Automation, Pre-Approval, QC Products; Rent vs. Buy; More Proposed Paperwork for Lenders
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Automation, Pre-Approval, QC Products; Rent vs. Buy; More Proposed Paperwork for Lenders
By: Rob Chrisman
7 Hours, 10 Min ago
Saturday was George Thorogood’s 74th birthday, and fans know that he wrote the classic tale of rent collection, land ladies, and payment avoidance. Time flies, but that may change. We’re faced with an actual five-day workweek this week, with no Federal holidays until Memorial Day, May 27th, two months away! Yikes. Here in Houston at the TMBA’s Southern Secondary Conference, the attendees are already making use of what time they have, discussing best execution procedures, warehouse tactics, management strategies, economic trends, the market for servicing, and operational efficiencies. I’m a capital markets guy, so arguably learned math good. But I didn’t learn math like this! MBS versus cash sales pick-ups is always a favorite topic, although last year the market was deluged by excess servicing trades. Flow and bulk purchasers of HELOCs and 2nds is search being undertaken by some, as well as climate change and insurance cost increases. (Found here, this week’s podcast is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products – nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics – unite the people, systems, and stages of the mortgage process. Today’s has an interview with Yardsworth’s Matt Lucido on creative ways that homeowners can leverage their tappable equity, and how we can see more supply hit the market.)
Lender and Broker Services, Products, and Software
Promising Updated MBA Forecast: The MBA released their recent forecasted predictions on mortgage originations (1 to 4 family). A welcome sight is that they predict a 25+ percent increase in 2Q over 1Q 2024 and a 13 percent increase in 3Q over 2Q 2024. In addition, the 3Q 2024 prediction is nearly 22 percent higher than the same quarter in 2023’s actual originations. As volumes continue to rise quickly, having a solid quality control program is as important as ever in order to continue to produce quality loans while mitigating risk. Quest Advisors has nearly 30 years of experience in assisting mortgage lenders with their quality control needs. Examples of services Quest Advisors provides, are Post-Closing and Prefunding loan QC reviews, along with Servicing, HMDA, and MERS audits. To find out more information on how Quest Advisors can help, please reach out to Matthew Reich at (336) 404-1409.
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“Everyone wants to make their borrowers sticky and we’ve got the Krazy Glue. I’m talking ‘gotta get to the emergency room to get your fingers unstuck’ kind of glue. It’s called QuickQual, it integrates with Encompass® by ICE Mortgage Technology™ and once you pre-approve your borrower, they’re coming back.
Just as Morpheus offered Neo the ultimate choice between reality and illusion in The Matrix, Dark Matter Technologies invites you to choose between the past and the future of mortgage lending in its “Choose Your LOS Experience” ad campaign. Take the blue pill and stay the course with old-school thinking and technology. Or take the red pill and join DMT to revolutionize your business with cutting-edge technology, unparalleled automation, and relentless innovation, as evidenced by the Empower® LOS and the AIVA® artificial intelligence solution. When it comes to your future, “choose wisely.” Schedule a demo with the Dark Matter team today to explore how the Empower LOS can transform your business.
Is More Paperwork Heading Our Way?
Do we need more rules and regulations and paperwork, or better rules and regulation and paperwork? The federal bank regulatory agencies announced their first of a series of requests for comment to reduce regulatory burden. The Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Federal Financial Institutions Examination Council and federal bank regulatory agencies to review their regulations every 10 years to identify any outdated or otherwise unnecessary regulatory requirements for their supervised institutions.
To facilitate this review, the agencies divided their regulations into 12 categories and are first soliciting comments on their regulations in three categories: Applications and Reporting, Powers and Activities, and International Operations. Comments on the relevant regulations will be accepted for 90 days after publication in the Federal Register.
But Ballard Spahr reports that on February 16, the Financial Crimes Enforcement Center (“FinCEN”) published a Notice of Proposed Rulemaking (“NPRM”) regarding residential real estate. The final version of the NPRM published in the Federal Register is 47 pages long. We have created a separate document which more clearly sets forth the proposed regulations themselves, at 31 C.F.R. § 1031.320, here.
“FinCEN also has published a Fact Sheet regarding the NPRM, here. The Fact Sheet, slightly over four pages long, is helpful and walks through the basics of many of the proposed requirements. The NPRM proposes to impose a nation-wide reporting requirement for the details of residential real estate transactions, subject to some exceptions, in which the buyer is a covered entity or trust. Title agencies, escrow companies, settlement agents, and lawyers need to pay particular attention to the NPRM because, based on FinCEN’s “cascade” approach to who should be responsible for complying with the reporting requirements, these parties are the most likely to be responsible.
”Rent Versus Own” Economics
If you’re still paying off your mortgage, renting is likely cheaper than owning in each of the nation’s 50 largest metros. Median rent costs are lower than median homeowner costs for those with mortgages but higher than costs for homeowners without mortgages. LendingTree analyzed housing data to compare monthly rental and housing payments for homes with and without mortgages in the 50 largest metros in the U.S.
