HousingWire Magazine: February 2021

We start the beginning of each year with a magazine issue that focuses on servicing, and this year is no different. But after the tumultuous year we experienced in 2020, servicing will now be more important than ever. 

Flashback to the Great Recession that began in 2008 and the devastation that followed, servicers were put in the hot seat as foreclosures swept across the U.S. Now, once again the spotlight is on mortgage servicers, but they are rising to the occasion. In fact, even Federal Housing Finance Agency Director Mark Calabria recognized the effort servicers were making to help borrowers in forbearance and thanked them. 

But their work is far from over. Last year, servicers faced challenges as record numbers of Americans requested forbearance and job losses mounted. Regulators such as the FHFA and others put mandatory forbearance programs in place that servicers had to navigate. But in the year ahead, servicers will face even more challenges as forbearance programs come to an end, and loss mitigation efforts begin. 

Servicers will face challenges such as scaling up, and knowing when it’s right to do so, navigating various forbearance exit trends and what technology to use and when. We cover all this and more in our cover story starting on page 26.

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Source: HousingWire Magazine

Selling your home? Here’s how to do it fast!

If you’re selling your home, you probably don’t want it to be a slow process.  

Not only does it delay your goals of moving on or buying that new property, but it can also hurt your profits in the long run. 

Fortunately, there are some easy ways to prevent all that. Want to make sure your home moves quickly? These six strategies can help.

1. Stage it

Staging your home — or making it look as appealing and move-in ready as possible — can make a huge impact on its marketability. In fact, according to a report from the National Association of Realtors, over half of seller’s agents say staging either slightly or greatly decreases a property’s time on the market. 

Another perk? It could help you fetch a higher price, too. Over 40% of buyer’s agents say staging increases a home’s offer price by anywhere from 1 to 20%.

2. Invest in quality photos and videos

Interested in selling your home fast? Get on the computer! The majority of homebuyers start online — especially in today’s environment. So making your listing look as great as possible? That should be goal No. 1. 

First and foremost, you’ll want professional-grade photos of your entire home, including any standout details or features, the yard and its view from the street. Having a video tour, aerial footage or a drone video can also be great ways to get more buyers interested and entice them to come view the property. 

3. De-clutter and depersonalize the home

In order for a buyer to imagine themselves in the house, it needs to be a clean slate. And family photos and hand-drawn photos by your kids? Those are anything but. 

Before you list your house — more importantly, before you photograph it — always take time to clean, de-clutter and remove any personal items or touches. Anything that’s super taste-specific (like a neon green wall color or that framed painting of Elvis Presley above the mantel) needs to go, too.

4. Clear your schedule

Flexibility can really help you when selling your home — particularly when it comes to showings. If possible, try not to turn down any tour requests or, if you must limit your hours for some reason, try to do so as little as possible. After all, you can’t sell what buyers can’t see.

5. Price it right

The market might be hot right now, but don’t expect to get $100K over what you bought it for just yet. Rely on your agent, comparable sales and hard data when setting your price, and make sure it aligns with other properties in the area. An overpriced property is only going to take longer to sell. (Buyers may also wonder what’s wrong with the home the longer it sits on the market.)

6. Consider an iBuyer

With an iBuyer, you don’t have to bother with the open market. There’s no prepping, listing or marketing the house, and you sell the home directly to an iBuying company — one like Opendoor, Offerpad or Zillow Offers. 

With some iBuyers — like Knock, for example — you can even “trade in” your old house for a new one.

The post Selling your home? Here’s how to do it fast! appeared first on HousingWire.

Source: HousingWire Magazine

CFPB doubles down on mortgage servicing enforcement

The new acting director of the Consumer Financial Protection Bureau, Dave Uejio, told staff in an email on Thursday that the bureau will direct its attention to mortgage servicers, promising “aggressive action” to ensure companies follow the law.

In the email, Uejio laid out his vision for the coming months, saying that his top two prioities are relief for consumers facing hardship due to COVID-19 and the related economic crisis and racial equity.

