Hilltop in Texas to sell specialty insurance unit for $150 million

National Lloyds, which provides insurance for mobile homes, has a distribution network that operates in 40 states.
Source: American Banker

These markets will see dramatic multifamily supply hikes this year

Just a few weeks ago, RealPage revealed that the multifamily residential market will see the most starts it has seen in nearly 30 years in 2020.

Out of the nation’s 50 largest apartment markets, all but six will have more units completed this year than the last, RealPage said.

The most drastic supply hike is predicted to be in Los Angeles. In 2020, there are an expected 17,600 units coming in the City of Angels, the largest supply it has seen in more than 20 years. It’s also about double the average from the past decade.

This supply is much needed, as occupancy rates in Los Angeles have been at 96% for the past five years. Despite this, rent growth in Los Angeles has fallen to its lowest point since the start of this economic cycle, in 2019.

Washington, D.C. will gain 16,000 units in 2020, about 7,800 more than in 2019. Occupancies are at 96%, while rent growth has been below 2% for the past five years.

Houston is also expected to see over 16,000 new apartments in 2020, about 8,500 more units than last year. RealPage said that kind of bump is not surprising for a metro like Houston, which is experiencing rapid population growth. However, due to recent hurricanes and volatile oil prices, the market ended the year with a quarter of net move-outs that brought occupancy down to 93.6%.

Phoenix, Seattle and Fort Lauderdale, Florida are projected to see supply increase by about 4,000 units this year, with Phoenix and Fort Lauderdale both reaching a two-decade peak, RealPage said.

Seattle, meanwhile, is seeing a 20-year high, with 12,700 units set to be completed this year. San Jose, San Francisco and Oakland, California, will also all see significant increases in supply.

The post These markets will see dramatic multifamily supply hikes this year appeared first on HousingWire.

Source: HousingWire Magazine

7 worst excuses agents make to avoid taking action

As a real estate marketing coach and mentor to agents and loan officers, I’ve heard them all: All the “reasons” why you can’t do the thing you just said you wanted to do.

I’ve got to give it to you all, you’re pretty creative when it comes to finding “reasons” why you can’t launch your own podcast, start a blog, post on LinkedIn more or whatever. Unfortunately, this is one area where you don’t want to be creative.

Dustin Brohm, Columnist

I am a firm believer that the only way to win in this highly competitive industry (or in any business) is to “Ready. Fire! Aim.”

Take action now, and improve on it along the way. It doesn’t work any other way. You can’t learn how to do a great podcast without podcasting. You can’t write better listing descriptions without lots of practice writing. You can’t improve your video making skills unless you’re making videos. 

Here are seven of the most common excuses I hear agents use for why they can’t “do the things” they want to do or need to do to be successful:

1. It has to be perfect before I launch it.

Uhh no, it doesn’t. What is “perfect” anyway? Perfection doesn’t exist.

What you should strive for instead is constant improvement. But the only way to improve on something, is to make sure that something exists in the first place! If you’ve ever heard the very first episode of my Massive Agent Podcast, you’d agree it’s awful.

But guess what, I improved for the second episode. Episode 3 was a little better than that one. And so on. That is what you should strive for. 

2. I don’t know how.

That’s too bad because I was born knowing how to podcast. I was born knowing how to write these articles. I’ve always been able to walk, talk and pass a real estate exam. Hell, I was writing offers for clients before my parents took me home from the hospital!

Except that absolutely none of that is true (obviously). None of us knew how to do the things that we do, until we learned how to do them… by actually doing them. That means it took effort. This one is probably the most irritating and ridiculous of all the excuses.

With Google, YouTube and Udemy just a click away, it’s not a valid excuse anymore to say you can’t do something because you don’t know how. In reality, it’s nothing more than a lack of will or desire to learn how. The information is there, in abundance.

The only question is whether or not you’ll seek it out. 

3. I don’t like what I look like on video.

Really? That’s unfortunate because you look that same way when people see you in real life, too.

4. I don’t like what I sound like.

Again, unfortunate. That’s literally what other people hear whenever you talk. The only difference is now you’re hearing it through a speaker. I’ll give you a break on this one though. I hate the way I sound too. I think we all do.

Do it anyway. The alternative is doing nothing.

