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[ad_1] If there’s a bet to be made on the future of the non-agency lending space, it’s that the adjustable-rate mortgage (ARM) will become far more popular this year as purchase mortgages increasingly dominate a housing market pivoting to an up-rate environment. That’s the consensus forecast of a panel of non-agency industry experts who spoke at the Mortgage Bankers Association’s (MBA’s) Secondary and Capital Markets Conference & Expo in New York City this week.  “There was too much 30-year [fixed-rate mortgage paper] out there in the market for a while because it was just so cheap, and it was the right thing for the consumer,” said Matt Tomiak, senior vice president of non-agency originations at Bayview Asset Management.  Tomiak was one of the four MBA panel members who addressed an audience of loan originators and other industry players gathered earlier this week in a sixth-floor room at the New York Marriott Marquis hotel near Times Square. The topic of the panel discussion: “What’s New in Non-Agency?” “I think we’ll be seeing a lot more ARMs shortly,” Tomiak added. Another panel participant, Shelly Griffin, senior vice president of client development at non-QM lender Deephaven Mortgage, added, “When I’m talking with loan officers, I get asked about ARMs a lot. ARMs came up at almost every meeting, so it’s very relevant.” Maria Luisa De Gaetano Polverosi, associate managing director at ratings agency Moody’s Investor Services, said ARM mortgages are not yet showing up in significant volume in the mortgage-backed securities (MBS) private-label market “because most of the deals that we’ve seen so far this year are from 2021” — when low rates were feeding the refinancing boom. When ARMs do start showing up in securitization deals, however, she said Moody’s is well-equipped to assess the risk of those offerings.  “One thing I have to say positive about ARMs is that we’re not really concerned about them because we have a lot of data on those, and our models are built to assess that risk,” De Gaetano Polverosi added. “So, out of the many variations and new products that are going to come out of this [higher-rate] world … they [ARMs] are one that we’re not really concerned about in terms of the market’s ability to forecast the risk on this product. It’s a very well-trodden path.” Beyond a movement toward ARMs in the nonagency space, it’s also expected to be a solid year for non-QM lending in general as the housing industry overall seeks to expand its reach in the purchase market, according to panel members. “We’re excited to talk with you about what I think is the most pertinent topic of this conference, and that’s what the next six to 12 months are going to look like in mortgages in non-agency as we shift over to more of a purchase market,”’ said John Toohig, managing director of whole loan trading at Raymond James, and the moderator for the MBA panel. “Non-QM isn’t the 2006 product that it once was” — during the era of subprime mortgages. Toohig stressed that the non-QM space includes a large swath of mortgage products that require more time and expertise to underwrite, compared with a standard agency loan — particularly the low-hanging fruit of refinance loans that, until recently, drove the housing market. He described today’s non-QM market as a “very large bucket.”  Toohig added that the non-QM space ranges from mortgages originated based on bank-statements or asset depletion analysis to debt-service coverage ratios [DSCRs] and more. “There’s a lot to unpack,” he said, in terms of the guidance for the products and the underwriting involved.  “We’ve seen it [non-QM] grow and evolve over time,” added Griffin of Deephaven, which has been lending in the non-QM space since 2012. “There’s extended prime, which is just outside the prime box; nonprime for borrowers that maybe … have more credit issues in the past; and debt-service coverage ratio. “All of those products have features, maybe bank statement, asset utilization — you name it. There’s a lot of different reasons why someone falls outside the agency loans. … What we really focus on is meeting our customers where they are at.” Tomiak quipped that loan officers are smart, and if given the choice between doing six streamline refinance mortgages or spending three days on one DCSR mortgage, they will, of course, focus on the higher payoff achieved with the refinance loans. As the market pivots away from the streamline refinances because of the dulling effect of higher mortgage rates, however, and moves toward purchase-mortgage products, the supply of non-QM loan products will naturally begin to expand to meet the increased borrower demand, he explained. “We’re moving toward them [non-QM products] more aggressively at Bayview,” Tomiak added. “…Even with higher rates, moving into a mortgage loan is still a better choice than renting, and [many borrowers] have not been able to qualify, mainly because the industry has not been able to serve them,” due to the huge demand for other loan products that are popular in a low-rate climate — like streamline refinance mortgages. “But I think it’s going to be a very good year for expanded [non-QM] products,” Tomiak said. “… It’s going to take time, and it’s going to take learning, but I think the right firms and the right loan officers are going to have a very nice year, with consumers getting houses.” The post The housing industry will soon be up in ARMs appeared first on HousingWire. 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[ad_1] U.S. Congress OKs $40 billion in aid for Ukraine; Russia says it’s sent 900 Ukrainian soldiers to prison camp  CNBC Ukraine funding bill: These 11 Republican senators split from party leadership, opposed $40 billion in aid  Fox News Senate approves $40 billion aid package for Ukraine  CBS News Opinion | Why Even America-First Conservatives Should Back Aid to Ukraine  POLITICO Why I support a Ukraine aid package before it’s too late  Fox News [ad_2]