“One thing we can do immediately is focus our supervision and enforcement tools on overseeing the companies responsible for COVID relief,” Uejio said in the email. “I am concerned about the findings described in last week’s Supervisory Highlights edition that companies are failing to properly administer relief through the crisis.”

Here are some of the issues the acting director highlighted on servicers:

  • Mortgage servicers gave consumers incomplete and inaccurate information about CARES Act forbearances, failed to process forbearance requests and collected and assessed late fees despite having approved forbearances.
  • Servicers withdrew money even though consumers were in deferment.
  • One student loan servicer denied thousands of forbearance extensions because the loan holder never responded.
  • Companies across markets misreported accounts to credit bureaus and violated CARES Act amendments that added protections to the Fair Credit Reporting Act.
  • Some banks set off stimulus payments and unemployment insurance benefits in order to cover bank fees and other debts.
  • Examiners found that the widely used policy of banks only taking PPP applications from pre-existing customers may have a disproportionate negative impact on minority-owned businesses.

Uejio gave instructions to expedite enforcement investigations relating to COVID-19 in order to send a message to the industry at large.

How a cloud-based tax platform benefits mortgage servicers

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Presented by: CoreLogic

Uejio said all of this will be done alongside reversing changes made by the Trump administration that he says “weakened enforcement and supervision.”

“As of today, it is the official policy of the CFPB to supervise lenders with regard to the Military Lending Act,” he wrote. “And we are planning to rescind public statements conveying a relaxed approach to enforcement of the laws in our care.”

Uejio also promised to take “bold and swift action” to ensure racial equity, saying the country is having a long-overdue conversation on the subject.

“I am going to elevate and expand existing investigations and exams and add new ones to ensure we have a healthy docket intended to address racial equity,” he said in the email.

“This of course means that fair lending enforcement is a top priority and will be emphasized accordingly. But we will also look more broadly, beyond fair lending, to identify and root out unlawful conduct that disproportionately impacts communities of color and other vulnerable populations.”

This serves as a stark contrast to the treatment servicers received under the Trump administration. In October 2020 at the Mortgage Bankers Association Annual convention, Federal Housing Finance Agency Director Mark Calabria took the opportunity to recognize the effort servicers were making to help borrowers in forbearance and even thanked them. The message was clear: the mortgage industry wasn’t in the hot seat for this recession.

Until now.

This could be the first step of many as the bureau looks to increase its regulatory efforts. Under President Biden, the CFPB is poised to turn back the clock and former CFPB Director Richard Cordray believes the next four years could look a lot like his time in office.

Uejio will serve as acting director until Biden’s nomineeFederal Trade Commission Commissioner Rohit Chopra, is confirmed by the Senate as the next director of the CFPB. Once taking over, there is a high expectation that Chopra will ramp up the bureau’s regulatory efforts, but Uejio isn’t wasting any time.

“On COVID-19, we need to take swift action now, in order to make sure our actions help people in the middle of the crisis, rather than just cleaning up after the fact,” he said. “As you know, protecting economically vulnerable consumers is core to the mission of the CFPB and a key reason why the agency was created. It is going to take urgent action for the CFPB to step up to this challenge.”

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Source: HousingWire Magazine

HousingWire launches Spring Summit on March 4

The volume of homes sold or refinanced in 2020 was incredible, with total origination volume expected to top $4 trillion for the year once all the numbers are in. Wanting to take advantage of record low mortgage rates to gain more space in a pandemic, consumers didn’t follow traditional seasonal buying patterns, fueling a non-stop race to find and buy a house.

That dynamic is driving home sales this year too, which is why we’re hosting our virtual Spring Summit focused on The Year-Round Purchase Market.

