mortgage technology

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Apache is functioning normally

Since ICE announced plans to acquire Black Knight in May 2022, the firm went through a bumpy 16-month-period facing antitrust concerns from the Federal Trade Commission (FTC), lawmakers and trade groups. 

FTC sued ICE earlier this year alleging the two top mortgage technology providers would drive up costs, reduce innovation and limit lenders’ choices for mortgage origination tools. 

In an effort to save the merger deal, the two companies agreed to sell Black Knight’s Empower loan origination system and product and pricing engine (PPE) unit Optimal Blue to a subsidiary of Canada’s Constellation Software. 

Under the agreement between the FTC and the two mortgage tech providers, ICE completed the sale of Black Knight’s Optimal Blue and Empower in September.

ICE affirmed that Optimal Blue is still available to its customers, who are the largest consumers of Optimal Blue Solutions. 

In parallel, ICE plans to develop its own PPE to provide additional options to lenders and partners, ultimately lowering the cost for the consumer.

“We plan to maintain and invest in our own product and pricing engine, further strengthening the mortgage ecosystem by providing additional options and greater efficiencies to lenders, servicers and partners. Ultimately, lowering acquisition costs for lenders and enabling those savings to be passed to the consumer,” Jackson said.

With Black Knight part of ICE now, executives expect the integration of data and technology across the mortgage workflow to enable greater automation, in turn reducing friction and lower cost to originate a home mortgage for every party involved.

“By combining data on the consumer’s payment history, and loan balance with our rich analytical solutions, such as our valuations and AllRegs – which is an industry leading product availability and eligibility database – our servicing customers will be able to identify opportunities to proactively offer more efficient loan solutions to help lower costs and meet consumers needs,” Jackson noted. 

Other opportunities ICE acknowledged include developing innovative analytics that help lenders connect with potential buyers in historically underserved markets and identify minority bias in the home valuation process. 

Financials

In terms of financials, ICE expects net revenue synergies of up to $125 million by 2028 largely through cross-sell opportunities across the platform and ICE’s expanded customer base.

ICE executives said they’ve identified north of $300 million worth of opportunities for the company to go after which includes cross-selling data and document automation platform to the entire Black Knight’s MSP mortgage servicing system.

“There’s a little north of 100 [MSP clients] and we believe that 40 of those are not on Encompass today. That represents roughly 15 to 20% market share of annual loan volume that we think we’re going to have a great opportunity,” Jackson said.

For example, JPMorgan Chase, one of the largest servicing customers of Black Knight, is implementing ICE’s data and document automation platform to both its retail and correspondent channels, replacing its in-house legacy infrastructure, executives noted.

ICE expects Backnight to contribute approximately $85 million to $90 million of net revenues, and roughly 50 million to $55 million of adjusted operating expenses to Q3 results.

Full year 2023 ICE Mortgage Technology (IMT) revenues including the legacy IMT business and pro forma for Black Knight are expected to be between $2.05 billion and $2.07 billion.

“With Black Knight, ICE is well positioned to improve the execution and subsequent settlement and servicing of US home mortgages, the major credit exposure for most US consumers,” said Jeff Sprecher, chair and CEO of ICE.

Source: housingwire.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.”

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Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

Cybersecurity, Warehouse, Accounting, Marketing Tools; New Broker Products; CFPB Co-Marketing Case

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Cybersecurity, Warehouse, Accounting, Marketing Tools; New Broker Products; CFPB Co-Marketing Case

By:
Rob Chrisman

Fri, Sep 15 2023, 8:34 AM

“Happy” 15-year anniversary of Lehman Brothers going belly up. “I was struggling to understand how lightning works and then it struck me.” One of the conversation topics here at the NAMMBA event in Orlando is how Florida has its share of estimated lightning strikes every year. (As does the rest of the nation: here’s a link to an interesting real-time map.) Another topic is Florida’s Senate Bill 264 which prohibits the direct or indirect ownership of specific categories of real estate by “foreign principals” from a foreign “country of concern,” defined as the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, or the Syrian Arab Republic… The Statute prohibits the acquisition of (1) any interest in agricultural land by a foreign principal, (2) any interest in real property located near a military installation or critical infrastructure by a foreign principal, and (3) any real estate interest by a foreign principal of the People’s Republic of China, subject to very limited exceptions. There are challenges, of course. (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino Company, and award-winning developer of mortgage technology for modern lenders. Hear an interview with Simple Nexus’ Lori Brewer on areas in the mortgage space that technology and innovation will impact most.)

Lender and Broker Software, Products, and Services

“Our latest blog, ‘FEMA, Floods, Fires, and Funding, Oh no!’, highlights the early impact of this year’s hurricane season, blustered by Idalia’s trail of destruction and fanned by the Maui fires. This year packs a bigger punch as FEMA, the primary lifeline for relief, faces serious funding concerns that have led to restrictions on access to assistance. Where does this leave homeowners and servicers who face more disasters before yearend? Servicers, it’s time to evaluate your workflow automation, ensuring distressed borrowers have immediate access to relief and that your operations are streamlined accordingly. CLARIFIRE® delivers the speed, accuracy, and results that servicers need to succeed in the face of the volumes and complexities of all the parties involved. Arm your servicing team when disaster strikes with CLARIFIRE, delivering better results, better software, and BRIGHTER AUTOMATION®.

It used to be that our postal mailboxes were stuffed with all kinds of marketing materials. It still happens today of course, but mostly in our online mailboxes instead. But one thing has stayed the same: marketing still needs a special spark to stand out in a crowd, and that’s why utilizing a far less crowded medium might now be the “old-is-new-again” way to reach your prospects. Not to mention, it’s also one of the best ways for mortgage professionals to make a lasting impression on homebuyers during the holidays! Connect with the ICE team to learn how easy it can be to start with Surefire℠ CRM and Mortgage Marketing Engine.

