Fannie Mae : What Consumers Think

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1. Rocket arms brokers with a "Bully Shield"

Rocket Pro TPO will pay the penalties and court fees for mortgage brokers looking to exit United Wholesale Mortgage's ultimatum contract through its "The Bully Shield" initiative.

UWM's ultimatum, issued in 2021, requires brokers to stop doing business with Rocket Mortgage and Fairway or face penalties.

Rocket is offering to help brokers exit the contract and offers freedom to work with any lender afterward.

Rocket's Executive Vice President, Mike Fawaz, says the initiative is about standing up against a bully, not about cost or numbers, and that Rocket isn't afraid of retaliation.

2. Homebuyers prefer permanent buydowns

Most homebuyers are choosing permanent mortgage rate buydowns to combat unaffordability, instead of temporary buydowns, according to Black Knight.

During the third week of January,

• 57% of homebuyers who locked paid at least 0.5 points for a permanent buydown

• Only 3% used a temporary buydown.

Purchases made up 81% of rate locks during that week, with an average payment for a rate lock buydown of 1.16 points. 

This activity mirrors 2018 and 2019, when affordability was also a challenge.

However, this time the impact of rising home prices and interest rates is much greater, with the monthly mortgage payment on the average-priced home more than 40% higher compared to the same time last year.

3. MBA seeks meeting with FHFA

The MBA has written a letter to the FHFA to raise concerns about the operational challenges posed by the upcoming fee changes going into effect in May, which include price adjustments for loans sold to Fannie Mae and Freddie Mac with debt-to-income ratio (DTI) above 40%.

The letter requests a meeting with the FHFA Director to discuss these concerns and raises specific issues such as difficulties for self-employed workers and compliance challenges with TILA-RESPA integrated disclosures.

They also expressed concerns about the operational difficulties of implementing the DTI factor and its impact on borrower trust.

The letter also raises concerns about the complications the new pricing creates for the quality control checks that lenders do before selling a loan, and the use of DTI as a differentiator.

4. Fannie Mae: What Americans think about the housing market

• 82% = Bad time to buy

• 17% = Good time to buy

Respondents expect home prices to decrease or remain flat, and most believe it's a bad time to buy a home.

According to Fannie Mae's Home Purchase Sentiment Index, consumer confidence in the housing market is currently low, with only 17% of respondents considering it a favorable time to buy a home due to affordability issues caused by elevated mortgage rates and property prices.

However, job security does not seem to be a significant concern, as 67% reported their household income remained unchanged over the past 12 months.

5. More Nuggets

Speaking of… "when you hate your mortgage but love your house" (Axios)

Huntington Bank aims new mortgage product at underserved borrowers (BankingDive)

Guild Mortgage acquires Legacy Mortgage (Press Release)

☀️ See you on Friday!

p.s. If you like this newsletter, your friends may too. Forward it to a friend, and let them know they can subscribe here. Written by Ian M.