5. I’m not an expert. 

According to who? Which tribunal did you stand in front of and plead your case to receive your expert designation? What makes someone an expert is all in how they prove it. If you claim to be a local expert on a certain community, the only one preventing you is you. 

6. I can’t afford it. 

Now, this one I can relate to. This is the story I’ve told myself my entire life. In fact, my real estate career suffered dramatically about four to five years into it because I kept telling myself I couldn’t afford to hire a coach or take an online course to learn how to effectively run Facebook Ads.

So rather than spend $1,000 or so on a course or coach, I decided I’d learn it on my own, by watching videos, reading articles and trial and error. And guess what? I absolutely did learn how. But it took me much longer to learn those skills. I ended up spending way more money on testing and trial and error than I ever would have if I had only learned how from a professional who already knew the path.

Not to mention the months and months of lost income that I would have earned had it taken me 120 days to become a lead generation master, rather than 10-12 months. Can’t afford it? Usually, you can’t afford not to. Or at the very least, you can get determined and find a way to “afford it.” 

7. I don’t have time.

We all have the same 24 hours in a day. What we choose to do with that time is what separates the massively successful, and those who can’t make it in this profession.

I challenge you to audit what you spend your time on. How much of your day is wasteful? How much time do you spend on stuff that could easily be hired out to someone for $10-$20 per hour?

If you are still mowing your own lawn and doing your own transaction coordinator work, you’re basically working for $10-$20/hour. Focus your time on the money-making activities, and guess what… you’ll make more money!

I’m pretty dang productive and I am able to accomplish quite a bit each week. I work my ass off every single day. But I know I can do better and be more efficient with my time, and how I prioritize it. We all can.

Be honest with yourself, and be willing to make the adjustments needed to make time for those things that you think you don’t have time for. 

Connect with Dustin on Facebook.

The post 7 worst excuses agents make to avoid taking action appeared first on HousingWire.

Source: HousingWire Magazine

Leveraged loan risk remains 'elevated,' regulators warn

Nonbanks hold a disproportionate percentage of the worst-rated loans, but banks hold a majority of the market, and risk management safeguards are largely untested, according to an interagency report on shared national credit.
Source: American Banker

CIBC plans job cuts, joining Canadian peers in savings quest

The Toronto firm, Canada’s fifth-largest lender by assets, must keep “a careful eye on costs” and improve efficiency, its CEO said in a corporate memo.
Source: American Banker

Kristina Pool, partner and COO of The Middleton Advisory Group, to speak at engage.talent

The number of women serving at the highest levels of leadership in all sectors of corporate America can be discouraging, but companies in financial services have an even worse track record, despite the evidence that a diverse workforce increases a company’s performance. That’s why we’re excited to have Kristina Pool, partner and COO of The Middleton Advisory Group, speak at our engage.talent summit on Feb. 6.

Pool has a breadth of experience in corporate administration, including in health care, real estate, and mortgage, with a special focus on operations and business development. She will be speaking on Recruiting and Retaining Women in Leadership Roles, and sat down with HousingWire ahead of the summit to give us a sneak peek into the topic.

HousingWire: What are some of the biggest challenges when it comes to recruiting women into leadership roles?

Kristina Pool: In my opinion, experience (or what we consider or perceive to be experience by our individual perception) is the biggest hurdle. In nearly every company, prior experience leading is a huge requirement for even qualifying for leadership roles, yet women are rarely given the opportunity to lead – or aren’t given the titles associated with leaders – so any leadership experience they may have doesn’t show up on paper.

Additionally, lack of experience, leads to loss of further leadership opportunities. You may have a woman who is actually a phenomenal leader, but who will never be hired into a leadership position because she won’t even be considered for the role without previous leadership experience. So you might see those making the decisions to hire say ‘no’ right up front, rather than seek out the character traits and skillsets that make a great leader. The risk for them is seemingly too great.

I think another hurdle is whether or not hiring females is a priority to your existing leadership and whether you are actively seeking to make a change to existing stereotypes and prejudices.  Whether it is about equality or diversity in the workplace – if you aren’t paying attention to trends, to sub-conscious or deliberate preferences, you will be less likely to seek out that diversity in your hiring efforts and will inevitably pass up women for roles they are more than qualified to succeed in.

