Movement Mortgage brings on Chadwicke Earnest as new regional director

America’s mortgage lenders are now projected to exceed $2 trillion in origination volume come years end, primarily thanks to the nation’s low-interest-rate environment, which has spurred a significant uptick in purchasing demand.

Movement Mortgage, a company that closed $11 billion in loans in 2018 and is currently on track to close more than $15 billion in 2019, has plans to grow its production volume even larger.

The North Carolina-based lender, which currently operates in 49 states with about 650 branches and 3,500 employees, recently announced the launch of an expansion into the Texas and Oklahoma housing markets.

With strategic recruiting, marketing, and operational alignment, Movement believes the region is on pace to achieve $1.5 billion to $2 billion in annual loan volume by the end of next year.

Photo by: Michael Shea Photography

Leading the effort is Chadwicke Earnest,
who has joined the company as the new regional director for those states. Earnest
brings 11 years of experience to Movement and previously served as a division
president at AmCap Mortgage.

By bringing on Earnest, Movement is planting a flag in the region, which the company projects will be one of their fastest-growing areas in 2020 and beyond.

To drive this growth, Movement plans to focus its efforts on expanding its underwriting capabilities as well as utilizing Earnest’s leadership skills.

In an exclusive interview, Earnest, who announced his hire with an MTV Cribs inspired video, explained his motivation for joining the rapidly growing company.

“As you start to grow through a leadership path in this industry, words like vision and mission and most importantly, alignment, become important factors,” Earnest said. “Movement stands for so much of what I stand for, which is servant leadership and giving back to the community.”

Prior to
entering the mortgage industry, Earnest worked in critical care for more than a
decade. Back in those days, a lot of his time was spent caring for those in
need of help.

Although Earnest
is no longer apart of the medical field, his mission remains the same –
offering a helping hand to those that need it the most.

“Movement Mortgage
really cares about their employees, and that was the first thing I saw when I
walked the halls of Movement,” Earnest said. “It’s really not an anonymous feeling,
there’s a real sense of relevance and connectivity.”

Movement’s connectivity
transcends past its halls, as the company has traveled thousands of miles to bring several communities
humanitarian aid.  

The company’s nonprofit organization, Movement Foundation, is the majority owner of its business. Movement’s profits are paid to the foundation and used to fund investments in the U.S. and around the world.

Since 2012, Movement Foundation has invested more than $40 million in a number of initiatives, including the construction of community centers and churches in Guatemala, El Salvador, and Honduras.

Notably, the company has also taken its humanitarian work to Uganda, where it worked to construct a commercial farm that now creates jobs for the people of the Gulu region, who are still recovering from a decade of civil war.

The foundation has also invested in two
public charter schools in Charlotte, North Carolina, bringing education to
areas of the city with high rates of poverty and with large populations of immigrants
and refugees.

Movement’s dedication to bettering communities around the world is what initially attracted Earnest to the mortgage lender, as he and his wife, a native of Honduras, have spent many years working to build hope centers for Central America’s underserved communities.

“I was working in Central
America, with my wife prior to joining Movement, and during that time, I found
out the company was heavily involved with humanitarian work in Central America,”
Earnest said. “So, it was just the perfect match.”

Earnest now intends to
continue this work in the Lone Star State and beyond.

“Planting a Movement School in Texas would be a dream come true,” Earnest said. “In addition, I am focused on leadership, in partnership with the Movement Foundation and ICM, to build new Hope Centers to Central America and share the love of Christ with more than 200,000 people.” 

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Source: HousingWire Magazine

St. Louis Fed report: Down payment assistance not linked to default risk

The report from the Federal Reserve Bank of St. Louis has the term “cautionary tale” in its title: “A Cautionary Tale of How the Presence and Type of Down Payment Assistance Affects the Performance of Affordable Mortgage Loans.”

But, it’s not the type of warning you might expect a decade after risky lending resulted in about 10 million foreclosures. This is a report about the danger of restricting down payment assistance, or DPA.

“Our multivariate analysis indicates that the receipt of DPA is not significantly associated with default risk,” said the report from Michael Stegman, a senior fellow at the St. Louis Fed, Sarah Riley, a senior research economist at the University of North Carolina at Chapel Hill, and Roberto Quercia, a professor at the same university.

“In setting guidelines around down payment assistance, policymakers should take care not to close off opportunities to aspiring minority homebuyers,” it said.

Down payment programs are seeing “explosive growth,” the paper said, as first-time buyers with student loan debt and stagnant wages find it more difficult to find the money they need to get a mortgage. Stegman, one of the authors, said in an email saving for a down payment is one of the biggest barriers to homeownership.

