Big-bank execs condemn racism after George Floyd death

The chiefs of some of the biggest U.S. banks called on their workers to fight racism after an unarmed black man died as a result of a white police officer kneeling on his neck, prompting nationwide protests.
Source: American Banker

Rakuten refiles with FDIC for ILC charter

The Japanese e-commerce giant is taking another run at a U.S. banking charter after receiving feedback from the Federal Deposit Insurance Corp. about its initial application, which was withdrawn earlier this year.
Source: American Banker

When looking for signs of housing recovery, look to builder confidence data

In a recent guest contribution to HousingWire, Romi Mahajan suggested that the  National Association of Home Builders Housing Market Index is “inefficient, unscientific” and not predictive of future sales – In other words, useless or even “damaging” to the economy. 

I disagree.

The NAHB HMI is a builder confidence survey that provides a gauge of builder’s opinions on whether they feel confident enough to build or not to build single-family homes. The April HMI was 30, the lowest since June 2012.

Logan Mohtashami
Logan Mohtashami
Columnist

If you follow the index you know that number below 50 is considered “negative” or whereas a number above 50 indicates a favorable outlook on the future of housing starts. The index rose slightly in May to 37, which was better, but still considered negative.

As part of my work, I track all kinds of confidence indices, and while I understand they are not the equivalent of a “real economic model” in terms of predictive ability, many of them are useful and can give clues early on with shifting positive data. 

From the chart below, we can see that the HMI had a massive collapse during the housing bubble crash and a slow but steady recovery up until 2018, after which there was a noticeable drop.

May HMI data

In 2018, mortgage rates rose to 5%, and the builders had a terrible fourth quarter. The monthly supply of housing spiked to 1994 levels because higher interest rates scared off buyers and they simply weren’t buying as many new homes – especially on the larger, more expensive new homes.  This wasn’t a good time for the builders.

More recently, even with the coronavirus-induced recession on-going, monthly supply never got back to 2018 levels. The recession definitely threw a wrench into the overheating gears of the 2020 housing market, but it didn’t kill it.

Housing starts, for example, are still a positive, year to date, and in the last new home sales report, sales beat estimates by one of the largest margins ever recorded in U.S. history. 

May Monthly Supply

This recession has created negative waterfall economic charts and parabolic jobless claims charts, and the U.S. housing market also took a hit. But the HMI index did show a bounce recently, and this bounce was before the better new home sales data report. A similar heads up was given after rates move up in 2018. Economist Robert Diaz from the NAHB shows a good correlation here on the builder’s confidence moving along with housing starts.

hmi-may

Typically housing starts get weaker going into a recession. Historically, this is a noticeable trend. However, going into the COVID-19 recession, housing starts grew almost 40% year over year in the month of February in 2020, creating one of the best housing month data lines we had in over a decade.

Of course, this was prior to the COVID-19 shutdowns. 

Then on March 12, the government started its process of shutting down the economy and for the short term, there goes the strongest start to housing in over a decade. COVID-19 is creating special circumstances for all kinds of sectors in the economy.

In this case, the reason why a sector is responding as it does matter.

This is very different than your standard, bog-basic recession. Why something is happening matters because not all sectors of the economy are affected the same or react the same to the strange circumstances COVID-19 has forced us to endure. Engaging with the data, even soft data like surveys of opinion gives us reliable hints into what to expect in specific segments of the economy and what parts are going to recover faster.

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The HMI tells us that the housing sector is recovering, slowly but surely. That increase we saw in the HMI data also goes with the recent pickup in purchase application data which finally went positive year over a year recently after being down as much as 35% year over year.

Yes, the reasons always matter. 

The post When looking for signs of housing recovery, look to builder confidence data appeared first on HousingWire.

Source: HousingWire Magazine

Kleard offers self-guided home tours

Real estate tech company Kleard has launched a new self-tour technology and app for homebuyers to tour homes on their own.

The platform, Kleard Now, allows potential buyers to verify their identities, unlock participating homes and view them without an agent present, the company announced Thursday.

Self-guided home tours using apps is not new; the technology is becoming more adopted, especially by iBuyers and particularly amid the coronavirus’ physical distancing guidelines. About a year ago, Zillow announced it would launch a pilot app that provides users directions to a property, unlocks the doors when they arrive and allows them to tour the house without needing an agent or appointment. And last month, Redfin announced its own home tour app in select cities.

Yet co-founder and CEO Jonathan Martis said Kleard Now is different because it can be used by any licensed real estate agent, for any home, in any U.S. city.

“Our technology can be used by any agent, any brokerage, no matter how big your brokerage is, no matter how small,” Martis said. “That’s a great way for agents to use multimillion-dollar technology, pretty much handed to them saying,’Turn-key; here you go.’”