The difference between median housing costs for homes with a mortgage and median gross rent is $563 a month. The spread in costs between renting and owning a home with a mortgage is widest in the San Jose, Calif., San Francisco, and New York metros. The difference between the median monthly housing costs for homes with a mortgage and the median monthly gross rent in these metros is $1,341, $1,303, and $1,289, respectively. Phoenix, Orlando, Fla., Jacksonville, Fla., and Atlanta have the narrowest gaps between renting and owning a home with a mortgage. In Phoenix and Orlando, median gross rent costs are $87 and $145 less than median monthly housing costs for homes with a mortgage. In both Jacksonville and Atlanta, the difference is $216.
That said, Barron’s reports that, “Prospective buyers spent the President’s Day holiday last week window shopping, early data suggest. ‘Showing activity was strong,’ says Orphe Divounguy, a senior economist at Zillow, citing data from home tour software company Showingtime. Home touring activity was up 19.4% from the start of the year, pointing to a strong seasonal ramp-up.”
Capital Markets
Markets are known for “getting ahead of themselves,” and the latest example may be the “insatiable demand” for Nvidia’s artificial intelligence chips. The stock has shot up, resulting in the company briefly surpassing a $2 trillion valuation. But other equity prices have tagged along, boosting the general stock market.
That said, investors have been walking back expectations for Federal Reserve rate cuts. Goldman Sachs, for example, has pushed back expectations for a Fed rate cut to June. If you like rates where they are, fine. If you’re hoping for lower rates to jump start your business in the near future, well…
The dominating market narrative recently has been that while interest rate cuts may be appropriate at some point this year, it is not likely to be anytime soon. Resilient economic growth and optimism that inflation will continue to fall in the face of high interest rates has fostered household demand, bolstered expectations the U.S. will avoid a downturn in the near term and forced investors to ratchet back bets on early rate cuts. Philadelphia Fed President Harker warned against betting on early rate cuts late last week, saying “I will signal my belief that we’re ready for a rate decrease when all the data, both the hard and the soft, give me that signal.” Pricing in fed funds futures has all but erased the chance of a March rate cut, and the chance of a cut in June is currently a coin-toss. Economists now see a 40 percent chance of recession in the next year, the lowest reading since mid-2022.
Last week was fairly quiet in terms of economic releases and the few that came out did nothing to change the current narrative of U.S. economic conditions. The Leading Economic Index declined 0.4 percent versus a -0.3 percent forecast and is now just two points above its April 2020 low. Historically, the prolonged decline observed in this data set predates a recession, but at the moment, it appears this recession signal is out of step with current economic conditions. Elsewhere, existing home sales rose 3.1 percent in January thanks in part to declining mortgage rates in December.
Since then, rates have moved back up towards 7 percent. The FOMC has repeatedly indicated it is in no hurry to begin reducing the fed funds rate until they are fully confident inflation is sustainably moving towards their 2 percent goal.
This week opens with $169 billion in month-end supply over the first two days along with the usual $309 billion in Treasury bills. There are several important economic releases with the highlight being the Fed-favorite PCE price index for January is on Thursday. We will also receive durable goods for January, home price indexes for December, consumer confidence for February, the second reading on Q4 GDP, Chicago PMI for February, January construction spending, and final February consumer sentiment.
The deadline for Congress to avert a partial government shutdown is Friday. Today starts quietly with new home sales for January, expected to register 680k versus 664k in December, Dallas Fed manufacturing business index for February, and remarks from the new Kansas City Fed President Schmid. The Treasury will auction $63 billion 2-year notes, $70 billion 6-month bills, $63 billion 5-year notes, and $79 billion 3-month bills. We begin the week with Agency MBS prices roughly unchanged from Friday’s close and the 10-year yielding 4.24 after closing last week at 4.26 percent. Helping ARM rates, the 2-year is down to 4.68 percent.
Jobs and Transitions
Logan Finance is hiring! Non-QM Account Executives are in high demand at Logan Finance, especially those of you in Florida. Contact us today to learn more. Speaking of hiring, Logan is happy to announce that Ryan Rathert and Sarah Gonzalez have joined the executive team as Chief of Staff and Chief Operating Officer, respectively. Ryan is a proven mortgage finance wizard and Sarah a renowned industry maven, so put your sunglasses on, because the future at Logan is bright! And the spotlight will be on Logan’s SVP Business Development, Paul Jones, as he presents “Discover the DSCR Difference with Logan Finance”, session #2 in the monthly series, “The Modern Non-QM Experience”. Join Paul on March 6 at 2pm ET. Register here. If you’re looking for a Non-QM career boost, send your resume or check out LoganWholesale.com and LoganCorrespondent.com for more information. Join Logan and become a #LoganLeader today.
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Click n’ Close, a multi-state mortgage lender serving consumers and mortgage originators through its wholesale and correspondent channels and formerly known as Mid America Mortgage, announced Polly Cracchiolo has joined the organization’s third-party originator (TPO) sales team as an account executive.
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Roughly 24 hours after filing an objection to the U.S. government’s motion to stop the gathering of evidence in a case against Ginnie Mae, Texas Capital Bank (TCB) responded to the government’s attempt to dismiss the entirety of the bank’s complaint.
The case stems from Ginnie Mae’s extinguishment of Reverse Mortgage Funding (RMF) from its reverse mortgage-backed securities program.
