Nov. 2: Job market suggests lower rates; vendor news; Saturday Spotlight: TransUnion; Moet & Chandon vending machines?

A recurring theme with humans is food and shelter. At this point, for many in our business, mortgages may not be considered a “growth” industry. Yes, there are shifts in market share, and the MBA is predicting a 25%+ increase in 2025 over 2024, but dramatic growth for anyone will be a tough battle that can be financially rewarding. But growth can come from surprising places, so maybe you should invest in… vending machines? The vending machine business is an $18.2 billion industry in the U.S., with its 3 million machines typically generating around $525 per month in revenue. There are outliers, though, (Moet and Chandon!?) and as convenience becomes a premium, more and more sophisticated vending machines are coming online and getting rolled out throughout North America, building on success abroad. In the United States and Canada, the hot food vending machine sector is now worth $4.8 billion, and lots of robotics companies are coming up with ways to deliver pasta, burgers, and groceries autonomously by vending machine. The fresh food vending segment is projected to hit $8 billion by 2029, which will potentially expand the viable times for a nutritious bite.

Saturday Spotlight: TransUnion.com

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“Helping organizations address unique market challenges and opportunities.”

In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).

Established in 1968 as a railroad leasing company based out of Chicago, decades of investments in technology, strategic growth and acquisitions, and ongoing expansions into new areas like fraud, marketing, and customer-driven analytics, have drastically broadened our capabilities and transformed us into the leading credit reporting agency you know today.

TransUnion offers thousands of B2B solutions designed to address the unique needs of businesses across multiple industries. Mortgage lenders choose TransUnion for our identity-focused, data-driven mortgage insights and solutions, enabling them to achieve more desirable lending outcomes in a volatile housing market.

Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why.

We strongly encourage our associates to volunteer their time and give back to the communities where we operate, providing paid time off to those who participate (in 2023, employees recorded 6,675 volunteer hours). In addition, TransUnion has an established corporate giving program through which we donated nearly $4M in 2023 to community organizations focused on the advancement of economic inclusion, education, racial equity and others, on top of matching $525K in associate donations to eligible non-profits.

What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?

Our ongoing aim is to build a culture where everyone feels they’re in the right place and empowered to succeed. This includes offering tuition reimbursement, enterprise inclusion programs, and promoting participation in business resource groups. Our internal learning hub connects associates with a variety of educational programs and opportunities, in addition to offering career coaching, self-service mentoring guides and development resources.

Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.

TransUnion operates as a hybrid-first workplace, and we regularly run (and action inputs from) company-wide surveys that encourage employee feedback. In the most recent survey, 86% of respondents reported being satisfied with the flexibility TransUnion offers.

Things you are most proud of that don’t have to do with sales:

TransUnion’s commitment to expanding financial inclusion is a big reason many of us are proud to work here. Our partnerships with credit unions like VyStar and non-profits like HomeFree-USA help further our goal of expanding mortgage access and education to underserved consumers. For instance, we provide credit education tools (such as our CreditViewTM Dashboard) to HomeFree-USA which aims to help people of color on their homebuying journeys. And collaborations with organizations like FinLocker and MoCaFi support efforts to empower Black Americans building credit and wealth through homeownership.

Is there anything else you’d like to share along these lines?

We always aim to meet our customers where they are, and in a mortgage market that remains tumultuous and unpredictable, helping lenders meet financial goals is a high priority. One current area of focus is preapprovals. When mortgage lenders determine consumers’ creditworthiness earlier in the approval process, they can more easily ensure their time and resources are being invested for the right buyers. This customer-centric focus plays a large role in why lenders choose TransUnion, and we aim to continue delivering on their high expectations in the years to come.

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.) 

A slowdown in the labor market should lead to lower rates

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Nonfarm payrolls in the United States rose just 12k last month, below consensus expectations for a 100K gain. It is clear that the hurricanes and strikes reduced employment growth below what it otherwise would have been. That said, the continued softening in employment conditions was consistent with the other labor market data released this week. A 25 bps rate cut at next week's FOMC meeting seems highly likely according to experts.

MBA SVP and Chief Economist Mike Fratantoni had some thoughts. “The numbers showed a notable slowdown in the labor market, with an increase of only 12,000 jobs for the month. There were increases in government and health care sector gains and job losses in temporary help and manufacturing. Beyond this slowdown in October, job gains from the prior two months were revised down by a cumulative 112,000 jobs.

