to pick up steam under Trump than Harris,” Bloomberg said. “Some 38% of 350 Bloomberg Markets Live Pulse survey respondents see gains accelerating a year from now under the Republican candidate, versus 13% under the Democrat.”There’s a caveat. Should Harris be victorious, nearly half of the respondents expect the market to maintain its positive momentum into her term. But nearly 60% of respondents think a Trump victory will also continue that pace.But the market for potential homebuyers would be more beneficial under a Harris presidency, according to respondents.“The median estimate for [a 30-year, fixed loan] rate at the end of a Harris term would be 5.5%, according to survey participants, and 5.9% under Trump,” the story explained.According to data at HousingWire’s Mortgage Rates Center on Wednesday, the 30-year conforming rate stands at 6.75%, entering its highest territory since August.“Many potential buyers have been stranded on the sidelines in recent years waiting for borrowing costs to come down,” Bloomberg said in its survey results. “Sellers with mortgages at 3% or below, meanwhile, have been reluctant to move and take on more expensive debt,” describing the mortgage rate lock-in effect.Harris and Trump are making their closing statements in the final days of the election cycle. The past few days have been marred by controversies, with the Trump campaign uncharacteristically backtracking on comments about Puerto Rico made at a recent New York City rally, while Harris has distanced herself from comments made by President Joe Biden about Trump supporters.

Lower mortgage rates in September had a measurable impact on home sales.According to data released Wednesday by the National Association of Realtors (NAR), pending home sales in September jumped 7.4% compared to August and 2.6% year over year. NAR’s index reading of 75.8 is the highest number since March. An index reading of 100 equates to sales activity in 2001.“A slight improvement in pending-sales activity reflects August’s sharp decline in mortgage rates, which helped boost housing demand and provide some much-needed consumer optimism, particularly for the purchase of big items,” CoreLogic chief economist Selma Hepp said in a statement. “However, with rates pushing back to 7%, the rebound in pending activity is likely short lived and is unlikely to be enough to help 2024 home sales exceed 2023 levels.”The jump in pending sales occurred in all four regions of the county, with the West leading the way with a 9.8% monthly gain, followed by the Midwest (+7.1%), the South (+6.7%) and the Northeast (+6.5%). The South’s index reading of 89 is by far the highest of the four regions, with the Midwest next at 75, followed by the Northeast (65.6) and the West (64).NAR’s data release also includes a forecast. Chief economist Lawrence Yun said that over the next two years, he expects home-price growth to slow, which will also boost sales.Pending home sales data is the latest sign that falling mortgage rates in August and September boosted home sales. In the U.S. Census Bureau’s new-home sales report for September, sales jumped 4.1% compared to August and 6.3% year over year.But NAR’s existing-home sales report for September showed sales falling 2.5% from August and 3.5% year over year. The S&P CoreLogic Case-Shiller home-price index for August showed a slowing appreciation rate as a result of mortgage rates dropping during the month. 

In the latest episode of the RealTrending podcast, Amy Stockberger — broker-owner of Amy Stockberger Real Estate — joins Tracey Velt for a tantalizing conversation that covers her teamerage’s unique “Lifetime Home Support” model and other ways that agents can provide value to home buyers and sellers. This interview has been lightly edited for length and clarity. The conversation kicks off with a window into Stockberger’s past and her early involvement with real estate. Amy Stockberger:  I was a buyer’s agent, then I decided that wasn’t for me. I had my sister come join me almost immediately, started a team with her and a part-time assistant, and then we started growing. Since then, we’ve been the highest-producing team in our state, and we’ve been lucky enough to keep on growing and serving in the Sioux Falls, South Dakota, area. Tracey Velt: Tell me a little bit about your “Lifetime Home Support” model and how it transformed your approach to real estate. Stockberger: In 2014, I noticed a major hole in our business. For the amount of clients we were serving, we weren’t getting that repeat and referral business. We created a serve-serve-serve-sell system for every step of the home buying and selling process.Velt: What are some of the key tenets of this model? Stockberger: First, we added a moving truck. The second thing we did was our party and tool shed. I was providing service to them, outside of just that real estate need, to stay top of mind and make sure that I was helping them in everything they needed. Velt: How do you encourage your current or past buyers and sellers to actually use the services that you’re offering?Stockberger: It’s very omnipresent. It’s one of the first things we’re going over. On top of that, has anybody shown you how the buying process works, or what’s new in the industry? We go through that too. We have a system and strategy for every step of the process before, during and forever. We just walk them through the unique value propositions that match their human experience. Velt: Looking for multiple revenue streams is really important for real estate leaders to do. What are some other ways that you are generating revenue through some nontraditional means?Stockberger: We borrow from the Amazon model and seek sponsors for our client events. Those are profit centers for us as well. And it provides an opportunity for our vendors to come in and be in front of our market and their target market, which is our audience. Velt: What do you think is shaping the future of real estate right now?Stockberger: One of the reasons we’re in the situation our industry is in is that there was just that perceived lack of value. I think that what agents truly should be doing is really tripling down on their service model. What are they doing for their clients outside of the transaction? What are the levels of care for clients for their whole human journey? Shifting from being transactional to transformational is going to allow certain agents to excel at a high level in our industry going forward. 

Former House Speaker John Boehner, pictured on the big screen, shares his perspectives on the 2024 election during the MBA Annual event in Denver on Tuesday. (Photo by Chris Clow)If the U.S. presidential election were held today — one week prior to Election Day — then Donald Trump would retake the White House and Republicans would gain control of the Senate, while the picture in the House of Representatives is harder to predict.These were some of the perspectives shared by John Boehner, the former Ohio congressman and Speaker of the House, who left office at the end of 2015 less than a year before Trump won the 2016 election.Current political climateBoehner was speaking on stage Tuesday at the Mortgage Bankers Association (MBA)’s Annual Convention and Expo in Denver. He was joined by MBA president and CEO Bob Broeksmit to talk about his decades of experience in Washington, D.C., and the dynamics in play ahead of the election.Boehner was critical of the tenor of modern national politics, particularly in his old stomping grounds on the House floor. Having worked in his family’s tavern at a young age, he said that a skill he learned was to “disagree without being disagreeable.” That trait, he said, is not as commonly seen today.When asked by Broeksmit about the dynamics in play on the Republican side, Boehner said he is “having a hard time recognizing” the Republican Party he served. He criticized Trump for “hijacking” the party, but he also attributed the deep divisions in the political system to one of its key attributes — representation.“We shouldn’t be surprised that Congress is as divided as it is because their constituents are that divided,” he said. “They reflect their views, and they’re holding their members of Congress hostage to their right-wing or left-wing politics. It’s disgusting — I’ll just say it the way it is.”Makeup of CongressWhen Broeksmit asked Boehner to offer his election predictions, Boehner was quick in his appraisal of the Senate.“Let’s do the easy one first. Republicans are going to win the Senate,” he said. “Now, the question is, do they have 51 votes or 52? If they really have a good night, they’ll get 53 votes. But if you don’t have 60 votes in the Senate, you have nothing other than the budget and a process called reconciliation, which only requires 50 votes on each side.”But any proposals beyond revenue and spending will be harder to get passed with such a narrow majority, he said.While not weighing in on a clear winner either way in the House, Boehner does foresee a similarly slim majority to the one in play today regardless of who actually takes control. This will keep the odds of consensus on many issues low.The presidential raceAs he transitioned to the presidential race, Boehner took a moment to take some swipes at both Trump and Vice President Kamala Harris.“We have 330 million Americans and we’re down to these two,” he said. “Really?”He recalled feeling similarly in both 2016 and 2020, but at the end of the day, he felt like the tailwinds are working in Trump’s favor. He attributed some of his thinking to polls that underestimated Trump’s ultimate electoral tallies in both of his prior races. At this point in 2020, Joe Biden had more of an advantage in the polls than Harris has now, and that race largely resulted in a “dead heat,” Boehner said.“Unless the pollsters have figured this out, which I don’t think they have, Donald Trump has a bigger lead than what would appear today,” he said. He also cited “nervousness” from his Democratic friends, and what he viewed as Harris’ own issues with answering questions in interviews.But he also qualified by saying that it was still possible for Trump to lose, since the decisive factor is often about motivating voters to get to the polls. Harris needs younger people and women to turn out , which is a harder hill to climb since older Americans in general are more likely to vote.Broeksmit added that at a recent function with the founder of a political news and polling aggregator, it was posited that the key issue of the day has carried each presidential election since World War II — and that issue is usually the economy. Boehner concurred.“It’s always about your pocketbook and the economy,” he said. “People vote in their own self-interest.”