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[ad_1] The Supreme Court on Thursday struck down the integrated goods and services tax (IGST) levy on ocean freight, upholding the Gujarat HC decision that had gone in favour of taxpayers. “The Supreme Court has held that GST on ocean freight paid in case of import of goods is unconstitutional. As a corollary, the Indian importers who had paid such tax will be eligible to refund. Further, those importers who had not paid the tax on import of services will now not be required to pay tax because of this Supreme Court ruling,” said Abhishek A Rastogi, partner at Khaitan & Co, who argued for the companies. This judgment may change the landscape of those provisions under GST which are subject to judicial review. As the court has gone ahead to categorically hold that the GST Council recommendations have only persuasive value, there will be a pragmatic approach to the provisions which are subject to judicial review by way of challenge to the constitutionality of such provisions based on the GST Council recommendations, Rastogi added. [ad_2] Source link

[ad_1] HousingWire recently spoke with Jon Irvine, Chief Production Officer at Change Lending, about how brokers can gain a new competitive advantage in the current tight market. HousingWire: The current inventory shortage doesn’t seem like it will let up anytime soon. What challenges does this present to brokers? Jon Irvine: First, refinance volume has already dropped significantly from 2021 to Q1 2022. MBA estimates refinances will drop over 60%, but in my opinion, given the current trajectory, it could drop as much as 80%. As a result, brokers will be forced to look to the purchase market to fill their volume needs. The combination of the slowing refinance market and the current inventory shortage has made fulfilling volume needs even more challenging. Since there are fewer houses on the market, naturally, there will be fewer purchase transactions as well. With that in mind, everybody is going to be working harder for their piece of a much smaller pie. Overall, it is stressful and hard on business. HW: What are some ways brokers can gain a new competitive advantage, despite the challenges you mentioned above? JI: The first thing brokers must focus on is their service and ability to close loans on time. Purchase-money transactions are particularly sensitive because brokers are often working with a referral partner in real estate. The ability to close loans as of the contract date is important for the customer and it serves to strengthen relationships with referral partners too. To stay ahead, brokers must find a lending partner that understands just how beneficial this is. Another thing that can give brokers a competitive edge is the ability to align themselves with a partner that has a full suite of products that can serve a diverse set of borrowers. Not all borrowers will be able to secure a traditional mortgage. Having the ability to help various types of borrowers can really take a broker’s business to the next level. HW: How does Change Wholesale specifically aim to provide brokers with an advantage? JI: We have a saying at here Change Wholesale… “Close More, Close Faster.” How do we help brokers close more loans? By providing brokers with the broadest product base in the industry. Not only is Change Wholesale able to fulfill agency needs with traditional loan products supported by Fannie, Freddie and Ginnie, but we also have a suite of non-QM products too. Additionally, as a Consumer Development Financial Institution (CDFI), we have unique products, like our Community Mortgage and EZ Prime program, that give brokers access to flexible lending options others cannot. This gives brokers a unique ability to fulfill the needs of more borrowers. Our proprietary Community Mortgage program is a unique opportunity for brokers to expand their product base. Community Mortgage loans allow amounts up to $3.5M, CLTVs up to 85%, and can be used for primary residences as well as second homes. Borrowers can even qualify for a Community Mortgage without employment or income documentation. It is a very unique product in the marketplace that gives brokers a huge competitive advantage, and that is just one of many ways a broker can successfully partner with Change Wholesale. Brokers will not have this same opportunity with other organizations. HW: Given concerns about subprime loans and defaults, how is Change Wholesale mitigating the risks of loans like the Community Mortgage? JI: To clarify, Change Wholesale is not a subprime lender. It feels like the non-QM or nonqualified mortgage moniker has become stigmatized by old subprime labels from the 1990s and early 2000s. In reality, our Community Mortgage product is tailored for prime, eligible customers that have been unfairly cut out of the mortgage market. We keep a close watch on our default rates. Our average FICO scores are well into the 700s and we have great loan characteristics. Over the last two and a half years, The Community Mortgage has proven that non-QM loans can perform well and be great quality. The post How can brokers get ahead in a tight market? appeared first on HousingWire. [ad_2] Source link

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[ad_1] Finance minister Nirmala Sitharaman on Thursday underscored the importance of multilateralism and the spirit of global cooperation for economic recovery in the aftermath of the pandemic. The minister, who chaired the 7th annual meeting of the board of governors of New Development Bank (NDB) via video conference, also emphasised that developing innovative financial products and services, and incentivising strategic investments are crucial to maximising development impact, according to the finance ministry. NDB has so far approved 21 projects of India involving a funding of $7.1 billion, including $2 billion in emergency loans to support health and economic recovery in the aftermath of the Covid-19 outbreak. The theme of the annual meeting was “NDB: Optimising Development Impact”. Last year, India had called for expanding the funding horizon of the NDB, often referred to as BRICS Bank, so that resources could be utilised for bolstering social infrastructure in a post-Covid world, besides promoting the industrial sector. The NDB was set up based on the inter-governmental agreement among the BRICS nations (Brazil, Russia, India, China and South Africa) in July 2014. The purpose of this bank is to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries. [ad_2] Source link