More than ever, mortgage brokers and correspondents need a lending partnership that empowers them to exceed client expectations with elite service, speed, and simplicity. Rocket Pro TPO’s technology team delivered Pathfinder, the most powerful technology ever for brokers, created in partnership with Google. Combining multimillion-dollar AI and machine learning tech, it’s a first-of-its-kind centralized platform, right at your fingertips, 24/7/365. Also, their partners outpace the competition by leveraging Rocket Connect portal technology which connects brokers to the right team right away, including operations leaders for any question or escalation need. Their industry-leading Pricing Calculator quickly produces loan options to share with clients using Clear Quote, an easy-to-download PDF. To learn more, watch EVP, Mike Fawaz discuss more details. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO.

In challenging down economic times, Loan Vision is your solution to maximizing profitability and reducing costs in your business. With Loan Vision, companies see improvements of 25 to 35 percent decrease in days to close the books, 20 percent reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility that allow for better business decisions. Don’t accept a competitive disadvantage or get caught flat footed in a recovering market. To improve your cash position, gain a competitive edge, and prepare your business for sustained growth, contact Carl Wooloff to schedule a call today.

“Mortgage Industry Veterans Announce Fund It, New Startup Venture to Automate Warehouse Lending. Fund It is redefining how the mortgage industry manages its warehouse banking processes. Most IMBs still handle their warehouse funding manually. The Fund It platform, built with AI-powered algorithms, provides an automated warehouse lending solution. View capital needs projections in the next 30 to 60 days, eliminate human data errors, and access robust reporting tools that drive data-driven decisions. It also seamlessly integrates with many popular mortgage tools that IMBs currently use. Fund It’s platform tracks fundings, collateral administrations, and loan purchases. It also pinpoints cost leakages. These features help IMBs save time and increase profit on every warehouse-funded mortgage loan. FundIT optimizes every element of an IMB’s warehouse lending process. Use Fund It to enjoy higher profits by automating a traditionally manual-heavy process. Visit our website to learn more how to manage your company’s warehouse funding operations.”

Click links, ask questions later. The most common attack vector for a cyberattack is the human element. It’s what phishing emails, phone calls and text messages all have in common. Yet while it’s the weakest link, the human element could be your organization’s greatest prevention layer if trained correctly. In an industry that incentivizes people based on sales goals, every mortgage lead has bottom line potential. And in the current market, it’s only human to go after leads without stopping to consider their legitimacy. But recent data shows just how risky clicking without thinking can be. According to ISACA, in 2022 social engineering (tricking humans) was the #1 attack vector, and even the best teams are vulnerable. Learn how to do a better job at testing and training your team to identify legitimate leads. Talk to Richey May’s cybersecurity experts for help assessing and defining your cybersecurity training needs.

The CFPB and Co-marketing

Ken Perry with the Knowledge COOP writes, “The Freedom mortgage case should capture the attention of every mortgage broker, lender, and real estate agent. This is the biggest statement the CFPB has made about their feelings on co-marketing in a long time! The fact that they targeted a mortgage company providing free open house flyers, and free access to a subscription they pay for is huge because these arrangements exist in so many mortgage companies, including wholesale lenders, and rarely does the referring entity have to pay for these things. This is truly a case of, ‘if everybody is doing it then is it even wrong?’ Well, it looks like the CFPB has answered that question. Now we wait and see if $1.75 million was enough of a deterrent to force people to look at their business practices and make some immediate changes. These settlements usually come in groups. I can’t help but wonder if we will see more soon…”

Capital Markets

Much like the Consumer Price Index on Wednesday, the Producer Price Index report for August came in above expectations yesterday (0.7 percent versus consensus 0.4 percent). Other data on the day also included better than expected August Retail Sales (0.6 percent month-over-month, largely due to gasoline stations), and a smaller than expected increase in weekly jobless claims. Low jobless claims reflect a fairly tight labor market, which helps to explain why consumer spending continues to hold up in the face of inflation pressures and rising rates.

On the central bank front, the European Central Bank raised interest rates for the 10th consecutive time, to 4 percent, as President Lagarde signaled a shift that could mean the peak has been reached, though she insisted that she can’t yet say if that’s the case. As far as our Fed, there is zero likelihood the central bank is going to signal they’re done hiking rates at the conclusion of the FOMC meeting next week.

Despite all the major events over the past couple days that have influenced bonds, including the beginning of an auto worker’s strike last night, today’s calendar also has some market moving potential. We’ve already received Empire manufacturing, import prices (-3.0 percent, ex-gas flat), and export prices (-5.5 percent from the prior year). Later this morning brings August industrial production and capacity utilization, and preliminary September Michigan sentiment that includes inflation expectations. We begin the day with Agency MBS prices worse .125 from Thursday evening, and the 10-year yielding 4.32 after closing yesterday at 4.29 percent; the 2-year is up to 5.03.

Employment

Crescent Mortgage Company, a subsidiary of United Bank, named “Most Trusted Bank in America” for 2023 by Newsweek, is celebrating its 30th anniversary and rapidly expanding its retail division in the southeast. We welcome ambitious Loan Originators seeking growth and unparalleled support. Seasoned veteran David Rapson, CMB serves as SVP – Retail Lending, guiding us to new heights. President and CEO Fowler Williams, CMB emphasizes our unique commitment to allowing originators to do what they do best, originate loans, we will handle the rest! Backed by advanced technology and curated product offerings including agency, 1X close construction or renovation, low down payment options, non-QM, as well as unique portfolio offerings, Crescent has built a platform for Loan Officer success, a platform for you. Join our journey. Experienced Loan Originators or Branch Managers, explore possibilities by contacting David Rapson to elevate your success. The future is bright at Crescent Mortgage.

