BofA submits $28B in loan requests for coronavirus relief

In round two of the Paycheck Protection Program, the bank has sent some 256,000 loan applications to the Small Business Administration for processing.
Source: American Banker

Mr. Cooper has nearly 200,000 customers in forbearance but is no longer worried about liquidity

Despite having nearly 200,000 of its customers in forbearance, the nation’s largest nonbank mortgage servicer is no longer concerned about having enough money to front the principal and interest payments it is required to send investors on loans in forbearance.

Mr. Cooper, the nonbank formerly known as Nationstar Mortgage, revealed Thursday that it currently has 194,118 customers in forbearance, which represents 5.6% of its total portfolio. That’s an increase of more than 100,000 customers from earlier this month.

Despite that increase, Mr. Cooper CEO Jay Bray told HousingWire Thursday that that the company is prepared to cover servicing advances even if the number of borrowers in forbearance quadruples.

In its first quarter earnings information, the nonbank disclosed that it is preparing for as many as 20% of its 3.7 million customers to need forbearance, but Bray said that the take up rate is actually lower than the company originally expected.

Bray cautioned that the numbers could jump soon.

“Our current volumes are running below what we originally expected,” Bray told HousingWire Thursday. “And so, we’ll see. My theory is that you’re going to see these come in waves. I think you’ll see a lot coming in early May when the May payment comes due. But right now, you know the volume is less than what we projected.”

Despite that, Bray said that Mr. Cooper is now in a financial position to cover all the advances it could be required to make.

“On the liquidity side, we’ve solved that equation,” Bray said. “We’ve gotten additional capacity from a couple different lenders, a total of $850 million in additional capacity from a borrowing standpoint. So, frankly in any kind of scenario that we can see, we think we’re in good shape.”

Despite that, Bray still thinks that the government or Federal Reserve may still need to step in and provide other servicers with a liquidity facility even after Fannie Mae and Freddie Mac’s recent announcement that servicers will only be required to cover four months of missed payments.

“The forbearance plan that exists today is something that we’re big supporters of,” Bray said. “We worked with Fannie, Freddie and all the others to get it in place. Early on, we advocated pretty strongly for a program through the Treasury or Fed, just because we felt like that was the best thing for the industry. And when we look at the possible numbers on the forbearance plans that could happen, I still think that is something that would be good for the industry.”

Bray commended the work that the GSEs have done thus far to support the mortgage industry.

“Fannie and Freddie have been amazing partners and we speak to them daily and they’ve been truly accessible, responsive and proactive in helping us work through it,” Bray said.

“The FHFA coming out and clarifying the four months was good,” he said. “We had expected that because obviously we’re in constant communication with (the GSEs), but making it official, I think was a great thing. It brings clarity for potential lenders. Obviously, this brings clarity to us from an operational standpoint in liquidity and capacity planning. We were very happy to see that come out official.”

According to Bray, Mr. Cooper is now in position to not need to lean on government sources for funding, whether it’s a Treasury or Fed facility or Ginnie Mae’s program.

“I think there’s a little confusion in the marketplace, right? Because if you look at the solutions that are out there today, you have the Ginnie Mae program, PTAP, which is a good thing,” Bray said. “For us, that’s more like a backstop, but it’s a good thing for the industry.”

Other companies may need it, though.

“There’s still, I think, a need for the medium or small players for some more solutions,” Bray continued. “I think it’s still the right thing for the industry. I think the (Mortgage Bankers Association) is going to continue to advocate for it and we’re supportive of that.”

“It’s something that we don’t need,” he said. “But, again, from an industry standpoint, I still get it’s something MBA should still advocate for and we’re supportive of.”

As for whether the Fed and/or Treasury are going to provide that much-asked-for facility, Bray said that the government seems to be taking a “wait and see” approach on whether it will be necessary.

“I don’t have a great insight into it, but my sense is that it’s status quo,” Bray said when asked if he was aware of any movement towards a federal facility.

“I think it’s probably consistent with what you’ve seen in the past in that there’s a little bit of wait and see mentality,” Bray said. “I think people want to see what the May numbers look like. They want to see how many people actually tapping into the Ginnie facility. I think there are plans in place and if they were needed, they’d implement them, but I still think it’s a wait and see mode.”