The lingering pandemic, uncertainty about rates and a demographic tsunami of buyers means those in real estate and mortgage have to be as smart and agile as ever. We’re bringing together experts who can speak to the topics that are critical to your success at this year’s Spring Summit, including:

  • What mortgage tech is solving now
  • Servicing challenges in a pandemic period
  • Operational strategies in the current market
  • The brave new world of valuations
  • eClosing/RON update
  • Mortgage disruption outlook
  • A new regulatory regime

Our keynote session is a one-on-one interview with UWM President and CEO Mat Ishbia. In January, UWM completed the largest SPAC deal in history to become a publicly traded company valued at $16 billion, raising $925 million in cash in the process, with an opportunity to elevate mortgage brokers nationwide.

In this session, HousingWire CEO Clayton Collins will interview Ishbia about the way the company responded to the COVID crisis, the decision to go public and the future of the mortgage broker model.

We’ve also got sessions on increasing minority homeownership, the economic outlook, lessons from local markets and more.

As with all our events, we’re bringing together some of the brightest and most successful people in mortgage, real estate, compliance, security, technology and regulation to speak at our Spring Summit. These experts will provide insights and a holistic view of what’s happening right now in real estate and mortgage, as well as what’s coming next.

The 2021 Spring Summit is designed for our HW+ premium members, who get access to all HousingWire virtual events, long-form digital content published weekly, an exclusive Slack community and more. Sign up for HW+ membership here, or get event-only access for your company or team here.

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Source: HousingWire Magazine

MERS eNotes increase 261% in December

The use of eNotes registered on the Mortgage Electronic Registration Systems increased a full 261% year over year in December 2020.

The MERS eNote eRegistry is managed by the Mortgage Industry Standards Maintenance Organization, a subsidiary of the Mortgage Bankers Association. It is used by lenders and market participants to track the control and ownership eNotes. The registry showed that 2020 was a record year for eNotes, with 462,671 registered on the MERS eRegistry. This shattered the previous record set in 2019 of 127,178, as the chart below shows.

Sources: MERS, First American

In December, 55,076 eNotes were registered on the MERS eRegistry, a 261% annual increase.

This comes as no surprise – a recent survey from the American Land Title Association of major vendors working in the remote online notarization space showed adoption of remote online notarization soared 547% in 2020.

“Today, RON is being utilized most extensively in Florida, Texas and Virginia,” ALTA told its members. “Additionally, use of this technology is trending up significantly in Midwestern states. A decade ago, Virginia became the first state to enact a RON law and in 2017 Texas was the third state to approve RON legislation. Florida’s law is relatively new, having passed in 2019, but adoption there has been rapid.”

And as MISMO started its new year under its first full-time president, Seth Appleton, the company was clear that the digital mortgage will be one of its top priorities. As it moves into the digital future, MISMO also announced this year it will begin to use eNote registries to pull in income for the organization. The organization announced in June it would assess a new fee of 75 cents for every origination registered in the system.

Leveraging eClosings to effectively manage increased loan volumes

With record-low rates and the increased loan volume, lenders must streamline workflows and accelerate time to close. Evolving to full eClosings can help lenders process more loans at a faster pace without overwhelming their resources.

Presented by: SimpleNexus

This surge in eNote usage also comes as more lenders and even government agencies begin accepting eClosings. In December, Rocket Mortgage became the first lender to use eNotes in closing a Ginnie Mae-backed loan as part of a pilot program. Now, it says the market is set to see widespread eClosings of Ginnie Mae loans by the end of this year.

And other lenders are also advancing their eClose capabilities. After Ellie Mae announced that it had agreed to be acquired by Intercontinental Exchange, ICE announced it was preparing to unleash a “fully digital mortgage ecosystem.”

In the final months of 2020, the number of companies with a MISMO RON certificate doubled. Originally introduced in April, the MISMO RON compliance certification was designed to ensure that RON tech providers met a universal set of standards including credential analysis, borrower identification, capturing and maintaining a recording of the notary process electronically, audio and video requirements, record storage and audit trails.

