Jan. 6: 23andMe hack; Vendor news; HECM opinion; thoughts on the job situation; NAR lawsuit timeline

Did you know that “zero” is the only number that cannot be represented by Roman numerals? Any Dallas Mavericks employees who thought they were receiving $0 bonus for 2023 were wrong, as Mark Cuban announced they are receiving $35 million! Residential mortgage fundings have not hit zero, but according to Curinos, December 2023 funded mortgage volume decreased 11 percent YoY and 4 percent MoM. In the retail channel, funded volume was down 19 percent YoY and 4 percent MoM. The average 30-year conforming retail funded rate in December was 7.25 percent, -22bps lower than November and 70bps higher than the same month last year. Purchase rates were -28bps lower MoM and 73bps higher YoY, while refinance rates were 12bps higher MoM and 59bps higher YoY. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures; more on the data here.

What’s the big deal with reverse mortgages?


Last Saturday the Commentary took a deep dive into HECMs (reverse mortgages). The primer prompted one industry vet from the Hoosier State to shoot me a note about their own loan.

“This is the first newsletter that I’ve read word for word. (Don’t take it personally, I’m only here for the jokes, such as they are.) I finally found a proprietary reverse mortgage, and it took a lot of work to find it. Almost all companies advertising reverses use the FHA product. I found that the MO was astronomical, and, in my situation, I would have had to spend about $12,000 in closing costs (which include that MI) to gain access to maybe $30,000. Huh? These loans are supposed to help seniors?

“It turns out that a number of lenders do not serve Indiana. Not sure why that is, but it is. And the company that I finally found has three lenders who offer proprietary products, but they are aimed at jumbo loans and only one of them would finance my loan, which is less than $450,000. Good Lord! But at least there is no MI, which was going to amount to about $4,500.

“To me, the reverse mortgage market is where the subprime mortgage sleazebags (some, not all) went after that market evaporated in the 2008 meltdown. And in my opinion, eliminating HECM to HECM refinances is a disservice to seniors as well. If you get a reverse mortgage when rates are relatively high, like now, and rates improve later, why not be able to make a good economic move and refinance? Ask me how I really feel!”

Vendors and lenders aren’t the only hacking victims


Who’s looking at your DNA? In December 23andMe announced that hackers had stolen genetic and ancestry data from 6.9 million users, as one source noted, “an outcome which felt pretty much inevitable in the “mail your genes to a strange P.O. Box so they can tell you you’re Irish American for $50” space of companies. The data breach at first only affected 14,000 user accounts, which hackers obtained access to through brute force credential stuffing. But from there, they were able to obtain 6.9 million accounts’ personal data because they’d opted into the DNA Relatives feature, which allowed the hackers to scrape their personal data even if they weren’t directly hacked. One way to think about it is a bunch of scams that were rendered useless are now back being used. “Pretend you’re a long-lost cousin from the old country to rob the fools blind” was over and done with in the ‘30s but is now back.

The U.S. employment picture: “strong like bull”


Yesterday we received a stronger-than-expected Employment Situation report for December, which will not prompt the Fed to start cutting rates. The report included above-consensus nonfarm payroll growth (216,000, 40-50k above guesses), better than expected growth in average hourly earnings (+.4 percent), and an unchanged Unemployment Rate (3.7 percent). Rates quickly worsened but rebounded (due to a larger-than-expected deceleration in December service sector growth, according to the ISM Non-Manufacturing Purchasing Manager’s Index. What are the experts thinking?

MBA SVP and Chief Economist Mike Fratantoni’s reaction? “The job market remained relatively strong in December, with growth in payrolls of 216,000 (just below the monthly average of 225,000 in 2023) and the unemployment rate unchanged at 3.7 percent. Payroll gains for October and November were revised down by 71,000, countering the somewhat faster pace of job growth anticipated in December. As in prior months, the bulk of the job gains were in just a few sectors, with a 52,000 increase in government employment leading the pack. At the same time, businesses are hiring fewer temp workers, down 33,000 for the month and down 346,000 from its peak, a sign that businesses do not need to expand their production capacity in this market.

