Rushmore Exits Correspondent, Vendor Services, GNMA Risk-Based Capital; Jobless Claims

It really is the hope that kills you. That phrase, which was coined by English football fans and is probably more well known in America among Ted Lasso watchers, is now extending to the mortgage industry. After dozens of lawsuits and years of litigation in the case of Collins v. Yellen, Fannie Mae and Freddie Mac shareholders are about to get their first actual trial next month when Fairholme Funds v. Federal Housing Finance Agency and several related cases come before a jury in a U.S. District Court. Earlier this week, there were hopes that inflation would come in weaker than expected, meaning the Fed could eventually ease up on its quantitative tightening cycle. The CPI print rising 8.3 percent year-over-year in August forced markets to price in more rate hikes to already worrisome policy expectations which will further push up borrowing costs and push down prospects for avoiding a recession. Mortgage companies are hoping borrower demand returns toward normal levels. Borrowers are hoping rates come down, but is that possible without the Fed over tightening monetary policy and sending the economy into a recession? Yesterday was the last day of MBS purchases by the Federal Reserve for the foreseeable future as the central bank speeds up the pace at which it winds down its balance sheet, which stands at almost $9 trillion. The move is causing stress to bond market liquidity, as gaps between prices at which traders buy and sell widen and as prices swing wildly. Our business continues to change, the latest example being Rushmore exiting correspondent. How about some good news? Well, the world’s oldest two-headed tortoise celebrated his 25th birthday. There was a party and presents! (Available here, this week’s podcast is sponsored by SimpleNexus an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender. Todays has an interview with Optifunder CRO, Jon Rutila, on the importance of a Warehouse Management System.)