TCB claims that it dealt with Ginnie Mae in good faith, having lent “millions of dollars in much-needed financing to help the collapsing [RMF] continue making payments to senior citizens as part of a mortgage program critical to the federal government.”
TCB’s “protection for those loans was a lien on certain collateral,” its attorneys state, and “Ginnie Mae — up to and including Ginnie Mae President Alanna McCargo — assured TCB that the collateral would be a source for repayment.”
‘Impermissible and wrong’
In its filing, TCB recognizes that Ginnie Mae was within its rights to “extinguish RMF’s mortgage servicing rights” but claims that Ginnie Mae did not specify the impact such a move would have on the liens that the bank had a vested interest in, its attorneys said.
“But months later, Ginnie Mae took the radical step of announcing that its extinguishment of RMF’s servicing rights had also purportedly extinguished TCB’s lien — a striking collateral grab unsupported by the statute and contrary to Ginnie Mae’s prior dealings with TCB, basic fairness, and common sense,” the filing reads.
TCB also claims that the FHA Commissioner “has stated that Ginnie Mae’s brazen action is impermissible and wrong.” As stated in their original complaint, they allege that Ginnie Mae’s actions are in violation of the Administrative Procedures Act (APA), “creates liability for promissory estoppel given the agency’s stark breach of its word” and also “constitutes tortious interference with property rights.”
The bank’s attorneys go on to claim that the government’s motion to entirely dismiss the complaint “does not come close” to establishing that TCB’s claims “fail on the face of the complaint,” and that “the Government’s motion focuses almost entirely on Ginnie Mae’s authority to extinguish RMF’s interests in the mortgage-servicing rights pursuant to a contract between Ginnie Mae and RMF.”
Alleged promises by Ginnie Mae
That contention, however, does “nothing to undermine TCB’s claim that Ginnie Mae lacked statutory authority to extinguish TCB’s interest in its collateral, which was not only separate from the servicing rights but also subject to no contract between TCB and Ginnie Mae,” the filing reads.
In other words, the government motion only addresses Ginnie Mae’s authority to act against a participant in its reverse mortgage securities program, and not against the separate interest that the bank maintained over the lender’s collateral.
The bank also claims that the government’s motion does not adequately address promises made by Ginnie Mae officials and the impact those promises had on the operations of the bank, attorneys said.
“At minimum, factual disputes on critical questions, from the nature of TCB’s property interest to the commitments exchanged by the parties, preclude dismissal on the pleadings alone,” the filing reads. “The Government’s motion should accordingly be denied.”
Recounting history
TCB began its relationship with RMF in 2015 by “financing […] to enable RMF to fund and operate its business — including funding for RMF’s operations involving tails,” the filing states.
“Ginnie Mae was involved in and expressly consented to various transactions between TCB and RMF,” and “also contracted with other RMF lenders, including Leadenhall Life Insurance Linked Investments Fund PLC (“LCP”). But Ginnie Mae has never sought to contract with TCB itself regarding TCB’s transactions with RMF.”
Shortly after RMF declared bankruptcy in November 2022, the lender failed to make required payments to its borrowers, resulting in Ginnie Mae reaching out to TCB, the filing reads.
“Ginnie Mae was deeply concerned about the impact of these non-payments on senior-citizen borrowers,” TCB attorneys stated. “Ginnie Mae accordingly implored TCB to lend money to RMF. But TCB was hesitant to lend money to a bankrupt company. Specifically, TCB was concerned that if Ginnie Mae seized RMF’s [mortgage servicing rights], TCB would face delays in being repaid.”
In the end, “the most senior representatives of Ginnie Mae and FHA provided commitments to TCB that the Government would provide TCB with adequate support to ensure TCB was repaid if the Government seized RMF’s MSRs.” The defendants restated assurances given by Ginnie Mae President Alanna McCargo, FHA Commissioner Julia Gordon and Ginnie Mae chief operating officer Sam Valverde, which are supported by a sworn declaration from the bank’s president of mortgage finance.
In March 2023, months after Ginnie Mae had seized control of RMF’s servicing portfolio, the company “suddenly and without warning expressed the startling position that its seizure of RMF’s servicing rights in certain mortgages months earlier had, unbeknownst to anyone at the time, resulted in the extinguishment of TCB’s security interest in the tails,” TCB attorneys state.
“TCB repeatedly reached out to the Government in an effort to resolve the foregoing issues without the need for litigation, but the Government summarily rejected all of those efforts and refused even to schedule a meeting to discuss them. TCB was thus left with no alternative but to file this action,” the bank concluded.
Ginnie Mae’s position
In its January filing responding to the TCB complaint, government attorneys claimed that by Ginnie Mae exercising its authority to extinguish RMF’s interest, the company “necessarily eliminated TCB’s interest as well,” attorneys for the government explained in its court filing. “By law, the mortgages were the ‘absolute property’ of GNMA.”
Government attorneys went on to say that TCB “ignores that each of the relevant authorities” underpinning the core elements of the dispute corroborate that Ginnie Mae “had a right in the event of default to extinguish the issuer’s interest in the mortgages and related interests,” including Ginnie Mae’s charter statute, implementing regulations, RMF’s contracts with both Ginnie Mae and TCB, and bankruptcy court orders.