Supreme Lending is pleased to announce Rachel Saylor Brown as its newest Producing Tampa Bay Area Manager. Leveraging 10 years of remarkable industry experience, Brown will steer Supreme’s Florida expansion strategy, together with her husband Chris Brown, and a best-in-class team: Kaitlin Schiro, Nancy Myrick and Anna Livingston, all seasoned mortgage professionals. Rachel and her team are known for providing exceptional client experiences through transparent communication, meaningful relationships, and industry-leading technology. Supreme Lending is thrilled to welcome her to the team!

“Revolutionize Your Leadership: Meet Your Visionary Executive! Are you on the hunt for a C-suite dynamo to steer your organization to new heights? Look no further! I am a strategic powerhouse primed to tackle the role of President, CEO, COO/CSO. With a proven track record in strategy, team building, P&L mastery, and agile execution, I’m all about results, not magic. My extensive network includes GSE’s, investors, regulators, vendors, PE sources, and compliance experts. My experience spans Mortgage, Insurance, Tech and more. I don’t just lead; I innovate. I seamlessly integrate tech into strategy diversifying revenue streams while boosting traditional sales. Fintech? Consider it a bonus. Comfortable with boards and stakeholders, I’m a goal-driven, creative problem solver and an adept communicator. West Coast-based, but I’m open to relocation or remote work. Ready to transform your organization? Email Chrisman LLC’s Anjelica Nixt today for more details and a game-changing connection.

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Source: mortgagenewsdaily.com

Apache is functioning normally

Hedging, PPE, Fee Collection, QC Products; Gov’t and Conforming News; Producer Inflation Alive and Well

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Hedging, PPE, Fee Collection, QC Products; Gov’t and Conforming News; Producer Inflation Alive and Well

By:
Rob Chrisman

Thu, Sep 14 2023, 11:15 AM

This morning I head from Chicago to Orlando along with 74 million others (yearly). More fun with numbers: Although the MBA thinks we’ll fund about $1.7 trillion in 2023, weekly applications continue to reflect a declining market so let’s use $1.5 trillion to make the numbers easier. That averages out to $6 billion per business day of production. The Fed is looking to offload $13 billion in MBS from bank seizures. To keep things in perspective, that is only two days’ worth of production, certainly not enough to “swamp the boat.” Perspective is good, and here’s another example. Higher and volatile interest rates, uncertainty about property values, and stresses in some property markets have increased pressure on some loans and properties. Accordingly, MBA reported that commercial and multifamily mortgage delinquencies increased in the second quarter of 2023. Even with the uptick in delinquency rates, they remain at the lower end of historical ranges. Loans backed by properties (and property types) with stable cash flows, are faring better than those that may have seen declines in incomes. (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino Company, and award-winning developer of mortgage technology for modern lenders. Hear an interview with C2 Financial and Revest Homes’ Jim Black on how originators can win business in a tough rate environment.)

Lender and Broker Software, Products, and Services

Amidst changing QC requirements and increasing repurchase risk, lenders must invest in automation to drive efficiency and protect profits. The industry needs to shift its focus from crisis management to prevention with proactive QC. Not only does this approach set lenders up for success regardless of the origination environment, but it’s also a regulatory imperative now that Fannie Mae requires lenders to conduct pre-funding QC on a minimum of 10% of their production. ACES Quality Management empowers mortgage lenders and servicers to take control of their operations and embrace proactive QC. ACES seamlessly combines cutting-edge technology with comprehensive data analysis, giving mortgage professionals the tools they need to identify, anticipate and rectify potential issues in near real time. Learn why financial institutions and third-party providers rely on ACES.

“Looking for a full-service depository bank that will help you achieve your long-term growth plans? NexBank has been a dependable lender to our clients through all business cycles. We’ve been in the wholesale, correspondent, and warehouse lending business since 2008 and don’t compete with our clients for retail originations or refinancing business. Our long-tenured account executives, with an average of 24 years of industry experience, know our business well and are dedicated to helping you grow yours. This month, we celebrate the 15th anniversary of three professionals who have contributed to the success of our clients and NexBank. Lance Hackney with $4 billion closed volume; Brandi Horton with $4.5 billion closed volume; and Steve Smith with $5 billion closed volume. We support all channels: Wholesale, Non-Delegated & Delegated Correspondent with Portfolio, Conventional, FHA, and VA products, and offer Delegated & Emerging Banker Warehouse Lending and Escrow Deposit Management. Email Jon Hodge to reach an AE. Member FDIC. Equal Housing Lender. NMLS 672886.”

If you’re using Encompass® by ICE Mortgage Technology™ and you’re not using Fee Chaser to collect your upfront fees you it’s time to get your act together. Fee Chaser enables your borrowers to pay their upfront fees right from a text message. No more missed appraisal fees, no more paper checks, no more credit card numbers floating around on printed forms. Check out Fee Chaser here and they’ll text a demo right to your phone.

“Optimal Blue’s market-leading product, pricing and eligibility (PPE) engine has been the industry’s preferred choice for years because of our ability to serve our clients’ needs. With Optimal Blue’s open-API platform, our clients can access and use all of the functionality that exists in the Optimal Blue PPE via APIs, including creating customized rate quoting tools, fully automating lock events, and ensuring LOs have on-demand access to product and pricing where and when they need it. Reach out to Optimal Blue today to learn more about our open-API platform and how you can use it to unlock hidden efficiencies and improve your business!”

Government and Other Conforming Program News

Plaza Home Mortgage® reminded brokers of the ins and outs of getting government deals done. Here are five really great reasons to look to Plaza first for your government loans:

Manual underwriting may be an option for loans that do not get an approval through AUS-Total Scorecard (manual underwriting requirements apply). FHA and VA FICOs down to 550. USDA FICOs down to 600. Cash-out allowed on FHA and VA. Experienced Underwriting team that is willing to go the extra mile for your borrower.