There’s less than a month until the final approval hearing for the commission lawsuit settlement agreements reached by the National Association of Realtors, HomeServices of America, and other brokerages and non-Realtor-affiliated MLSs that opted in to NAR’s settlement. Ahead of that date, the objections have started to roll in.In addition to the objection filed by law professor Tanya Monestier on Monday, objections were recently filed by attorneys at Knie & Shealy, who represent the Burton suit plaintiffs; Hao Zhe Wang, who has filed his own commission lawsuit; Robert Friedman, who filed and later dismissed a commission suit against the Real Estate Board of New York (REBNY); Monty March, who also has a suit pending in New York; and James Mullis, a plaintiff in the Batton homebuyer commission lawsuits.Burton plaintiffsAttorneys for the Burton plaintiffs filed two objections on Monday, one against the NAR settlement and a second against HomeServices’ settlement.Burton plaintiffs, who represent a proposed class of “individuals who sold homes on an MLS Listing Service servicing the District of South Carolina,” claim that NAR’s settlement “endeavors to insulate comprehensively the entire real estate industry from the punishment due it for its long, storied history of commission fixing.”“It further fails to address the ultimate issue, price fixing within the real estate business and adequate compensation for the millions of harmed home owners,” the objection states. According to the filing, only one brokerage in South Carolina was not automatically grandfathered into the NAR settlement.“In other states, it is certain that there were no such brokerages,” the objection states. “This settlement leaves those States with wrongdoers who will not be punished, despite having made substantial profits at the expense of residents of those States, all because Co-Lead Counsel are personally uninterested in pursuing suit against them, deeming them too small.”The Burton plaintiffs also claim that the brokerages and MLSs that opted in to NAR’s settlement failed to do so by the opt-in deadline. They noted that many parties opted in but did not execute their supplemental settlement agreements until well after the deadline. Additionally, they feel the selection of the $2 billion-per-year transaction volume threshold — and 2022 as the year to base the settlement amounts on — was arbitrary.In their objection against HomeServices, the Burton plaintiffs claim that the traditional reasons for class action do not support the certification of a national class for this settlement.“While there may be some common questions of law, the questions of fact vary widely by state. Further, the claims at issue would generally be economical for plaintiffs to pursue, at least on a state class basis. Each claim is worth at least several thousand dollars,” the objection states.Additionally, the Burton plaintiffs take issues with the fact that HomeServices’ settlement releases the firm’s franchisees, despite not requiring them to pay anything.“It is uncontroverted that the franchisees of the Defendant in this case will pay no money toward the total monetary settlement,” the filing states. “This settlement agreement does not bind the franchisees at all because there is no exchange between the parties, despite the fact that the complaint is replete with examples of franchisees taking active part in the price fixing activities complained of and the formulation of the rules by which much of price fixing was accomplished.”Wang weighs inPlaintiff Hao Zhe Wang filed his commission lawsuit in New York in March. He is not seeking class-action status, and he is representing himself pro se. In his objection to NAR’s settlement, Wang notes that he has bought and sold real estate in recent years. He claims his experience working with “hundreds, if not thousands” of brokers contradicts “key factual elements in the home-seller plaintiffs’ complaint in this case, including their central allegation that NAR self-servingly and collusively chose not to contest: that home sellers, not homebuyers, paid for buyer brokers’ commission and offered them to homebuyers as a ‘seller concession.’”Wang claims that he has paid hundreds of thousands of dollars to buyer brokers and listing brokers in the past few years. According to Wang, sellers who have also been buyers in recent years — barring them from filing claims against the settling parties as buyers if they are part of the settlement class — would be better off if they could bring claims under state consumer protection statutes or false advertising statutes.“In our adversary legal system, my potential claims must not be precluded when direct purchaser homebuyers have facts that were never alleged, investigated, or litigated in this case,” Wang wrote.Wang also claims that the settlement is racially discriminatory, which he attributes to racial minorities being less likely to inherit homes and having to pay more in buyer broker fees than in listing broker fees. Additionally, he feels that the business practice changes outlined in NAR’s settlement codify “NAR’s most abusive, oppressive, and anticompetitive conduct against homebuyers.”“Over the summer I have experienced first-hand the result of the ‘practice changes’ that home-seller plaintiffs have negotiated with some of NAR’s co-defendants that required the same type of ‘practice changes’ and won final approval from this Court,” Wang wrote. “These changes merely lend moral legitimacy and legal mandate to unlawful monopolistic practices that the brokers continue to inflict upon homebuyers. The NAR settlement is facially unreasonable for incorporating the same harmful ‘practice changes.’”Two more objections in New YorkMonty March and Robert Friedman each filed copycat commission lawsuits against REBNY and New York-based brokerage firms after the Sitzer/Burnett verdict in October 2023. Friedman voluntarily dismissed his suit in January.In their filings, March and Friedman object to the nationwide applicability of the NAR settlement. They say this prevents home sellers in New York City from filing their own suits as REBNY is not a NAR-affiliated MLS.“The alleged REBNY and NAR agreements to fix, raise, maintain, or stabilize residential real estate commissions are distinct and factually unrelated. REBNY separated from NAR in 1994. NAR’s Mandatory Offer of Compensation Rule was adopted in 1996. REBNY RLS rules, including its broker commission sharing rule were instituted in 2004,” March’s objection states. “REBNY – an entirely distinct and separate real estate association – could not have played a part in NAR’s creation and implementation of the Mandatory Offer of Compensation Rule in 1996 because REBNY left NAR two years earlier.“Similarly to the Burton plaintiffs, Friedman takes issue with allowing firms that have not contributed anything to the NAR settlement being covered by it. His attorneys claim that by allowing brokerages that operate solely in New York City under REBNY to be covered by the settlement, these firms “escape liability with zero consideration paid in exchange for their release.”Building off the claim that allegations against REBNY and NAR are completely separate, Friedman claims that “nothing in the record of proceedings of any action involving the NAR conspiracy supports the release of claims involving REBNY and the RLS.”Batton plaintiffs are backYet another objection was filed by James Mullis, a named plaintiff in the Batton homebuyer commission lawsuits. Mullis is no stranger to objecting to commission lawsuit settlements. Earlier this year, he and the other Batton plaintiffs unsuccessfully attempted to block the final approval of the RE/MAX, Anywhere and Keller Williams settlements.Mullis’ latest objection pertains to settlement class members who also bought homes listed on an MLS in which the seller paid the buyer broker’s commission. He claims that the settlement as it currently stands allows room for the settling defendants to claim that the agreement also covers the homebuyer plaintiffs, such as those in the Batton suit.“The buyer and seller cases have been litigated as separate suits on behalf of separate classes of victims in separate courts asserting separate sets of claims,” the filing states. “Sellers never sought to consolidate, coordinate, or intervene in the buyer cases and never engaged buyer plaintiffs in the discussions that resulted in the current settlements.”Due to what Mullis believes is a vagueness in the settlement, he is asking the court to clarify the language to ensure that the settlements cannot be purported to also release the Batton and Lutz homebuyer claims.“If the settling parties oppose such clarification, then the settlements should be rejected because: (1) they are not equitable to class members who both bought and sold a home (especially those who purchased multiple homes or a more expensive home than they sold); and (2) sellers and buyers here have divergent interests that create inherent conflicts the settlements fail to address,” Mullis’ objection states.