“What is most striking about this return to high-leverage home lending is the proliferation of more than 2,500 privately sponsored and government-funded down payment assistance programs across the country, which have the collective effect of reducing first-time homebuyers’ contributions from as little as 3% to something substantially less,” Stegman said.

The 64.8% share of American households that own their residences increased from 64.1% in the second quarter, the Census Bureau reported on Tuesday. The rate has been trending higher since reaching a five-decade bottom in 2016.

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Source: HousingWire Magazine

ATTOM: Zombie foreclosures are ticking down

The amount of vacant homes in the U.S. continues to sit at a lull, slowly ticking down, according to a new data set from ATTOM Data Solutions.

In the fourth quarter of 2019, there were 1,527,142 single-family homes and condos left vacant, representing 1.5% of homes in the U.S.

In Q3, 1.6% of homes were vacant in the U.S., meaning there was a small tick down in the vacant home sector in this quarter.

According to the report, there were about 288,300 homes in the process of foreclosure, with 8,535 considered empty, also known as zombie foreclosures.

This is down to 2.96%, compared to the 3.2% of properties in Q3.

“The fourth quarter of 2019 was a repeat of the third quarter when it came to properties abandoned by owners facing foreclosure: the scourge continued to fade. One of the most visible signs of the housing market crash during the Great Recession keeps receding into the past,” said Todd Teta, chief product officer with ATTOM Data Solutions.

“While pockets of zombie foreclosures remain, neighborhoods throughout the country are confronting fewer and fewer of the empty, decaying properties that were symbolic of the fallout from the housing market crash during the recession,” Teta said.

Washington, D.C. continues to have the highest percentage of zombie foreclosures, at 10.5%. Kansas (7.9%); Oregon (7.9%); Montana (7.4%); Maine (6.7%) and New Mexico (5.8%) are all states that sit above the national average of zombie foreclosures, which is 2.9%.

New York had the highest number of zombie properties, with 2,266. Florida followed with 1,461; Illinois with 892; Ohio with 823 and New Jersey with 398. However, these numbers were all lower than they were in Q3.

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Source: HousingWire Magazine

Guaranteed Rate, real estate brokerage @properties partner to launch mortgage lending venture

Guaranteed Rate is already part of a joint venture with one of the nation’s largest real estate companies, with Guaranteed Rate Affinity marketing mortgages across the Realogy family of real estate companies, but Guaranteed Rate isn’t slowing down.

The company announced this week that is partnering with @properties, one of the biggest real
estate brokerages in the Midwest, to launch a new mortgage lending joint

The new company, which is set to launch in early 2020, will
be called Proper Rate.

According to the companies, the new mortgage company will “deliver
a high-end, customer-focused retail mortgage lending experience.”

@properties has 2,800 agents and 30 offices in Chicago,
surrounding suburbs, and Southwest Michigan, Northwest Indiana, and Southeast
Wisconsin. The company bills itself as the “largest residential brokerage firm
in the Chicago metro area.”

And now, @properties real estate agents will be able to
offer a mortgage experience powered by Guaranteed Rate.

“We have a vision for an independent mortgage company built
around relationships between borrowers, real estate agents, loan originators
and other key stakeholders in the real estate transaction,” @properties
Co-founder and Co-CEO Thad Wong said. “In Victor and Guaranteed Rate, we
found a partner that is eager to help us realize this vision while leveraging
industry-leading technology, systems and support.”

Wong’s partner as co-founder and co-CEO, Mike Golden, said
that the move will help the brokerage customers and agents alike.

“Proper Rate will allow us to more seamlessly integrate the
entire real estate transaction, from brokerage to mortgage financing to title
and closing services, resulting in a better experience for the consumer and
increased value for the real estate agent and loan originator managing the
transaction,” Golden said.

According to the companies, Proper Rate’s loan origination
platform will feature a “complete digital mortgage, an easy-to-understand,
transparent loan process with competitive pricing” and expertise from loan

“This is a unique opportunity for us to accelerate growth by working together with one of our most trusted and best-in-class business partners,” said Guaranteed Rate Founder and Chief Executive Officer Victor Ciardelli.

“Thad and Mike have built an incredible business over the
last two decades and we are thrilled to form this joint venture with them,”
Ciardelli added. “@properties has a proven track record of creative innovation,
seamless operations and strong brand loyalty. We are very much looking forward
to introducing Proper Rate to homebuyers in select markets across the U.S.”

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Source: HousingWire Magazine

PrimeLending promotes its president to CEO

PrimeLending, the mortgage lending subsidiary of PlainsCapital, announced this week that it promoted Steve Thompson it its president and CEO.