Effective August 25th, the Attorney Authorization Approval (AAA) Matrix is available within Property 360™ on both the Claims and Excess Fees landing pages. The matrix remains accessible on the Excess Attorney Fee – Cost Guidelines webpage in the Single-Family portal.

Federal Housing Agencies issued a reminder for mortgage assistance for those impacted by the Maui Wildfires. In a joint statement, the Federal Housing pledged their offices’ ongoing support for Hawaiian residents affected by the devastating wildfires on the Hawaiian island of Maui.

Hurricane season has begun, MBAF provided a reminder of MBA’s Disaster Recovery Resource Guide. This guide outlines what to do before and after a natural disaster, along with how to start, and then, work through the recovery process. Additionally, another resource available is Hurricane Help FAQs.

Fifth Third Correspondent Lending Communiqué 2023-6-9.1.23 has the following topics:

Final Document Reminder, as a reminder, Fifth Third expects Final Title Policies and Recorded Mortgages to be delivered within 90 days of the loan purchase date. Excessively aged documents will be assessed a fee per section 1.07 of the Correspondent Seller Guide.

Maximize Cash Out with Loan Stream Mortgage Non-QM Closed End Seconds. Program highlights include clients can Access Equity with our Non-QM CES Cash Out Refi: 90% CLTV Full Doc, 85% CLTV Bank Statements, 80% CLTV Investment Properties and 75% CLTV DSCR. Also available on Purchase, Rate/Term Refinance & Cash Out.

Chaos has a way of bringing on unexpected opportunities. Plaza Home Mortgage®. Co-President and COO, Michael Fontaine, shares with National Mortgage News how Plaza navigates in the evolving wholesale landscape. From diverse strategies to tapping into improved technology plus Plaza’s training offerings to help amplify broker clients’ strengths, take a look.

Plaza Home Mortgage® Jumbo opportunities keep getting better, now offering 2-1 and 1-0 Temporary Buydowns on its new Jumbo Elite loan program. Get in touch with your Account Executive for the qualifying details. Explore the complete range of Jumbo solutions Plaza offers for your borrowers.

Capital Markets

Why do those in the mortgage space watch the 10-year U.S. Treasury note? Historically, the 10-year U.S. Treasury yield has been considered a key benchmark for mortgage rates. Mortgage rates, however, are not actually based on the 10-year U.S. Treasury note (as is commonly believed). MCT released a blog, “How the 10-Year U.S. Treasury Note Impacts Mortgage Rates” that serves as an excellent primer for how mortgage interest rates respond to moves of the benchmark U.S. Treasury note. The piece discusses why mortgage rates and Treasury yields move together and how bonds are influenced by Treasury yields. With a trusted capital markets partner like MCT, you can rest assured that you will be notified of how economic trends could have the potential to impact your business. Sign up for MCT’s newsletter to receive educational articles like this one and learn more about variables that impact mortgage rates.

In rate news, even though inflation in August showed a larger than expected increase in core CPI (actual 0.3 percent when it was expected at 0.2 percent), it showed ongoing improvement on a year-over-year basis, enough to prevent any significant change in Fed rate hike expectations. The implied likelihood of a rate hike in December sits around 46 percent.

Digging into the numbers, gasoline prices contributed to nearly half of the increase to the headline number, rising nearly 11 percent over the month, and that inevitably had some trickle-through impact on the core reading, as transportation services were driven higher by energy prices. The 3.7 percent year-over-year rate of CPI is still well above the Fed’s 2 percent target, reflecting stickiness that, while probably not compelling enough to the Fed to raise rates further at this point as the trend in inflation has downshifted since the spring, will certainly keep the Fed in a “higher for longer” mindset. Looking forward to the FOMC meeting next week, another pause in rate hikes is already baked in, so the importance is actually much more about rate decisions in November, December, and January.

Today’s economic calendar is under way with several releases. Events kicked off with the ECB releasing its latest monetary policy decision (+.25 percent, as expected, in an effort to continue to tame inflation) followed by ECB head Lagarde’s press conference. The U.S. calendar is also under way with retail sales (+.6 percent for August, much higher than expected), the Producer Price Index (+.7 percent, much stronger than expected, core +.3 percent), and weekly jobless claims (220k, 1.688 continuing). Later today brings July business inventories, Treasury announcing the sizes for next week’s reopened 20-year bonds and 10-year TIPS auctions, and Freddie Mac’s latest Primary Mortgage Markets Survey. We begin Thursday with Agency MBS prices worse a few 32nds from Wednesday evening, the 10-year yielding 4.27 after closing yesterday at 4.25 percent, and the 2-year at 5.02 after this slew of economic news.

Employment

“Foundation Mortgage is rapidly expanding after several record months and is looking for top tier experienced Non-QM account executives to join our team. We have a vast array of non-QM products to choose from and common-sense underwriting. We make exceptions that other lenders won’t. If you are looking to join an experienced team that knows how to get loans done contact Dean Ayres.”

On the heels of the successful acquisition of Platinum Home Mortgage Corp, Planet continues its appetite for retail acquisition by looking to consolidate several independent bankers into its organization. If your firm is seeking better economies of scale or a strategic exit, let’s talk. With our strong multichannel support, speedy turnarounds, dedicated recruitment, and customer retention, Planet will give you a remarkable edge. Please contact Lee Gross to find out what Planet could do for you. All inquiries will be held in strict confidence. Confidentiality will also be honored for single MLOs or smaller sales teams who contact VP of Talent Peter Briggs or 435-709-6287.

