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Apache is functioning normally

Apache is functioning normally

Data Mining, Digital Lending, Real Estate Database, Servicing Products; Conventional Conforming Program Shifts

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Data Mining, Digital Lending, Real Estate Database, Servicing Products; Conventional Conforming Program Shifts

By:
Rob Chrisman

49 Min, 7 Secs ago

As if lenders and vendors don’t have enough other stuff to worry about, the budgetary standoff in the U.S. doesn’t look like it will abate soon, raising the likelihood of the first government shutdown since 2019. Current funding for federal operations will end on October 1 unless a deal is reached or the proverbial can kicked down the road. Thousands of federal workers might be furloughed without pay. Sure it will be temporary, and its wider impact will likely be limited, but still even talking about it is lousy. According to Morgan Stanley, the last 20 government shutdowns that occurred since 1976 “appear to have had limited impact on the economy.” As for bond prices, a shutdown may cause some “temporary instability”, but this is not a given. There is talk of a short-term Continuing Resolution (CR) providing funding until later this year, but federal agencies, including HUD and Treasury, will cease to function normally. The National Flood Insurance Program (NFIP) authorities also expire on October 1st. The Mortgage Bankers Association created a guide outlining how HUD (including FHA and Ginnie Mae), VA, and USDA would be directly affected by the furlough of government employees and the curtailment of agency operations. (Today’s podcast can be found here and this week’s is sponsored by Built. Built is powering smarter and faster money movement for the entire construction and real estate ecosystem, all while reducing risk. Hear an interview with Servbank’s Bryan Crofford on how companies can best invest in employees, promoting longevity and success.)

Lender and Broker Software, Programs, and Services

Life can change on a dime, and sometimes even the most prepared borrowers end up facing financial hardships they never would have imagined. Forward-thinking credit unions are preparing today, so they can be there for their members when they need help the most. It’s why Mission Federal Credit Union implemented the MSP® loan servicing system, to not only improve their own efficiencies, but better serve their members who are facing financial difficulty. Are you ready to join Mission Federal Credit Union by enhancing your technology to be there for homeowners in life’s most challenging moments? Learn more about MSP today.

One thing that you can always count on in the mortgage space, is that regulatory requirements are always changing. This is why it’s critical for Banks or Mortgage Servicers to stay vigilant with comprehensive Compliance Testing and Monitoring to mitigate exposure and minimize risk. At the MBA Annual in Philadelphia, PA, Servbank’s Shayna Arrington will be helping us all do exactly that. Watch her moderate the panel, “Today’s Top Regulatory Issues” on Tuesday, October 17 at 1:30 PM, on 200 Level, Exhibit Hall E. Want to dive deeper into how Servbank can partner with you? Servbank will have a meeting space at the W Philadelphia on 10/16 and 10/17. Schedule some time to meet with them here: [email protected] or learn more at www.servbank.com.

One-Time Close (OTC) Volume Soars to record highs at AFR Wholesale® (AFR)! While housing inventory is still at an all-time low, OTC loans have witnessed an unprecedented surge in volume! In August, AFR closed more One-Time Close loans in one month than at any other time in their long history of offering the product. Homebuyers are increasingly drawn to the convenience and cost-saving benefits of OTC loans, as they streamline the construction process, reduce paperwork, and offer more favorable terms. This surge in OTC loans at AFR is not just a testament to its effectiveness but also an indicator of the outstanding clients and partners of AFR. Breaking news: As a thank you to their clients, AFR has also brought back FHA OTC on site-built homes!! This long-awaited product is back for partners of AFR to utilize now. Partner Today or contact AFR, email or call 1-800-375-6071.

One of the biggest questions for LOs in a down market is “How do I find more agent partners?” The answer is MMI. To find the right agent partners, you need the right data. MMI has assembled the industry’s most comprehensive real estate and mortgage transaction database which is leveraged by thousands of mortgage professionals daily. Using MMI’s database, LOs can easily search & filter, find an agent and at the click of a button, push the info to a CRM like Bonzo. Sign up for a demo today to see why a majority of the top 25 lenders rely on MMI.

Free eBook: Market-Proof: How to Build a Flexible Lending Business Resilient in Upcycles & Downturns. The exaggerated upcycles and downturns of the past few years underscore just how crucial it is for lenders to build resilience and flexibility into their businesses. To overcome today’s challenges, lenders need to hone their lending process at each step. In this new eBook, Maxwell provides 12 tips from industry veterans to help you optimize your mortgage process from loan application to the secondary market. You’ll get insight from exclusive interviews with industry veterans on how to increase efficiency, access economic scale, and become resilient to market volatility like never before. Click here to download Maxwell’s new eBook “Market-Proof: How to Build a Flexible Lending Business Resilient in Upcycles & Downturns.”

The transformation from paper to digital processes offers substantial benefits, including cost reduction and improved borrower experiences. Most lenders are in a hybrid phase, blending paper and digital processes. To navigate this ongoing change and ongoing innovations in the digital lending space, lenders should consider embracing five best practices: create a successful strategy, prioritize borrower experience, ensure compliance, harness technology, and stay adaptable in the evolving digital landscape. Tackle the future of lending by staying informed and proactive. For deeper insights into this digital lending revolution and actionable steps, read the full article.

“Heading to Vegas? The Total Expert team is in full force at the Digital Mortgage conference in Las Vegas! There are three ways to interact with us. The first is to stop by booth #501 to get your Customer Intelligence ROI report and learn how you could increase funded loan volume by 20 percent. You can watch a LIVE demo of Total Expert on Tuesday 9/26. Lastly, catch our Founder & CEO Joe Welu for a panel discussion: The Customer Data Goldmine Goes Way Beyond Credit Triggers on Wednesday 9/27.Schedule time to meet with the Total Expert team in Vegas.”

