May Real Estate Market Update With New Credit Scoring Options

We share a fast May 25 real estate market update, from mortgage rate movement back into the sixes to what the latest home price and sales reports suggest about demand. We also break down a major lending change: VantageScore is arriving sooner than expected, plus a simple birthday outreach habit that keeps us top of mind and wins repeat business. 

• Lenders testing VantageScore alongside FICO using a dual score model 
• Opening access beyond 20% down as some programs move toward normal guidelines like 3% down 
• Why automated underwriting matters and what changed with DU and LP support 
• Who to recontact right now: denied borrowers, thin credit profiles, first-time home buyers 
• Simple agent follow up tactics using birthdays, personal mail, and manual holiday texts

Call or text Nikki at 952-484-1584 to talk more about all the opportunity headed our way! Or email: Nikki@KevnikGroup.com. Find her on socials at MortgagesFromMNToAZ. 

Transcript

SPEAKER_01 0:01

All right. It's the week of May 25th, and here is your real estate market update.

SPEAKER_00 0:07

Hello, everyone. So after the kind of peace talks that happened over Memorial Day weekend, the market has responded favorably. So last late last week, we were up into the high sixes from an interest rate standpoint on a conforming 30-year fixed rate. We are now back down into that mid to low six range for today at least. Those positive responses for the peace deals, as long as those keep continuing, we expect the market to remain a little bit stable and maybe even move down towards the lower end. So good way to

Weekly Market Update Kickoff

SPEAKER_00 0:35

start off the week after a holiday. Case Schiller Home Appreciation Report came out today. What they do is they talk about appreciation year over year and month over month. Year over year, they're saying that the appreciation on average is about 1%

Rates React To Global Headlines

SPEAKER_00 0:48

year over year. As far as month over month goes, it has remained flat. So remember that this information is from the March numbers because they are a little bit delayed as they keep reporting in appreciation and from that standpoint. Also, the FHFA, which tracks home sales, says that home sales are up 2% year over year and up 0.7% month over month. Keep in mind that the

Home Price And Sales Reports

SPEAKER_00 1:11

FHFA does not include cash sales, they only include conforming loan sales. So actually, the numbers for government loans and things of that nature might actually increase that home sale number a little bit higher than what they report on the year over year, month over month basis. So the big change that has happened last week. We've been talking about this. We've been waiting for it. We thought it was going to take a lot longer, but we have lenders now that will use vantage score over that FICO score for qualifying borrowers right now. So what Fanny did is they sent out a kind of like a testing mode to certain lenders, including Rocket Mortgage, Penny Mac, United Wholesale, and New Res. They all have access to doing this vantage score model. I personally have access to the Rocket Loan, the Penny Mac loan, and the New Res loan. So I do have some resources

VantageScore Rollout For Mortgages

SPEAKER_00 2:01

that can help clients do a vantage score. As a reminder, FICO score is traditionally what mortgages have been taken, you know, have what mortgages have been based on, which is your credit history on debt that reports to credit. Whereas the vantage score can report a score based on things like rent, utilities, things that are not normally outside of the credit purview to help strengthen a borrower to be able to borrow from a mortgage standpoint. With that being said, the way that these models are running right now is we are running what's called a dual score model. We'll pull a FICO and a Vantage, try on the FICO if it doesn't work. We'll switch over to the vantage. First, most lenders put this out in for 80% or better conforming loans, which was kind of like this trial period. Well, of course, they didn't get a lot of response because people with who need to use this vantage score normally do not have 20% down on a conforming loan. And so they've now opened that back up as of this morning. A couple of the lenders have opened that up to normal lending guidelines, so as little as 3% down, in order to kind of test the market in that way and see who we need. With that being said, there is somewhat of an automated approval system. I think I had talked about how we run the FICO through the automated approval system, desktop underwriter. It's called DU or LP to get that automated approval. And where we were where we were kind of having technical difficulties was getting to run that vantage score through those two systems for the automated approval. But that actually has been taken care of relatively quickly. We were estimating 12 to 18 months, but it's here early and it's here now, and people are using it. So those are opportunities if you have clients who are first-time home buyers who were denied in the past, who had thin credit profiles, low credit history, things of that nature. Those are the clients that you want to reach out to. Anyone that was denied for a loan and anyone that you know was either a first-time home buyer or had some prior derogatory credit history that may have gone to the process of getting pre-approved, and then were told that they have two lower score or were told that they just didn't weren't qualify for automated approval and didn't meet the guidelines to qualify it for a manual approval. So those are going to be opportunities to reach back out to clients. I know for me personally, any pre-approvals that I've done in the last 12 months, I'm looking at anyone that I could not get pre-approved, reaching back out to them and seeing if we can get them approved from a vantage score standpoint. So yeah, very exciting news for the mortgage industry as a whole and hopefully opening us up to more buyers and ability to help people get into homes.