[ad_1] The National Association of Realtors reported Thursday that existing home sales for April came in at 5.61 million, with double-digit home-price growth driving a housing market that is still savagely unhealthy. However, this year has seen one big game-changer: the 10-year yield finally cracked over 1.94%, which drove mortgage rates over 4%. This is something that I said would change the tone of housing, and we are seeing that result this year as sales decline and inventory picks up. The real story in housing has been the price boom that we have seen since 2020. I was adamant about the price growth rule of 23% from 2020 to 2024. As long as prices only grew by 23% during these five years, we would be OK. Of course, that didn’t happen, in fact, median home price growth today was 14.8%.  From NAR Research: In April, the median existing-home price for all housing types was $391,200, up 14.8% from April 2021 ($340,700), as prices increased in each region. This marks 122 consecutive months of year-over-year increases, the longest-running streak. Wait, what? How are home prices up 14.8% year over year? We were told that population growth is slowing, we were told that Americans would panic sell and that massive inventory would hit the marketplace once rates got to 4%. Spoiler: If you haven’t realized that the housing market since 2012 has been trolled out by professional grifters who don’t ever forecast sales, that is on you. Economics done right should be boring, and you always want to be the detective, not the troll. It’s May 19, mortgage rates are over 5.5%, and the mass exodus of 7-8 million Americans selling their homes to cash out at any price has never happened. Inventory is always seasonal. It rises in the spring and summer and fades in the fall and winter. My rule to get the housing market out of the unhealthy stage is that we need total inventory back between 1.52 million and 1.93 million. Today inventory levels are at 1.02 million. I use the 1.52-1.93 million range because it brings us back to 2018-2019 levels, the last time we had a balanced housing market. The last time we had total inventory growth was back in 2014 when we tried to get back to 2.5 million units and six months of supply; we couldn’t do that then, even though purchase application data was down on trend 20% year over year. Because we had a housing credit bubble from 2002 to 2005, the credit demand push on exotic loan debt structures was a setup for future forced credit selling. What I mean by forced credit selling is that the homeowner’s credit financials didn’t allow them to have the capacity to own the home any longer, so they were forced to sell their home. This created an abnormal amount of foreclosures and short sales, which exploded the supply levels for the existing home sales market. As we can see below clearly, the market worsened before the job-loss recession happened. This was a big reason why we saw the monthly supply data pick up in 2006, 2007 and 2008 — all before the job-loss recession happened late in 2008. The job-loss recession added more forced credit selling into the mix. We have been through a lot of drama since 2012, especially the drama in 2020, 2021 and 2022. We are sitting with just 2.2 months of supply. Now supply should pick up with higher rates — we had our first weekly positive print. We are not taking the unhealthy housing market theme off this marketplace. NAR Research: At the end of April, the total housing inventory amounted to 1,030,000 units, up 10.8% from March and 10.4% from one year ago (1.15 million). Unsold inventory sits at a 2.2-month supply at the current sales pace. In February of 2021, when I was saying that we need higher rates to cool housing, my mindset was that there were two things higher rates could do: They could cool down price growth and create more days on the market. More days on the market is the number on the short-term data line that I want to rise to above 30 days. Currently, it’s at 17 days; anything that is a teenager with this data line is exceptionally unhealthy. NAR Research: First-time buyers were responsible for 28% of sales in April; Individual investors purchased 17% of homes; All-cash sales accounted for 26% of transactions; Distressed sales represented less than 1% of sales; Properties typically remained on the market for 17 days. Currently, the housing market is reacting just like you would expect when we have higher rates. When have seen higher rates cool down sales before, and right now, it seems the same to me. I kept that target level of 1.94% going on during 2020-2022 as an inflection point for housing. This is sticking with my theme in the past that when rates rise, it cools down housing. Even though mortgage rates are historically low, they still always matter because mortgage buyers are the biggest homebuyers in America. We still have some legs to move lower in sales. Hopefully, this chart gives you some context to previous times when rates have risen post-2010. The one aspect of higher rates that I have gotten wrong so far is that I was anticipating a bigger hit to mortgage demand by now. Because the home-price growth level broke my model, higher rates at this stage mean a bit more to me than most. So, I was anticipating purchase application data to be down 18%-22% year over year by now. That level would be a traditional decline with a noticeable hit from demand working from a higher base than in the previous expansion. I like to use a four-week moving average on this data line on a year-over-year basis only, and as of today, this hasn’t happened. By October of this year, we will have more challenging comps to with worth, and