Freddie Mac, Fannie Mae, Conventional Conforming News

The Federal Housing Finance Agency (FHFA) released its second quarter 2023 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac (the Enterprises) completed 47,370 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,818,471 since the start of conservatorships in September 2008. View the News Release

FHFA-OIG released two reports: Within the Federal Housing Finance Agency (FHFA), the Division of Federal Home Loan Bank Regulation (DBR) is responsible for supervising the Federal Home Loan Bank (FHLBank) System to ensure the safe and sound operation of the FHLBanks. In response to market disruptions, DBR adapted the scope of its Federal Home Loan Bank Supervisory Activities in 2023.

Regulated entities have not been immune to the trends affecting the labor market over the past few years. Some of the regulated entities experienced higher attrition in 2021 and 2022, consistent with trends in the broader labor market, but one Enterprise reported that its turnover rate started declining in 2022. Read the full report, People Risk at FHFA’s Regulated Entities.

Freddie Mac will update Loan Product Advisor® (LPASM) in October to support multiple recent Single-Family Seller/Servicer Guide announcements, plus more enhancements, described in Freddie Mac October LPA Releases.

Freddie Mac Loan Selling Advisor September Updates includes the following information: Uniform Loan Delivery Dataset (ULDD) Phase 4a Updates and Phase 5 Specification, Auto Evaluate on Import Loan, New Loan Delivery Rules Supporting the Duty to Serve Credit Fee Cap, Initial Principal and Interest Payment Amount Conditionality update, Auto Re-evaluate: Improvements to Modify and Evaluate, and Enhancements to Mandatory Cash Contracting.

Leverage Fannie Mae’s new edition of Beyond the Guide to help your organization build a best-in-class quality control (QC) program. Specific examples and scenarios provided can help teams understand and apply Selling Guide concepts in a way that is most impactful to their organization. A robust QC program helps strengthen loan quality ensuring a safe, sound, and resilient mortgage industry.

Fannie Mae Appraiser Update September 2023 edition focuses on dual themes of delivering high quality appraisals and understanding recent policy changes. Topics include updates to the Appraiser Independence Requirements (AIR), new options for 1004D completion, our stance on 3D printed homes, and more.

Fannie Mae posted the September Appraiser Quality Monitoring (AQM) list. Read the AQM FAQs.

Chris Whalen writes, “Our short take on the future of the GSEs (Government Sponsored Enterprises) looks a lot like the character played by Bruce Willis in the 1995 Terry Gilliam film, ‘Twelve Monkeys.’ Imagine if the GSEs were released from conservatorship, but then were immediately designated as a ‘systemically important financial institution’ (SIFI) by the FSOC. How do you think that would work for private investors? What would happen to the guarantee fees?”

Pennymac Conventional LLPAs updates effective for Best Efforts Commitments: Pennymac Announcement 23-58 replacement of ‘Purchase Special’ LLPA Grid with new ‘Area Median Income Adjustments’ LLPA Grid. Pennymac Announcement 23-59 introduces new ‘Investment Property’ LLPA to the ‘LLPAs by Product Feature for All Eligible Loans’ LLPA Grid. Pennymac Announcement 23-60 updates values for the ‘2nd Home Additional’ LLPA on the ‘LLPAs by Product Feature for All Eligible Loans’ LLPA Grid.

Pennymac is aligning with the FHFA based updated project review and eligibility requirements announced in Fannie Mae SEL 2023-06 and Freddie Mac Bulletin 2023-15, with the exception of any reference to co-op projects. View Announcement 23-61: GSE Updated Condo Project Review Requirements

Citizens Correspondent National Bulletin 2023-16 provides updates on the following topics: Conventional Conforming Products, Review requirements for condominium eligibility – DU and LPA, Gifts and Gifts of Equity – DU, 3D printed homes, Trust Income – DU, USDA-RD Product, Fiscal Year 2024 Conditional Commitment Notice, All Products, Disaster Tax Filing Relief.

PHH Mortgage Corporation updated Conforming Product listings for both Delegated and Non-Delegated loans.

Pennymac announcement 23-62: Fannie Mae SEL 2023-06 Condo Project Manager Updates

Citi Correspondent Lending Bulletin 2023-08 provides Credit policy updates regarding Non-Agency Depreciating Markets list updated, Condo & Co-Op Critical Repairs, Shared Equity and Shared Appreciation, LPA Asset, and Income Modeler (AIM), Continuity of Obligation: Limited Cash-Out, Hazard Insurance Update: Effective Date, and Taxpayer First Act.

On September 6, 2023, Fannie Mae and Freddie Mac announced Selling Guide policy changes addressing multiple topics in Fannie Mae SEL-2023-08 and Freddie Mac Bulletin 2023-18.

AmeriHome Mortgage accepts all revisions, view Product Announcement 20230910-CL for details.

Capital Markets

Ahead of today’s $48 billion 2-year Treasury auction, headlines to open the week revolved around increases in oil prices that’s evidence of inflation’s stickiness, Chinese developer Evergrande calling off talks with creditors as it appears headed for bankruptcy, and reaction to hawkish Fed remarks which is forcing yet another reprice from markets. There is growing sentiment that central banks across the globe aren’t done hiking rates, and Treasury yields trended higher to open the week as a result. With the calendar turning to fall, the economy is facing a few headwinds such as the run up in oil prices, student loan payment resumption, an expanding auto workers strike, and a partial shutdown of the U.S. government.

Every lender knows that mortgage rates remain above 7 percent, and housing data released over the last week highlighted another decline in builder sentiment. Housing starts fell 11.3 percent to a 1.25-million-unit pace in August. Existing home sales were down 0.7 percent in August as low inventory, high prices, and high mortgage rates continue to weigh on sales. Hoping for lower interest rates? A recession would likely mean lower interest rates, but workers with stable jobs (most individuals) would want to take advantage of low interest rates, causing home prices to rise faster. Initial jobless claims fell to 201k for the week ending September 16, which was the lowest weekly reading since January. The JOLTS report indicated that the demand for new workers is moderating somewhat however, significant layoffs are not on the horizon.