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

Source: mortgagenewsdaily.com

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Warehouse, HELOC, AMC, Rate Lock; Automation, POS Products; Insurance and Disaster News

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Warehouse, HELOC, AMC, Rate Lock; Automation, POS Products; Insurance and Disaster News

By:
Rob Chrisman

4 Hours, 46 Min ago

One of the topics here in Tennessee is how lenders can help real estate agents or clients. Wanna maybe help your client or favorite real estate agent grappling with inventory? HUD has a “Home store” of houses. Worth a shot at 3.5 percent down properties! For something to really start your synapses firing on a Monday morning ahead of a five day work week, the CEO of the California MBA, Susan Milazzo, sent, “The latest effort to pass legislation to address California’s insurance crisis has died. Assembly Democrats felt that the bill favored insurance companies over consumers, and they wanted to add a provision that would prohibit insurance companies from not renewing any business through the end of next year. With no real guarantee of when the commissioner would do the emergency regulations or the contents of those regulations, it amounted to a poison pill.” (More insurance news below in the “disaster” section.) (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino Company, and award-winning developer of mortgage technology for modern lenders. Hear an interview with J.D. Power’s Craig Martin on the U.S. Mortgage Servicer Satisfaction Study.

Lender and Broker Software and Services

Credit unions, it’s time to make your mark at the 2023 ACUMA Annual Conference from Oct. 1 – 4. Secondary marketing experts from Optimal Blue will be on-site and ready to discuss ways you can up your game and do even more to maximize success. Whether you’re working to get your members the best possible rates, trying to more effectively mitigate pipeline risk, or aiming to better understand the value of your MSR assets – we’re ready to help you reach your goals. Stop by our booth to learn more.

Your online loan application should win you business, not scare prospective borrowers away. Win borrowers here.

Attention TMC Members! Join Capacity CEO David Karandish and Mike Metz of VIP Mortgage for an exciting 3:15 p.m. session on Monday, September 11th. Learn how VIP Mortgage is springboarding their AI pursuits. Book one-on-one time with our team at TMC Fall, or join the session to learn about our personalized, in-depth AI Assessments. Whether you already use automation tools or you’re just starting to explore, Capacity’s AI Assessments offers a unique way to scale your tech initiatives. Over three meetings, our team will learn about your business needs, identify automation and AI tools opportunities, and provide in-depth resources to guide you through your AI roadmap. Want to jumpstart your AI journey? Meet Capacity at TMC Fall.

“OptiFunder Bringing the Primary and Secondary Markets Together. Nearly 15% of all warehoused loans now go through OptiFunder for warehouse selection and automated funding, shipping, and purchase advice. Since 2019, our mission has been to bring mortgage bankers and warehouse lenders together to optimize selection and streamline the historically manual process of funding mortgage loans. Nearing the top of Inc. 5000’s list of fastest-growing private companies, it’s safe to say we’ve been successful in that mission. As we continue to grow, we’re working on additional opportunities to bring the primary origination and secondary markets together. We’ve spent the last few years making the lives of originators easier; it’s time to put some focus on warehouses. Join the OptiFunder community on Linkedin to keep up with what we’re doing or visit our new website to learn more about OptiFunder.”

Does it feel like your current point-of-sale vendor has lost focus on mortgage? As a mortgage-specialized partner, Maxwell is committed to giving lenders a competitive advantage in a tough mortgage market. Compared to a top competitor, Maxwell Point of Sale averages a 5.9% higher pull-through rate from rate-lock to close. For the average lender using Maxwell POS, this equates to $42MM in additional loan volume. Maxwell also focuses on providing an excellent borrower experience, with a 17% faster turn-time from application submission to conditional approval. Schedule a call with the team to learn how Maxwell Point of Sale can start working for you and your borrowers quickly.

Are you tired of having to adjust head count every time the market changes? The Mortgage Automation Suite, brought to you by Richey May and Zoral, can help. With scalable automated solutions that improve accuracy while reducing repurchases and costs, your business will be well-equipped for any market cycle. Leveraging this powerful automation will allow your team to close loans more easily, helping to retain your best staff. Plus, it adds the extra layer of stability needed during difficult times; something we could all use a bit more of these days! Find out how the Mortgage Automation Suite from Richey May & Zoral can help you today. Email [email protected].

In this market, hustle is everything. You can’t afford to waste a single deal – or a single minute. That’s why ReadyPrice has launched Shop. Lock. Deliver.® It’s an innovative new platform designed to help independent mortgage brokers like you save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders – and all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Check out ReadyPrice today.

Attention Lenders and Real Estate Appraisers: In a September 6th article found in Housing Wire, it was pointed out the 1/2 of all appraisers claimed “fee pressure” by AMCs was their biggest challenge this year. Also included were “technology fees” appraisers are forced to pay has become a major issue. AMCs are taking an increasing cut of the appraisal fees and at the same time selecting appraisers who are willing to work for relatively lower fees. The Private Asset & Management Group, LLC has launched its new platform allowing retail and wholesale lenders the ability to use they’re ‘own’ roster of approved appraisers, with realistic fees for their market areas, self-manage the process with 1 dashboard from a state-of-the-art software system with absolutely “NO” cost! And it reduces the appraisal fee to the borrower by 25%-35%. For further information contact David Cedar (631-319-6161).

TPO Programs for Correspondents and Brokers

In this most challenging of rate environments for the industry, Luxury Mortgage (“LMC”) continues to show steadfast commitment to all its business partners. LMC strives to offer competitive rates and products to assist brokers in closing more loans. Due to overwhelming popular demand, LMC is stepping up again and extending last month’s unprecedented purchase specials. Full and Alt Doc loans (including Bank Statement, 1099 Only, and Asset Qualifier) will receive up to a 100-bps price improvement (yes, you read that correctly!), and DSCR loans will receive a 50-bps price improvement! Click here for complete details of these special offers. If you are not yet an approved broker, now is the perfect time to become one. Click here to begin the process of becoming an approved wholesale broker.