“Job openings, the pace of hiring, and the quits rate are all trending down, but layoffs and initial claims for unemployment insurance are not moving higher. Together, these data indicate a market where employers are slower to take on new employees but are not seeing enough weakness to dramatically cut payrolls. Wage growth at 4.1 percent over the past year remains brisk, but we expect this will slow in the year ahead, supporting further reductions in inflation.

“In summary, this report shows a job market little changed from November. We expect that the economy will slow down in 2024, and this will likely lead to increases in the unemployment rate. In terms of implications for the housing market, these figures are likely to keep interest rates from falling further at this point, but we expect mortgage rates to drift down over the year as the economy slows.”

Doug Duncan, Chief Economist at Fannie Mae, writes, “While job gains were generally broad-based, the largest gains came from less cyclical sectors, including government (+52,000) and health care (+38,000). Still, we note that employment in residential construction, including specialty trade contractors, rose by 5,500 in December, bringing the cumulative gain in 2023 to more than 40,000. The resilience of residential construction despite mortgage rates averaging 6.8 percent over the year highlights the continued demand for new housing and bodes well for starts activity in 2024… While the headline job gains number is a strong one, we see some conflicting signals that could indicate the labor market is set to soften in 2024.”

All kinds of news about Realtors


Well, NAR lost another leader when Wayne LaPierre resigned yesterday… oh, wait a minute, that’s the NRA, not NAR (National Association of Realtors). Let’s get back to real estate agents.

Recall that on Halloween a $1.78 billion verdict was announced that could impact commissions. Ed Groshans with Compass Point Research & Trading, LLC, writes, “We expect the final opinion in the Burnett/Sitzer v. National Association of Realtors (NAR) to be published in late March or April. In November, Judge Stephen Bough issued an order listing the post-trial briefing schedule with the final briefs due on March 18… We were also informed that final approval of the HOUS/RMAX can be expected to occur after the final order is published. According to the order granting preliminary approval, the parties were required to contact the court by December 22, 2023, to schedule a final approval hearing. Our expectation is the date will be set in April or May.”

What about the $1.78 billion award: does it earn interest? “The posttrial briefing schedule indicates that interest on the award may have started to accrue on November 1, 2023. This date can be challenged by either party. The U.S. Courts Post Judgment Interest Rate guidance states the rate of interest used is the weekly average 1-year constant maturity Treasury (CMT) yield, as published by the Federal Reserve (Fed). The Fed’s Selected Interest Rates (H.15) showed the 1-year CMT to be 4.80 percent.

“We estimate that interest accrual since November 1 to be $15 million. The annual interest accrual would be $86 million at the current 1-year CMT. The defendants could potentially owe the accrued interest at the end of the appellate process. If the award is trebled, the accrued interest would also be trebled. We expect this decision to be appealed by NAR, which was confirmed by the court.”

Ed’s note wrapped up with scheduling thoughts. “Any post-trial motions to be filed by the Defendants shall be due on January 8, 2024, any oppositions to Defendants’ motions shall be due on February 26, 2024, and any replies to Plaintiffs’ oppositions shall be due on March 18, 2024. Execution of any judgment shall be stayed until 30 days after resolution of all post-trial motions. Post-judgement interest accrual date may be November 1, 2023, and all parties reserve all rights and arguments as to the date on which prejudgment interest begins.

Vendor news & opportunities


Loan originators are looking at a “full stack” loan origination & processing platform like Realfinity.io, allowing them to go “independent” allowing them to get the most competitive pricing directly from wholesale lenders with no overlays due to corporate expenses. Check out this WSJ article. To learn more about going independent reach out to Luca Dahlhausen.