Today’s calendar includes the Philadelphia Fed non-manufacturing surveys for September, Redbook same store sales, July house price indexes from S&P Case-Shiller and FHFA, September consumer confidence, August new home sales, Richmond Fed manufacturing for September, Dallas Fed Texas services for September, the aforementioned Treasury auction of $48 billion 2-year notes, and remarks from Fed Governor Bowman. We begin Tuesday with Agency MBS prices a few ticks (32nds) better and the 10-year yielding 4.50 after closing yesterday at 4.54 percent. The 2-year is up at 5.12.

Employment

“At Fairway Independent Mortgage Corporation, customer service is a way of life. #FairwayNation mortgage loan officers are dedicated to finding great rates and loan options for our customers while offering some of the fastest turn times in the industry. Our goal is to act as a trusted mortgage advisor, providing highly personalized service and helping you through every step of the loan process, from application to closing and beyond.”

Logan Finance Corporation, a national Non-QM mortgage lender, is excited to welcome Aaron Samples to Logan’s Executive Leadership Team as Chief Revenue Officer. To learn more about why Aaron joined one of the fastest Non-QM lenders in the nation, contact Randy Viars.

The FHA has a job opening for a Senior Underwriter: Job Announcement Number 23-HUD-2915-P. Job duties include assisting the Branch Chief in monitoring the status of goal accomplishment. Advise the Chief of potential problems in attainment of goals and objectives. Research required underwriting procedures and techniques. Serve as an expert-level resource within his/her Office on matters relating to Underwriting and other Direct Endorsement issues.

Don’t forget that private mortgage insurance companies are hiring: MGIC, National MI, Arch MI, Radian, Essent, and Enact (in no particular order). And while’s we’re at it, Fannie Mae and Freddie Mac. And my cat Myrtle’s friend the CFPB.

Dovenmuehle Mortgage, Inc. announced that Robert Howerton has joined the organization as Chief Information Officer where he will be maintaining and expanding Dovenmuehle’s current information technology (IT) infrastructure.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

Homebuilders are to blame for the current housing and mortgage crisis, according to a report released by the Laborers’ International Union of North America (LIUNA).

The group’s report focuses on mortgages originated between 2005 and 2006 in Maricopa County, Arizona by the lending units of three of the nation’s largest homebuilders, including Richmond American, Lennar, and KB Home.

More than one-third of the mortgages originated by these homebuilders in the county are five-year adjustable-rate mortgages expected to reset between 2010 and 2011, and with many of these homeowners now underwater, they could face serious payment shock.

Per the report, in just the last year the value of Lennar homes has declined $61,600, KB Home values have sunk $55,600, and Richmond American Homes are worth $49,500 less.

In the KB Home Santarra Development in Buckeye, Arizona, home values have dropped a staggering $78,800 in the last year, troubling because 55 percent of mortgages held are five-year ARMs, and 63 percent of purchase loans have a second mortgage.

“Former Countrywide-KB Home Loans Regional Vice President Mark Zachary has said in court that KB Home pressured its lending joint venture to engage in systematic mortgage fraud to drive sales, including encouraging inflated appraisals, assisting buyers in supplying false income information, and approving loans without review or documentation,” the release said.

LIUNA, which earlier this year exposed the homebuilder tax break in the Foreclosure Prevention Act, is calling on agencies such as Fannie Mae and Freddie Mac to place greater scrutiny on the mortgages originated by homebuilders and their mortgage lender partners.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

HELOC, Manufactured, Technology, Marketing, and Digital Tools; Central Banks and Inflation

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HELOC, Manufactured, Technology, Marketing, and Digital Tools; Central Banks and Inflation

By:
Rob Chrisman

7 Hours, 56 Min ago

If you want something sobering, almost mesmerizing, here’s a short drone video of the flood damage in Libya (at the 15 second mark you can see how it tore through the city). Fortunately not so sobering are some stats out of the United States. The U.S. homeownership rate in 2022 was even higher than before the COVID-19 pandemic at 65.8 percent compared to 64.6 percent in 2019. That rebound was driven largely by those aged 44 and younger. And who says Millennials aren’t buying homes? Homeownership continued to climb from the foreclosure crisis (2004) and Great Recession (2008), when rates dipped as low as 63.4 percent in 2016. Homeownership rates recovered approximately half of the 5.6 percent decrease from 2004 to 2016. In Hawai’i the homeownership rate is 59 percent, I bring up the Aloha State because American Savings Bank, First Hawaiian Bank, and Central Pacific Bank joined Hawaiʻi Community Lending, a Hawaiʻi-based nonprofit community development financial institution, in pledging to provide mortgage forbearances to Maui families impacted by the recent wildfires. (Today’s podcast can be found here and this week’s is sponsored by the Trade-In Mortgage powered by Calque. Homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Lenders can help their clients negotiate a lower purchase price, reduce their interest payments, and eliminate PMI. Today’s podcast features Greg Korn and Ben Petit in an interview from the New England Mortgage Bankers Conference.)

Lender and Broker Software, Products, and Services

In an era defined by technological advancements, Dark Matter Technologies LLC emerges as a transformative force in the mortgage origination landscape, marking its evolution from Black Knight Origination Technologies. Under the Perseus Operating Group of Constellation Software Inc., Dark Matter Technologies remains steadfast in its commitment to pioneering innovation. CEO Rich Gagliano aptly sums up the company’s vision: “Dark Matter Technologies is on a mission to revolutionize the mortgage origination business by supporting, growing, and aggressively innovating new and existing products.” With over 1,300 dedicated mortgage technology experts and a portfolio that includes Empower, AIVA, Exchange, and more, Dark Matter Technologies is poised to lead the industry into a new era of unparalleled transformation. Learn more about Dark Matter Technologies and their mission, here.

