Mortgage rates jump back over 7%

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1. Mortgage rates jump back over 7%

The average rate on the 30-year fixed mortgage jumped back over 7% Thursday, rising to 7.1%, according to MND.

The increase is linked to growing concerns that inflation is not cooling off, causing bond yields to rise. Mortgage rates loosely follow the yield on the U.S. 10-year Treasury.

Rates previously reached 7.37% last October, the highest level in over 20 years, but dropped in the following months as inflation appeared to ease.

While the trajectory for rates now appears to be higher again, it is not necessarily guaranteed for the long term.

2. Fannie Mae updates selling guide for property valuations

Fannie Mae has updated its selling guide to offer more options for property valuations, moving away from implying that an appraisal is a default requirement.

The valuation modernization introduces the following:

• Value acceptance will be used in place of the term “appraisal waiver.” Fannie Mae said the term better reflects “the actual process of using data and technology to accept the lender-provided value.”

• Value acceptance + property data is a new option that utilizes property data collection by a third party to confirm property eligibility without requiring an appraisal. Lenders must verify the data collectors' background checks and training, and submit the data to Fannie Mae's Property Data API with a specific code.

• Hybrid appraisals. These are based on interior and exterior property data collection by a vetted and trained third-party that is provided to an appraiser to inform the appraisal. They are permitted for certain one-unit transactions where value acceptance + property data was initially started, but changes in loan characteristics results in the transaction not being eligible for that option.

• Alternative methods for the Appraisal Update and/or Completion Report (Form 1004D). These include a borrower/builder attestation letter to verify completion of construction, and a borrower attestation letter to confirm completion of repairs for existing construction in lieu of Form 1004D. The policy further describes required exhibits and controls.

These new updates are meant to make the home valuation process more efficient and accurate.

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3. More Nuggets

🔒 Lock-in effect. According to Goldman Sachs, 99% of borrowers have a mortgage rate lower than 6% or the current market rate, and around 28% of those have rates below 3%. (Yahoo)

🏠 Home equity line of credit (HELOC) volume fell 16.2% in Q4 2022 compared to Q3 2022, according to Attom. However, the 313,973 HELOCs in the fourth quarter still accounted for a hearty $60.1 billion in volume and made up 20.7% of all loans to close the year. (Attom)

💸 JZZ Technologies is acquiring Oxygen Mortgage for a "low seven-figure number" as it looks to expand into real estate and grow a real estate development division, allowing Oxygen Mortgage's team of loan officers to access JZZ's extensive database of clients. (Newsfile)

4. Majority of Hispanic Americans now own a home

According to a report by the NAR, the homeownership rate among Hispanic Americans has surpassed 50%. This rise was driven by income growth and partly due to more people reaching the prime home-buying age.

Additionally, Latinos now have higher levels of income and education, and are more likely to be married and opt for larger, multi-generational homes. By 2030, an estimated 56% of all new homeowners will be Hispanic.

However, the Hispanic homeownership rate is still below the national average of 65.5% and that of White Americans at 72.7%.

5. UWM reports financial loss in 4Q

UWM's parent company, UWM Holdings, reported a net loss of $62.5 million in Q4 2022, including a $150.8 million decline in the fair value of mortgage servicing rights.

Despite the loss, UWM still claimed the top spot in the wholesale market with a 54% share and an 11% share of the overall market. 

The company originated $25.1 billion in Q4, a dip from the previous quarter, but had a record $90.8 billion of purchase volume across 2022, surpassing 2021.

☀️ Happy Friday. See you on Monday!

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