Editor’s note: This is the third in a series of articles that will explore the effects of the landmark Sitzer/Burnett case, which was decided on Oct. 31, 2023, and has since reshaped the business practices for real estate brokerages and agents across the country.It is no secret that many first-time homebuyers are struggling. Stubbornly high interest rates, low levels of inventory and elevated home prices are putting a strain on the often-limited budgets of first-time buyers.So, when many in the real estate industry correctly anticipated changes to the agent commission structure — which were solidified by the National Association of Realtors’ (NAR) settlement following the jury verdict in the Sitzer/Burnett lawsuit nearly a year ago — there was quite a bit of fear about how first-time buyers would be impacted.Despite the initial concerns, many industry professionals say first-time buyers are currently faring no worse than other buyers — for now, at least.Competitive dynamics“Nothing has changed a whole lot at this point,” said James Dwiggins, the CEO of NextHome. “The market is not great, so we aren’t often dealing with multiple-offer situations. And it is a little bit early, but some of the preliminary data I have looked at show that sellers are continuing to pay buyer agent compensation.”Due to these conditions, Dwiggins and other industry professionals believe there won’t be much of an impact on first-time buyers until the housing market strengthens, leading some sellers to potentially stop offers of buyer broker compensation.“If the market shifts and it is a lot more competitive for buyers, buyers may see more sellers who aren’t willing to help with their agent’s fees,” said Aja Adair, an agent at Berkshire Hathaway HomeServices Drysdale Properties. “I think ultimately, though, sellers should be looking at their net (profit). A seller is probably more willing to look at an offer that nets them the most, even if it does include a buyer’s agent commission as part of the terms.”Bryan VantHof, a member of the RE/MAX Advantage Plus-brokered The Minnesota Real Estate Team, also believes the amount the seller nets is central to getting a deal closed. But he also said that in a bidding war situation, first-time buyers may not have to offer way over asking price to emerge victorious.“I’m not seeing that the first-time homebuyers are going to have a real competitive disadvantage for the types of houses they are going to be buying,” VantHof said. “So, on a starter home, where you might get multiple offers, the first-time buyers who are competing are all going to probably have similar buyer profiles and will probably all be asking for help with buyer broker compensation. So, just asking for it in the offer probably won’t disadvantage them.”On the hookBut even before first-timers get to the offer stage in their homebuying journey, some agents say they are seeing them run into issues with the new requirements mandated by NAR’s settlement agreement.Since the new terms went into effect nationwide on Aug. 17, agents have had to obtain a signed buyer representation agreement before showing a home. Per the settlement, the agreement must outline how much the buyer broker will be compensated — pending the successful closing of a transaction. And the buyer must acknowledge that if the seller is unwilling to pay this amount, they will be on the hook for potentially tens of thousands of dollars.According to Mandy Nichols, a Dallas-based Brixstone Real Estate agent, this requirement is causing some first-time buyers to forego representation if it is not property explained.“Many first-time homebuyers don’t have enough to pay the agent and all the closing costs,“ Nichols said. “The main issue I see is agents not really explaining the buyer’s representation agreement correctly or explaining to the buyer how they can help them. “Because of this, they may go out and deal directly with the listing agent that is representing the seller and does not have their best interest at heart.”When faced with the possibility of having to pay an agent out of pocket — and possibly compounded by working with an agent who has poorly explained the buyer representation agreement — Nichols said some first-time buyers feel they are better off going unrepresented. This is concerning, she added, given the complicated nature of the real estate transaction.These same issues are why Joanne Mendoza makes sure she is prepared for buyer presentations, especially when working with first-time buyers.“There is always change in our industry and this was a change we had to make, so I fully embraced it,” said Mendoza, a California-based agent for Berkshire Hathaway. “The way you approach a change is really about your mindset. And with this change, if you are going to be fearful of it, that is going to convey to your clients and you are not going to be able to articulate it well to them, because you’ve already prepared yourself and them to be fearful of it.” As the housing market continues to shift and agents become more comfortable and confident with buyer representation agreements, it remains to be seen what the ultimate impact of the NAR settlement on first-time buyers will be.

Employment data for October is set to be released Friday, and it will go a long way in determining the path for mortgage rates, which have surged upward in the past month.At HousingWire’s Mortgage Rates Center on Tuesday, the average rate for 30-year conforming loans was 6.72%. That’s up 10 basis points (bps) from one week ago and 41 bps higher than on Sept. 18, when the Federal Reserve lowered benchmark rates by half a percentage point. The average 15-year conforming rate has jumped 58 bps since Sept. 18 and now stands at 6.28%.The Fed is meeting again next week and will announce another interest rate decision on Nov. 7. Interest rate traders are placing near-unanimous odds on a cut of 25 bps, according to the CME Group’s FedWatch tool, which would bring the federal funds rate to a range of 4.5% to 4.75%.The forecast is more conservative for the Fed’s December meeting as roughly 75% of market experts anticipate another 25-bps cut and 25% call for no cut.  Next week’s decision from Fed policymakers hinges heavily on the October jobs report that will be released Friday. Last month’s report showed that employers beat market estimates by adding 254,000 jobs in September. Additionally, the job creation numbers for July and August were revised upward by 72,000, stoking fears of higher inflation that has recently come under control.“It’s going to be all about the jobs report,” Melissa Cohn, regional vice president at William Raveis Mortgage, said in recent commentary about the Fed’s next move. “There’s no point in speculating in anything until we see what the jobs report is. If the jobs report comes out and we see that all of a sudden, the number of new jobs created has dropped significantly, that will support at least a quarter-point rate cut.”Data released Tuesday by Redfin showed that affordability has declined for prospective homebuyers due to the recent increases in mortgage rates. Citing data from Mortgage News Daily, Redfin said today’s 7% average rate provides $33,000 less in purchasing power compared to the 6.11% average rate in mid-September.Put another way, a homebuyer with a $3,000 monthly housing budget can afford to buy a home for $442,500 at a rate of 7%, while they could’ve purchased a home for $475,750 at a rate of 6.11%. The monthly payment on the median-priced U.S. home of $428,000 is now $2,895, which is $200 higher than it was six weeks ago.“My advice for buyers is to focus on finding a house they love and try to negotiate on things they have some control over, like the sale price and home repairs,” Chen Zhao, Redfin’s economist research lead, said in the report. “Sellers should know Redfin agents are reporting that there are buyers out there, but they’re mostly looking for move-in ready homes in good condition.” New data from First American showed that housing affordability improved in September, immediately before and after the Fed’s rate cut. The analysis showed that nominal household incomes rose 3.1% and the 30-year fixed mortgage rate was down 1 percentage point year over year. This equated to homes being 9.2% more affordable than in September 2023, although First American reported that homes remained 36% less affordable than their pre-pandemic historic average.First American also noted the benefits tied to rising levels of home equity. Home prices have increased each year since 2012, so even for someone who purchased a home in 2006 and saw significant depreciation due to the housing crisis, their financial gains have outpaced those of the U.S. renter population.“While the owner gained nearly $170,000 in equity (since 2006) due to appreciation, a renter spent over $229,000 in rent over the same period,” the report explained.