There is approximately $9T in agency or government MSR outstanding. Billions of dollars are being transacted daily and this volume requires disciplined loan accounting processes to record loans accurately, produce investor reporting, and power business decisions. SBO from SitusAMC is a comprehensive loan accounting and master servicing platform that reconciles daily and monthly servicer cash collections down to the penny, aiding in the discovery of potentially misplaced funds and enhancing the financial integrity of the entire process. Servicers using SBO produce accurate and timely details providing confidence that their investor reporting obligations are being met. Schedule a demo of SBO with SitusAMC’s client-focused experts.

“Did you hear Capacity’s big announcement at TMC Fall? We’ve acquired Denim Social! Together, we’re building a support automation platform that helps you automate support, connect more authentically with your borrowers, and close more loans, faster. Read the press release to learn more! We also gave away a personalized AI Assessment worth $10,000 to help mortgage lenders identify opportunities for improving their business with AI. Plus, our new GSE Search feature pulls accurate, up to date GSE regulations within seconds using generative AI. Want to join the AI in mortgage revolution? Meet the Capacity team today.”

A new era in loan origination has arrived. Mortgage Machine Services, an industry leader in digital origination technology to residential mortgage lenders, announced the launch of its namesake platform Mortgage Machine™, an out-of-the-box, all-in-one LOS designed to accelerate lenders’ operational velocity and support an end-to-end digital origination process. Developed by digital mortgage pioneer and industry veteran Jeff Bode, Mortgage Machine utilizes intelligent automation, configurable business workflows and a cloud-based infrastructure to optimize the entire loan lifecycle and create a seamless lending experience. Key platform features include AI-powered task automation, a scalable cloud-based infrastructure, flexible APIs, pre-configured workflows for retail and TPO channels, integrated document management and POS functionality. Mortgage Machine also offers all-in-one eClosing capabilities, including an eClose room, eNotes, eVault and RON, and utilizes MISMO SMART Doc® data and security standards. Visit here to get started on your digital transformation journey.

Blend Labs continues to be the mortgage industry’s leading technology platform. Core to the platform is Blend’s unique integration with Desktop Underwriter® (DU®) and LPA. These integrations help streamline your approval process for borrowers, with all the conditions lined up for your fulfillment team. Add in intelligent and automated follow-ups and you’ll get to the closing table faster and more efficiently. Putting this information at the loan officer’s fingertips creates a streamlined process and eliminates manual work which equals lower costs, higher pull-through, and increased revenue. See more ways that Blend is committing to innovation and continues to lead the way.

Looking for timely advice on how to capture more loan volume and improve your bottom line in a down market? Now is the time to explore ways to tap into new markets. Expanding your mortgage footprint through new products and channels or by reaching new geographies insulates your business against economic and interest rate volatility by diversifying your sources of volume and revenue. By setting the groundwork to connect with new borrower markets now, you’ll open new revenue possibilities for when the market inevitably recovers, positioning your business to hit the ground running and beat out the competition. Download this informative eBook from mortgage solutions provider Maxwell for actionable advice, including how to create your expansion plan and choose the offerings best suited to the markets you want to pursue. Click here to download Growing Your Mortgage Footprint: How to Launch New Loan Products, Channels & Geographic Expansions.

Broker and Correspondent Products

Build your book with AFR Wholesale® (AFR)! Now, get the chance to listen from and ask questions directly to AFR and Freddie Mac to turn those prospects to active pipeline at the next Why Wait webinar series covering Manufactured Home Financing on Wednesday, September 20th at 1 PM EST. Register here today! Have you and your borrowers looked into Manufactured Housing as an option? With unbeatable affordability, customization options that are very tailored, quick installation and trusted quality, manufactured homes are worth exploring. Especially with a top lending partner in AFR who has been an industry leader for over 25 years. This is a live webinar, and a recording will not be provided so make sure to join and get great insight and have the opportunity to ask questions and listen to scenarios! Visit AFR Wholesale, email [email protected], or dial 1-800-375-6071. AFR Wholesale® – Don’t wait. Register today!

“With Cash-Outs on the decline during this high interest rate environment, it is important to present your borrowers with different cash-out options. That is why Vista Point is announcing a brand new HELOC product coming soon, in addition to our existing Closed-End Second. Our HELOC product is being designed as a complement to our Closed-End Second to provide a full suite of Equity Solutions. Our HELOC will provide a specific solution for borrowers that want the optionality of an interest-only payment, or the ability to draw up and buy down their line during the 5-year draw period with no Appraisals up to $250k. Just like on our Closed-End Second offering, with HELOC loan amounts up to $550K and combined lien amounts up to $2.5M, your borrowers can get the cash they need without sacrificing their advantageous 1st mortgage rate. HELOC will be available for full doc and bank statements on OO and 2nd homes. For more information, reach out to us, or meet us at the Philly MBA to discuss.”

Capital Markets

We learned last week that prices in August rose by the largest monthly percentage in 15 months. However, that month-over-month inflation was widely expected due to a surge in gasoline prices. Underlying oil prices are also pointing towards further increases in September. Meanwhile, core prices were up 0.3 percent and core goods prices declined by 0.1 percent. Over the last three months core prices have increased at an annualized pace of 2.4 percent, the lowest three-month pace since March 2021. Retail sales rose faster than analysts’ expectations in August, also due to higher gas prices. Many analysts expect consumer spending to slow as excess savings built up over the pandemic have materially declined and credit is increasingly costly and difficult to obtain. Additionally, the resumption of student loan payments is expected to cut into discretionary spending. It will take more than expectations of slower spending before the Federal Reserve feels inflation is firmly under control.

What could move mortgage rates this week? The U.S. Federal Reserve, Bank of England, Bank of Japan, and the central banks of Norway, Sweden, and Switzerland are all announcing rate decisions after a spate of recent inflation data shows that price increases are alive and well. The Fed’s Federal Open Market Committee (FOMC), the action arm of “the Fed,” is not expected to raise rates. It’s unlikely that the commentary around the commitment to keep fighting inflation and higher rates for longer will change either, but it could tilt a little more to the hawkish side after a stronger-than-anticipated inflation report for August.