Sometimes, your clients’ needs are as simple as a safety net. A HELOC is a perfect product to provide them with financial liquidity, stability, and support – especially in today’s market! Symmetry’s HELOC offers your borrowers the ability to purchase a home with less cash down, afford home renovations or repairs, purchase a 2nd home or investment property, consolidate and pay off debt, and many more benefits… Not sure how to best present Symmetry’s HELOC to your borrowers? Contact your area manager to build a plan that works for you!

Disaster Updates

Several top insurance companies (like Farmers, State Farm and Allstate) have reduced their footprint in California over the last several months. State Farm and Allstate say they’re not writing any new homeowner insurance policies in California moving forward due to it being too expense. And just ask a homeowner in a low-lying area of Florida, Louisiana, or the Carolinas how it’s going.

Last month the Biden administration urged a federal judge to reject a challenge by Florida and other states to an overhaul of the National Flood Insurance Program that has led to higher premiums for many property owners.

Meanwhile, the FDIC sent out, “The Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration, the Office of the Comptroller of the Currency, and state financial regulators, collectively the agencies, recognize the serious impact of Hurricane Idalia on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities.

“The agencies encourage financial institutions to work constructively with borrowers in communities affected by Hurricane Idalia. Prudent efforts to adjust or alter terms on existing loans in affected areas are supported by the agencies and should not be subject to examiner criticism. In accordance with U.S. generally accepted accounting principles, institutions should individually evaluate modifications of existing loans to determine whether they represent troubled debt restructurings or modifications to borrowers experiencing financial difficulty, as applicable. In making this evaluation, institutions should consider the facts and circumstances of each borrower and modification. In supervising institutions affected by Hurricane Idalia, the agencies will consider the unusual circumstances these institutions face. The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest.”

FEMA Disaster Declarations are in the news. Georgia Hurricane Idalia – DR-4738-GA. Florida Hurricane Idalia – 4734-DR-FL, Amendment 001, Amendment 002, Amendment 003.

AmeriHome spread the word that on August 31, 2023, with DR-4734, the Federal Emergency Management Agency (FEMA) declared that federal disaster aid with individual assistance has been made available to counties in Florida to supplement recovery efforts in the areas affected by Hurricane Idalia from August 27, 2023, to September 4, 2023. On September 1, 2023, with Amendment No. 1, FEMA granted Individual Assistance to 6 additional counties. On September 3, 2023, with Amendment No. 2, FEMA granted Individual Assistance to 1 additional county.

On September 4, 2023, with Amendment No. 3, FEMA announced an Incident Period End Date of September 4, 2023. On September 9, 2023, with Amendment No. 5, FEMA granted Individual Assitance to 2 additional counties.

On 9/3/2023, with Amendment No. 2 to DR-4734, FEMA declared federal disaster aid with individual assistance has been made available to an additional Florida county, Pinellas, affected by Hurricane Idalia from 8/27/2023 and continuing. See AmeriHome Mortgage Disaster Announcement 20230902-CL for inspection requirements.

On 9/4/2023, with Amendment No. 3 to DR-4734, FEMA provided an Incident Period End Date of 9/4/2023, for Florida counties affected by Hurricane Idalia from 8/27/2023 to 9/4/2023.

See AmeriHome Mortgage Disaster Announcement 20230903-CL for inspection requirements.

On 9/7/2023, with DR-4738, FEMA declared federal disaster aid with individual assistance has been made available to 3 Georgia counties Cook, Glynn, and Lowndes affected by Hurricane Idalia on 8/30/2023. See AmeriHome Mortgage Disaster Announcement 20230905-CL for inspection requirements.

Capital Markets

There’s anxiety (isn’t there always?) over the Federal Reserve turning more “hawkish” and impacting investor sentiment, and therefore bonds and stocks. While the Fed is largely considered to be nearing the end of its hiking cycle, the “terminal rate” is still unknown, of course. Federal Reserve speakers, typically the presidents of each district, are in a blackout period ahead of the FOMC meeting scheduled for September 19-20, which will give this week’s economic reports extra weight.

So, what is the financial press yammering about? Student loans having to be repaid, the latest jump in oil prices in the past few days driven by longer-than-expected production cuts by key oil nations Saudi Arabia and Russia, and data showing a tight labor market in the form of initial jobless claims falling for a fourth straight week.

Think about it. Despite the rapid rise in interest rates and restrictive monetary policy, the U.S. economy remains resilient. August’s employment report and last week’s ISM Services Index provided evidence that the post-pandemic economic expansion continues. The ISM Non-Manufacturing PMI Increased From 52.7 in August to 54.5 in September, its highest level since February, highlighting continued growth in sectors accounting for the majority of U.S. economic activity such as: services, mining, construction, and public administration. This series has been in expansion territory for all of 2023. There was a small increase in the prices paid index due to higher fuel costs, indicating that services inflation is far from returning to pre-pandemic levels.

The Fed’s Beige Book also reported an uptick in economic activity from July to August. However, unlike the ISM indices, the Beige Book showed inflation moderating in some parts of the country. A revision to unit labor costs – which gauges wage inflation – showed a 2.2 percent annualized increase compared to the initial estimate of 1.6 percent while productivity growth was revised down to 3.5 percent from the initial estimate of 3.7 percent. It is likely not the last revision for these data series from the Department of Labor as they are difficult to measure in real time. Elsewhere, the trade deficit has narrowed over the last few months but remains wider than pre-pandemic levels.

Even with a slight decrease last week, mortgage rates have ticked back up over the last couple weeks. The market has priced in “higher for longer” rate expectations from the Fed and are about one percent higher than the lows seen in February. Mortgage applications have declined six of the last seven weeks as higher rates erode affordability. Mortgage purchase applications reach a low not seen since April 1995. This week includes the $99 billion mini-Refunding as well as key inflation reports with CPI on Wednesday, PPI and retail sales on Thursday, and import / export prices as well as Michigan sentiment on Friday. No Fed speakers are currently scheduled with the FOMC in blackout period ahead of the September 19/20 FOMC meeting. Today’s economic calendar is limited to a Treasury auction of $44 billion 3-year notes. We begin the week with Agency MBS prices slightly worse, the 10-year yielding 4.29 after closing last week at 4.26 percent, and the 2-year at 4.98.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

Mortgage rates may fall slightly by the end of the year, but don’t expect record lows anytime soon.