A Greater Town has built a robust real estate portal into its national hyperlocal marketing site and is looking for one mortgage lender (or a few select mortgage lenders) to “own” it, similar to having your own Zillow or Rocket Homes. About 600 MLS associations are represented with over 1,100,000 listings & 750,000 real estate agents & brokers. A comprehensive directory of every mortgage lender & MLO in the country is in construction as well. It’s the ideal environment for a national lender to set up shop. Examples include Editors Picks, Sally Forster Jones, Founder & CEO of the Sally Forster Jones Group at Compass, and Jerry & Lisa String, Listing & Buyer Agents at Realty ONE Group DocksideSouth. For further information, please contact Drew Knapp, CEO of A Greater Town, (973-477-7154).

Valuation Review posted that the New Jersey Senate approved a bill regarding house appraisals that supporters say would help historically disadvantaged residents move up through economic ranks in a state with one of the nation’s largest racial wealth gaps.

In a disrupted market, mortgage professionals are increasingly interested in leveraging data to help make strategic decisions about their business. Modex’s integration with OptifiNow enables wholesale lenders and recruiters to see loan officer production data, including volume and type, in a single click. Access to lender beneficiary data empowers wholesale lenders with an understanding of how they stack rank against competitors and what percentage of market share they have in a given location, as well as a granular view of data in specific geographical representation zones. With the integration comes the major benefit of contact data. Now, users can not only access contact details for key targets but can also seamlessly store this data in their CRM for direct sales and marketing at their fingertips. Equipped with up-to-date email and phone data, customers will extract more value from every sale and marketing campaign, saving time and increasing ROI along the way.

Argyle, a platform providing automated income and employment verifications for some of the largest lenders in the United States, announced its integration with the Exchange℠ network of mortgage-specific service providers available to customers of the Empower® loan origination system (LOS) from Dark Matter Technologies. Argyle’s automated verification of income and employment (VOI/E) is now available to customers of the Empower LOS from Dark Matter Technologies via an integration with what Dark Matter calls its Exchange network of service providers. Lenders are pretty excited about the cost savings (~80 percent) they are getting from switching to Argyle over legacy solutions (The Work Number), and now they can order Argyle verifications directly from Empower, one of the industry’s top loan origination systems.

NotaryCam® announced it will support remote online notarial acts in California beginning in 2024 following the passage of CA Senate Bill 696. Stage 1 of the bill took effect on January 1, 2024, and allows the use of remote online notarization (RON) by notaries commissioned outside the state for transactions such as title and escrow transaction documents in connection with California real property. Other provisions of the bill are slated to take effect in phases starting January 1, 2025. The final phase, which is expected to commence by January 1, 2030, authorizes the commissioning of California notaries to perform remote online notarial acts, following the completion of technology updates by the California Secretary of State office to allow for such actions. This bill puts California with 44 other states that have enacted laws providing permanent access to remote online notarization, according to the American Land Title Association (ALTA). Updates and additional information on RON in California can be found on the California Notary Public.

The sharing of marriage…

The old man placed an order for one hamburger, French fries, and a drink.

He unwrapped the plain hamburger and carefully cut it in half, placing one half in front of his wife.

He then carefully counted out the French fries, dividing them into two piles and neatly placed one pile in front of his wife.

He took a sip of the drink, his wife took a sip and then set the cup down between them…. As he began to eat his few bites of hamburger, the people around them were looking over and whispering.

Obviously they were thinking, “That poor old couple – all they can afford is one meal for the two of them.”

As the man began to eat his fries a young man came to the table and politely offered to buy another meal for the old couple. The old man said, they were just fine; they always shared everything.

People closer to the table noticed the little old lady hadn’t eaten a bite. She sat there watching her husband eat and occasionally taking turns sipping the drink.

Again, the young man came over and begged them to let him buy another meal for them. This time the old woman replied, “No, thank you, we are used to sharing everything.”

Finally, as the old man finished and was wiping his face neatly with the napkin, the young man again came over to the little old lady who had yet to eat a single bite of food and asked, “What is it you are waiting for?”

She answered, “THE TEETH.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. STRATMOR’s current blog is titled, “How Treasury Auctions Influence Mortgage Rates”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2024 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

Rob Chrisman