“There is no turning back or slowing down at this point,” First American Financial Corp. wrote on its blog. “Lenders are now experiencing the increased efficiency, lowered costs and increased compliance that can be achieved by adopting eClose. More importantly, consumers expect the mortgage lending process to be as easy for them as other types of transactions that are completely digital.

“No consumer was ever sold on the functionality of an eNote, but they do expect the convenience of being able to sign documents electronically, including a note or security instrument,” it continued. “The industry needs to be able to adapt the preferences of consumers whether they want to interact with their lender in-person, by phone, text, email, or via lending portal. They want convenience and they want options and functionality that make the mortgage lending process as easy as it can be.”

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Source: HousingWire Magazine

Regulators extend comment period for First Citizens-CIT merger

The Federal Reserve said its decision to accept input for several more weeks reflects the logistical challenges presented by the coronavirus pandemic.
Source: American Banker

Loan officers made insane money in Q4 2020

Over $4 trillion in originations made its way through the housing market last year, and new data from mortgage software firm LBA Ware revealed that by the end of 2020, loan officers played every last card in their deck to get those deals closed by New Years.

Total funded loan volume by loan officers in Q4 2020 increased 106% from the fourth quarter of 2019, a data analysis by the software firm found.

To handle all that volume, lenders and broker shops grew LO headcount by 27% year-over-year. Even with more LOs battling for all those sweet originations, the average LO managed to produce $2.6 million per month in volume in the last quarter. That’s a 63% increase and a whopping million dollars more per person than seen in Q4 2019. It’s also flat sequentially from the prior quarter, where $2.6 million was the production average.

Despite per-loan compensation decreasing 0.2% year-over-year, LO pockets remained full due to the phenomenal increase in volume.

“Low interest rates flamed an increased demand for mortgage activity, which in turn benefited LOs and processors,” said LBA Ware Founder and CEO Lori Brewer. “They were rewarded for their long hours with robust compensation checks.”

Mortgage Tech Demo Day

HousingWire’s virtual demo days are designed specifically to help mortgage industry decision makers identify the technology solutions they need to operate efficiently and securely. Tune in February 2nd to experience demos from the most innovative loan origination and valuation tech companies in the industry.

Amid all that production, LOs saw purchase volume grow 71% annually, averaging $1.35 million in funded purchase loans in Q4. However, refis, driven by weeks upon weeks of record low mortgage rates, accounted for 51% of all the volume LO’s funded, and soared 158% from the same time in 2019.

As rates are predicted to rise in 2021 (and possibly for years to come), Brewer said LOs should prepare for the influx of refi commissions to begin to subside.

“As rates are predicted to rise in 2021 and for several years to come, loan teams that wish to maintain their earnings would do well to put a strategy in place that enables them to offset waning refi volume with more purchase volume,” Brewer said.

On average, LOs funded $20.4M in annual volume in 2020 overall, with transactions split evenly at 50% purchase loans and 50% refinance loans.

The LOs also had a lot more help to process those loans than they had in the past (which also drives up the lender’s cost to originate the loan).

According to Brewer, processor headcount increased 51% year-over-year. And they cumulatively handled 99% more loan files compared to Q4 2019. Per-loan bonus compensation earned by processors rose 21% to $128 per loan in Q4 2020 ($106 in 2019), earning processors an average production bonus of $2,503 per month ($1,569 in 2019).

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Source: HousingWire Magazine

Homepoint’s Maria Fregosi talks IPO

Maria Fregosi

Home Point Financial, the parent company of wholesale lender Homepoint, joined the growing ranks of nonbank mortgage lenders listed on the public markets.

As HousingWire first reported Thursday night, the company plans to raise $94.25 million on the NASDAQ Stock Exchange in its debut.

The IPO is a secondary offering, meaning the company itself isn’t selling shares and will not receive proceeds. Shareholders from its private equity backer Stone Point Capital initially had hoped to raise $250 million by pricing 12.5 million shares between $19 and $21. Instead, the IPO was downsized, with shareholders selling 5.3 million fewer common stock shares.