“While the unemployment rate was unchanged for the month at 4.1%, the household survey did show a 368,000 decrease in employment, with an estimate that more than 400,000 individuals left the labor force as job seekers pulled back from the market in the face of a slower pace of hiring across the country. This continues a theme we have seen in recent months, where the labor market is not seeing large layoffs but instead an ongoing reduction in job openings and a reluctance by employers to add workers. That said, wage growth remained steady at a 4% annual rate.

“The MBA is forecasting a slowdown in the pace of economic growth beginning in this quarter and extending through 2025 and expects that the Federal Reserve will respond by continuing to cut rates at a steady pace over the next year. Longer-term rates, including mortgage rates, have largely priced in this expected path by the Fed, but today’s news is likely to bring mortgage rates somewhat lower as it adds more evidence that the economy is on a path to slower growth.”

National Association of REALTORS® Chief Economist Lawrence Yun also chimed in. “Job additions in October were light, with only a 12,000 net gain, but this could partly be attributed to a special one-time factor: The impact of recent hurricanes. However, the fact that job figures were revised lower in the prior two months, by 112,000 in sum, clearly hints at a slowdown in the economy. At the same time, the unemployment rate remains low at 4.1%. The tight labor market is pushing wage growth to 4%, now outpacing one-year consumer price inflation and home price rises.

“The number of Americans out of the labor force and uncounted by statistics remains high at 101 million. Many are retirees and students. However, the fact that five million quickly left the labor force when COVID-19 arrived, and the number hasn’t come down since then, is why there are so many ‘help wanted’ signs across America.

“Today’s job report means that the Federal Reserve will make a rate cut at least one more time before the end of the year. Several more cuts are also likely in 2025. That does not mean mortgage rates will fall in lockstep. The large issuance of Treasury bonds to fund the swelling budget deficit has prevented mortgage rates from falling deeper. The deficit problem is not just in the U.S. but worldwide. That is why the dollar can remain strong. However, the rise in gold prices reflects investors’ unease about government finances across the globe."

Third party provider tidbits

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Call them vendors or third-party providers, they’re doing a lot.

Stairs Financial, an industry-leading marketplace for 1st time buyers, has been recognized as a certified integration partner of the Optimal Blue PPE, the mortgage industry’s most widely used product, pricing, and eligibility engine. “This collaboration will enable Stairs Financial to display lender 1st-time buyer and down payment assistance programs in a complete and transparent way, not currently offered anywhere in the market. “This strategic partnership underscores Stairs Financial’s commitment to utilizing advanced technology to provide comprehensive solutions for 1st-time homebuyers. By integrating the Optimal Blue PPE with Stairs Financial's user-centric marketplace, prospective homeowners can expect a seamless and efficient experience as they choose the right loan program and lender for their needs.”

CampusDoor , an Incenter company, and LoanSense unveiled a program to supercharge lenders’ ability to lower these high-potential borrowers’ student loan payments, improve their debt-to-income (DTI) ratios, increase their homebuying budgets, gain a competitive advantage as their advocates, and put more of them into homes. “The program, which they are testing with a select number of lenders, alerts loan officers to borrowers who would benefit from student loan refinancing, provides marketing support to reach these borrowers, and then automates the refi process, without adding significant technology costs. It lowers the number of borrowers who would otherwise be declined and empowers lenders to increase their sales volume. The initiative combines LoanSense’s expertise at unlocking savings for homebuyers with government student loans, and CampusDoor’s leadership in private student loan origination and refinancing.”

“CampusDoor’s turnkey, white-label private student loan origination platform provides lenders with the underwriting and compliance expertise and back-end infrastructure for a superior borrower experience. The firm also provides lenders with marketing assistance and its clients do not need to balance sheet the student loans. Lenders who would like to participate in the CampusDoor/LoanSense launch should contact Sara Parrish or Cat Kaiyoorawongs.

INB, N.A., a locally owned bank and leading Central Illinois provider of escrow services to mortgage customers is addressing rising concerns over increased mortgage payments stemming from higher homeowner insurance premiums and property taxes. As these costs continue to climb, customers are experiencing significant impacts on their monthly payments, prompting an increase in inquiries to INB's mortgage operations. "Our customers are understandably upset," said Steven Day, AVP, Loan Servicing Manager at INB. "We've seen instances where mortgage payments have increased by as much as $939 a month. It can be a substantial burden for many homeowners." Day highlighted that these rising costs are affecting everyone, leaving limited options for customers seeking relief. INB advises homeowners to explore alternatives such as shopping for a different insurance carrier or appealing their property tax assessments with their local county. However, either option might not change things. Homeowner insurance rates in Illinois have increased 20 to 30% in the last 12 months, and tax appeals often provide disappointing results.