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The Federal Reserve has been working to tame inflation for nearly 18 months now, approving 11 hikes to its benchmark interest rate since March 2022. Those moves — along with other economic factors — have pushed mortgage rates up considerably in that time. In fact, since last March, the average rate on 30-year mortgage loans has jumped from under 4% to 7.23% today, according to Freddie Mac. Mortgage interest rates are currently the highest they have been since 2000. 

That’s a far cry from the sub-3% rates the market saw in 2020 and 2021 — and a significant barrier for many hopeful homebuyers.

Fortunately, mortgage rates fluctuate constantly, so they won’t stay that high forever. Just how long could those elevated rates stick around? And when can consumers expect lower rates once again? We asked a few experts for their opinion. 

Explore your mortgage rate options here now to see what you qualify for.

Where are mortgage interest rates headed?

There’s no way to tell for sure, but most experts and industry groups think rates are at or near their peak. As Matt Clarke, chief operating officer of Churchill Mortgage, puts it, “We’re approaching a glass ceiling where rates going too much higher would be detrimental to other critical aspects of the economy.” 

Still, rates being at their peak doesn’t necessarily mean they’ll decrease. For that to happen, inflation would need to slow, investments into mortgage-backed securities would need to increase and the Federal Reserve would need to ease up on its rate hikes.

According to the CME Group’s Fed Watch tool, there’s only about an 18% chance the Fed increases its rate at its upcoming September meeting. For its November meeting, the chances are higher (though that’s still a way out and a lot could change before then). 

“Inflation needs to slow, and unemployment needs to start creeping up,” says Jerry Schiano, CEO at home equity lender Spring EQ. “I think unemployment will start increasing before year-end. Consumers are stressed, and that could lead to less buying and pullback by companies.”

If this happens, the Fed could ease up on its benchmark rate hikes and mortgage rates may decrease as well. 

Explore your mortgage purchase and refinance rate options here to learn more.

When will mortgage interest rates drop?

Realtor.com, Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association all expect mortgage rates to be slightly lower by the end of the year, with predictions ranging from 6% to 6.7% on average.

That’s a drop — but not anything significant. For reference, a 7.23% rate (today’s average) on a 30-year $400,000 loan comes with about a $2,723 monthly payment. At 6.7%, it falls to $2,581 — just a $142 difference.

“I expect mortgage rates to stay elevated through most of 2024,” says John Paasonen, co-founder and CEO of Maxwell, a mortgage technology provider.

More notable dips in rates are probably much further down the line — possibly by 2025, Clarke says.

“I think significantly lower rates — back to the 5% range — could realistically happen in 2025, with 2024 beginning a slow trend downward,” Clarke says.

Note that he says 5% — not the 2 to 3% rates we saw a few years ago. According to all three experts, those record-low numbers aren’t returning any time soon (and they may never). 

“Let’s just say I’m glad I locked into a 2.6% mortgage rate on my own home,” Paasonen says. “The market will restabilize at a new norm, likely within the next 12 to 18 months. That new norm most certainly will not be below 3% — that was a unique attribute of the amount of economic stimulation following a global pandemic.”

Getting a mortgage in the meantime

Until that new norm is achieved, taking out a mortgage is going to be more expensive than it has been in years past. You also may want to think carefully about selling your home if you’re one of the many who took advantage of those ultra-low mortgage rates.

“Anybody who took record low rates made a great decision,” Schiano says. “They are saving a lot of money each month and should think carefully before refinancing or even selling their house.”

If buying a new home is necessary, though, there are strategies for getting a lower mortgage interest rate. You can buy points, negotiate a temporary buydown, or consider a lower-rate mortgage product, like a 15-year loan or adjustable-rate mortgage. VA loans and USDA loans also tend to have lower rates than other mortgage options (if you can qualify for them). 

Explore your mortgage options here now.

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Source: cbsnews.com

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Intercontinental Exchange (ICE) completed its acquisition of Black Knight Tuesday, making the combined company the biggest player in the mortgage tech space. I sat down with Tim Bowler, president of ICE Mortgage Technology, a business unit of ICE, to talk about the company’s mortgage automation strategy — and what keeps him up at night.

Sarah Wheeler: ICE’s acquisition of Black Knight just closed today. What is top of mind for you moving forward?

Tim Bowler: We’re incredibly excited about what we will be able to bring to our customers, to borrowers, as well as to other stakeholders across the mortgage ecosystem. We’ll accelerate our focus on delivering value and efficiencies with the combined ICE and Black Knight entities so we can continue the journey of helping more people into homeownership.  

SW: ICE Mortgage Technology is known for its focus on automation. What parts of the mortgage loan process have been the most resistant to digitization up to this point?

TB: It’s hard to say because there are so many different kinds of transactions between borrowers and lenders. What we’re trying to do at ICE is break down the various transactions where a borrower and a lender might interface and figure out how we can deliver a set of technology tools and solutions so that the borrower can get their loan — for purchase or refinance — as fast as possible with the least amount of cost.

That mindset of knowing that mortgage transactions vary depending on the borrower’s circumstances is an important lens for us because it helps us actually get to the solutions that make the most sense for each one of those discrete transactions.

SW: How does ICE determine the right balance between automation and the human element?

TB: The reality is that the mortgage process, particularly in today’s purchase market, is still a deeply human process. We realize that we are providing the appropriate set of tools and solutions to those humans who are helping those borrowers through the most important financial transaction of their life, so that the processcan be as efficient, seamless and pleasant as possible. The right technology can help you achieve faster approvals and faster closing, while also giving greater comfort and certainty to that borrower.