The week could also see some extra drama on the political front as the countdown continues toward a potential government shutdown on October 1 in addition to the battle between the United Auto Workers (UAW) union and Detroit automakers. The auto worker strike could complicate Fed Chair Powell’s bid for a soft landing. Union leaders are asking for a 36 percent wage increase over four years, to match the similar recent pay increase for top executives. The union also wants pay to rise automatically with inflation in the future, as it did before the financial crisis.

This week brings the aforementioned FOMC meeting that begins tomorrow and concludes on Wednesday with the Statement, updated SEP (where fed funds projections will be closely scrutinized), and Chair Powell’s press conference. The treasury will also be in the headlines with more coupon auctions scheduled: $13 billion reopened 20-year bonds tomorrow and $15 billion reopened 10-year TIPS on Thursday. The only scheduled, probably non-market moving, news out today is the NAHB Housing Market Index for September. We begin the week with Agency MBS prices roughly unchanged from Friday, the 10-year yielding 4.34 after closing last week at 4.33 percent, and the 2-year is at 5.00 percent.

Employment

Are you more energized, more encouraged, and more motivated to succeed today than yesterday? Zig Ziglar famously stated, “People often say that motivation doesn’t last. Well, neither does bathing; that’s why we recommend it daily.” “As an industry leader, Thrive knows that motivation, discipline, and belief in your ability to succeed is critical,” stated Randell Gillespie, National Sales Leader for Thrive Mortgage. “There is no better time than now to find ways to continually motivate your team, which is why we put so much focus on daily opportunities like these at Thrive. Through our weekly High-Performance Coaching Calls, our very own nationally-recognized Marketing Master, James Duncan, leads these motivating and educational experiences for results. The biggest names in the mortgage industry and thought-leadership have been part of our Thrive Nation broadcasts. We want everyone to be better today than yesterday. Start a conversation with us and find out how.

“The fall season is here, and now more than ever is the time to build rapport with your referral partners and clients to maintain a steady stream of business. At Guaranteed Rate Affinity, not only do we have the greatest number of products, but we have the tech platform for our loan officers to do business from anywhere. With PowerVP, you can do anything from creating loan applications to sending pre-approval letters all from your mobile phone. Anything you could do from your desk, you can now do on the go with PowerVP. Gone are the days of being chained to your desk and missing out on important moments. Primarily, it gives you a work-life balance you never thought possible. Luckily, we’re hiring the best of the best loan officers to leverage our tech platform to grow their business. Ready to learn more? Contact Tim McGraw to get started.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Lately, I probably haven’t been winning many friends with my somewhat pessimistic view on the real estate market.

A couple weeks back, I warned that affordability was set to take a major blow, as a result of higher home loan interest rates and surging home prices.

And just last week, I cautioned readers that the housing market might be cooling, at least in some parts of the country.

Interest Still High, Quality Perhaps Not

The issue I see materializing is a lack of qualified buyers, not necessarily a lack of interest from prospective home buyers.

In other words, properties that are listed at seemingly astronomical prices will continue to receive bids, but if the buyers aren’t actually able to obtain financing at those sky-high prices, it all means nothing.

There are a few different issues at hand. For one, there is the prospective buyer who got pre-qualified to buy a home two months ago, when both interest rates and home prices were significantly lower.

For this individual, they may find that they can no longer actually afford what they thought they could, once their lender says their mortgage rate is no longer 3.5%.

This is especially true for those who were just squeaking by in the affordability department, as many often are.

It’s simple math really. If a borrower’s DTI ratio is now too high, the lender won’t be able to offer them a loan. And with rates and prices higher, there’s no easy way around a higher monthly housing payment.

That is, unless you buy down your rate, or bring more money in at closing to reduce your loan amount.

[Watch Out for the Adjustable-Rate Mortgage Pitch!]

Down Payment Dilemmas

Unfortunately, that brings us to another issue. Most homeowners probably don’t have a surplus amount of cash to put down on a home, especially seeing that prices have risen dramatically nationwide.

For example, cash set aside for a 20% down payment may only go as far as 10% nowadays, or even less, based on markedly higher listing prices.

This creates an issue when making a big offer for several reasons. For one, it means you’ll need to find a lender willing to offer a loan with a LTV ratio greater than 80%, or secondary financing to arrange a combo loan. There’s also mortgage insurance to contend with.

In any case, financing can get chancy if the loan is no longer straight-up vanilla.

Secondly, those who are already putting down less than 20% will have few places to turn if (and when) the appraisal comes in low.

Let’s face it – some of these properties are listed for way too much these days, and without supporting comparable sales, lenders won’t be able to assign sufficient appraised values. So when the properties don’t appraise, these offers will fall through.

For the market to hold up, it will need sustained interest from qualified buyers, not just any old buyer. I’m talking a buyer with plenty of assets and income who can adapt when things go awry.

This will be especially important as investor interest wanes.

The alternative, of course, is looser underwriting guidelines, creative financing, inflated appraisals, and another housing crisis.

Source: thetruthaboutmortgage.com

Apache is functioning normally

With mortgage rates above 7%, historically low levels of housing inventory, defaults in commercial real estate, and a series of potentially onerous regulations to come, Mortgage Bankers Association President and CEO Bob Broeksmit said the trade group is doing all its can to influence policymakers.

“MBA cannot control macroeconomic forces, but what we can do is make sure the actions of policymakers help our industry instead of hindering it at a crucial time,” Broeksmit said at the organization’s Compliance and Risk Management Conference this week in Washington, D.C.

Broeksmit highlighted the group’s work in helping a bill about remote online notarization get through the divided U.S. House of Representatives. The bill would create federal minimum standards to allow notaries to perform remote online notarization (RON) transactions. The MBA also supported Rep. John Rose (R-TN)’s effort to curb trigger leads, he said.

