[David] Alice, let's get right into your segment. Alice Alvey, Vice President of Partner Education and Training at Union Home Mortgage. Thank you, Union Home for lending her to the podcast each and every week. Alice, what you got?
[Alice] Today I was going to talk about what MBA reported on and that was the actuarial report. Say that five times fast. We talk about that every year. And so as they reported on MBA, and I think as an industry, we need to go back at FHA and try and get the MIP premiums down. Now they're very sensitive. Their volume is very sensitive to changes in MIP. When you look at the chart, so I haven't been through all 189 pages yet, but I've been through about 89 pages, which is the nuts and bolts in the beginning. Before you get to all the…
[David] Amazing that you made it that amazing that you got through 89. That's not the most exciting read. Only someone like you would enjoy reading that.
[Alice] I know I'm weird, you all benefit from that weirdness. But I think the bottom line is I'm looking at the report. I think it's got valuable information just as a lender, as you look at what is my market share compared to the overall FHA to conventional share really am I operating in the same LTV and credit score bands that FHA is? So please take a look at the report. I find it interesting. They've been pretty stable in certain credit score bands. I was surprised to see them jump their credit scores above 720. Are over 22 percent and they haven't had that high since 2013. So, more people with better credit are going to FHA, which plays even more into, they got a ton of money and now money, as far as I know, just sits there. Maybe I have to do some digging, Kittle, they don't leverage it. It doesn't go to technology. Maybe it does get leveraged. I wish it would. Yeah, in any case, ever since 2013, when they stopped the cancellation of the MIP on the annual MIP on so many loans. The fund just keeps building and no matter how bad a scenario they paint in that actuarial report, they're going to be fine today. So there really is a really strong argument to bring the MIP that we're talking about the, we call it an annual, but it's divided by 12. So, most people call it a monthly, but to get that number down even further and then, for those of you in sales, look at what does that do with now my conventional PMI comparisons? Yeah. David, you've been around this block a few times.
[David] Yeah. We have been Mr. Kettle. We all have. Yeah, we all, yeah, we all have. Yeah.
[Kittle] I would say, Alice, I love what you just said. They're painting that picture because they wanna keep the money.
[David] Yeah.
[Alice] Yeah and they don't need it. It's, and it's a ridiculous argument.
[Kittle] And they need to cut the up.
[David] Yeah. Bill,
[Bill] Yeah. So I believe they need to cut, also, when I hear those numbers and then I look at. FHA delinquencies in double digits, literally, 10%, like how do those two things flow together and to the comment about the 720 credit score, the way over the last year or so, especially it may go longer, the way pricing is played out. FHA loan with the MIP can beat a conventional loan. So, even if you have good credit, even if you have down payment, there are a lot of times where that arguably is a better way to go and I think that's probably where a lot of the surpluses come from, that the market pricing structure has created opportunities for much higher quality borrowers than one would think in the FHA product. But again I haven't even gotten to page one on the report yet. It’s
[David] 80, 90, and so only got a hundred to go. Come on, Alice, don't be a slacker. We want to report on all the other stuff, even the footnotes.
[Bill] I still struggle with the 10 percent plus delinquency, but certainly the easiest thing is the eliminating the life of loan that's just getting way too greedy.
[Alice] Yeah, their argument is that's what yeah, because that's definitely where you saw the change into the fund not teetering on the edge of trouble in relationship to the delinquencies. Now, their average interest rate, as it was shown was 6.43. So that's. For them, based on all the modeling that they do, if rates stay stable, then they don't have a runoff problem. People refi out of an FHA real fast. Obviously, you've got your streamline opportunities. But even that, if you've got higher quality borrowers, the refi is, becomes payment driven rate plus MIP versus just, Oh, I can get a lower conventional rate. So I'm curious. It's a good point. There's probably more sensitivity in there than they think and so that's where I haven't had a chance to dive into and there are better experts than me on that. But so for those of you who are listening, who are serious experts on this stuff, that's the stuff to go look at and I'm sure MBA have they done the calculations correctly and taken all those things into account?
[David] Great point. If it's a labor report, I can guarantee you, they haven't done it correctly. It's going to be restated.
[Alice] They got a new auditor two years ago. So the report feels very, I don't know. I feel like I'm just reading a bunch of old facts and somebody plunked in 2024 numbers and didn't really think it through. When you look at the report year after year for as many years, I'm like, okay, for some reason, this auditing report felt more like a plug and play.
[David] And yeah. Really, it's gonna be really interesting who Trump puts in the head of HUD to see what that has. The ramification of that for housing program is of significant. So I'm sure that will all get looked at. And the good news is we have a lot of people on the hill that listen to our podcast. And so I'll never forget that time where I got a phone call from one of the lead major legislators and had me come in, and I wanted to sit down and talk. So anyway, we encourage you legislators that are listening to this to pay attention to the podcast. I'm glad to have it, thank you, Alice. Good job. Again, thank you to Union Home for having you allow us to participate in this as much as you do. Very grateful to have you and so grateful for the friendship.
Alice Alvey, Master CMB
Vice President Partner Education and Training at
Union Home Mortgage
8241 Dow Circle
Strongsville, OH 44136
D: 440.420.4294
C: 248.941.1939
She handles development of their World Class Training program designed to support UHM partners and organizational effectiveness.
Prior to UHM, Alice served as Senior Vice President at Indecomm leading the Indecomm-Mortgage U division, Internal QA and Compliance and SaaS technologies. Indecomm acquired Mortgage U in 2013, where Alice was President/Co-founder, providing training and consulting since 1996. Prior to MU she served as SVP of Operations at a national bank overseeing operations for wholesale, retail and correspondent from underwriting through servicing, and compliance.
She has been in the trenches of mortgage lending operations from application through servicing for over 30 years. Her authoring work in training content, policies and procedures and the FHA/VA Practical guides illustrates her ability to bridge regulatory requirements with day-to-day operations.
Alice has been a weekly contributor to the Lykken on Lending show since its beginning in April 2009 and has made her weekly contributions to 450+ episodes!