Earlier this year, Lewisville, Texas-based property services company MCS announced that it acquired Five Brothers Asset Management Solutions, a deal that brought MCS into the reverse mortgage industry for the first time. Soon after, CEO Craig Torrance offered an early look at what he hoped to achieve with the move.Roughly six months later, Torrance and Chad Mosley, the company’s president of mortgage services, attended the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo in San Diego to get some face time with industry professionals.The company now has a clearer vision of the reverse mortgage space, and these leaders sat down with HousingWire’s Reverse Mortgage Daily (RMD) to explain some of what they’ve learned about where the industry is at while also gauging where it could go.Chris Clow/RMD: How have things been going in the reverse space since the acquisition of Five Brothers?Craig Torrance: We’re still learning the reverse mortgage space. I think one of the things that struck us when getting into Five Brothers is that there are certainly differences between forward and reverse, but from our perspective, there’s a lot of similarities from the actual service that we provide.Craig Torrance, CEO of property preservation company MCS." data-image-caption="Craig Torrance" data-medium-file="https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?w=200" data-large-file="https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?w=683" tabindex="0" role="button" src="https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?w=683" alt="Craig Torrance, CEO of property preservation company MCS." class="wp-image-452585" style="width:200px" srcset="https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg 1920w, https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?resize=100,150 100w, https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?resize=200,300 200w, https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?resize=768,1151 768w, https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?resize=683,1024 683w, https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?resize=1025,1536 1025w, https://img.chime.me/image/fs/chimeblog/20241030/16/original_c6146526-8df6-4284-b820-a759026b8e1c.jpg?resize=1366,2048 1366w" sizes="(max-width: 1920px) 100vw, 1920px" />Craig TorranceWhen you get down to the nuts and bolts of the kind of work that we do as a company, I think that we’ve been happy with it. We felt then that our services could translate well into the reverse space. Five Brothers did both forward and reverse, and we were certainly very interested in the reverse piece, because we have an established forward presence. But we also didn’t really know how different it would be until we got into it.We found that a lot of the services that we offer and the way that we offer them are the same. Now, I think that’s the service itself. But it’s also everything that’s wrapped around that in terms of the process, the customer interaction, the client processes. That’s where I think we see the differences from our group of forward customers.Clow: How does that look from your end, Chad?Chad Mosley: The thing I’ve been really impressed with, being new to the reverse industry, is being able to interact with several of the reverse servicers that we now work with and getting to see how they execute on a daily basis. Just based on the senior clientele, their processes, procedures or communication is very much geared toward that consumer base. And that’s been really interesting and refreshing to see their focus on their customers.How we can support that, to me, has been the big difference. All of the reverse servicers that we have the privilege of working with are very tight on that and really have some great strategies. That’s made for a great learning process and something we’re excited to continue to be a part of going forward.Clow: How have the differences between forward and reverse been most visible in terms of what your company does? Torrance: If I fundamentally take reverse versus forward, the reverse space generally appears to have a much higher level of interaction and communication with their customers. That may sound fairly obvious, but I think that the hook from the consumer perspective lies in the experience.When you go and get a forward mortgage, you get a mortgage, buy a home and live in the home. All you’re supposed to do is write a check every month, which the vast majority of us today do on a recurring payment. I never, ever talk to my servicer. I don’t think I’ve talked to my mortgage servicer in 10 years. But when you flip it to reverse, there is still a healthy hook and connection between the reverse customer and the reverse servicer.Clow: How do those experiences compare based on what you’ve observed?Torrance: What I see from the reverse servicers is that business is built around that level of interaction and communication. Their processes, team, training programs, software, everything seems to be structured around making that connection work. And it’s not that forward customers don’t care about customer service, but I do see a level of depth to the reverse connection versus the forward connection.Even from our perspective, we get high volumes of work coming into us, and it’s very mechanical and transactional. But on the reverse side, I think it’s more human, and the connection is just built differently.Clow: Do you see reverse business currently punching above its weight in terms of how it can contribute to overall company revenue and profitability? Or are you in this to get in on the ground floor, considering the trend of demographics?Mosley: I think how we see it is in terms of the future and growth. We’re bullish on the reverse industry, and being out at the NRMLA conference and having some conversations with a lot of different people — not just servicers but originators — there seems to be a lot of buzz and a lot of excitement about growth in the industry.Ultimately, more volume and a larger industry turns into revenue and profitability. But it seems like there’s interest from new originators to get into the space, and more people there that were first-timers interested in it, just by the nature of the demographic. We have a growing senior population and more folks aging in place that would have a need for the product. I think, just by the nature of the demographics and some of the macroeconomics, I think we see it as a growth engine.

Is home-price growth finally cooling? That’s a question raised by the S&P CoreLogic Case-Shiller Index for August, which showed deceleration on a year-over-year basis and a slight dip relative to July.On a non-seasonally adjusted basis, the national home price index posted a 4.2% gain year over year, less than the 4.8% gain from July. The monthly index fell by 0.1%. Economists pointed to lower mortgage rates as the reason for slower growth.According to Bright MLS, it’s the slowest annual gain in 2024 thus far and the first monthly decline since December 2022.“This month’s release captures the time period during which rates dropped from roughly 7% to 6.35%,” Realtor.com analyst Hannah Jones said in a statement. “Though significant, this drop in rates has not yet resulted in a significant uptick in demand and home sales activity, which meant home price growth continued to mellow.”The 10-city and 20-city composite indices also showed a slight dip in prices month over month. The 10-city index dropped 0.4% relative to July and rose 6% year over year, which represents a deceleration from the 6.8% year-over-year gain in July.The 20-city composite posted similar numbers, with a 0.3% month-over-month decline and a 5.2% gain compared to August 2023. That’s down from 5.9% annualized growth in July.Among the 20 cities analyzed, New York posted the highest year-over-year home price growth at 8.1%, followed by Las Vegas (+7.3%), Chicago (+7.2%), Cleveland (+6.9%) and Detroit (+6%). New York and Las Vegas also had the highest monthly gains in July.Denver posted the slowest home-price growth compared to a year ago at 0.7%, followed by Portland, Oregon (+0.8%); Dallas (+1.6%); Minneapolis (+2%); and Phoenix (+2.1%).Despite the Federal Reserve’s half-point interest rate cut in September, rates for 30-year conforming loans have climbed back up to 6.7%, according to HousingWire’s Mortgage Rates Center. This is significantly higher than rates in August and likely foreshadows the Case-Shiller index accelerating again when results for the next few months arrive. “Monthly appreciation stabilized with the break in mortgage rates pulling in more buyer’s interest at a time of pinched affordability,” Zillow chief economist Skylar Olsen said in a statement. “That mortgage rate relief continued into September, but has since dissipated, and perhaps that renewed strength in monthly appreciation along with it,” she added. “As we near the slower fall months, buyers are likely to continue refusing steep pricing, but sellers should continue to expect record high home equity, especially in the northern and southwestern swaths of the U.S.”