Todd Salmans will continue to serve as the company’s chairman.

Thompson will take over as CEO on Jan. 1, 2020.

Thompson joined PrimeLending in 2011 as the regional manager for the Southwest. The company later promoted Thompson to Western division manager, and later to national sales leader.

In 2017, PrimeLending promoted Thompson to the role of president of the company. In that role, Thompson led the company’s 1,300-plus loan originators nationwide, as well as taking on responsibility for national operations, capital markets, joint ventures, and marketing.

Before he joined PrimeLending, Thompson held numerous leadership and production positions within the mortgage and financial services industry, including key roles at several prominent nation-wide mortgage lenders.

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Source: HousingWire Magazine

What helped Cullen/Frost expand its 3Q margin

The San Antonio company said it withstood rate pressures because it has been ahead of the game in deposit pricing over the last two years.
Source: American Banker

Carson: No changes coming to FHA mortgage insurance premiums, HECM rules

When the Federal Housing Administration’s flagship insurance fund finally surpassed its congressionally mandated capital threshold of 2% in 2015, it was seemingly a cause for celebration.

It was, after all, the first time the Mutual Mortgage Insurance Fund had exceeded its required ratio since 2008, but Department of Housing and Urban Development Secretary Ben Carson said earlier this week that exceeding 2% isn’t good enough.

In an interview, Carson told HousingWire that he would like to see the MMI Fund at more than double its mandated threshold of 2%, and because of that, there won’t be any changes made to FHA mortgage insurance rules or premiums this year.

Carson revealed this news earlier this week in an interview
with HousingWire conducted at the Mortgage
Bankers Association
’s Annual Conference in Austin, Texas.

While giving his keynote address, Carson told the crowd that
HUD and FHA plan to build the MMI Fund’s capital ratio well beyond 2%,
intimating that there will likely be no changes to FHA mortgage insurance
premiums this year.

Later, HousingWire asked directly if that meant that there are no anticipated changes to FHA mortgage insurance premiums coming this year. To which Carson replied, “Correct.”

In Carson’s view, the MMI Fund should be much stronger than it has been in recent years before the agency makes any changes to FHA mortgage insurance rules.

“We want clearly (for the MMI Fund) to be to robust,” Carson told HousingWire, adding that additional changes that could be made to FHA lending rules to increase credit availability if the fund was at a higher level.

“You know, there was a time the MMIF was like 6%,” Carson said. “That gives you a lot of flexibility. When it comes to experimenting with things, maybe looking at alternative credit sources, there are a lot of things you can do when you’re up at 6% that you can’t do when you’re at 2%.”

While Carson discussed the possibilities that would be
presented by the MMI Fund topping 6%, he said his goal for the fund’s health is
lower than that still beyond where it’s been in recent years.

“I definitely want to see it over 4%,” Carson told

HUD is due to release its annual actuarial report in
approximately two weeks. The report, which is typically released in
mid-November, provides insight into the health of the FHA’s insurance fund.

In recent years, the fund has remained above its mandated threshold of 2%. Last year, for example, the fund’s capital reserve ratio came in at 2.76%.

Much of the growth in the MMI Fund in the last few years has
been because of the FHA’s forward mortgage program, rather than the reverse
mortgage program, which has dragged the fund down.

And considering what kind of year it’s proving to be for the mortgage business, it’s likely that the MMI Fund will prove to be in good health this year.

But that doesn’t mean anyone should expect a FHA MI premium cut, even though there are efforts in Congress to see one put into place.

“I remember when I first came (to HUD), they said, ‘the
capital ratio is above 2%, we need to get a 25-basis-point reduction,’” Carson
told HousingWire. “And now we have some Congressional bills that have been put
forth that says we should give people a 25-basis-point reduction if they take
financial literacy courses, without any regard to what’s going on. It’s crazy

Carson is referring to The Housing Financial Literacy Act of 2019, or H.R. 2162, which stipulates that first-time homebuyers who complete a housing counseling program to learn about sustaining homeownership can get a 25-basis-point discount (0.25%) on their upfront mortgage insurance for an FHA loan.

The bill passed out of the House of Representatives earlier this year, but Carson doesn’t appear to be a fan of the bill.

In Carson’s view, he wants the MMI Fund to be even healthier
before making changes that could negatively impact it.

The fund’s health has improved over recent years, showing growth in five straight years, before declining last year.

Much of the volatility in the FHA fund in recent years has
been caused by the HECM (or reverse mortgage) portion of the portfolio.