Here’s how Kleard Now’s patent-pending technology works:

  • An agent would order a app-compatible smart lock from Kleard’s website for either $139.99 per lockbox or $159.99 per deadbolt
  • After downloading the Kleard app and pairing the lock with the agent’s phone, the system is ready to be used; there are no additional fees from Kleard
  • Kleard also sells yard signs that promote the instant access self-tour
  • A prospective buyer can tour the home by downloading the app, then going through what the company says is a 90-second verification process
  • The listing agent must approve the buyer’s tour request and then receives real-time information on how long the buyer is at the property, when the buyer leaves and their feedback on the home

It’s these safety measures, requiring multiple levels of verification from prospective buyers, Martis said, that also set Kleard Now apart from other self-tour apps.

The app verifies the front and back of the buyer’s driver’s license, then sends a code to verify the cell phone number, sends their email a link to verify their email address and requires a selfie taken from their phone for facial recognition technology. Finally, the app uses GPS verification to ensure that the prospective buyer is actually at the home they’re requesting to see.

Kleard is part of the 2019 National Association of Realtors‘ REACH class, a technology accelerator program that helps launch early- to mid-stage companies in the real estate, financial services and banking industries. It was also named to HousingWire‘s Tech100 and T3 Sixty‘s Top 500 this year.

Martis said he’s been working on the self-tour concept for more than a year, drawing on his past experiences as a licensed real estate agent.

“I felt like there was a lot of wasted time in real estate because if you think about it in a big city, to go show a property to somebody might take you a couple of couple of hours to get there,” said Martis, who’s based in Seattle.

“The thing is the buyer might just be passing by a home, and they want to see it. I’ve had that happen to me where a buyer sends me a picture of a house and they’re at the house. And they’re interested in the house, but I can’t get there in time. It’s like rush hour traffic. So nobody really won.”

The timing of Kleard Now’s launch is coincidental with self-distancing protocols, but will help agents and buyers alike.

“Even more so, it makes it something people should be aware of because as people want to social distance more, this is something that can help with that,” Martis said.

Martis said rental support is expected to start in July, allowing for self-tours for homes, condos and apartments for rent. Martis also said Kleard is seeking to raise $2 million in seed funding this summer in order to scale the business.

The post Kleard offers self-guided home tours appeared first on HousingWire.

Source: HousingWire Magazine

Credit card lenders clamp down to mitigate coronavirus risk

Since March, issuers have tightened their criteria for opening new accounts and closed millions of existing ones in hopes of avoiding waves of defaults.
Source: American Banker

PPP loan forgiveness, BofA’s cost cutting, Amex’s cloud commitment: Top stories of the week

The SBA issues guidance on Paycheck Protection Program loan forgiveness; after staffing up for PPP, Bank of America may need to delay investments to meet cost targets; American Express has leaned hard on cloud tech to help employees work at home during the pandemic.
Source: American Banker

Forbearance requests slow to a trickle, Black Knight says

Requests for help from borrowers have slowed with the total number of mortgages in forbearance at about 4.8 million, Black Knight said on Thursday.

Only 7,000 mortgages entered forbearance this week, Black Knight said.

“Volumes of forbearance plans have flattened, and in fact new inflows have slowed to a relative trickle,” the mortgage data firm said in a statement.

The overall share of home loans with suspended payments stands at 9%, Black Knight said. Broken out by investor types, 7.2% of mortgages backed by Fannie Mae and Freddie Mac are in forbearance. That’s a total of 2 million mortgages.

The forbearance share for home loans backed the Federal Housing Administration and the Veterans Administration was 12.6%, or 1.5 million mortgages.

At this week’s level for all types of mortgages in forbearance, servicers need to advance a combined $3.6 billion a month in principal and interest payments to holders of government-backed mortgage securities on COVID-19-related forbearances, the report said.

That’s on top of the $1.5 billion in payments for taxes and insurance they are required make on behalf of borrowers. Typically those so-called T & I payments come out of a mortgage holders escrow fund they pay into every month.

American mortgage holders have swamped servicers with forbearance requests in the months following the start of the COVID-19 pandemic. Requests are slowing as more people go back to work and are able to pay their bills.

Jobless claims since March have topped 40 million, meaning layoffs have hit 1 in 4 American workers, according to a report from the Labor Department on Thursday.

But, the data showed some workers have been rehired. Continuing claims that measure the total number of people receiving unemployment benefits declined for the first time since the start of the pandemic.

The number of people receiving jobless benefits dropped by about 3.8 million to 21.1 million as some people were rehired, according to jobs report.

The post Forbearance requests slow to a trickle, Black Knight says appeared first on HousingWire.

Source: HousingWire Magazine

6 key Senate races for bankers to watch

Several Senate Banking Committee members from both parties are facing tough reelection challenges in a year when control of the entire chamber — and the banking policy agenda — may be up for grabs.
Source: American Banker

Fed policies ‘absolutely’ don’t add to inequality, Powell says

Chairman Jerome Powell said the Federal Reserve’s actions during the coronavirus outbreak have been aimed squarely at helping U.S. workers, not Wall Street or wealthier Americans. He also said Friday that a new lending program geared toward middle-market firms is “days away” from getting up and running.
Source: American Banker

The reasons some banks have a hard stop on PPP lending

Many lenders are paying close attention to liquidity and capital ratios. Others are trying to avoid overtaxing employees who process, service and handle forgiveness of the loans.
Source: American Banker