Saturday AM Economist: Mortgage Update & Authorized User Accounts!

Welcome to this edition of my Saturday Morning Economist, where I'm sharing the latest mortgage market updates, along with additional information and insights that I believe you may find helpful.

Mortgage Market

The start of this week began with rates decreasing after the Treasury Department's Q1 bond issuance announcement was smaller than anticipated. On Wednesday, the FED held benchmark short-term rates steady, stating that the central bank is encouraged with how inflation is trending, but needs to see further improvement before reducing rates. Friday's massive employment report showed the labor market is poised to support broader economic growth, perhaps vindicating the Fed's decision to hold rates steady and continue monitoring inflation data.  This surprisingly strong employment report increased mortgage rates, erasing gains from earlier in the week with terms for most programs ending the week the same or slightly higher.

Next week is light on economic reporting and I'll be monitoring additional guidance on future monetary policy as well as Treasury auctions for any potential impact on mortgage rates.

CNBC: Blowout January Jobs Report & Rate Cut Timing 

FED: Federal Reserve FOMC Statement (Jan - Meeting)

Did You Know?

Topic: Authorized User Accounts

Did You Know that Authorized User Accounts do not count towards a borrower's credit history regardless of AUS approval (automated underwriting) and regardless of a payment being included in their debt ratios.

Fannie Mae's guideline states, "For borrowers with traditional credit, a minimum number of tradelines is not required as long as the borrower has a credit score.". This is true in the sense that there is no required number of tradelines that must be available, however the credit history still needs to be reviewed to confirm if there is sufficient credit history to make an underwriting decision. Authorized user accounts do NOT count towards sufficient credit history. These accounts are fine to have but it can be an issue when the authorized user account(s) is the only credit history or majority of the credit history that the borrower has and can lead to false positives on preapprovals.

Please reach out to me if you have any questions or would like us to review a credit profile for sufficient credit history.

Economic Data Points:

If you have any questions, please let me know, I'm always happy to help both you and your clients.