The FHA worked to address that unpredictability in recent years, announcing new HECM rules in 2017 designed to stop the bleeding, but the new guidelines stifled the program and limited the pool of eligible borrowers.

Carson said that HUD feels good about the changes that were
made to the HECM program, but wants to do more.

“The hemorrhaging appears to have stopped,” Carson said, in
reference to the HECM portfolio. “But we’re still keeping a close eye on it.”

Carson said HUD is asking Congress to separate out the HECM portfolio from the forward mortgage portfolio because the two segments perform so differently on a yearly basis.

“We would like HECM to have its own capital reserve,” Carson said. “But, Congress will have to do that.”

If they do, Carson said, “everything becomes much more transparent” in terms of the HECM program and its associated costs and benefits.

“Right now, even though we’ve been able to achieve a
positive capital ratio, look at the drain that’s been going on,” Carson said.

Another change that FHA could enact is to remove the life-of-loan policy, which requires most FHA borrowers to maintain mortgage insurance throughout their entire loan term, regardless of how much principal is still owed.

In this way, the FHA’s mortgage insurance program works
differently from private mortgage insurance, which typically falls off after a
borrower reaches a certain principal balance.

The FHA’s policy wasn’t always this way.

The FHA’s previous policy of requiring borrowers to pay mortgage insurance premiums until the outstanding principal balance reaches 78% of the original home value, but the FHA instituted the life-of-loan policy back in 2013, as part of an effort to improve the health of the MMI Fund.

The FHA needed a $1.7 billion bailout in 2013, due to the significant shortages in the MMI Fund. As stated above, the fund’s health has improved, but not to the point that Carson is comfortable pursuing a change to the life-of-loan policy.

“Recognize that the life-of-loan policies apply differently to FHA then they would to private mortgage insurers, or even the GSEs,” Caron told HousingWire. “They have different obligations. Our obligation continues forever. Theirs’ don’t. It’s apples and oranges.”

The post Carson: No changes coming to FHA mortgage insurance premiums, HECM rules appeared first on HousingWire.

Source: HousingWire Magazine

New suit against Discover highlights lingering robocalling risk

The case — the card issuer’s third in six years — is an example of the legal peril that banks and other companies continue to face over the use of automated phone calls for debt collection and other purposes.
Source: American Banker

House bill would mandate congressional visits by big-bank CEOs

Rep. Ayanna Pressley, D-Mass., has proposed requiring annual testimony by the heads of the U.S. “global systemically important” banks.
Source: American Banker

PeerStreet rakes in $60 million in latest funding round

PeerStreet, an online marketplace for real estate-backed loans, announced this week that it raised $60 million in its Series C funding round. 

The 2019 HW Tech100 winner’s round was led by Colchis Capital, a San Francisco-based private credit investment management firm. The firm is no stranger to investing in PeerStreet. Other returning investors included Andreessen Horowitz, World Innovation Lab and Thomvest Ventures.

“We’ve been a strategic partner of PeerStreet for years as an investor in the company and in loans on the marketplace. Leading this round was a natural next step for us,” said Ted Conrads, co-founder and president at Colchis Capital. “We’re excited to be a part of their growth as they continue to innovate as the market leader.”

According to PeerStreet, the latest round of funding will help the company “continue to hire top talent and scale PeerStreet’s two-sided marketplace.”

Beyond the newly added $60 million in funding, PeerStreet also announced that it secured $4.25 billion in new capital commitments from institutions to purchase loans through PeerStreet’s proprietary platform. 

“2019 has been an incredible year of growth for PeerStreet, and this funding round will accelerate that growth,” said Brew Johnson, PeerStreet’s CEO and co-founder. “The injection of equity capital into our business via the Series C, combined with strong demand from loan buyers, means we will continue to provide value for lenders, end borrowers, and investors for years to come.”

While the company has grown in 2019, PeerStreet has been on this track for some time now. HousingWire reported in 2018 that PeerStreet funded over $900 million in loan volume at the time and more than doubled its loan volume from 2016 to 2017. 

And with a growing platform based on investing in real estate-backed loans, PeerStreet’s co-founder is acutely aware of the inventory issues facing the country.

“I think our society is at a crossroads—there is a shortage of housing in many areas of the country and nearly 40 percent of existing homes were built before 1970. We can either build more homes and continue to take over green spaces, or we can up-cycle the existing aging and dilapidated housing stock,” said Brett Crosby, PeerStreet’s COO and co-founder. “PeerStreet’s business model ultimately supports real estate entrepreneurs doing the latter, curing the capital constraints that have held them back and allowing them to reinvest in American communities.”

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Source: HousingWire Magazine