If you didn’t know it before, you’re likely to be reminded every day between now and Nov. 5 that this is a close election for the balance of power in Washington, D.C.This theme persisted through the first full day at the Mortgage Bankers Association (MBA)’s Annual Convention and Expo in Denver this week. Programming material has been focused on the election and policy discussions were easy to find on the main stage, in the exhibit hall or among attendees throughout the Colorado Convention Center.There is a lot riding on the election’s outcome at the top of the ticket. In his opening remarks, MBA president and CEO Bob Broeksmit talked about the association’s readiness to work with whomever is ultimately elected, and that they’re ready to stop “bad ideas” regardless of which candidate they come from.Broeksmit also detailed that the trade group is preparing for a divided government scenario, where power in the executive and legislative branches are owned by different political parties.The congressional racesAt a stage event late in the day on Monday called “Election Jeopardy,” Bill Killmer, MBA’s senior vice president of legislative and political affairs, introduced two of the association’s legislative liaisons.George Rogers, who primarily works with Senate Republicans, pointed out that the Senate race in West Virginia — where longtime Sen. Joe Manchin is retiring — is being closely watched as a pickup opportunity by Republicans and could help swing the upper chamber into their control. On top of that, the Senate race in Montana is showing incumbent Jon Tester, a Democrat, trailing in the polls.Given the closeness of the majority, if the polls hold with these results, that’s enough to flip the Senate into Republican hands and give them key committee positions to pursue their legislative priorities, including those in housing.On the other hand, Madisyn Rhone — the MBA’s legislative liaison for House Democrats — expressed confidence in the potential for that chamber flipping to Democratic control. Republicans are facing their own slim-majority perils, and Rhone and Rogers agreed that Democrats will be likely to confirm a speaker as soon as the new Congress is sworn in this January, should they win the majority.The same can’t be said with the same level of confidence on the Republican side, where it was an unprecedented challenge to confirm Kevin McCarthy as speaker when the GOP took narrow control of the chamber in early 2023. And on top of that, the odyssey to replace McCarthy following his ouster as speaker roughly a year ago was notoriously arduous, placing more uncertainty over the chamber should Republicans hold onto control.Of particular interest to the housing industry will be an emerging tax debate, Killmer explained. In 2025, key provisions from one of Donald Trump’s signature legislative achievements, the Tax Cuts and Jobs Act, will expire. This will likely lead to what Killmer called a “tax Super Bowl” of a debate to emerge in Congress next year.The presidential raceThat’s before you get to the presidential contest. Trump and Vice President Kamala Harris are down to their final days of duking it out in a handful of swing states for even a slight advantage that would translate into more electoral votes. Housing has emerged as a major issue of the campaign, but far from a dominant one, particularly as Harris and Trump are making their closing arguments to voters.This all looks like a serious challenge for the nation, but at least on the housing front, there could be a hint of stability since housing itself is not often a very partisan political issue, according to Scott Olson, executive director of the Community Home Lenders of America (CHLA).“Having been doing this stuff for 30 years, I think there are a few things that are less partisan than housing,” Olson told HousingWire in an interview. “So, that’s good. And I think divided government does tend to lend itself more to people in Washington compromising. I think that’s maybe a good thing; people could disagree about that. But obviously the biggest thing will be whether or not Donald Trump is elected.”That’s because in a second Trump administration, there will likely be a host of agencies going in different leadership directions, many of which have extreme importance to the mortgage industry.“There would be new leaders at the CFPB, FHFA, those who run HUD and FHA — all of those things will change if he’s elected,” Olson said. “And so, policies will change, so I think that’s the one thing to really pay attention to, more so than Congress.”Control and continuityEven considering all the partisan rancor happening in the House and Senate, each chamber has its own level of controls, institutional or otherwise. If Republicans sweep both chambers, for instance, the likelihood of a more pronounced majority in the House is slim.This means the House will “have trouble doing big things or passing major changes,” Olson said.In the Senate, which is also likely to be narrowly divided even if power changes hands, the filibuster often serves as a control to indefinitely stall the passage of a bill by preventing debate on it from ending.“The major changes would come if there’s a change in administration [to Trump],” Olson said. “Now, if Vice President Harris gets elected, there might be some changes, but it’s going to be largely continuous [with the Biden administration].”Harris has not yet signaled any potential cabinet picks. After the resignation of Marcia Fudge as HUD secretary earlier this year, Adrianne Todman has been in the position on an acting basis. And Sam Valverde has served as acting president of Ginnie Mae since shortly after the resignation of Alanna McCargo in April.If elected, Harris could forward either Todman’s or Valverde’s name for full Senate confirmation, but it’s all conjecture until the results are tabulated and the next president fills out the incoming administration. And it’s difficult to envision today how that will go.“Now, you’re probably thinking, ‘OK, Bob, but cut to the chase. Who do you actually think will win?’” Broeksmit said during his remarks on Monday morning. “Well, if I knew that, I wouldn’t be in Denver. I’d be in Vegas.”

Industry-leading reverse mortgage lender Finance of America (FOA) announced this week that nearly all of the holders of outstanding senior notes that were set to mature in 2025 will participate in a new bond exchange offer that was first announced in June and amended last month.Under the amended offer, the current unsecured notes, due in 2025 with an interest rate of 7.875%, could be swapped for one of two new bond options — those with the same interest rate due in 2026 (with a company option to extend into 2027) or new bonds with a 10% interest rate that would come due in 2029.Among the holders of notes due in 2025, nearly 98% had agreed to participate in the exchange when the offer initially expired Oct. 25. In response, the company amended the expiration date to Tuesday, Oct. 29, at 5 p.m. ET.“We are thrilled to have such a high participation rate in our company’s exchange offer,” FOA CEO Graham Fleming said in a statement. “This transaction positions the company to benefit from enhanced financial flexibility and an improved capital structure, while aligning our cash flows with our debt obligations. We sincerely appreciate the continued partnership with our noteholders.”The deal is applicable for “only eligible holders of 2025 unsecured notes,” who will then be provided with the memorandum detailing the exchange offer and its mechanisms, according to a prior announcement of the offer.By exchanging the current notes for new, secured debt that will come due beyond the original 2025 maturity date — and prioritizing it for noteholders — FOA can have more immediate financial breathing room. This is taking place as FOA prepares to release its third-quarter earnings results on Nov. 6.Since closing a deal to acquire American Advisors Group (AAG) in April 2023, FOA has made multiple moves to balance its size with its ambitions for reverse mortgages and other retirement solutions. The company reduced its headcount and faced threats of delisting from the New York Stock Exchange (NYSE) for being out of compliance with its continued listing standard.But it also successfully implemented a 10-to-1 reverse stock split in June, and it posted improved earnings in the second quarter. The earnings report showed reduced losses — although short of recovery into black ink — and enthusiasm from company leaders over expected business impacts related to the Home Equity Conversion Mortgage (HECM) program and internal marketing efforts.

While we can’t share their names, we can share their stories.  It’s the same one, over and over again. An individual, often for the first time, is engaging in one of the most important transactions of their lifetime: homeownership. Already intimidated by the multitude of financial requirements that come with securing a mortgage, the borrower becomes even more overwhelmed by the hundreds, sometimes thousands, of emails, calls and texts they receive from an unaffiliated third-party vendor after they pull their credit score. This invasive and often abusive marketing blitz, known as “trigger leads,” can open the door to identity theft, fraud and predatory lending—ultimately harming borrowers who are in pursuit of their dream of homeownership. A trigger lead is a marketing product created by the national credit bureaus (Experian, TransUnion, and Equifax) and utilized when a consumer applies for a mortgage—whether it be an outright purchase or a refinance. When a borrower’s credit is pulled by the lender, a trigger is sent to the credit reporting agency to signal that an individual is interested in applying for home financing. This trigger lead is then repackaged and sold down the vast chain of third-party brokers–completely unbeknownst to the borrower. The data sold to these third parties includes everything from a consumer’s date of birth to the last seven digits of their social security number. While, in theory, trigger leads should introduce a borrower to a better, more competitively priced product, perverse financial incentives have led to an explosion of bad-actor mortgage participants within the ecosystem. The reality is that many borrowers are hit with more than 50 ads a day via email, text and phone calls from unsolicited third parties who are looking to lure borrowers away from their current lender and make a buck on their naivety. The Community Home Lenders of America (CHLA) is appalled at the harm these practices have on prospective homebuyers and communities across our nation. Our IMB members have experienced the wrath, frustration, and fear from homebuyers. One home buyer was so distressed about the bombardment of solicitations and afraid of a privacy breach that they withdrew their loan application:   “I have decided to halt this process. Since I got approval, I have been bombarded and totally disrupted and my privacy was invaded by potential lenders. I squashed the weekend warriors, but Monday I received 47 phone calls & 10 text messages. Tuesday calmed a bit with only 15 calls, but all hell broke loose again today. I just won’t have it, and from someone that had an identity theft in 1996, when it was barely acknowledged, what I went through was horrid…Thank you for your time, but this transaction is finished.” The non-transparent and widespread way in which a borrower’s detailed personal information is disseminated puts homebuyers at heightened risk for identity theft and fraudulent charges. And while data breaches are not necessarily linked to trigger leads, it is a fact that this harmful practice increases the catastrophic impact a breach would have on a borrower’s life and financial security.This past September, the Homebuyers Privacy Protection Act (HR 7297)—which provides critical protections against these abusive trigger leads for veterans, active-duty service members, and their families–was included in this year’s National Defense Authorization Act (NDAA). For Veterans Affairs (VA) lenders across the country, 50% of borrowers are first-time homebuyers–many of whom are particularly susceptible to these harassing calls and text messages. Service members and their families are an increasingly prime target for scammers, and it is critical that we protect our military men and women with the same diligence they use to serve and protect our country. CHLA strongly supports the inclusion of HR 7297 in this year’s NDAA on behalf of the lenders, consumers and service members who are being financially and personally impacted by the deluge of trigger leads. We applaud the bipartisan leadership of Congressmen John Rose (R-TN) and Ritchie Torres (D-NY) on the introduction of language to remove this harmful activity, and we urge the House Financial Services and House Armed Services Committees to approve this. Scott Olson is the Executive Director of the Community Home Lenders of America (CHLA)Rob Zimmer is the Director External Affairs at the Community Home Lenders of America (CHLA) This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.To contact the editor responsible for this piece: zeb@hwmedia.com