A magistrate judge overseeing the case has set a series of pretrial deadlines that extend into 2025. Because of that, it is possible that government officials currently in leadership positions at Ginnie Mae and the U.S. Department of Housing and Urban Development (HUD) may not be in office should the suit progress to trial sometime next year.
November’s presidential election could bring a new administration in January 2025, and thus new decision-makers at these agencies by the time the deadlines arrive.
Mortgage servicers, regulators and economists are closely watching the delinquency rates for Federal Housing Administration (FHA) loans following a spike in the fourth quarter of 2023.
Industry experts say that although there’s a correlation between unemployment and delinquency rates, some homeownership costs — including insurance — have increased significantly over the past two or three years, which has had a strong financial impact on homeowners. But experts also say the situation is not as bad as the one experienced during the COVID-19 pandemic.
The sources spoke about these issues during this week’s Mortgage Bankers Association (MBA) Servicing Solutions Conference & Expo in Orlando.
The latest MBA data shows that the delinquency rate for one- to four-unit properties rose to 3.88% at the end of 2023, compared to 3.62% in the third quarter, but still below the historic average of 5.25%. Meanwhile, the FHA-insured loan delinquency rate recorded a larger jump during the same period to 10.81%, up from 9.5%, the highest level since Q3 2021.
“We are seeing a bit of a pickup for two quarters in a row, but it’s very important to keep in mind that we were at the absolute lowest point in delinquencies in the third quarter of 2023,” Marina Walsh, MBA vice president of industry analysis, research and economics, said in a market outlook session.
According to Walsh, the delinquency rate for FHA loans increased by 130 basis points from the third to fourth quarters, but the current level is “certainly not nearly where it was at the height of COVID-19.”
In addition, she said that foreclosures are not picking up, so borrowers are either paying off their loans before entering the severe delinquency stage, or if they are in the serious delinquency stage, they are entering a workout.
“The question I posed to all of you is, ‘Is this a blip or a bigger trend?’” Walsh said, adding that based on data MBA has received from the industry, she believes the delinquency rate could come down a bit in first-quarter 2024 following the end of the busy holiday shopping season.
“All these increases in costs impact people’s ability to pay, without question,” Steven R. Bailey, senior managing director and chief servicing officer at PennyMac Financial Services, said in an executives’ perspective session. “But we still see the strongest correlation is between unemployment and delinquency.”
Bailey said that although increases in delinquencies are not a trend that servicers want to see, “I don’t look at it with the same fear that I used to look like.”
Homeowners insurance
According to industry experts, one of the costs affecting homeowners is their insurance, which can lead to increases in delinquencies. California and Florida are among the states where the situation is more evident.
Seven of the 12 largest insurers in California have either paused or restricted new policies over the past 18 months, including State Farm and Allstate. In September, the state’s top insurance regulator announced that new rules are in the works to persuade insurers to remain.
In Florida, the departure of many insurers and reinsurers has resulted in homeowners paying an average of nearly $4,000 a year, almost three times the U.S. average, according to estimates from the Insurance Information Institute. In some instances, homeowners have seen their insurance costs more than triple, but a new bill seeks to help them.
“That’s a combination of both rates from a carrier perspective, as well as just the increase in home values,” Patrick A. Sullivan, vice president of industry relations and compliance at Assurant, said in a session about homeowners insurance.
Sullivan said reinsurance is another factor weighing on homeowners insurance costs, a function of the global capital markets. He added that reinsurance costs have more than tripled over the past three years.
“Homeowners insurance is certainly a problem we need to tackle together,” John Bell, executive director of loan guaranty service at the U.S. Department of Veteran Affairs (VA), said during a regulatory session.
“I hope that there are others on this panel and others out there that want to work together to try to solve some of those rising prices that our homeowners just can’t absorb, and at some point in time, it’s going to hurt the market.”
Bell said that if a home costs $800 per month more than last year, the industry needs to figure out how to solve it. Bell and the VA are working to move forward with options to help veterans avoid foreclosure, including a partial claim solution.
FHA Commissioner Julia Gordon, who announced the agency’s new payment supplement partial claim during the conference, added that the issue of homeowners insurance will take a village to tackle.
“And that’s going to take real work in the states also, which is hard, and we just have to do it if we want people to be protected,” Gordon said.
A plan by the Department of Veterans Affairs to introduce a low-interest refinancing option for veterans with VA-backed loans facing foreclosure drew ire from a House lawmaker who complained some homeowners might choose to default for lower monthly payments. (Stars and Stripes)
WASHINGTON — A plan by the Department of Veterans Affairs to introduce a low-interest refinancing option for veterans with VA-backed loans facing foreclosure drew ire of a House lawmaker who complained some homeowners might choose to default for lower monthly payments.
Rep. Merrick Van Orden, R-Wis., chairman of the House Committee on Veterans’ Affairs subpanel on economic opportunity, on Thursday questioned whether the new VA Servicing Purchase program — also known as VASP — will cause some homeowners to forgo paying back home loans to qualify for VA refinancing at the lower rate of 2.5% offered by the program.
The average interest rate now for a 30-year fixed mortgage is 7.24%, according to Bankrate, a consumer financial services company that surveys major lenders weekly.