HW: How has this challenge changed over the last 5 years or so?

KP: There has been a tremendous amount of change in the past five and even 10 years. The advancements in technology and information, the ability to expose sexism in the workplace, even terms like ‘glass ceiling’ are becoming both more mainstream and yet obsolete in many ways. I say ‘mainstream’ in the sense that knowledge is now available at our fingertips, and in a split second we can become more aware of obstacles women have faced in the past and today, and with that awareness comes change. 

Having women in c-suite leadership has also changed dramatically in major well-known brands in the past 30 years, so we are looking at our current workforce having seen women in high positions for some time now – think of Indra Nooyi, former CEO of Pepsico, or Irene Rosenfeld, CEO of Frito Lay and Kraft Foods – powerful women leading some of the world’s largest brands. These changes help to broaden more archaic views of women and help to create future equalities for women in the workplace.

Obviously, there is so much more to this and even more that still needs to be done in regards to seeing more women in leadership roles. I think more than anything, we can and should celebrate positive change, draw attention to it in order to break down perceptions and prejudice, and continue to push for women to stand up and lead rather than take a back seat or falter due to push back or even failure.

HW: What factors are different for retaining women than men in these roles?

KP: Again, experience is a huge factor. Men are given more opportunities regardless of experience, and once in a role, women without experience are held more accountable to that lack of experience. Men are also still respected more by other men (and yes, even women) than females in the same roles. I think traditionally, men have been seen as more authoritarian and as “head of the household,” and those same perceptions — whether conscious or sub-conscious — bleed over into the professional sphere. 

Failures also hit harder. I have seen women promoted or hired into leadership roles and although the standard and expectation may be the same for both men and women (although they might actually be greater for women in the same roles), the failure to meet those standards is almost less forgivable when a woman fails. To make things even more complex, those failures also contribute to a greater lack of respect for women than men. 

I think that goes back to respect and perception. Because of these issues, women get burnt out quicker, they feel less satisfied in their roles, they often feel they have to try harder just to validate being in those roles. Studies have shown that women are three times as likely to resign from leadership roles, and that is largely due to the fact that expectations for women – both in the workplace and in the home – are different than those placed on their male counterparts.

When you add it all up – a lack of respect, more responsibility, higher and disproportionate standards and expectations, less recognition and opportunities for promotion, as well as far less pay than their male counterparts – it’s pretty clear why retaining women in leadership roles is and will continue to be a challenge.

HW: You wrote on LinkedIn that a business’ success depends on both the capability and the happiness of their employees. In your experience, what kinds of things contribute to employee happiness, beyond salary?

KP: I think respect is huge. Respect translates and is shown in so many ways. When you respect your employees, you listen to them, you make decisions in their interest, you allow them to grow in healthy ways, and you create realistic expectations for them. I read recently that nearly every employee will essentially reach a plateau where they are actually underqualified for the position they are in, due to employers constantly over-utilizing and essentially overworking employees who excel.

If and when this happens, employee satisfaction inevitably suffers because the employee who is now is no longer excelling begins to lose excitement for the work they are responsible for and also begins to struggle under the weight of the expectations being placed on them.

It’s natural and important to push your employees towards excellence, but there’s also a balance in understanding that when they do excel, that’s likely the best place for them to be until they’re ready to take on more. Respecting your employees means understanding this and taking care to protect what’s going well rather than continually push for more.

I think when employees feel heard, and when they are heard, this also brings about a great sense of happiness from their work. We have to remember that we spend so much of our lives working, to have unhappy employees is to essentially be okay with – and this may sound extreme – ruining the lives of your people.

I think that it is every bit our responsibility as leaders to make sure our employees are happy, and that starts with respect and making sure we are listening and taking action to protect them. If you don’t protect your employees, you aren’t protecting your company, and you’re setting the table for failure.

Don’t miss the opportunity to hear more insights from Pool and other talent leaders at engage.talent on Feb. 6. Register here.

The post Kristina Pool, partner and COO of The Middleton Advisory Group, to speak at engage.talent appeared first on HousingWire.