Douglas Elliman continues to shake up its leadership team. In a document filed on Friday with the Securities and Exchange Commission (SEC), the firm announced the termination of Douglas Elliman Realty CEO Scott Durkin, as first reported by The New York Times.According to the filing, Durkin was “terminated, effectively immediately.”Durkin’s dismissal came just days after the firm announced the retirement of parent company CEO Howard Lorber. Michael Liebowitz, the firm’s board director, was named the new chairman and CEO.Durkin joined Douglas Elliman in 2015, becoming chief operating officer in 2016 and president in 2017. He was named CEO in 2021 after being selected by Lorber and Dottie Herman, Elliman’s previous CEO.The New York Times reported that Richard Ferrari, who previously managed Douglas Elliman’s brokerage sales and operations in New York and the Northeast, has been named CEO of Douglas Elliman Realty.The firm has taken heat in recent months from its investors, who felt that the company’s finances were being mismanaged due to its continued losses in quarterly earnings. Its value has dropped from roughly $900 million to $130 million since 2021, according to the Times. Additionally, Douglas Elliman and its leadership has come under scrutiny for its alleged mishandling of sexual assault complaints lodged against former Douglas Elliman agents Oren and Tal Alexander.The Alexanders’ firm, Official Partners, is now brokered with Side and is currently facing a lawsuit from Side that deals with an alleged breach of their contract.

Mortgage technology company Gateless is offering its flagship automated underwriting platform to a new lender. The Loan Store — a wholesale lender based in Arizona — will now use the Gateless Smart Underwrite platform, according to a recent announcement.The artificial intelligence-based platform, the latest addition to the Gateless AI mortgage tool suite, aims to enhance The Loan Store’s underwriting capabilities. The platform automates key aspects of the underwriting process — including credit review, income verification, asset data and documents — to lighten the workload for mortgage brokers.The company introduced its Smart Underwrite system in May 2023 to reduce manual tasks for underwriters and reduce loan processing times, addressing a significant efficiency challenge in the mortgage industry. Smart Underwrite also improves compliance-related tasks with data that reduces human error and improves underwriting accuracy for brokers. Teresa Reber, chief originations officer for The Loan Store, highlighted the company’s commitment to helping brokers close loans faster and improve the buyer experience. Mike Brown, chief revenue officer for Gateless, echoed her sentiment and praised The Loan Store for its forward-thinking attitude.“Their input has been incredibly valuable, significantly shaping the ongoing development of Smart Underwrite, especially in the growing wholesale market,” Brown said in a statement. “The Loan Store’s decision to partner with Gateless highlights their commitment to creating a more efficient loan process and delivering an exceptional experience for their partners and their partner’s clients.”Last year, The Loan Store launched a consumer rewards program designed to aid mortgage brokers in offering better interest rates. Meanwhile, Gateless partnered with Mortgage Automation Technologies to offer the Smart Underwrite platform to its point-of-sale system.Gateless — a HousingWire Tech100 Winner — contributed to another big tech integration mortgage. Chicago-based Rate recently launched a $100 million AI platform, Rate Intelligence, aided by its partnership with Gateless.

After previously taking issue with some of the forms generated as a result of the terms of the National Association of Realtors’ (NAR) nationwide commission lawsuit settlement agreement, University of Buffalo law professor Tanya Monestier is now objecting to NAR’s settlement.In a document filed on Monday in U.S. District Court in Kansas City — less than a month before the NAR settlement is slated for its final approval hearing — Monestier took issue with the business practice changes, saying they don’t do enough to protect consumers. She also objected to the fees that are expected to be paid out to the plaintiffs’ attorneys.The objection is 132 pages in length. Monestier claims she filed an objection this long because she believes no one else will.“This settlement is sorely lacking outside, neutral analysis. I wish there were more voices closely scrutinizing whether this settlement provides the value it claims to aggrieved class members and whether the attorneys have provided a third of a billion dollars in value to the class,” she wrote. “As far as I know, those voices are nowhere to be heard.”In her objection, Monestier claims that the settlement “is the worst of all possible worlds,” and that the implementation of the settlement has been a “disaster.”“The goal of the settlement was laudable,” Monestier writes. “It was based on the premise that buyer brokers were using commission rates posted on the [multiple listing service] to steer buyers to properties that provided higher levels of compensation.  … The settlement makes sense — but only on paper. It is an example of something concocted by lawyers without a full appreciation of how this would play out in the real world.”While Monestier, who reportedly sold her Rhode Island home in 2022 and is part of the affected class, believes sellers were paying “inflated commissions,” she feels that prior to the settlement changes going into effect, the rules governing the industry were “clear and confusion did not reign supreme.”Following the Aug. 17 implementation date, Monestier now believes the industry has the “pre-NAR settlement system in place with a whole lot more paperwork, headaches, lies, chaos, and frustration. The settlement, as applied in the real world, is an abject failure.”In her objection, Monestier claims there is “ample evidence” of agents asking buyers to sign modified buyer representation agreements, which allow the buyer’s broker to increase their agreed-upon compensation to whatever the seller is offering.“In my view, modifying a representation agreement to increase the level of compensation for a buyer broker violates the NAR settlement agreement. In this respect, I don’t think this is a ‘workaround’ so much as a flat-out breach of the agreement,” Monestier wrote. “Practices like this where realtors scoop up ‘excess’ funds result in the maintenance of the commission structure that the NAR settlement was intended to dismantle.”Monestier claims that the ambiguity around this practice in NAR communications, and the settlement itself, have allowed for this practice to occur. Additionally, Monestier claims that some buyers are being asked to sign documents that allow for “seller paid bonuses,” if the seller is offering more compensation than the buyer and their broker agreed to. In other cases, some buyers and their agents are signing agreements for certain properties that tailor the buyer broker compensation to whatever the seller is offering.The filing also takes aim at the touring and showing agreements some brokers and agents are initially using with buyers before they enter into a more formal contract.“The written agreement that governs their relationship for that toured property is the one they executed prior to the tour, even if the scope of services was limited,“ Monestier wrote. “The realtor will not be able to collect any fees in excess of what was agreed to in that initial agreement. In other words, a realtor is limited to the amount set out in the agreement that was signed prior to the showing — not an amount reflected in a new buyer representation agreement entered at the time the buyer decides to submit an offer.”Additionally, Monestier’s objection also claims that agents are still engaging in steering. She wrote in her filing that she believes “many listing agents are telling their sellers that if they don’t offer compensation in advance, then they will not get offers. This, in turn, scares sellers into offering buy-side compensation.” Monestier also claims that buyers are being told they should skip seeing houses if the seller is not offering buyer broker compensation. According to Monestier, this practice would “blackball” sellers who don’t offer compensation, which she said would lead the industry “back to square one.”Monestier’s objection also looks at the required buyer representation agreements. She claims that some agents, especially on the listing side, are refusing to show an unrepresented buyer one of their listings or allow them into their open house without first signing an agreement with that agent.This is not the first time Monestier has voiced concerns about buyer representation agreements. In a report published in August, Monestier examined the agreements promulgated by 19 state and local Realtor associations, concluding that “by and large, they are all very complicated and will not be understood by the average buyer and seller.”She expanded on this in her legal objection. “If there is anything that anyone agrees upon, it is that this settlement has caused mass confusion for both buyers and sellers,” she wrote.“Plaintiffs and Defendants may believe that this confusion will be worked out in time, that these are just ‘growing pains.’ I disagree. I think if this settlement is given final approval, home selling and buying will be forever changed — for the worse,” she wrote. “I have spent about six months trying to understand the settlement, the industry, real estate practices, forms, etc. And I am confused. What hope is there for the average everyday consumer? Adding to the confusion is the fact that a large number of realtors do not themselves fully understand the settlement. How can they then be entrusted to put it into practice?”Other issues Monestier has with the settlement are that cooperative compensation remains permissible, and that there remains a lack of enforcement mechanisms to ensure agents and brokers are following the rules.In addition to examining the business practice changes, Monestier also looked at the fees that plaintiffs’ attorneys are asking for as part of the settlement. In total, the settlement amount for NAR and the settling brokerage firms in the Sitzer/Burnett suit comes in at nearly $1 billion. Of that amount, more than $300 million is expected to be paid out to the plaintiffs’ attorneys, leaving less than $600 million, after fees and expenses, for the plaintiffs. According to Monestier, this would be a “negligible recovery” for individual class members, of which there are estimated to be tens of millions.“It’s simple math. The larger the denominator, the less valuable the recovery is. Not one expert or economist in this litigation has estimated what the actual monetary value of this settlement is for an individual class member,” she wrote. “This is because Plaintiffs want to obfuscate the fact that the monetary recovery is next-to-nothing for an individual home seller in Kansas City, Missouri. Meanwhile, attorneys will pocket a third of a billion dollars.”Judge Stephen R. Bough is scheduled to hold the final approval hearing for the settlements reached by NAR and HomeServices of America on Nov. 26, 2024.