“It is essential that we support the dream of home ownership for veterans who served our country,” said Van Orden, a Navy veteran who used a traditional VA home loan to buy his house. “I have used this program myself, and it is awesome.”
But he also said he has “grave reservations” that the new VASP program would result in unintended consequences that could destroy the VA home loan program.
The refinancing option is expected to be rolled out in spring, according to the VA.
Under the program, the VA would purchase the loan from the servicer to hold it in its own portfolio. Qualifying veterans would be allowed to refinance their mortgages under the VASP rate of 2.5% after falling behind on at least two mortgage payments.
“I am concerned that this program poses a moral hazard and will encourage veterans to become delinquent on their loans to let VA take over the servicing of their payments,” Van Orden said at a House hearing about the home loan program.
He said if the VA then experienced high delinquency rates under the VASP program, it could end up being responsible for thousands of home loans it serviced.
Van Orden questioned whether the VA should be in the business of servicing loans and expressed concern that the VA would force veterans out of their homes if they failed to pay down their mortgages.
Given that veterans are 50% more likely to be homeless than others, Van Orden said he could not imagine “the VA would go so far as to be kicking people out of their homes — default or no default.”
Under those circumstances, Van Orden speculated the federal government would end up owning mortgage-delinquent properties and letting the veterans stay in their homes.
“It is no longer private property. It is public property with private citizens living in public property. That was tried in the Soviet Union. I am not signing up for that,” he said.
Van Orden said the House subcommittee has received little information on how the VASP program will operate, its costs and its overall effect on the mortgage markets.
“All of this is a cause for concern,” he said. “We need answers on VASP.”
The VA announced the VASP program in November 2023 in the Federal Register that stated “VA is initiating an expanded program using existing refund provisions. Under this program, VA will exercise its statutory option to purchase the loan from the servicer and VA will hold the loan in VA’s own loan portfolio.”
VA-guaranteed loans comprise more than 10% of the mortgage market, according to the VA.
The VA worked to assist thousands of veterans during the coronavirus pandemic who fell behind on mortgage payments, said Rep. Mike Levin of California, the top Democrat on the subcommittee. He said many financial relief measures implemented during the pandemic have ended.
Levin said the VA in December 2023 paused foreclosures on VA home loans through May 31. The measure allows veterans who have defaulted on their loans to stay in their homes.
Under the foreclosure pause, the VA extended its coronavirus refund modification program that allowed the VA to purchase past due payments — along with additional principal amounts as necessary — and give veterans a second mortgage with no interest.
Lenders meanwhile are encouraged by the VA to work with delinquent homeowners to modify payments with plans that are more affordable. Last year, the VA helped more than 145,000 veterans and their families stay in their homes through various programs, the agency said.
“I understand that the VA cannot prevent every foreclosure. But I expect it to exhaust every option,” Levin said, in reference to VASP and other VA assistance programs.
VASP would provide refinancing at an interest rate lower than the current market rate, which would continue over the life span of the loan, said John Bell, executive director of the VA Home Loan Guaranty Program.
The VA estimates under a VASP Program loan — with a 2.5% fixed interest rate for 30 or 40 years — there would be an average payment reduction of 20%, in principal and interest, for homeowners.
“It is so important that we get this right,” said Levin, who urged the VA to let Congress know what additional tools it might need to assist borrowers in default and ensure that foreclosures occur only “in the most extreme circumstances.”
Bell said job loss, divorce and catastrophic illness can impact financial stability for homeowners.
The VA home loan program — established in 1944 during World War II for soldiers returning home — helps veterans, active-duty personnel, members of the reserves and National Guard, as well as their family members, buy homes, refinance loans and pay for home improvements.
VA has guaranteed more than 28 million loans, valued at nearly $4 trillion, since the program’s inception, Bell said.
One of the attractions of the VA home loan program is the offer of 100% financing without requiring a down payment. A veteran purchasing a home at $386,000 — the median rate now — could avoid a traditional 20% down payment of $77,000, he said.
In fiscal 2023, the VA received 860,000 calls from veterans seeking information and assistance with their home loans. He said 65,000 borrowers are at least 90 days late on their VA home loans.
Bell doubted homeowners would default on home loan payments, damage their credit and face foreclosure to secure a 2.5% interest rate through the VASP program.
“The VASP program is simply a more sustainable option for veterans who cannot afford other available loss mitigation options, such as repayment plans, special forbearances and traditional loan modifications,” he said.
But Van Orden disagreed.
“My focus is to ensure that veterans remain in their homes whenever possible,” he said. “But I am concerned that this program could evolve into a financial burden of billions of dollars in bailouts that fall on the shoulders of taxpayers.
At a recent congressional hearing, Treasury Secretary Janet Yellen said that U.S. regulators are monitoring risks stemming from nonbank mortgage lenders, cautioning that a failure of one of them is possible due to market strains and a lack of access to deposits.
The Community Home Lenders of America (CHLA), which represents small and mid-sized nonbank independent mortgage banks (IMBs), appreciates the concerns regulators have about the so-called “shadow banking system” – nonbanks carrying out traditional bank financial activities. Failures of large cryptocurrency firms have harmed consumers and caused some economic panic. Firms that offer risky financial products should receive appropriate supervision like banks do.