Source: HousingWire Magazine

Lordy, there's a tape of Trump discussing VA loan legislation

There’s a second undercover video of President Donald Trump at a private event with Lev Parnas and Igor Fruman, and part of the discussion centers on mortgages backed by the Department of Veterans Affairs.

The new recording brings to mind the famous statement by former FBI Chairman James Comey during testimony to the U.S. Senate in 2017: “Lordy, I hope there are tapes!”

Bill Edwards, the former chairman of Mortgage Investors Corp., or MIC, the now-defunct lender that once was the largest originators of VA loans, complained to Trump on the video about new regulations aimed at preventing so-called loan churning.

Churning is when lenders encourage frequent refinances, with the fees rolled into the loan’s principal and paid off with interest over the life of the mortgage. When refinances are done abusively, it drives up rates on all government mortgages, the Urban Institute reported last year.

On the video, Edwards complains to Trump about then-pending bipartisan legislation with new regulations aimed at preventing loan churning in the VA’s Streamline Refinance program.

“Where’s the problem? In the Senate or the House?” Trump asks.

“The Senate,” Edwards responds, citing an effort by Sen. Elizabeth Warren (D-MA) and Thom Tillis (R-NC). The legislation was later adopted.

Mortgage Investors in 2013 agreed to pay a $7.5 million fine to settle a Federal Trade Commission lawsuit, without admitting fault. In the court order, MIC is prevented from soliciting refinancings while misrepresenting itself at the VA and required to stop contacting veterans on the federal Do Not Call list.

On Thursday, Joseph Bondy, the attorney for Parnas, released the second video of Trump at private events with Parnas and Fruman, both under federal indictment for breaking campaign finance laws.

The two men pleaded not guilty in October to charges of illegally funneling foreign donations to U.S. candidates. They were arrested at Dulles International Airport near Washington, D.C., with one-way tickets out of the country.

Trump has claimed numerous times that he “doesn’t know the gentlemen.”

Their former attorney, John Dowd, who represented Trump during the Special Counsel investigation led by Robert Mueller, wrote to the House of Representatives on Oct. 3, during a short period when he represented the pair. Dowd said in the letter the men couldn’t hand over subpoenaed documents because they were part of Trump’s legal team and the material was covered by the attorney-client privilege.

In the first recording, released Jan. 24, we hear the president at a private dinner with Parnas and Fruman at his hotel in Washington on April 30, 2018, ordering the firing of former Ukraine ambassador Marie Yovanovitch, saying “Take her out! OK? Do it!”

The second recording that includes the mortgage conversation occurred 10 days earlier at a private gathering at Mar-a-Lago in Palm Beach, Florida. It shows Trump meeting with a small group of Republican donors including Parnas and Fruman.

The group discussed topics ranging from Syria to mortgages. Both recordings were first reported by ABC News.

The Mar-a-Lago recording is below. The mortgage discussion begins just before the 29-minute mark.

The post Lordy, there's a tape of Trump discussing VA loan legislation appeared first on HousingWire.

Source: HousingWire Magazine

[PULSE] The value of warehouse lenders in the mortgage market

The share of the mortgage market occupied by independent mortgage banks (nonbanks or IMBs) has grown substantially in recent years.

Mike Dunlap,
Guest Author

As traditional bank lending has receded, IMBs and the warehouse lenders that extend them credit have filled a void.

Yet misperceptions about the warehouse lending market and IMB liquidity persist.

According to the recent FSOC 2019 Annual Report, “Nonbanks often obtain liquidity from warehouse lines provided by banks, and these lines can be a significant portion of nonbank liabilities. In times of significant stress, warehouse lenders may face strong incentives to cancel the lines and seize the collateral as quickly as contractually permitted.” 

Unfortunately, this narrative is misleading and must be addressed. 

Warehouse lending’s role in real estate finance

Let us first acknowledge that warehouse lending is a critically important part of real estate finance. Over the last decade, the number and diversity of warehouse lenders have grown significantly to provide the liquidity needed for IMBs to support the housing recovery.

Warehouse lenders typically extend lines of credit to IMBs in order to fund the issuance of their loans, with the intent that these loans will be sold to the secondary market within a short amount of time – typically within two to three weeks. 