We track inventory and home sales very closely, so the biggest surprise this year has been the resiliency of home prices. Given the unrelenting mortgage costs, generally weak homebuyer demand, and the year’s rising supply of unsold homes, I’ve been expecting home prices to recede a bit in the second half of this year. They have not. That’s an important lesson to learn from when looking into next year. All the dominant trends in the housing market this year seem like they would indicate home prices declining. With just a few local market exceptions, home prices nationally will finish the year up again and will go into 2025 with some upward momentum.Home prices ticked up this week. The median price of the homes that went into contract this week — these are the new purchase offers with contracts pending —  is now 6% greater than last year. As mortgage rates have spiked in the last few weeks, and as the price paid for homes creeps upward, the mortgage payments required for the median-priced home in the country are on the rise again. Affordability is not catching any break. Payments on a median-priced home in this country jumped by 1.5% this week. However, even though home prices are higher than last year at this time, payments are 6% cheaper than last year at this time. Last year, in the fourth quarter, and then again in May this year, homebuying costs were the absolute worst. Let’s take a look at the data for the end of October 2024.Inventory ticked down this weekInventory ticked down to 738,000 from 739,000 last week. Our model had expected inventory to climb just a bit this week. We could still see another bounce up week in inventory, but we’re near the peak for the year. Florida had an uptick in inventory with a bit of a rebound in new listings now that the storms are over. This year has maybe only just peaked in inventory. As a result, we’re now only 21% fewer homes on the market than this point in 2019. Maybe next year, if mortgage rates stay in the high 6s, inventory will build closer to the old normal after five years of a severe shortage. If mortgage rates fall, say into the 5s, I expect that demand will pick up faster than supply, and inventory will shrink again. Last year, when rates were rising to 8% in October, inventory was also rising pretty quickly even this late in the year. Last year, the unsold inventory was piling up each week; this year the market is much more stable. This year’s mortgage rate moves are smaller than last years.New listings go upThis year continues to have slightly more sellers than last year but fewer than we used to get in past years. There were 60,000 new listings unsold this week for single-family homes. That’s roughly the same as a week ago and just 6% more than last year at this time. With the holidays rapidly approaching, the new listings volume falls off pretty sharply from here through January. There were another 9000 new listings/immediate sales this week. These are the homes that got listed for sale and took offers and went into contract within just a few days of listing. They’re already in contract, so they don’t add to the active inventory. There are immediate sales in any market, the best homes at the right price always go quickly, but the immediate sales pace now is down significantly from the pandemic times. That’s an indication that homebuyers don’t see any urgency in making offers. Overall, the days spent on market is 24% higher now than a year ago. 66 vs. 53 days. When you add it all together, there were just a 2% more new sellers hitting the market this week than a year ago. I mentioned that Florida rebounded this week with sellers that postponed for the storms. Texas and California new listings volume is ticking down as you’d expect for autumn.So, there are slightly more sellers this year, but inventory was building faster last year. New pending sales are holding upSales rates are holding up pretty well, given the recent disappointing trend in the cost of money. There were 59,000 new pending home sales for single-family homes this week with another 12,000 condo sales. The sales rate is inching lower for the season, but still performing better than the last two years. Home sales are not strong, of course, but we might see a little normalization. Mortgage rates are 120 basis points lower than they were a year ago. Sales are coming in a little better each week compared to last year and 2022. The takeaway for home sales — each week is looking better than the last two years. At some point, this momentum will show up in other headlines. Prices stay strongAs I mentioned, it’s been surprising (especially in the second half of this year) how resilient home prices have been. As homebuyer demand has stayed muted, supply of unsold homes has risen. I’ve talked about rising inventory, slightly more sellers each week, longer days on market, fewer immediate sales — given all this data, you’d expect that would mean that prices would be subsiding at least a bit, but in general, across the country, home prices are not subsiding. The way to look at it is: Homebuyers are buying homes at these prices. See this year’s line —where prices are staying around $390,000 as the median price for the new pending sales here into late October? Compare that to the price curves of either of the last two years — fourth quarter in 2023 and especially 2022. You can see how much more stability is in the market now. The median price of the homes newly in contract this week is $389,900. That’s up a fraction from last week and is 6% more than last year at this time. The median price of all the homes on the market is $439,000. That’s down a tick from last week and is slightly above last year at this time. If you walk into the housing market today and want to buy a home, $439,000 is the median price. The sweet spot price that people want to pay is always slightly less than what’s available. One fascinating insight about home prices this year is that the sale-to-ask price ratio is much less than the last two years. In other words, buyers are showing their willingness to buy at these current prices. Price reductions defy expectationsWe’ve been exploring today how the price signals keep defying my expectations. The leading indicators of future prices are showing a similar pattern of price stability. As of this week 39.5% of the homes on the market have taken a price cut. That’s up just a tiny fraction from last week. And has been basically unchanged for 12 weeks. Price reductions, while a little elevated, are not climbing. There are still slightly more homes on the market now that have taken a price cut than last year at this time. I think this relative stability reflects the fact that no sellers are surprised by this market. The big change in rates was 2022. Two years ago, despite those of us shouting about how sellers would need to get ahead of the changing market, many sellers were nonetheless still surprised, overpriced, and had to cut their prices in the fourth quarter when mortgage rates jumped again. That 2022 line is so clear on this price reductions chart. It’s also true that most home sellers continue to be in a position of strength and this price reductions data is a good illustration of that fact. If your home is on the market and you’re not getting the price you want, you can cut the price or you can withdraw the listing to try again later. Withdrawals are a significant factor here. It’s wild how quickly the sentiment can change. As of now, 2024 looks like home prices are holding firm nationally and inventory is roughly peaked for the year. What if strong economic news drives mortgage rates back over 7%?  We know that buyers can put the brakes on very quickly. Mike Simonsen is the founder of Altos Research.

