Michigan agents, brokers sue NAR due to antitrust settlement

🌅 Good morning! Today’s newsletter is 662 words, a 2.5-minute read.

1. Open Mortgage shuts down retail channel

Open Mortgage has shut down its distributed retail channel, laying off 25 loan officers. This move follows the company's change in ownership six months ago and its exit from the reverse mortgage business nine months prior.

• The company will retain two retail employees temporarily to close out existing deals.

Open Mortgage will now focus on third-party origination (TPO). CEO Christopher D’Auria, who acquired the company in February 2024, confirmed the decision, citing financial challenges and a shift in strategy.

2. Buyers seek piggyback mortgages amid affordability struggles

Piggyback mortgages, those involving a first and second lien at origination, are on the rise among first-time and low- to moderate-income homebuyers, according to a report released by CoreLogic on Monday.

From June 2022 to June 2024, the share of piggybacked FHA loans increased from 10.8% to 18%, while conventional loans with piggyback saw a rise from 2.2% to 3.6%. These loans, used to cover down payments or closing costs, often come with higher interest rates and leave borrowers with minimal or negative equity.

FREE RESOURCE

New Rules, New Strategy: How to Drive Mortgage Leads in the Aftermath of NAR & FCC Rule Changes

The way home buyers interact with loan officers and real estate agents is changing. NAR practice changes take effect this Saturday, 8/17/24, and the new FCC rule, set for 1/27/25, shifts the way lenders can purchase and pursue mortgage leads.

Now is the time to get ahead of rule changes with a well-crafted lead generation strategy.

Click here to download Maxwell’s new eBook to learn how NAR and FCC rule changes will impact lenders (hint: LOs will take on a new, bigger role), challenges and opportunities to expect, and 3 tips for building a strong mortgage lead funnel in today's market.

3. More Nuggets

⚖️ Michigan real estate brokers file antitrust suit against NAR. (HousingWire)

💰 The median home price hit $2 million in this metro area. (NAR)

📉 Bonds see modest gains as PPI eases; CPI takes center stage today. (MND)

🏘️ Fannie "Real Estate Owned" inventory decreased 10% in Q2’24. (CalculatedRisk)

4. Mortgage applications surge by 16.8%

A recent drop in interest rates led to a significant surge in mortgage applications, with refinance volumes more than doubling compared to a year ago, according to the Mortgage Bankers Association (MBA).

The MBA's Market Composite Index showed a 16.8% weekly increase in applications, reaching the highest level since January 2023. Refinances drove the growth, with the Refinance Index jumping 34.5% week-over-week and 118% year-over-year.

5. CFPB: Land contracts are under federal mortgage protections

The Consumer Financial Protection Bureau (CFPB) has declared that contracts for deed, also known as land contracts, must adhere to federal home lending rules and include essential consumer protections.

• In these contracts, sellers retain ownership of the property until the buyer completes all payments, which often leads to predatory practices.

The CFPB noted that these deals typically involve inflated home prices, high interest rates, and balloon payments, causing many low-income buyers—particularly in Black, Hispanic, immigrant, and religious communities—to lose their homes and down payments.

The CFPB is taking action to enforce compliance with federal laws, such as the Truth in Lending Act, to prevent these abuses and ensure buyers are better protected.

☀️ You’re all caught up. See you on Friday!

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