In today’s market, the vast majority of these loans meet standards set by Fannie Mae and Freddie Mac or Ginnie Mae. IMBs today originate high quality, sustainable loans. As a result, the loans that serve as collateral for the warehouse line of credit are high-quality mortgages that have a deep and liquid “take-out” market should an IMB ever run into trouble.  

Because of this business model, warehouse lenders manage risk from both a collateral standpoint as well as a counterparty credit standpoint.

Warehouse lending risk is substantially mitigated because the warehouse lenders control the collateral.  The warehouse lender has possession of the loans and can quickly protect its interests.

Risk is also managed by tracking the number of days between funding and sale based on the delivery expectations (whole loan versus MBS trade). And typically, loans have curtailment provisions once the loan or collateral has aged on the warehouse line past a reasonable expectation.  

Weathering the market cycle

This approach – short-term credit lines backed by high-quality collateral saleable into a deep and liquid market – is one of the reasons warehouse lenders can weather various market cycles.

The protection provided by the GSE and Ginnie Mae take-out gives warehouse lenders comfort that the loan will sell either by the mortgage banker or, in a worst-case scenario, by the warehouse lender.

More than likely, if a warehouse lender were to pull its lines, it would be because of fraud, a material and sustained warehouse line covenant violation, or bankruptcy/failure of the IMB. Pulling a line of credit for reasons other than these would create the very problem warehouse lenders seek to avoid.   

So, what happens if an IMB goes out of business due to mismanagement or a lack of cash or capital?

When this happens, the warehouse lender assumes control of the loans through the agreements and/or possession of the collateral. Depending on the stage, the warehouse lender then delivers the loans to the investors through its own mortgage company or retains it for its own portfolio. With a diverse customer base and a liquid takeout market, it is highly unlikely that warehouse lenders would collectively pull all their lines of credit at the first sign of trouble or a market downturn.  

Indeed, over the last decade, some IMBs have failed. However, they have not posed a systemic risk during this time given the large numbers and diversity of IMBs in the marketplace. 

Much has changed since the 2008 recession. The multitude of new federal regulations and rules has created a lending environment that is safer than ever before. Warehouse lenders and IMBs are an important component to this new reality.

Policymakers, regulators and other housing stakeholders should look to both as a beacon of stability and strength in the financial markets – not a source of systemic risk. 

Mike Dunlap is the president and CEO of Merchants Bank of Indiana and a member of the Mortgage Bankers Association.

The post [PULSE] The value of warehouse lenders in the mortgage market appeared first on HousingWire.

Source: HousingWire Magazine

Consumer lending outlook: Solid near term, shaky long term

Mortgages, auto loans and credit cards should perform well for the next two quarters. Beyond that, all bets are off.
Source: American Banker

Do you know the 2 categories of fintech?

We say fintech in housing and banking like those in Hollywood say Kimye. But unlike the shorthand for power-couple Kim Kardashian and Kanye West, fintech is more than shorthand for financial technology.

Let’s make sure we understand fintech’s definition and two distinct categories so we can make better decisions for our companies and careers.

Julian Hebron, Columnist

Before Fintech Was In The Dictionary

Before we do fintech’s two definitions, here’s a quick history.

The term “fintech” landed in Merriam Webster Dictionary and Oxford English Dictionary in 2018, but it was coined in the 1980s. Back then, Peter Knight of The Sunday Times in London was editor of a business newsletter called Fintech.

But the term fintech didn’t go mainstream as a moniker until earlier in this current economic expansion cycle. Fintech started sticking as two crops of companies came up in the pre- and post-crisis years.

Propser, LendingClub and SoFi started the digital, phone-first personal and student loan wave in 2005, 2006 and 2011, respectively.

Wealthfront, Betterment, Personal Capital and Robinhood started the digital, phone-first investing and stock trading wave in 2008, 2008, 2009 and 2013, respectively.

Fintech became cemented as these companies matured into known players valued at a combined $16.5 billion.

Also cementing fintech as a phrase and concept was the rise of software companies powering banks and lenders.

Examples with meaningful mortgage market share include Ellie Mae (founded in 1997), Finicity (1999), Black Knight (2008), FormFree (2008), Total Expert (2012), Blend (2012) and Plaid (2013). It’s worth noting that Black Knight has a longer history and wasn’t called by its current name until 2017, and that Ellie Mae has been particularly active in fintech M&A throughout these post-crisis years.