As for Mr. Cooper’s business itself, the company reported a net loss of $171 million in the first quarter, reflecting a negative $383 million mark-to-market on its servicing portfolio.

But the company’s mortgage originations were more than double what they were in the first quarter of last year.

According to the company, Mr. Cooper had total originations of $12.4 billion in the first quarter, up from $5.7 billion in the first quarter of 2019. Of that $12.4 billion, correspondent was responsible for $5.5 billion, consumer direct was responsible for $6.4 billion, and $500 million came from wholesale, which Mr. Cooper recently shut down.

Bray said that the company made the decision to shutter its wholesale channel so that the company could focus direct and correspondent.

“We didn’t feel like we could scale it to the degree we could scale the correspondent business and the direct to consumer business,” Bray said. “The thinking is, it’s better to do fewer things well than to spread ourselves too thin.”

When asked why the company’s originations were so much higher this year than last, Bray said it was all about refinances, which accounted for 74% of its originations in Q1.

Bray was also effusive in his praise for the work of his company’s staff, approximately 95% of which are now working from home.

“I’m so proud of what our team did to shift us to work from home,” Bray said. “Our productivity is quite good. On the origination side, it’s actually a little better than it was when we were in the office.”

And according to Bray, employees of the company, based in the Dallas metro area, are going to continue working from home for now.

Bray said that despite Texas Gov. Greg Abbott’s recent move to reopen Texas’ economy, Mr. Cooper’s employees will be home-based through at least June 1.

“We’re going to be a follower there, not a leader,” Bray said.

“Our primary concern is our team members and so we are communicating with our team members that you definitely will not be coming back into the office prior to June 1,” Bray continued.

“We’re going to go slow,” he said. “The health and safety of our team members is absolutely the first priority. We’re going to take all the precautions necessary.”

The post Mr. Cooper has nearly 200,000 customers in forbearance but is no longer worried about liquidity appeared first on HousingWire.

Source: HousingWire Magazine

[PULSE] Learning from past pandemics: Will COVID-19 derail the housing market?

Like most of the news surrounding the COVID-19 global pandemic, reports about the U.S. housing market have been discouraging. Year-over-year listings of homes for sale have plummeted – in the worst-hit markets like New York City, listings are down 80% compared to April 2019. 

Rick Sharga,
Guest Author

Home sales began to slow down dramatically in the last half of March, and are expected to drop even more drastically in April and May, which are usually two of the months with the highest volume of home sales. Pending home sales are off over 30%. And over 3 million homeowners have applied for mortgage payment forbearance, causing at least some concern about a large number of potential defaults at the end of the forbearance period. None of this should be surprising, under the circumstances. With almost every state in the country implementing some form of shelter-in-place order and shutting down most non-essential businesses, more than 25 million citizens filed for first-time unemployment benefits over the past four weeks. 

With the majority of businesses closed or running below capacity, the consumer spending that accounts for 70% of the U.S. economy has contracted suddenly and severely, and economic projections for Q2 U.S. GDP are universally ugly.

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The post [PULSE] Learning from past pandemics: Will COVID-19 derail the housing market? appeared first on HousingWire.

Source: HousingWire Magazine

CFPB critics moving swiftly to challenge payday lending rule

Consumer groups are poised to take the bureau to court over its gutting of underwriting requirements, while House Democratic leaders could attempt a repeal through the Congressional Review Act.
Source: American Banker

PPP fee income will go straight to loan-loss reserves at many banks

The millions of dollars earned from Paycheck Protection Program transactions will help cover rising provision costs tied to the new CECL accounting standard and coronavirus shocks to loan books.
Source: American Banker

Under tight state restrictions, Michigan’s housing market perseveres

michigan flag

This is one in a new HW+ series examining the distinctive challenges faced in state-level housing markets.

On April 15, a Michigan advocacy group called Operation Gridlock staged the first protest against statewide stay-at-home rules. The protest criticized Gov. Gretchen Whitmer’s executive orders, claiming they were too draconian compared to the stay-at-home guidelines and non-essential business definitions enacted in neighboring states.