But mortgage lenders simply don’t merit the alarms they seem to be generating. Last March, CHLA released a comprehensive report: rebutting the myths about nonbank IMBs being risky and explaining how IMBs’ business model of originate and sell significantly reduces risk.
Without risky assets on their books, turmoil in mortgage markets does not result in significant IMB losses. Instead, IMBs’ financial struggles have largely been focused on bringing down operating expenses to match a significantly reduced revenue based in response to the volume collapse in the mortgage refi business. Notably, if an IMB lender goes out of business, the main impact is — wait for it — the firm simply won’t be around to originate more mortgage loans.
As a result, we assume that FSOC’s concern is not mortgage lenders per se, but about a small handful of mega mortgage servicers. Mortgage servicers do hold assets on their books — mortgage servicing rights (MSRs) — that could decline in value. Moreover, servicers have financial requirements to advance funds to mortgage pools when a borrower does not make a mortgage payment. FSOC’s concerns are that nonbanks don’t have access to deposits (like banks do) to carry out this function.
The answer is not to clamp down on IMB lenders or servicers, but to create credit facilities commensurate with what banks enjoy, to enable servicers to perform this banking-like function.
So, in January 2023, CHLA wrote a letterto Ginnie Mae, asking Ginnie to expand its PTAP program, to increase liquidity for Ginnie servicer/issuers experiencing increases in advance responsibilities. Note we are not calling for a bailout — just a liquidity facility for this function.
And in October 2022, CHLA wrote a letter to FHFA asking that the Federal Home Loan Bank (FHLB) system use its advance capabilities to do the same for advances for Fannie Mae and Freddie Mac MBS. Both these actions would do far more to reduce risk than any more draconian actions FSOC might be contemplating for servicers.
CHLA is also asking regulators to be precise about IMBs and risk. Regulators should clarify that risks are limited to only a very small handful of mega servicers, and not to the much larger universe of nonbank IMBs. Regulators should publicly explain that the limited risks that do exist are not predominately a risk of financial loss, but a liquidity risk, arising from servicers’ obligation to effectively act as a banker to borrowers that don’t make mortgage payments.
We would also point out that an excessive focus on nonbank mortgage lender risk could divert attention from the more significant financial risks we confront. As nonbanks were on the receiving end of alarms over their financial strength, last March’s Silicon Valley Bank fiasco was followed by last week’s turmoil around New York Community Bank. While some are focused on the risks of single-family loans, the true threats to our financial stability are in the trillions of dollars of commercial real estate loans held by banks.
But the ultimate risk is that federal policy makers and members of Congress get caught up in the echo chamber of false myths about nonbank IMB lender risks — and pursue unnecessarily draconian policies which harm IMBs’ strong homeownership record. All of this comes at a time of the unparalleled twin challenges to homeownership affordability of skyrocketing mortgage rates and home prices still at near-record levels.
As our recent annual CHLA IMB Report chronicles, IMBs now originate over 80% of all new mortgage loans, demonstrably outperform banks in loans to minorities, and consistently do a much better job of access to mortgage credit for underserved first-time homebuyers than banks.
IMBs welcome scrutiny of both their finances and their performance in serving consumers’ mortgage needs. They just ask that a good narrative doesn’t get in the way of the facts.
Scott Olson is Executive Director of the Community Home Lenders of America (CHLA), the only trade group exclusively representing non-bank IMBs.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this story: Sarah Wheeler at [email protected]
Reston, Virginia-based Ardley Technologies announced on Tuesday the launching of its white-label automated underwriting engine called Autopilot, which the company states will enable lenders to create instant, conditional loan approvals for qualified borrowers.
“The main thing about Autopilot is the speed with which we can offer a decision to a borrower,” Nate Den Herder, founder and CEO of Ardley, said in an interview. “Most technologies are not architected to do a million loans every five minutes.”
Den Herder, who spent about 15 years at Fannie Mae before founding Ardley in 2021, explained that the platform runs the borrower eligibility and pricing rule at every stage throughout the loan application and is able to offer a conditional approval at the end of the process. Requests for additional documentation can be made while the borrower fills the platform.
“By leveraging a client’s pricing, fees and credit policies, along with any resell guidelines, Autopilot delivers confidence that every offer presented to a customer with conditional approval is real,” Den Herder said. “And by generating loan approvals instantly — not minutes, hours or days later — our clients can be assured they are first in line when a customer needs financing.”
Autopilot was added to the company’s deal-flow engine Actionable Data Intelligence, which in 2023 was used to structure 6 million loan offers and generate $1 billion in origination volume for its clients, the company reported. Ardley added that there’s no human assistance, and the engine can integrate with any loan origination system (LOS) or customer relationship management (CRM) solution.
Den Herder founded Ardley after noticing a need for more technology for servicers in the market, since for the past eight years, startup investments have gone to point-of-sale systems that focus on origination.
Although Autopilot is available to all lenders, it was built for companies that are also servicers and have borrower data ahead of time to maximize deal opportunities in any interest rate environment.
“We are happy to sell to anybody, but we see an opportunity with large servicers that maybe haven’t built out a lot of the technology that you need to do direct to consumer.”
Ardley can help servicers with retention strategies and find new deals within their portfolio. A top 10 servicer is already using Autopilot, the company reported.