This history helps us understand why fintech must be defined in two categories.

Fintech Category 1: Financial Services Providers

The first fintech category is digital native consumer-direct banks, lenders, wealth managers, insurance and other finance companies.

Today, there’s a whole new crop of these fintech companies that are also referred to as challenger banks, neobanks or simply startup banks.

In addition to the names above, the new crop of consumer-direct fintechs includes players like Varo (1 million customers), Monzo (3 million), Chime (5 million), MoneyLion (5.7 million) and Revolut (8 million).

These companies mostly start with a single budgeting, saving, borrowing or investing product, and are now expanding into other banking products since proving their customer acquisition and engagement power.

Closer to housing, Figure is another consumer-direct fintech example. It began with home equity lending, and is now expanding into first mortgages and student loans. Figure has already raised $225 million since founding in 2018, and has a valuation of $1.2 billion.

While no company in the original or new crops of consumer-direct fintechs have attained mortgage dominance, SoFi remains active in mortgages, plus Wealthfront and Varo got more vocal about mortgage ambitions in the fourth quarter of 2019.

Fintech Category 2: Financial Services Software Providers

The second fintech category is business-to-business (B2B) software, tools and tech platforms to power banks, lenders, wealth managers, insurance and other finance companies.

Likewise, today there’s a new crop of these B2B fintechs powering consumer finance companies in addition to the list in our history section above.

For example, the entire mortgage point of sale (POS) concept was created recently with companies like SimpleNexus, Roostify, Blend, Cloudvirga and Maxwell created in 2011, 2012, 2012, 2016, and 2016, respectively.

The mortgage-specific CRMs date back to 2003 and 2004 with the founding of Top of Mind and Volly, respectively. And since its founding in 2012, Total Expert helped evolve this segment from just CRM into a full marketing operating system (MOS) that can serve all of consumer finance (beyond just mortgage) with automation and modern digital tactics.

More recently, a new crop of B2B fintechs is rising to help banks and lenders with customer incubation, conversion and engagement.

This is absolutely necessary as customers increasingly expect banking and lending to be as easy as ordering same-day Pringles from Amazon before binging on Netflix.

The consumer-direct fintechs get this, and these newer B2B fintechs are now enabling existing banks and lenders to deliver on it.

Examples here include NestReady, Home Captain, Ojo, Homebot, Sales Boomerang and ComeHome (by HouseCanary), all founded in 2012 or later.

All of these B2B fintechs discussed above will continue reshaping the lending and banking space in 2020 and beyond.

What Kind of Fintechs Are The Lead Aggregators?

But let’s not forget about the lead aggregators, which are evolving so fast that some are still B2B fintechs and some have become consumer-direct fintechs.

Zillow was founded in 2004 and caught on immediately as we all snooped on our friends’ and families’ home prices.

Until last year, they made all their money selling leads (the hundreds of millions of us on the site) to lenders and realtors. Then Zillow became the Netflix of homes by buying, selling and financing homes directly.

They went from B2B to consumer direct. Their B2B segment is still a huge contributor to its $9.4 billion market cap, but it’s now a hybrid fintech model.

Will Credit Karma go the same way? They have a valuation of around $4 billion and 100 million members monitoring credit. They refer members to banks and lenders when requested.

But Credit Karma also recently added a Credit Karma Savings account. This is the same playbook as the consumer-direct fintechs noted above.

Consumers and Fintech Pros All Win Together

Through third quarter of 2019, U.S. venture capital equity funding in both consumer-direct and B2B fintech categories was $12.9 billion over 513 deals according to CB Insights.

That’s already past the $12.5 billion in funding from all of 2018. So while the economic cycle is mature, the fintech push is still very strong. Customers win as consumer-direct fintechs push innovation ever-faster.

The B2B fintechs then bring this same innovation to existing banks and lenders. So it’s even easier for customers if their existing banks and lenders can just add the cool tech.

And as long as we keep up, the fintech race is great for our careers.

I’ll keep doing my part to help us all keep up.

The post Do you know the 2 categories of fintech? appeared first on HousingWire.

Source: HousingWire Magazine