Mortgage – HousingWire

Aslan CEO on the benefits of higher mortgage rates

Posted: 21 Apr 2022 07:40 AM PDT

The HousingWire award spotlight series highlights the individuals who have been recognized through our Editors' Choice Awards. Nominations for HousingWire's Women of Influence award are now open through Friday, April 29, 2022. Click here to nominate someone you know — it can even be you!

As interest rates continue to climb and mortgage applications decline, many in the industry are dreading what's to come for lenders. But Carrie Gusmus, President and CEO of Aslan Home Lending Corporation, has a more positive outlook despite the current headwinds.

"Higher rates can help level off the runaway growth in prices in some markets and lower the level of stress for homebuyers brought on by the high-stress offer environment," said Gusmus.

Gusmus lives in Colorado, where home prices have soared in the past year, becoming unaffordable for many. "Homebuyers may feel the pinch of the higher payment based on the higher rate, but they may also be more successful at getting a home under contract and closed."

Gusmus was selected as a 2021 Women of Influence, which recognizes the outstanding efforts of women in the industry who are driving the housing economy forward. At Aslan, a 100% woman-owned business, Gusmus has assembled a team of powerful and collaborative female leaders who have helped the company achieve aggressive growth over the years.

HousingWire reached out to Gusmus for industry insights during a unique time in lending and to learn more about her experience as a female executive in a male-dominated industry.

HousingWire: How is the fast-rising interest rate landscape impacting housing right now and what do you think the impact will be for the coming years?

Carrie Gusmus: I’m actually a little thankful for this fast-rising rate environment. I’m located in Colorado. Here, like many markets, rapidly rising home prices are causing much of the metro area to be unaffordable for families and singles. The fast rising rates, confirmed by agents I’ve talked with too, are causing housing prices to possibly plateau. In addition, finally homes that might have had double-digit offers when rates were in the 3s are seeing fewer offers with rates in the 5s. Higher rates can help level off the runaway growth in prices in some markets and lower the level of stress for homebuyers brought on by the high stress offer environment. Homebuyers may feel the pinch of the higher payment based on the higher rate, but they may also be more successful at getting a home under contract and closed.

HW: The future of the digital mortgage and mortgage tech have been a topic of interest in recent years. What advances are you seeing being made and how has adoption changed over the past year?

CG: What we’ve seen over the past few years is that the fully digital mortgage is a fail. There is only a very small percentage of the population that can self-help their way through the entire process. Where giant strides have been made to simplify the process through digital mortgage platforms is where we are seeing combined tools. POS, LOS, CRM, pricing engines, doc-less verifications — all integrated into native solutions, not clunky, expensive API integrations.

The future of digital mortgage isn’t removing the mortgage expert and clients helping themselves. The industry proves time and again too complex for that model. The future of digital mortgage is fully mobile seamless technology enhanced by professional consultative relationships. The technology is changing so fast, platforms are available today that providers said were not possible just two years ago. If you aren’t married to an expensive long-term technology platform and contract, you’re able to embrace technology making a simpler, more streamlined process for your clients and your teams.

HW: As a leader, you facilitate quarterly coaching sessions for Aslan employees to become “the best versions of themselves.” What advice do you have for young professionals, particularly women, who are entering the mortgage industry?

CG: At Aslan, our team has a higher than average percentage of loan officers who are under 30. My advice to them, and to all young professionals is really a question. What are you waiting for? I bought my first house at 22 and was a highly successful sales professional by 25. In your 20s or 30s you can lead production channels, you can lead divisions, you can lead companies. You are only limited by the limits you impose on yourself.

But you have to do the work. Be the expert. The reason that we hold quarterly personal and professional development days is so our people have time to envision their lives, believe they can make those visions reality, and plan their execution strategies. There are few worthwhile things that are easy. But do not use the excuse of age or gender as a limiting factor.

I look for women who are in their 20s and 30s who are capable and want my role and those of the rest of our executive team. Those are the women and the people I want to hire. If you’re a young professional woman, find someone who has what you want professionally and is willing to mentor you to your own success. Maybe that’s just one level up from where you’re starting, maybe it’s 12. I would not be where or who I am without the mentorship and coaching of other amazing people, both women and men.

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Purchase mortgage rates climb to 5.11%

Posted: 21 Apr 2022 07:00 AM PDT

After crossing the 5% threshold last week, mortgage rates have provided no indication that they’ll drop below that mark anytime soon. Rates are moving north for the seventh consecutive week, according to the latest Freddie Mac PMMS.

Purchase mortgages this week averaged 5.11%, up 11 basis points from 5% a week ago. A year ago at this time, 30-year fixed-rate purchase rates were at 2.97%. The GSE's index accounts for just purchase mortgages reported by lenders over the past three days.

According to Sam Khater, Freddie Mac's chief economist, mortgage rates move as Treasury yields continue to rise, causing volatility in demand. "It continues to be a seller's market, but buyers who remain interested in purchasing a home may find that competition has moderately softened," he said in a statement.

Another index shows mortgage rates even higher. Black Knight's Optimal Blue OBMMI pricing engine, which considers refinancings and additional data from the Mortgage Bankers Association (MBA), measured the 30-year conforming mortgage rate at 5.3% on Wednesday. Meanwhile, the 30-year fixed-rate jumbo was at 4.8%.

Mortgage rates are following the Federal Reserve's (Fed) inflation-fighting monetary policy. The central bank has signaled that it will raise rates more six times in 2022, and likely several more times in 2023.

Also, the Fed since early March has been letting its purchases of mortgage-backed securities run off. There is consensus from the Fed governors to stop replacing up to $35 billion of maturing MBS assets each month.

Cutting the Fed's monthly MBS purchase tally will create a lot of new supply in the market, which will likely further increase pressure on interest rates, and could be amplified by other potential world events, Lawrence Yun, chief economist for the National Association of Realtors, recently told HousingWire.

According to economists, the tightening monetary policy will reduce originations in 2022 and 2023, and can also bring a recession to the U.S. economy next year.

Higher rates are reducing borrowers' demand. Mortgage applications dropped 5% from the past week, and refi applications were down 68% from a year ago, according to MBA. Just 2% of homeowners can save money by refinancing these days, a Fannie Mae survey showed.

This week, Fannie's Economic and Strategic Research (ESR) Group dropped its projected single-family mortgage origination volume for 2022 from $3 trillion to $2.8 trillion. It also downsized the 2023 forecast from $2.7 trillion to $2.4 trillion. To compare, in 2021, the total was $4.5 trillion.

"Data from U.S. economic history suggest that successfully negotiating a 'soft landing' requires monetary tightening to be pre-emptive rather than responsive," Doug Duncan, Fannie Mae senior vice president and chief economist, said in a statement. "As such, we've updated our 2023 forecast to include a modest recession, but one that we do not expect to be similar in magnitude or duration to the recession of 2008."

The 15-year fixed-rate purchase mortgage averaged 4.38% with an average of 0.8 point, up from 4.17% the week prior, according to Freddie Mac. The 15-year fixed-rate mortgage averaged 2.29% last year. The 5-year ARM averaged 3.75% with buyers on average paying for 0.3 point, up from last week's average of 3.69%. The product averaged 2.83% a year ago.

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