According to Den Herder, in the current environment, “it costs more every day to originate loans, especially in the home equity arena, where loans are smaller.”
“Every penny counts when it comes to costs of origination. We think that lenders win when it’s cheaper and easier to originate those loans,” said Den Herder, who is launching Autopilot at this week’s Mortgage Bankers Association Servicing Solutions Conference & Expo in Orlando.
In a challenging market, when servicers and lenders are cutting vendor costs, Den Herder said Ardley has a subscription price for its platform that is “meant to be kept as low as possible,” and his company “gets paid on closed loans.”
“It’s true that many lenders are taking a very hard look at their expenses with their technology vendors; we aim to have positive ROI with all of our clients,” he said. “We accomplish that by participating when one loan closes, so we want to find more loans and help close them more quickly. Everyone wins, even in a tough environment.”
In today’s volatile housing market, ensuring your home is protected against unexpected repairs and replacements is more crucial than ever. As homeowners seek peace of mind amidst the unpredictability of homeownership, home warranty companies have stepped up to offer a buffer against unforeseen expenses.
5 Best Home Warranty Companies
With so many options available, pinpointing the most reliable and value-packed home warranty company can be daunting. To help you choose, we’ve curated a list of the best home warranty companies to ensure your home’s systems and appliances receive the top-tier coverage they deserve. Take the time to discover which provider aligns best with your needs.
#1 Choice Home Warranty
There are plenty of reasons to go with Choice Home Warranty. First, they are a top-rated business according to ConsumerAffairs.com and have an average rating of 4.8 out of 5.
They have a five-star rating from Trust Pilot, and Inc. 5000 has recognized them as one of America’s fastest-growing private companies.
Choice has customer service available 365 days a year, 24 hours a day, 7 days a week. So if you’ve got a problem, don’t be afraid to pick up the phone and call them.
They are more than happy to answer any questions about your home warranty plan or, if need be, put in a request for a repair. A licensed, pre-screened, and continuously monitored technician will come to your house, usually within one or two business days.
The age of your home, its systems, and appliances is not relevant to Choice Home Warranty. They always cover items that have been properly maintained and were in well-working order when coverage was initiated.
If the item in question needs to be replaced but is no longer available on the market, they will give you a cash payment of the item’s replacement cost.
Another plus is that you don’t even have to get your home inspected before Choice Home Warranty will begin offering you coverage.
Choice also has a very reasonable $85 dollar service call, which makes them among the most competitive warranty providers for service calls.
Plan Options
1. Total Plan ($450 a year)
Includes coverage on the following —
AC
Heating
Electrical
Plumbing
Water Heater
Whirlpool
Refrigerator
Oven
Dishwasher
Microwave
Garbage Disposal
Washer and Dryer
Ductwork
Garage Door Opener
Ceiling and Exhaust Fans
2. Basic Plan ($378 a year)
Includes coverage on everything mentioned above, EXCEPT:
AC
Refrigerator
Washer and Dryer
Items that can be added at additional cost include:
Pool
Central Vacuum
Well and Sump Pump
Limited Roof Leak
Stand Alone Freezer
Second Refrigerator
Septic System
Septic Pumping
Read our full review of Choice Home Warranty
#2 Advanced Home Warranty
Advanced Home Warranty offers comprehensive coverage and a 24/7 claims hotline, making it a strong choice for anyone considering a home warranty.
Home warranties are available nationwide, so you can qualify for a plan, no matter where you live in the U.S. Plus, you can try it out without any risk by signing up to get your first month completely free of charge.
Trade service fees are reasonable at $60. If the cost of the repair is less, you’ll pay the smaller amount. This is one of the lowest service fees available among the providers on our list.
While they don’t offer a wide range of plans, you can get coverage on some of the big-ticket items associated with homeownership.
A low monthly fee can be much more manageable than paying for replacements outright every time an appliance breaks. There are also parts of even larger systems that are included in their coverage.
Here’s a breakdown of the two home warranty plans available from Advanced Home Warranty, how much you’ll pay, and what exactly they include.
1. Basic Plan ($370 a year, plus one month free)
Includes coverage on the following:
Heating System
Electrical System
Plumbing System
Dishwasher
Microwave
Garage Door Opener
2. Total Plan ($450 a year, plus one month free)
Includes coverage on everything above, PLUS:
Air Conditioning
Refrigerator
Washer/Dryers
Do read each home warranty plan for details on exactly how each specific item on the list is covered.
Read our full review of Advanced Home Warranty
#3 Liberty Home Guard
Liberty Home Guard offers a high degree of personalization for your home warranty coverage. For example, you can pick the plan and also how often you want to be billed.
You can choose monthly payments, annual payments, or for the most savings, multi-year home warranty plans.
Liberty Home Guard offers a service call fee of $60, which is a competitive service fee. You can also expect your service call to be delivered within 48 hours of making a claim.
You don’t need a home inspection to qualify for coverage with Liberty Home Guard. There’s also no limit to how many claims you can file within a year.
You can file your claims online for your ease and convenience. And with a 60-day satisfaction guarantee on service, you’re sure to be satisfied with the repair or replacement process.