On Monday, the Federal Housing Finance Agency (FHFA) announced that all approved lenders will have access to a fee-based alternative to repurchase Freddie Mac’s performing loans with defects, expanding a pilot program launched earlier this year.In addition, the FHFA announced that government-sponsored enterprises (GSEs) will give 60 days of advance notice for increases to their base guarantee fees greater than one basis point when the loans are delivered through the mortgage-backed security swap channel.Regarding repurchasing loans, Naa Awaa Tagoe, deputy director of the division of housing mission and goals at the FHFA, explained that through the pilot program, instead of repurchasing defective – but performing – loans within the first 36 months of origination, lenders pay a fee based on the defect rate of their performing loan deliveries to Freddie Mac on that quarter’s aggregate loan balance.Tagoe spoke on stage during the Mortgage Bankers Association (MBA) Annual Convention & Expo in Denver, when the FHFA announced the pilot’s expansion and other initiatives, such as those related to appraisals.Lenders will have the option to opt in or out of the fee-based structure annually. If they opt out, Freddie Mac is also adding a “fee-only” option, for which the fee is only charged on the defective loan as an alternative to repurchasing the loan.  Freddie Mac said the extension will begin in the first quarter of 2025. It added that, due to the expansion, lenders will no longer be subject to repurchases on most performing loans. Instead, they will be subject to a fee-based structure that incents quality loan origination.“Today’s announcements are part of making good on our commitment to be part of the solution and build upon the progress we have already made with lenders and industry partners over the past year. We know lenders will continue doing their part to keep improving loan quality,” Sonu Mittal, senior vice president and head of single-family acquisitions at Freddie Mac, said in a statement.According to Freddie Mac, lenders with a non-acceptable quality rate above 2% will be charged a fee in a step-up approach based on the unpaid principal balance of loans delivered for the quarter. However, the fee will be assessed on lenders who deliver enough loan volume to generate statistically significant sampling, excluding some small lenders. Loans that default within the relief period are still subject to repurchase.Freddie is also publishing a quarterly report of repurchase data beginning in 2025. The company claims repurchase requests, which the industry pointed out as a problem in the past couple of years, are approximately 55% lower than their peak in the first quarter of 2023. The MBA commended the changes. President and CEO Bob Broeksmit said the trade group “has been a leading industry voice in seeking effective alternatives to loan repurchase.”  Broeksmit also said the 60-day advance notice for some guarantee fee increases will help lenders better manage pricing strategies and loan pipelines.“We have long called for increased pricing transparency and believe more conversations are needed to better balance who bears the risks of pricing volatility between the primary market and the GSEs,” Broeksmit said. The Community Home Lenders of America (CHLA) similarly cheered the move.“CHLA greatly appreciates the expansion of this repurchase alternative pilot for performing loans,” said Scott Olson, executive director. “We continue to support this program and its mission to provide balance in a challenging housing environment for lenders and borrowers by improving loan quality and ensuring borrowers, particularly underserved, are able to stay in their homes.”

In a significant move designed to expand homeownership access, the Federal Home Loan Bank of New York (FHLBNY) announced the adoption of an alternative credit scoring model to boost mortgage credit availability.The wholesale bank will now allow members to pledge mortgage collateral using the VantageScore 4.0 system. FHLBNY will partner with 330 lenders across New York, New Jersey, Puerto Rico and the U.S. Virgin Islands to reach 3.1 million prospective borrowers through innovative credit solutions.Credit scores from VantageScore 4.0 give lenders alternative data points — including rental payment histories — to assess borrower worthiness. Traditional scoring models that primarily consider credit history, debt-to-income ratios and other factors can limit underserved homebuyers.With the integration, FHLBNY joins its peers at the Federal Home Loan Bank of Chicago and the Federal Home Loan Bank of San Francisco in efforts to narrow the racial homeownership gap, which has increased in recent years, via more credit opportunities for underserved borrowers.FHLBNY’s decision to add the VantageScore 4.0 follows a push from Democratic Reps. Ritchie Torres and Gregory Meeks, who in August formally urged FHLBNY to accept mortgage collateral and recognize more inclusive data. Torres describes FHLBNY’s initiative as the first layer of a critical foundation for wealth creation in the U.S.“The decision by the Federal Home Loan Bank of New York to recognize Vantage Score 4.0 lays a critical foundation for broad base wealth creation in America,” Torres said in a statement. “I have constituents who have reliably paid their rent in full and on time for decades, and yet none of their rental history is taken into account by conventional credit scoring.”Meeks echoed Torres’ statement, highlighting his personal background and the vital role homeownership played in his upbringing. “My family’s own experience is a personal attestation to the importance of home ownership. By allowing for the use of VantageScore 4.0 credit scores, the Federal Home Loan Bank of New York is broadening opportunities and ensuring that people who have been traditionally left out will have the ability to begin their homeownership journeys,” Meeks said.The announcement comes as Democratic lawmakers champion affordable housing solutions. Torres recently introduced the Accelerated Production Housing Act (ASAP Housing Act) that aims to boost affordable housing supply. Meanwhile, Meeks introduced several bills — including the American Dream Down Payment Act — to aid first-time and underserved homebuyer groups.FHLBNY’s affordable housing efforts may continue to grow next year, as the bank received more than $100 million in community funding for homeownership programs in 2024.

The Federal Housing Finance Agency has expanded the eligibility for alternative appraisal methods on purchase loans by increasing the maximum loan-to-value (LTV) requirement. The announcement was made on Monday during the Mortgage Bankers Association (MBA) Annual Convention & Expo in Denver, Colorado.The maximum LTV ratio will increase from 80% to 90% for appraisal waivers and from 80% to 97% for inspection-based appraisal waivers, consistent with standard guide eligibility guidelines. “To be clear, the expanded eligibility of appraisal waivers does not constitute an expansion of a credit box, but rather it will allow more first-time home buyers, and particularly low- and moderate-income first-time homebuyers, to recognize the benefits associated with appraisal waivers,” Naa Awaa Tagoe, deputy director of the division of housing mission and goals at the FHFA, said on stage.Following the announcement, Freddie Mac said it was updating its automated collateral evaluation (ACE), which it claims has saved borrowers $1.63 billion in appraisal fees by using proprietary models, historical data, and public records. Requirements and the effective date will be available in the upcoming single-family seller/servicer guide bulletin.Meanwhile, Fannie Mae announced that changes to the value acceptance programs will begin in the first quarter of 2025. It says that using appraisal alternatives has saved mortgage borrowers more than $2.5 billion since early 2020.On the appraisal front, the FHFA has also included appraisal data from the Federal Housing Administration (FHA) as part of the Uniform Appraisal Dataset (UAD ) releases. The UAD is a database derived from more than 68 million appraisal records. Previously, only data from Fannie Mae and Freddie Mac were available.“The data which we have released at both the aggregate and appraisal levels allow stakeholders to analyze and understand the full valuation of price trends, including the problem of appraisal bias. And we all know that the more data we have, the better we can pinpoint a problem and identify solutions,” Tagoe said.HUD head Adrianne Todman said the agency was taking “a major step forward, working with our partners at FHFA to make public data that is both current and comprehensive on home appraisals.”In a statement, FHFA Director Sandra Thompson added, “Today’s announcements highlight actions that will better ensure the Enterprises are reliable sources of liquidity for lenders of all sizes and types, which in turn will promote access to sustainable credit for consumers.”Thompson added: “FHFA is committed to supporting current and aspiring homeowners, as well as renters, who face persistent affordability challenges in the housing market.”