The core of the protest was Whitmer’s executive order No. 2020-21, issued on March 23, which decreed that “no person or entity shall operate a business or conduct operations that require workers to leave their homes or places of residence except to the extent that those workers are necessary to sustain or protect life or to conduct minimum basic operations.” Under this edict, Whitmer defined the real estate, mortgage and home construction industries as non-essential businesses.

So how can a real estate professional do their job?

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The post Under tight state restrictions, Michigan’s housing market perseveres appeared first on HousingWire.

Source: HousingWire Magazine

Keller Williams launches its biggest virtual training event for agents

Keller Williams has launched another virtual training event for its agents.

Recently, Keller Williams teamed up with Facebook to train its agents on best practices associated with virtual home tours, and quickly adapted to the virtual workplace by creating virtual home tours in mid-March.

BOLD Pivot will be offered for Keller Williams agents via KW MAPS Coaching for agents across the U.S. on May 5, formatted digitally.

According to Keller Williams spokesperson Darryl Frost, more than 21,100 agents have signed up and the company is expecting over 25,000 to attend.

“We believe this changing market requires a change in approach,” Frost said. “And that’s why BOLD Pivot was created to help our agents and those in our industry shift their mindset and adopt the tactics and scripts proven to bring success in the extraordinary business landscape.”

Attendees will receive expert advice twice weekly during interactive livestreams, where BOLD Coaches will address current business challenges in today’s market. The course will be offered in a livestream training format over a period of four weeks, according to the company.

Key course takeaways include overcoming limiting beliefs to obtain big goals, time-saving strategies and techniques to operate efficiently, best practices to running a tech-enabled agent business and more.

“You have to be programmed to use the best practices and the lessons learned, and that comes in the form of using your experience, but also takes in training and coaching so you can thrive in this environment,” Frost told HousingWire. “Without the right mindset, you’ll just go into survival mode, and you won’t be able to move forward in the best way possible given the circumstances.”

The post Keller Williams launches its biggest virtual training event for agents appeared first on HousingWire.

Source: HousingWire Magazine

Pennsylvania moves one step closer to allowing real estate services to resume

Pennsylvania Gov. Tom Wolf issued a shut-down order on March 19 that did not recognize real estate companies as essential businesses, prohibiting in-home home showings and inspections.

On Tuesday, the Pennsylvania House passed House Bill 2412 in a 125 to 77 vote, allowing real estate services to be conducted uniformly across the state, according to the Pennsylvania Association of Realtors.

Now the Bill has moved to the Senate, undergoing committee consideration.

Last week, PAR issued a call-to-action to its members, asking them to contact respective representatives in support of the legislation.

“We saw a tremendous response from Realtors in just a few days. PAR is grateful to Rep. Polinchock and the other 124 state representatives who supported this bill,” said PAR President Bill Festa in a statement. “They understand how severely real estate has been curtailed in Pennsylvania, despite the fact that most other states have been safely conducting real estate throughout this crisis.”

Meanwhile, the Department of State issued guidelines on what in-person real estate is permitted and outlined how the real estate industry would reopen under Gov. Wolf’s red-yellow-green plan.

“The association believes a fractured reopening of the real estate industry will continue to impede consumers’ abilities to purchase homes where they want to live. Requiring the industry to reopen by region would create a very confusing situation for clients,” Festa said.

“We know that real estate is being conducted safely in almost every other state in the country. That’s why PAR will continue to support Rep. Polinchock’s efforts to pass House Bill 2412, which would allow for the uniform reopening of real estate across the state.”

Another state that had curtailed real estate activities, Colorado, started relaxing those rules starting this week.

The post Pennsylvania moves one step closer to allowing real estate services to resume appeared first on HousingWire.

Source: HousingWire Magazine

OnDeck sharply curtails lending as delinquencies mount

The online lender reported a hefty first-quarter loss on Thursday and said that a whopping 45% of its small-business loans are past due.
Source: American Banker

Oklahoma credit union to buy community bank

Tinker Federal Credit Union’s deal for Prime Bank in Edmond, Okla., is set to close later this year.
Source: American Banker