Expect another refi wave next month

The first quarter of 2020 may see a perfect storm for refis, according to this article in Bloomberg. Here’s a little background. Most mortgages get wrapped into bonds and sold to investors on the secondary market. For advisors to securities investors, predicting homeowner behavior is important. When homeowners refinance, that purchase mortgage is removed from the bond and investors can no longer rely on a return, as the underlying collateral vanishes. It’s called duration risk.

In this case, Wells Fargo is saying that 30-year mortgages have a heightened duration risk due to the expectation that rates may dip even lower, coming closer to the all-time low of 3.31% in November 2012.

According to the article, if rates do dip closer to that record, 60% of Fannie and Freddie borrowers, and 70% of FHA and VA borrowers may be incentivized with a refinance rate that’s 0.50% lower. As a result, investors are going into their specific pools of mortgages to measure duration risk.

Lenders, take heed, there could be a fresh opportunity here. 





Guaranteed Rate makes gains with tech & new branches

Looks like Guaranteed Rate is on a roll. In case you haven’t noticed, Guaranteed Rate made some impressive gains in the last week or so. Recently, the top mortgage lender ($37 billion in total funded loan volume in 2019) launched its 2020 Agent Partner Advantage Program, which aims to create a “best-in-class” home buying and selling experience with some new digital tools and products.

For its loan officers, Guaranteed Rate offers Red Arrow Connect, a multi-faceted Customer Relationship Manager platform used to help them and their agents stay connected with leads and potential buyers. 

The company is also making some non-tech expansions. They opened a new branch in Hudson Valley, New York and another one in Cumming, Georgia. It also named Top Originator (Scotsman Guide) Marc Demetriou vice president of mortgage lending for the northern New Jersey area, to boost lending operations in that market, too.

CVS plans to exceed the $67MM it invested in affordable housing in 2019

Hats off to CVS. The healthcare company doesn’t just recognize the connection between health and affordable housing, it’s actually doing something about it. It’s often overlooked, but healthy lives start with a combination of elements: access to fair banking, fresh groceries, clean water, and especially affordable housing. And CVS is putting its money where low-income mouths need it most.

To help provide support to underserved populations across the country, CVS Health invested $67 million in affordable housing in 2019. The investments helped to create more than 2,200 affordable homes with supportive services for individuals and families across 24 cities in six states.

What’s more, CVS said it plans to exceed those goals this year. “Providing affordable housing options to people who are facing significant challenges can be their first step on a path to better health,” said Karen S. Lynch, Executive Vice President, CVS Health and President, Aetna Business Unit.  

How deep do its pockets go? Since 1997, CVS Health and Aetna, a CVS Health company, have combined to invest more than $1 billion in affordable housing and community investments. These investments have led to the building and renovation of over 93,000 affordable rental units, positively impacting hundreds of thousands of low-income individuals, families, and seniors.

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