Rate cuts now "a matter of if, not when"

Good morning! We made it to Friday... Today’s newsletter is 612 words, 2.5 minutes.

1. Hot inflation, strong economy, delay rate cut hopes

Traders are solidifying on the idea that inflation will remain hotter for longer and the Federal Reserve isn’t going to be able to cut rates as much as it has suggested.

The latest read on US consumer price inflation, which came in at 0.4% month-over-month versus the expected 0.3%, slapped an exclamation point on that new consensus. YoY consumer prices were up 3.5%, up from 3.2% in February

“The sound you heard there was the door slamming on the June rate cut,” JPMorgan Asset Management’s David Kelly said minutes after the consumer price index hit.

Following the inflation report, mortgage rates surged at a pace seen only one other time since October 2022. The average lender moved up by 0.28%.

2. CFPB weighs ban on charging homebuyers for lender title insurance

According to a report by Bloomberg, the Consumer Financial Protection Bureau is considering a ban on mortgage banks charging homebuyers for the lender’s title insurance policy.

Lender’s title policies protect lenders from issues that may arise with the title of the property, but they are paid by the borrower. The homebuyer also has the option to purchase an owner’s title policy, which protects the equity they build on the property.

While the draft measure may be abandoned altogether, Bloomberg reported that in its current form it would apply to both home purchase and refinance transactions.

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3. Catch up quick

🔊 "We f*king took those c*ksuckers down" - Mat Ishbia's leaked audio shows Suns owner beefing with rival Dan Gilbert. (SportSkeeda)

⬆️ For the week ending April 5, Mortgage applications increased 0.1 percent from one week earlier. (MBA)

⚖️ FDIC finds banks violated RESPA on mortgage brokerage payments. (Yahoo!Finance)

🏘️ 10 best markets for first-time home buyers in 2024. (Zillow)

🏢 This is the largest office-to-rental apartment conversion in New York City so far. (Watch Now on CNBC)

4. New VA program to help more than 40,000 veterans stay in their homes

Starting next month, Veterans Affairs officials will offer a “last-resort” program for tens of thousands of veterans in danger of losing their homes because of post-pandemic mortgage problems.

The new Veterans Affairs Servicing Purchase (VASP) program, which launches May 31, will allow the department to purchase defaulted VA loans from outside mortgage servicers, then modify the terms to allow financially strapped veterans to avoid losing the properties.

Borrowers will be guaranteed a fixed 2.5% interest rate for the remainder of their loans.

5. State financial regulators and FHFA enter mortgage information sharing agreement

The Conference of State Bank Supervisors (CSBS) and the Federal Housing Finance Agency (FHFA) have entered into a formal agreement designed to facilitate information sharing with respect to nonbank mortgage companies. 

The memorandum of understanding establishes substantive information sharing protocols between state financial regulators and FHFA, improving the ability to coordinate on market developments, identify and mitigate risks, and ultimately, further protect consumers, taxpayers, and the nation’s housing finance system.

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