[Kittle] Thank you, Matt. Check out nbslive.net for up to the nanosecond updates. Use the sign-on code LOL to get an extended trial period without having to put in your credit card number Okay, so now we’re gonna move to today’s discussion. And let’s see. Dr. Corbett is in the house this morning. Bill, there’s one thing I heard when we were getting the explanation of when Les was doing his report, his analysis of Europe. It almost sounded like what Dave Lykken brought up last week, some flight to quality.
[Bill] Yeah. Spot on. So if you listen to last and that, what has or can help bond markets rally? You’ve got flight to quality, you’ve got oil, you’ve got economic growth or lack thereof, and you’ve now got the angst in the tech center, tech spending space. the moral of the story is don’t try and predict rates right now If you’re an originator, if you’re a secondary shop, if you just like to predict rates ’cause you’re kinda wishing the survival of your company, don’t try and predict rates, Not only you’ve got those four biggies, there’s any number of things that could be driving the direction of rates. And, so great, now the 10-year has come back just below 5%, I think Les kinda nailed it when he’s still saying the range is 4.90 to 5.35, right? While it’s 10-year’s gone below a psychological level, it’s not really that meaningful for the market overall. And don’t try and create a market euphoria that’s not really there, ‘ cause any one of those factors, can change the market direction and what bond traders are looking at. Matt laid it out. That changes from day to day, week to week. take the little bit- But you- … of relief and just, kinda be happy and go find purchase business.
[Kittle] So in the pre-conversation to the call today when you said just because it’s under five, don’t bet on four, right?
[Bill] Absolutely. There’s a long way in between.
[Kittle] Yeah, I would kinda tend to agree with you. I like what you said, and it’s probably good advice for 99% of the time. You should never try to predict rates at all, actually, and just go do loans. But so let’s talk a little bit about the executive order that was put out there by President Trump. What are your thoughts on that?
[Bill] So my comment when it first came out was underwhelming. It was. I think the mortgage insurance piece that’s talking about new business being written okay, so you’ve just explained to me in theory how customers could save money 2028 to 2031. I’m not sure that’s a pre-election, shot of adrenaline that they were looking for. I think in there, I know, you’ve been a huge advocate of the title insurance changes. I would be fascinated to see where that goes. And the other one, ’cause it got a fair amount of good conversation at the MBA conference, is the revisions to manufactured housing. I think a lot of folks and again, the- HUD folks recognize this clearly is Growing housing supply at the affordable end is where there’s an opportunity, right? You’re not gonna… I used this example over the weekend with some folks, You’re not gonna make the $400,000 house cost 300,000. Number one, it’s not gonna happen. Number two, if I owned one of those $400,000 houses, I think I’d be a little agitated if you just trashed the value of my house. Where you can solve a chunk of affordability is getting $300,000 houses on the market, and that’s going to come from manufactured housing. I think that’s the biggest stack of chips that they have to play, and the efforts that they’re talking about seem very market friendly, rational, like almost the antithesis of what you would expect coming out of the government. They seem like they’re on the right track with a lot of good ideas. That, part of it I like.
[Kittle] Let me inter- let me interject something there. Let me interject something. When you’re talking about manufactured housing at $300,000, it certainly blows my mind, but we’re talking in that scenario, that is first time home buyer, right? Oh, yeah. And most of the first time home buyers, I think still, look to go, if it’s an affordability and cash problem, they will go FHA. Certainly $300,000 manufactured house can be financed under FHA. So I go back to, in addition to what I’ve talked about helping affordability in addition to title insurance needs to be totally revamped, is get rid of, let it sunset, but get rid of the upfront MIP on FHA loans. It gives them immediate equity. They don’t finance it. It is a half a percent however you cut and if you do that along with the other guidelines, it encourages people into the marketplace. He could go out right now, and politically it’s good. It’s not only good for the borrower, it’d be politically good in the last two Drop it a half a percent. Yeah. He actually controlled rates. He was begging the Fed chair all the last year and a half to lower rates, and here he can do it on his own.
[Bill] So we’ve talked about this on air and off the air a lot. Two of the biggest things that would have an immediate impact on affordability are the FHA insurance and LLPAs. There we go. And neither one of them are getting the immediate level of attention that they should.
[Kittle] I don’t think they’re getting any attention. Maybe a little discussion about LLPAs, but I don’t hear the administration talking about the MIP at all. Again, it’s eight and a half times over What they’re supposed to hold there. And if you sunset it after a year, and if it’s still doing well and you don’t have a lot of delinquencies, then keep it going further. But you could certainly give some relief, for, again, for the borrower, and it’d give him some political relief as well
[Bill] Some of these things I go back to what Winston Churchill said about the Americans, that you can always count on the Americans to do the right thing after they’ve exhausted every other option
[Kittle] I got nothing for that, but that’s exactly right. We tend to not learn very well, especially in this industry. We repeat ourselves about every seven years we actually do. What else you got on your plate, Bill?
[Bill] This kind of muddies some of those conversations up, but I thought it was fascinating again that, the merry-go-round has gone full circle, and now Besson is talking about yeah, maybe we are gonna look at releasing Fannie and Freddie in the ’27, ’28 legislative session.” Never happened Really? why are you wasting air talking about something like that, that just is thoroughly confusing folks.
[Kittle] I agree. That was just like, ” Where’d that come from?” ‘ Cause usually his comments are pretty pointed and spot on, and that just looks like- Yeah … a red herring out there for something else. And what good would that do- Exactly … the market at this point? Yeah, totally. Okay. Bill, as always, thanks for your comments.