Broeksmit also touched on agency-focused policy work, citing the cancelation of a controversial Federal Housing Finance Agency (FHFA) policy that would have imposed a controversial upfront fee on Fannie Mae and Freddie Mac borrowers with higher debt-to-income (DTI) ratios.

The trade group has its eyes on other challenges ahead, including a proposal by the Financial Stability Oversight Council (FSOC) at the U.S. Department of the Treasury that would label non-bank financial entities as systemically important financial institutions, which MBA opposes.

“This will be a major regulatory power grab over a part of the housing finance market that is already well-regulated by the states and other federal agencies,” Broeksmit said. “If FSOC is concerned about the core banking activities taking place outside the purview of prudential bank regulation, then it should reconsider the regulatory environment that has caused the exit of so many traditional depository institutions from the marketplace in the first place. If you regulate everyone out of the business, who is left to originate and service these loans?”

MBA is also looking ahead to a U.S. Supreme Court decision expected early next year that will decide the constitutionality of the Consumer Financial Protection Bureau (CFPB), Broeksmit added.

“While the MBA has its disagreements with many of the Bureau’s regulatory actions, we have a strong position on the need for consistency and our opposition to chaos,” he said, noting the MBA has filed an amicus brief saying as much.

MBA is also keeping an eye on a developing case before the U.S. District Court for Maryland where the CFPB and the U.S. Department of Justice (DOJ) are aiming to make lenders liable for actions of third-party appraisers when those actions result in bias or discrimination during the valuation process, which MBA is also against.

“Lenders cannot be held vicariously liable on fair lending grounds for the actions or inputs of an independent third party such as an appraiser or [automated valuation model (AVM)] provider,” Broeksmit said. “AVMs hold great promise as an opportunity to alleviate appraiser shortages, minimize bias and reduce transaction costs. Clear rules of the road are necessary so we will stay engaged with federal policymakers on ways to reduce bias and improve accuracy for AVM users of all sizes and business models.”

Source: housingwire.com

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When you’re about to make an offer on a home, your real estate agent will ask how much “earnest money” you’d like to put down. Earnest money is a type of security deposit, also known as a “good faith” deposit, made to the seller of a home. It represents your intent to buy the property by showing the seller you’re serious about purchasing the property. In most cases, earnest money can also act as a deposit on the property you’re looking to buy.  

This Redfin article gives an overview of what earnest money is, why you need it, and how much you may need, and how to protect the money once you deposit it. 

What is earnest money in real estate transactions?

Earnest money is the money you pay after a home seller has accepted your offer on a house and before closing on the home. Earnest money assures the seller that you as the buyer are acting in good faith, and it provides them with some compensation in case you back out of the deal without a valid, contractual reason. 

Once the seller’s agent is able to confirm that your earnest money has been deposited into an escrow account, the buyer and seller will enter into a purchase agreement and the seller’s agent will mark the listing as a pending sale — in effect taking the property off the market. At this stage, various inspections, appraisals, and possibly other contingencies you had in the offer contract move forward to finalize the sale. 

Who keeps earnest money if the deal falls through?

If the buyer backs out, the earnest money is paid to the seller. If the deal falls through due to something coming up on the home inspection that would be prohibitively expensive (like a cracked foundation) or any other contingency listed in the contract, the buyer gets their earnest money back. 

How much earnest money do you need to offer?

The buyer and seller can negotiate the earnest money deposit amount, but it typically ranges from 1% to 3% of the sale price, depending on the market. However, if you’re buying a home in a seller’s market (when there are more buyers than homes for sale), or bidding on a highly competitive home, the earnest money deposit might range between 5% and 10% of a property’s sale price.

Be sure to talk to your real estate agent about how much earnest money you should offer in the housing market you’re competing in. 

Do you need to pay earnest money? 

In the strictest technical terms, the answer is no – earnest money is not a requirement when you make an offer on a house. However, your offer likely won’t receive the seller’s serious consideration without putting a good faith deposit down of some kind. Earnest money can act as added insurance for both parties in the transaction.

How is earnest money paid and where does it go?  

In most cases, your earnest money deposit is paid to the escrow or title company, which holds it in an escrow account until the transaction closes. If you work with a real estate attorney, the deposit may be put into escrow there. You can pay this deposit with a personal check, a cashier’s check from the bank, a money order, or wired funds, depending on the terms of your contract. 

What does the good faith deposit count toward? 

Once the sale of the home has been completed, the earnest money you paid can be applied toward your closing costs or down payment. Alternatively, you can receive your earnest money back after closing. Because the sale went through the home sellers do not get to keep the earnest money deposit.

When does a seller keep the earnest money deposit?

If you fail to meet your offer’s contractual obligations, your earnest money could now belong to the seller.  Examples include:

  • After the due diligence period is over (usually a couple of weeks), you learn that the home sits in a flight path or near a refinery and you decide to walk.
  • You back out for any reason not listed as a contingency in the contract.
  • You cannot close on time, without a relevant contingency, and the contract has a “time is of the essence” term.

If you face any of these issues but still want to purchase the house, don’t give up. Have your agent get with the seller’s real estate agent. If you are upfront about the situation, the seller may extend the timeframe. 

Is earnest money refundable? 

As a buyer, you can reclaim your earnest money for a couple of reasons:

  1. If the seller doesn’t fulfill their side of the purchase contract. For example, if the home inspection found faulty windows and the seller agreed to replace them – but did not follow through by the contract deadline. That breach of contract allows a buyer to back out of the purchase and receive a refund of their earnest money. 
  2. If you have a contingency in place, and you have a reason related to that contingency to cancel the contract. There are a number of contingencies you can put into the contract and, if not met, you can walk away from the deal with your good faith deposit in hand.

Other examples of when your earnest money would commonly be refunded:

  • The title company finds a lien against the property. 
  • Your lender denies you the loan, but you have a financing contingency in your offer.
  • If your offer is contingent on selling your current home, but you are unable to do so after a given period of time.
  • If you have an appraisal contingency, and the home appraises at a lower rate but the seller won’t reduce the price of the home.