HousingWire caught up with Homepoint’s Chief Investment Officer Maria Fregosi to talk about the lender’s debut, its long-term goals, the investor appetite for the wholesale market, the position of its private equity backer Stone Point Capital, what the appointment of former Fannie Mae executive Andrew Bon Salle as chairman signifies for the company, and much more.

The interview has been lightly edited for length and clarity.

HousingWire: Congrats on the debut, Maria. Can you clarify the terms of the offering? It looks like $94 million is being raised, with 7.25 million shares priced at $13.00?

Maria Fregosi: Yeah, there’s an additional optional 1.875 million, so it could be as much as 108.

HW: Home Point Capital downsized the IPO. Can you talk about the thought process behind that?

MF: We felt it was very important for us and, really, for the mortgage industry, that Homepoint take this first step to go public. We wanted to make sure that we had a successful offering, so we adjusted the offering size to a level that made sense and allowed us to achieve our main goal of getting into the public market.

HW: Do you know at this point what that puts your market cap at?

MF: It’s going to be around $2 billion-ish. Around there.

HW: Can you talk about how the proceeds are used?

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HW+ includes weekly long-form digital content, HousingWire Magazine, access to HousingStack, and free admission to all HousingWire virtual events.

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Source: HousingWire Magazine

Is 2021 a good time to sell your house?

Last year, buyer demand increased due to record low mortgage rates.

That said, because of those low mortgage rates, and fewer houses on the market, home prices went up. To put it simply, the last half of 2020 was a seller’s market. But will 2021 be the same? If you’re wondering whether it’s a good time to sell your house, keep reading.

Here we break down the reasons why you should or shouldn’t sell in 2021:

Should sell your house: Interest rates are low

Low-interest rates are great for potential buyers. They make monthly mortgages more affordable! Why is this a good thing for sellers, you ask? While interest rates are expected to remain steady in 2021, there will still be a low supply of houses on the market. This means, home prices will rise and sellers will walk away with a good chunk of change. 

Shouldn’t sell your house: You refinanced or you’re in forbearance

Last year featured a huge refinance boom. As interest rates dropped, homeowners took advantage and refinanced their mortgages at lower rates. If you recently refinanced your house, you’re probably in a better place to afford your current mortgage than if you were to buy something new. 

According to the Mortgage Bankers Association, approximately 2.8 million homeowners are in forbearance plans. If you’re one of them, and you’re wondering if you can sell your house, we have good news.

In most cases, yes, you can! But, the money you haven’t paid will be added to your total payoff (which includes any interest you owe). If your forbearance plan is set to end and you’re still struggling, talk to your lender about an extension. 

Should sell your house: You live in a hot area

U.S. home prices have doubled in the last decade, according to Zillow. In recent months, some cities, in particular, have experienced huge booms in home prices. For example in 2010, the average home price in Denver, Colorado was $246,680. The average home price in 2020 was $464,068, 

If you live in an area where home prices are skyrocketing, it might be a good time to sell your home. 

Shouldn’t sell your house: Your income isn’t stable

The economy is starting to recover, but that doesn’t mean everyone’s back on track. If you’re waiting to go back to work after being furloughed, or you’re worried your job will be making layoffs, you might be thinking it’s a good time to sell your house and purchase something cheaper. 

Keep in mind though, a great deal of money goes into buying a new house (regardless of the property type). Besides a down payment, you’ll have to pay closing costs, property taxes, insurance, etc. The costs add up quickly. And if your income isn’t stable, you might struggle to make ends meet.

Instead of selling your house, talk to your lender about refinancing or entering a forbearance plan to help alleviate financial stress.

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Source: HousingWire Magazine

How Democrats could gain control of FDIC’s agenda

Trump appointee Jelena McWilliams is slated to be the agency’s chair until mid-2023. But legal experts say a provision in the FDIC’s bylaws gives Democratic members of the governing board, now in the majority, an opening to reverse earlier rules championed by Republicans.
Source: American Banker