It’s also helping those borrowers find the right products. Those will inevitably flow through a lender, so we make sure that the lenders have as much information as possible around what might be the best, most appropriate alternatives to present to borrowers.

SW: The FHFA recently held a tech sprint for the mortgage industry and part of the goal was to find out why adoption was low on some of the tech solutions that have been available for years that could really benefit lenders, servicers and borrowers if they were adopted. What do you see as the key obstacles to tech adoption now as, as opposed to in the past?

TB: It seems like each mortgage process should be relatively standardized because we’re manufacturing loans — the vast majority of which will be purchased by the two GSEs or insured by FHA, VA or USDA.

But in the midst of that process is an individual or family and it ends up being a very human-to-human experience. Maybe in the past, the industry looked and asked how we could just industrialize everything associated with the mortgage underwriting approval and funding process too myopically. We think taking a step back to look at that origination process through a human lens will be helpful to increase the uptake of some of the tools that are out there to make the process work.

SW: The cost of origination has been front and center for mortgage banking executives. How are the most successful mortgage executives prioritizing their resources right now?

TB: In this purchase market, it’s the ones who are identifying borrowers they can work with on purchasing that first home. Or, if they are selling and then buying another home, the lenders getting them approved as fast as possible. It’s so important in this market that when a buyer puts an offer on a home, it’s 100% clear that financing is available and ready to support the purchase. And then closing as fast as possible because we’re still in a tight housing market with tight inventory.

SW: We know that homeowners who locked in low mortgage rates might stay in their current home for years. And that’s just building on a trend that’s just been going on even before we got to these really low mortgage rates. What’s the role of tech as lenders play the long game in this market?

TB: Many families and households locked in extremely favorable rates. But I think there’s a dynamism in the U.S. economy and in the housing markets that means people will still move, they’ll still buy a bigger home when the time is right.

In today’s environment, I think there are going to be more households looking to use their equity to invest in their home within the context of retaining the existing primary mortgage that they have at attractive rates. So, for us as a technology provider, it is finding solutions that make it efficient for borrowers to make important investments in their house through mortgage products that meets their needs from a pricing perspective, while also delivering a smooth experience throughout the process.

SW: Affordable housing initiatives are on the radar of more lenders this year, but your typical loan officer may not have a lot of experience there. How are lenders helping borrowers take advantage of loan product innovation and affordable housing initiatives?

TB: There’s no doubt that debt-to-income levels are going to be stressed for that first-time borrower because home prices have remained high despite higher interest rates. And I think it’s incumbent on all of us in the industry to provide tools so lending officers have the knowledge they need to help borrowers access affordable programs, so they know what’s available and how pricing works for those programs.

SW: AI has really stepped into the spotlight this year. Is this going to be a time we will look back on as being a turning point?

TB: The way I think about a lot of these new tools that are being created, whether they be generative AI or more efficient search or more efficient document recognition, is that they should be used to help buyers have a better experience. Correctly harnessed and used, AI could ultimately lead to a more efficient process where decision-making for the borrower is faster.

Our team is focused on thinking about technology in this way: How do we help our customers and partners help borrowers have a better experience through the advanced technologies and tools that are being developed?

SW: Looking out 10 years, what part of the mortgage ecosystem will have changed most in that time frame? What challenges do you think we’ll still be talking about solving with technology?

TB: There are four key aspects to the mortgage process that could be evolved. First is determining whether the homebuyer has the capacity to cover that housing cost on a regular basis. And my hunch tells me that over the course of the next decade, we’re going to develop better tools than those that exist today to be able to highlight the fact that borrowers have the ability to repay on their loan. And a lot of that will come from better mechanisms to evaluate past rental history and the borrowers’ ability to manage housing payments consistently.

As a technology provider, we want to find a better way to show the ability to repay so that the ultimate investor in that mortgage or the insurer feels comfortable with it without having to retain massive amounts of personal information on a multi-decade basis, which is inefficient for the system and puts that information at risk.

Secondly, I think the tools around how we assess the value of the property and the risk associated with that property will evolve to drive a more efficient process, particularly for that first-time borrower or that lower wealth transaction.

The third area is trying to find a way to have a better outcome with refinancing for lower loan balance borrowers than what we saw in the last period of refinancing where the frequency of higher loan balances refinances was just so much greater relative to moderate-balance borrowers, who could benefit the most.

Lastly, this is just a deeply personal point for me because I’m always shocked at how inefficient it is: We’ve got to be able to use technology so when a borrower makes that last payment on the mortgage and owns that house free and clear, the release of liens or security interests is improved.

SW: You are the head of a very large mortgage tech company. What keeps you up at night?

TB: The lack of housing supply in the country and the lack of affordable housing supply, specifically. That lack is driving the cost of housing to artificially high levels that is really squeezing so many lower- and middle-income households.

And I’m hoping and praying that policymakers can be more creative and collaborative in that regard because we have to solve it for this generation of kids and the next generation of kids to come. So that they’ve got adequate housing at fair prices that does not chew up half of their paycheck — that is absolutely critical if you want to keep this economy going.

SW: Lastly, what makes you hopeful or optimistic about our industry right now?

TB: I’m deeply optimistic about our industry. Despite the fact that we face a myriad of challenges, I wouldn’t trade our mortgage market for any other mortgage market on the planet. We’re innovative, we’re dynamic, we have the ability to fund mortgages through thick or thin. We have all the tools at our disposition to retain the best mortgage market on the planet.

It is just incumbent on everybody in the ecosystem to work hard every day and in every way to make a difference to have a better, fairer, more dynamic market.

Want more mortgage and real estate technology features? Subscribe to the weekly HousingStack newsletter here.

Source: housingwire.com