Having a contingency may also allow you to negotiate the terms of your contract. For example, you may be able to ask the seller to perform repairs or give a credit at escrow to cover the agreed-upon repair costs. Typically, a buyer and seller can negotiate a resolution so the sale can be completed.

What if a buyer can’t afford a good faith deposit?

Most sellers will not consider an offer without earnest money. Keep in mind, however, that it may be possible to negotiate a work-around. If you can’t afford an upfront earnest money deposit, let the real estate agent and seller know right away. If your purchase method and financing look solid otherwise, maybe the seller will agree to move forward with the sale. If you are serious about the purchase, you may be able to ask a family member or friend to assist with a gift or loan of funds for the good faith deposit. 

A word of caution: Before taking a gift, institutional loan, or getting a cash advance on a credit card for your earnest money, be sure to consult with your mortgage lender. Any new gift, bank loan or cash advance that leads to high credit card balances during your transaction timeline could be detrimental to your mortgage loan approval. This deposit is meant to secure the property, not put it at risk of losing it.

Earnest money in action: Common scenarios

Let’s look at an example scenario of how earnest money may play out. Evan and Mia have listed their homes for sale in Washington, DC. Amelia is in the market for a new home and is interested in both properties and can’t make up her mind. In the event that both sellers require an earnest money deposit, three potential scenarios can unfold.

Scenario 1: The forfeited deposit

Because Amelia can’t decide which house to buy, she puts a good faith deposit down on both properties, prompting Evan and Mia to take their homes off the market. 

Later, Amelia decides to buy Mia’s house. Now, Evan needs to relist their home for sale all over again. Luckily, Amelia’s earnest money is Evan’s to keep because Amelia backed out, which offers some compensation for time and money lost while the home was off market.

Scenario 2: The early closing payment

After giving it some thought, Amelia decides to make a single deposit on Mia’s home and everything runs smoothly. On closing day, Amelia gets the keys and the deposit is put towards their downpayment.

Scenario 3: The failed contingency

Amelia makes a single deposit to Mia. However, during the home inspection, Amelia discovers the electrical wiring is not up to code and will be very expensive to update. Luckily, Amelia has a home inspection contingency in the purchase agreement and decides not to buy and gets the deposit back from Mia.

How to protect your earnest money deposit

Take the following steps to protect your earnest money against fraud or unjustifiable forfeiture:

  • Document Everything. A home is one of the largest purchases many of us will make. Make sure the contract clearly defines what amounts to cancel the sale and who ends up with the earnest money. Include any amendments to details like buyer responsibilities and timelines.
  • Use an escrow account. Instead of working directly with the real estate seller or broker, use a reputable third-party, such as an escrow company, legal firm, or title company. Ensure the funds are securely held within an escrow account and obtain a receipt.
  • Understand the contingencies. Familiarize yourself with the contingencies included in the contract, and double-check the contingencies that protect your interests are included. Do not sign a home purchase agreement that doesn’t have the clauses that protect you.
  • Fulfill obligations. Real estate purchase agreements typically establish deadlines to safeguard sellers. Honor these deadlines and be sure to promptly address inquiries, submit necessary documents, and meet inspection, appraisal, and closing timelines.

Earnest money is an integral part of most real estate transactions. Before signing a Purchase and Sale Agreement to buy a home, carefully review all contingencies, understand how much money you’ll need to pay, and know-how to successfully recover your earnest money if you need to back out of the sale.

Source: redfin.com

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Lender and appraisal management companies and other property data collection companies can now use Black Knight‘s Scout mobile property inspection as part of the value acceptance plus property data process.

With the cloud-based Scout app, users can easily collect detailed interior and exterior property data using a mobile device, Black Knight said Tuesday. 

“By using Scout, lenders experience significant efficiencies and cost savings as well as greater data transparency, minimize the potential for bias and realize faster origination turn times,” Ben Graboske, president, Black Knight data & analytics, said in a statement. 

The government-sponsored enterprise (GSE) approved six vendors following the roll-out of its new valuation initiative. The list includes some of the biggest names in the mortgage tech space —  Solidifi, Class Valuation, Clear Capital, Mueller Services, Inc., Accurate Group and Black Knight‘s Collateral Analytics LLC.

Through built-in rules, users can input specific home characteristics and take photos based on Fannie Mae‘s proprietary data requirements, the company noted. GPS tracking and other measures to validate the photos and data are collected at the borrower’s property. 

Fannie Mae‘s update of its Selling Guide, which occurred earlier this month and includes more options for property valuations, has stirred controversy. 

Key to the new options are Fannie Mae’s Property Data API, by which Fannie “has established a property data standard and API to collect data and images consistently,” the GSE said. According to Fannie, the process encourages the use of emerging technologies to capture property information, imagery and floor plans.

It’s a welcome move for mortgage tech firms in terms of modernization in the industry.

“This is a standardized data collection done at the property, which brings objective, transparent data into the whole process,” Kenon Chen, executive vice president of strategy and growth at Clear Capital, said. “I think that not only drives this program, but paves the way for a better appraisal process when an appraisal is needed.”

Appraisers, however, have voiced a desire to shift as much appraisal work away from Fannie Mae as possible.

“I encourage all appraisers to take a very serious examination of their current business model,” Washington-based appraiser Dave Towne wrote on AppraisersBlog.com. “If the Fannie Mae trend continues, you won’t have any of that business in the future anyway.”

Source: housingwire.com

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A lot rides on a home appraisal, whether you’re trying to sell a house, refinance your mortgage or tap into your home equity.

An appraisal may come in lower than you expected because property values dropped or because you’ve overestimated your home’s market value. But the appraisal process isn’t foolproof, and there are options if you think the appraiser got it wrong, or you suspect that you’ve been subject to appraisal discrimination.

Here’s what to do if your home appraises for less than you think it should.