FormFree®, a leader in financial technology since 2007, announced several enhancements to its customer acquisition marketplace, FormFree Exchange (FFX). Topping the list of enhancements is the auto-matching capability, connecting borrowers and lenders in seconds. FFX is the world's first marketplace that obsesses about consumers and helps lenders and borrowers find the right match. By delivering a 1-to-1 connection and ensuring that consumers have complete control of their data, FFX is compliant with both TCPA and Rule 1033. Using FormFree’s Passport, consumers can share all the core financial data required by loan underwriters including identity, assets, income, employment, credit history and cash-flow data in seconds, which generates a financial identity report and includes a Residual Income Knowledge Index (RIKI).

Ray White passed along some information on turkeys; and not the usual, “When it rains, they drown because they stare at the sky with their mouths open.”

While sitting down to enjoy turkey during the Thanksgiving holiday later this month, remember that although wild and domestic turkeys are genetically the same species, that’s about where the similarity ends.

“The wild turkey in a sprint can outrun a galloping horse for a short distance,” said Charles Ruth, Big Game Program coordinator for the S.C. Department of Natural Resources (SCDNR). “Although it is one of the largest game birds, weighing between 15 and 25 pounds, it can fly distances of more than a mile, sometimes at speeds of 55 miles per hour.”

Don’t ask a barnyard bird to try any of those feats! The domestic turkey lost its ability to fly through selective breeding that created heavier, broad-breasted birds, a feature much desired by chefs and commercial turkey producers. The shorter legs of the domestic turkey also mean it can’t run as well as its wild cousin.

In contrast to the heavier domestic bird, the wild turkey is slim, tall, and long-legged. Factor in its keen eyesight, hearing and native cunning, and the wild turkey makes a difficult target for human and animal hunters alike.

The separation of the wild and domestic turkey began hundreds of years ago, according to Ruth. Native Americans had accomplished the domestication of turkeys before Europeans set foot on the continent. Turkey bones have been found in Indian burial mounds in Tennessee, Kentucky, and some other parts of the South, and turkeys were being raised in Mexico and Central America for more than 500 years before the Spanish arrived. Turkey relics have been found in Arizona dating as far back as 25 A.D., and turkey-raising may well be one of the oldest forms of organized meat production in the Northern Hemisphere.

Spanish explorers took Mexican wild turkeys domesticated by the Aztecs home to Europe in about 1519. These now domesticated turkeys then spread rapidly through Europe and were introduced in England between 1524 and 1541, where they were highly sought after for gourmet dinners.

After the domestic turkey spread across Europe in the 1500s, the colonists who settled the New World brought these tasty birds with them across the Atlantic back to the land of their origin. Imagine the pilgrims’ surprise to find the turkey already one of the most plentiful foods of the American Indians.

Domestic stock from Europe was eventually crossbred with the wild turkeys of North America, leading to the six most common standard domestic varieties in the United States: Bronze, Black, Narranganset, Bourbon Red, Slate and White Holland.

While the attributes of wild turkeys have been historically important in enhancing domestic breeds, the flow of genetic material in the other direction is not encouraged. State law prohibits the release of pen-raised turkeys due to the possibility of introducing disease into wild birds and because of the danger of contaminating the wild turkey gene pool.

But Ruth said because domestic turkeys lack the “wood smarts” of their wild cousins, they generally fall prey to a host of hungry predators such as bobcats, foxes, or coyotes before getting a chance to breed with native birds.

Here are some “Turkey Trivia Tidbits” to contemplate during this season of Thanksgiving:

An adult wild turkey has about 5,500 feathers, including 18 tail feathers that make up the male's distinct fan.

Wild turkeys can fly and have a top flight speed of about 55 miles per hour.

Wild turkeys see in color and have excellent daytime vision, three times better than a human's eyesight, with a visual field of more than 270 degrees.

The wild turkey is an omnivore. It feeds on acorns, nuts, seeds, berries, greens as well as insects, small amphibians, and reptiles.

Turkey droppings tell a bird’s sex. Male droppings are j-shaped; female droppings are spiral-shaped.

The male turkey’s head can be red, white, blue or a combination of all three. The wild turkey's bald head and fleshy facial wattles can change color with excitement in seconds.

The flap of skin that hangs down over a turkey's bill is called a snood and can change color, size, and shape based on mood and activities.

Adult male turkeys are called toms, and females are called hens. Very young wild turkeys are called poults, juvenile males are jakes, and juvenile females are jennies. A group of turkeys is called a rafter or a flock.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you're interested, visit my periodic blog at the STRATMOR Group web site. The current STRATMOR blog is titled, “Help Borrowers Tap Into $36 trillion Available in Home Equity.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2024 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)