SPEAKER_01 4:32

Absolutely. And just this morning it changed again. Like you said, it is not taking as long as we initially thought. So that is why it's so important as agents to show up to this call every week or watch or listen to the recording because everything it's so much is changing at uh lightning speed. So appreciate you so much for staying on top of it and keeping us on top of it because I know three people that just came to mind for me. So it's definitely something to consider for certain. I love it. Absolutely, absolutely good. All right. Well, I wanted to talk about two going into June, just for agents out there. If you're not Facebook stopping your past clients or maybe prospects, it's a good thing to do. I just got up a call and there's a gentleman at my brokerage EXP, and he friends his past clients on Facebook and finds out their birthdays, and he sends actually birthday brownies and a cup for for their birthday, and then calls and texts them. So he sends that ahead of time. And it's just a really

Easy Client Outreach That Works

SPEAKER_01 5:40

interesting thing. I think a lot of us have gotten away from that. And he said, Yeah, I spent $200 a month, but I just got one of my clients gave me a friend, and that was $17, you know, thousand dollars in commissions that I got just from helping these people. So a lot of agents are coming to me. Yeah. If you have pre-approvals, ask your lender what the birthday is.

SPEAKER_00 6:00

We get that information upon application, and we have no problem sharing, you know, it's kind of public information, et cetera, and it's not considered a protected piece of information. And we don't give out the year, but we will give out the date. Um, so March 8th or whatever that is. And to be perfectly honest, I have in my database, I have probably 2,500 people a year that I wish happy birthday to via text. And you have no idea the amount of business that has actually brought me over the years. It's incredible because people it triggers in their mind and they go, Oh, yeah, I was gonna call you. Oh yeah, I was gonna contact you. Oh yeah, we're thinking about selling, you know, things of that nature. So I've gotten a lot of business over the years, literally just by texting or calling on a birthday.

SPEAKER_01 6:37

Yeah, top of mind, absolutely. And they had mentioned, I mean, if you think about it, even Christmas cards or holiday cards have gone down so much. Used to be able to line your whole door frame and half your house, and now you're lucky to get a handful. So you can still really stand out by sending someone a personal piece of mail. That's not a bill or a solicitation, it's about them. So just keep that in mind. I just have so many agents coming to me. Where do I buy leads? Where do I do this? Where do I do that? I'm like, haven't you been an agent for 20 years or 10 years? Like, how many past clients? Oh, I have 78. Okay, you have 78 people that you know you, like you, trust you, and would more than likely use you again. What if you got 10%?

SPEAKER_00 7:24

Right.

SPEAKER_01 7:25

You know, it's just it's so I just had to say that.

SPEAKER_00 7:28

I text a digital holiday card too as well. We do. We had manually and I manually text it. I don't use one of those services that does the automated text only because it then it doesn't come from my phone number and then they know it's automated. But I do take the time to send out those manual text holiday cards, even though they're digital, people love them. It still brings in business. And to be perfectly honest, it does take me two to three days, like committed two to three days, to send out 200 texts a day for two to three days. So I'm sending out six to seven hundred manual texts, and it does take time, don't get me wrong. And it is kind of a pain, but it is absolutely worth it because people then can I, you know, relate to you, they know they can see your face, they get their holiday message, and they remember you.

SPEAKER_01 8:09

Yeah, love it. Yeah, thank you, Nikki, for that. And that birthday, great. I yeah. So if you have any past clients and you don't have their birthdays and you want to get those, get in contact. Does Tidle have that as well?

SPEAKER_00 8:21

Would they give that a they do, but I'm not sure Tidal would share that information. I know that, like I said, we can share the date. We just can't share the year or, you know, because then it starts to from a privacy policy. But yeah, I mean, and we even have notes for certain clients who don't want to be wished happy birthday for certain cultural reasons or whatever that is. We have those notes as well. So it's definitely good to, you know, when you when you do get a birthday task, you know, hey, is there any, you know, is there can we wish you a happy birthday this year? Things of that nature.

SPEAKER_01 8:48

So absolutely. And I have agents that get overwhelmed. Do two a day, five a day, five a week, one a week. It's better than zero, but just start somewhere. It is and just start.

SPEAKER_00 9:01

Yes, absolutely. And it's funny because like we'll do it sometimes. I know, like in the past, I've done it on like a group text, and then one of the clients will text me and be like, Oh, so and so and I aren't, you know, together anymore. Hey, by the way, we both need to find housing. So that has happened to me as well, as embarrassing as that is, but it still was an innocent birthday text that resulted in multiple forms of business. So I know that that's happened to me at least a couple of times.

SPEAKER_01 9:24

Yes, absolutely. Well, Nikki, where do they find you?

SPEAKER_00 9:28

Uh, you can find me on Facebook or Instagram or TikTok at mortgages from MN to A Z. You can also call me or text me at 952-484-1584 or email me at Nikki at Kevinickmortgage.com.

SPEAKER_01 9:41

Perfect. Thank you so much. Now, agents, do this, take action, get out there and sell something, and we'll see you back here next week.