Understand how an appraisal affects home equity

A home appraisal is a licensed appraiser’s opinion of home value, based on research, analysis and professional judgment. Lenders require an appraisal for most kinds of home loans because the property serves as collateral for the loan — they don’t want to lend more than the property is worth. Lenders plug the appraised value into a formula called the loan-to-value ratio (LTV) — the loan balance divided by the home value. A combined LTV includes the balance of the mortgage plus the amount of a home equity loan or line of credit. The ratio affects the amount you can extract in home equity and whether you can refinance.

Here’s an example of how the appraised value would affect borrowing from your home equity. Say, for instance, a lender’s maximum combined LTV is 85%. You’d like to borrow $100,000 through a home equity loan and currently owe $200,000 on your mortgage.

If your home appraised for $375,000, your combined loan-to-value ratio (300,000 divided by 375,000) would be 80%, and you might qualify. But if the home appraised for $325,000, the LTV (300,000 divided by 325,000) would be 92%, too high to meet the lender’s requirement.

Check the appraisal report for accuracy

The lender is required to send a free copy of the appraisal report to the loan applicant at least three days before the loan closes. So you’ll get one if you’re refinancing or applying for a home equity loan. But in a home sale, the buyer will receive it as part of the mortgage process. If you’re the seller, work with your real estate agent to get a copy of the report from the buyer.

The appraisal report documents a slew of property details that the appraiser considered in the valuation. Even the best appraisers can make mistakes, so scour the report to make sure all the particulars are correct, such as:

  • Number of bedrooms and bathrooms.

  • Square footage.

  • Amenities, including fireplaces, patios and pools.

  • Garage type and condition.

  • Condition of roof, furnace or other major systems listed on the report.

  • Additional features, such as energy-efficient systems.

Evaluate the ‘comps’

To help determine home value, appraisers consider prices of comparable homes that were recently sold in the area, known as real estate comps.

Check which homes were used. Were they truly comparable? How nearby are the homes, and how recently were they sold?

You may want to ask a friendly real estate agent familiar with your neighborhood — or your agent, if you’re working with one — for a list of recent comparable sales.

🤓Nerdy Tip

Understand that appraisals are different from online home value estimates. The appraisal isn’t wrong just because it’s lower than the ballpark figure you saw online. Home appraisals take more details into account than home-search algorithms can, so use online estimates as guidelines only.

Submit a ‘Reconsideration of Value’

Promptly document any mistakes or missing information from the appraisal report, as well as any additional information about comparable sales that you think should be considered. If you’re the loan applicant, then submit that written information as part of a “reconsideration of value” to your lender.

If you’re the home seller, ask your real estate agent to communicate those issues to the buyer and ask the buyer to submit the information to their lender.

Although the loan applicant ultimately pays for the appraisal, the appraiser actually works for the lender. So any feedback about the appraisal should go to the lender, not the appraiser.

The lender will pass along the information to the appraiser. The information you provide could prompt the appraiser to revise the valuation, but only if the additional details are relevant and significant enough to move the needle.

A loan applicant could also ask for a second appraisal or start over with a different lender. But appraisals typically cost at least a few hundred dollars, and there’s no guarantee the next appraisal will come in higher.

File a complaint if you suspect discrimination

Under the U.S. Fair Housing Act of 1968, home appraisers aren’t allowed to discriminate based on someone’s race, color, religion, sex, disability, family status or national origin. Yet many media reports in recent years have highlighted instances in which properties appraised for more when Black homeowners hid evidence of their race. Although the stories were new, the concept of “white-washing” a home to get a fair value has a long and painful history in the Black community.

Another option is to file a fair housing complaint. You can do that directly with the Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity or get help through your local fair housing center. Funded through HUD’s Fair Housing Initiatives Program, fair housing centers do preliminary investigations and help people navigate the complaint process. You can find a fair housing organization near you on the HUD website.

Refinance programs that don’t require appraisals

If you have a mortgage backed by the Federal Housing Administration or the Department of Veterans Affairs, you may be able to refinance without getting an appraisal. These programs, however, don’t let you cash out any of your home equity:

Source: nerdwallet.com

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As a rule of thumb, real estate agents tell their buyers that they should be prepared to pay as much as 5 percent of the home’s purchase price in closing costs at settlement. For a home priced at $200,000, closing costs would amount to about $10,000.

That’s a lot of money, but is it accurate?

The true price of closing costs

According to the latest annual survey of closing costs by Bankrate, that figure seems high. Lenders’ fees, which include origination and underwriting fees as well as out of pocket expenses like credit checks, averaged $1,058 on a $200,000 home, an increase of only 1.6 percent over 2015. Third party costs in the survey included appraisals and surveys and averaged $1,070 for a total of $2128.

Unfortunately, Bankrate left costs out of the survey that vary a lot from place to places such as taxes, property insurance, association fees, interest and other prepaid items. These can be among the most expensive. Title costs, for example, can cost about $1,500 on a $250,000 home, but that cost can vary by hundreds of dollars based on the state and the title provider.

At close, buyers will also be required to compensate sellers for pre-paid expenses like property taxes and HOA fees that they have already paid at the time of settlement. These can be sizable and vary from jurisdiction from jurisdiction.

How you can measure your closing costs

Until recently, getting an accurate total of closing costs more than a few days before closing was virtually impossible. New federal disclosure forms that took effect in October 2015 called “know before you owe” help consumers estimate their closing costs at the time they apply for their mortgage, The new forms are designed to make it easier for consumer to save money by shopping around for closing services.

Within three days of receiving an application, lenders now are required to send borrowers binding estimates of the costs they will charge, and estimates of the third party cost that appraisers and other service providers will charge. Consumers can get more than one set of estimates and compare the dollar totals for lender-charged fees and 3rd-party fees. They can also choose their own third-party providers except for appraisers.

By doing a little homework and legwork, borrowers can save thousands of dollars on their closings costs.

Source: totalmortgage.com