[David] Thank you much, Matt. Be sure to get signed up for Matt’s service by going to mbslive.net. You can put in LOL for the sign-up code and get an extended trial period without a credit card. It’s a good service. Sign up. It’s worth it, every dollar of it. Let’s get over to you, Mr. Bill Corbett, with your commentary. Interesting what Les’ song we’re singing is going in circles and where the market’s going. Everything’s being driven by what we’re seeing back in the Strait of Hormuz-
[Bill] I think there’s two related things going on, We’re in a mode now where the trading range just seems to be getting tighter and tighter. No real conviction one way or the other, And that is still in large part due to ask somebody to describe the situation and more importantly, the resolution in the Persian Gulf in 25 words or less. Yeah. Well- Yeah. Bombs away … there’s no solution, and it’s the status quo until somebody gets mad at somebody else. Yeah. And, I don’t think anybody really has a solid- basis for a estimate on where things are likely to go, and more and more product is getting out of the Persian Gulf. But, when you say the amount of shipping activity has doubled, so it went from two ships to four- It’s real statistic, yeah. there’s still a lot of price pressure way beyond what you’re seeing for the headline price of oil. Yep. I think that’s gonna keep the inflationary pressure in place. To Matt’s point, there was a weaker jobs report, but- we’ve seen so much month-to-month volatility that, like- Yeah … you don’t, you gotta look at it a couple of months at a time.
[David] Yeah. It’ll also be interesting to see where they adjust the jobs report, if that gets adjusted.
[Bill] Yeah, seems like- Yeah, exactly. But I also think part of what is helping mortgage rates a bit is, Warsh is sticking to his inflation is going to get down to 2%. Now, he’s looking at different ways of measuring it to be fair, but to me, he’s made it very clear is he’s got one direction in mind, and not really waffling on the employment side and how that comes into play. Is this gonna be one of even the Fed talking about tightening starts to accomplish something good for longer term rates, which is, okay, maybe after five years there’s somebody that is actually serious about controlling inflation.
[David] Mr. Kittle, thoughts on what we heard. Frustrating to be dealing with this when we were hoping for somewhat of a recovery.
[Kittle] So I’ll go off on just a slight tangent that does have to do with rates. It’s something that I and we’ve been talking about now for almost a year, and something that could be done immediately for first time home buyers, and that’s to eliminate the upfront MIP for FHA loans. There’s discussion about it. They won’t do it. I just checked on it. The capital ratio right now required is 2%. It’s at 11.47, let’s just call it 11.5%, nine and a half percentage points above what is required. 5.7 times what is required. Yeah. They could get rid of it today that would immediately give, not a lot, but each FHA borrower equity in their property, which they don’t have when they close today. it’s a way to cut it, and it would be, if you want to talk about affordability for first time home buyers, there it is. There’s insurance in force right now is $1.647 trillion. If the market turned bad, all they’d have to do is reinstate it. But there’s not much FHA business out there to worry about it right now, and it’s completely being ignored, and the HUD secretary could do it with a stroke of a pen before 4:00 today.
[David] Yep. Any clues as to why you think, hunches as to why that is not being done?
[Kittle] I’m not sure they’re listening. I have no idea. This is so easy. It’s- Yeah … it’s a layup for a seven-footer. Yeah.
[David] Alice, your thoughts and rates?
[Alice] It was David’s comment about the MIP, and you guys were asking why you don’t think they do it. I was trying to come up with the analogy of, that’s their paycheck, right? That funds the program. And it’s only one component. Obviously, they have the annual MIP coming in each month with folks’ monthly payments which is the long-term driver of revenue. So trying to get rid of the upfront MIP I still think is a great idea if people just take the time to think about it. So David, I think part of what it is it’s such a crazy idea at first that people just automatically say no ’cause they can’t comprehend it, but if you sit down and really think about just a short-term time with no upfront MIP and they ran the numbers, I think they would be surprised that it actually can work. So I think that’s all it is it’s just something they never thought of and you’re asking them to, cut off one of their arms of income that they’ve never thought about before. But if they really do look at it as a short-term solution, and they put some parameters around it to then perhaps get a comfort level, but at least be willing to come to the table to talk about it and really see that if you crunch the numbers, I bet you there is a way to make that work.
[Kittle] Yeah, can I comment on that? I think- Alice brings up a ve- and I agree with her an interesting way she framed that. They’re worried about their income. And there it is. I mean- Yeah … it’s, it wouldn’t be income. It’s insurance against default for a federally backed program. If you’re five and a half times what you should be- Over the 2%, th- it’s our money at the end of the day Yeah. And it’s the mindset, they’re worried about their income, but yet they wanna find a way about affordability. What an oxymoron
[David] yeah. Which just fits exactly with the rate discussion because you, what we’re looking at is what rates, lower payments, what we can do to impact the lower payment. You submitted something, Mr. Kittel, to the White House on a paper. Did you get any feedback to the, from that? Zero Interesting. I think they’re a little distracted with some other things going on, Went to Treasury too you submitted to Treasury as well? Went to HUD, Treasury, and the White House. Interesting. And it was well-written and it was, it spot on to some very important points. We don’t know where that will serve us. We’ll see. Thank you everybody. And the comments about rates.