If for some reason, you want to cancel your plan early, it’s entirely possible because there’s no annual contract. You’ll receive a prorated refund for any time you’ve paid for, except for a small administrative fee.
With Liberty Home Guard, there are three different coverage options you can choose from. You can also include optional add-ons in any plan.
1. Appliance Warranty for $39.99 Monthly or $399.99 Annually
Clothes washer
Clothes dryer
Refrigerator with ice maker dispenser
Built-in microwave oven
Dishwasher
Garbage disposal
Range/ oven/ cooktop
Ceiling and exhaust fans
Garage door opener
2. Systems Guard for $49.99 Monthly or $499.99 Annually
Air conditioning
Heating
Ductwork
Plumbing
Electrical
Water heaters
3. Total Home Guard for $59.99 Monthly or $599.99 Annually
This choice offers the most protection of all the plans and includes everything listed in the two plans above.
4. Optional Add-ons
Pool and spa: $17.00 monthly; $195.00 annually
Sump and pump: $3.00 monthly; $36.00 annually
Central vacuum: $3.00 monthly; $36.00 annually
Well pump: $9.00 monthly; $101.00 annually
Additional spa: $16.00 monthly; $188.00 annually
Septic system and septic sewage ejector pump: $11.00 monthly; $123.00 annually
Stand alone freezer: $4.00 monthly; $44.00 annually
Second refrigerator: $4.00 monthly; $44.00 annually
Read our full review of Liberty Home Guard
#4 Complete Protection
Complete Protection is another excellent home warranty company. Servicing all but nine states, this A+ Accredited Business is open 24/7.
Only slightly more expensive, this once small-scale, family-owned business offers some of the most comprehensive home warranties available in North America.
One of the many benefits offered by Complete Protection is their no-fee service call policy. With most quality providers charging at least $50 per service call, having no service call fee at all is a major perk.
They have five plans you can choose from:
Kitchen/Laundry: $32 a month/ $384 a year — covers your dishwasher, oven, refrigerator, and washer and dryer.
Heating/Cooling: $34 a month/ $408 a year — covers your furnace, AC, and water heater.
Basic Built-ins: $40 a month/ $400 a year — Furnace, AC, water heater, dishwasher, and oven.
Full House: $50 a month/ $600 a year — Furnace, AC, water heater, dishwasher, oven, refrigerator, and washer and dryer.
Full House Plus: $60 a month/ $720 a year — Includes everything mentioned in the first four plans, but also includes electrical wiring and in-bound water pipes.
What makes Complete Protection stand out even more:
There are a few other things that make Complete Protection stand out from its competitors. For one, their home warranties don’t have a deductible. As a result, you don’t have to pay any approved repair costs when something happens — this includes the initial service call, parts, and labor.
Secondly, CP pays for all preventative maintenance. Other home warranty companies mandate that their customers undergo preventative maintenance on items such as HVAC systems, but they won’t even pay for it. Instead, they force their customers to do so!
Thirdly, CP home warranties cover all the parts within an appliance. Most home warranty companies exclude parts like ice makers or washing racks within dishwashers. CP does not pick and choose which parts it will cover.
Lastly, Complete Protection allows you to choose your own service contract provider. So, if you have a certified contractor with whom you work, you can go to them whenever home repairs are needed.
They do this because they feel that their customers should always be comfortable with the person working in their house.
Read our full review of Complete Protection
#5: American Home Shield
The accolades American Home Shield has received are many. In addition to being a Better Business Bureau Accredited Business, they also received the Women’s Choice Award from 2014 to 2016.
On top of that, Home Warranty Reviews gave American Home Shield the Best in Service award in 2014 and ranked them as Top Rated from 2015-2017. Last but not least, they are Consumer Affairs Accredited.
Why so much recognition from the industry? For starters, they’re always open. You can always reach them regardless of what day or time it is. And, when you do, expect a local contractor to be at your home within no more than 24 hours. You don’t even have to get on the phone. You can request home repairs directly from their website.
Another reason American Home Shield is recognized as the best among the best is its versatility with its home warranty plans. They have four to choose from:
Systems Plan: Covers the replacement or repair of your home’s key systems, such as: plumbing, electrical, heating, air conditioning, and smoke detectors.
Appliances Plan: Includes coverage on common, everyday household appliances, such as refrigerators, built-in food processors, dishwashers, and washer and dryers.
Combo Plan: Get coverage on all of your primary home systems and appliances. Saves you $14 a month if you were to rather purchase the systems and appliances plans separately.
Build your own plan: Choose only what you want to be covered by selecting 10 or more items from their list of covered items. This way you get the coverage that you care about the most.
Another element of their customized service is their service fees. American Home Shield allows customers to choose from a service fees range of $75, $100 or $125 per service request. This allows you to get the plan you want without having to account for a high service call fee.
The ability to choose your own service call fee regardless of the plan you’re on separates American Home Shield from most other home warranty companies which carry a standard service call fee.
Additionally, American Home Shield can provide coverage for your pool, spa, well pump, and septic system (at additional costs) and can assist you during the moving process by covering your home while it’s listed. If the new owner decides they would like to upgrade service afterward, it’s an easy switch to do so at closing.
Read our full review of American Home Shield
Methodology: How We Chose The Best Home Warranty Companies
When researching the best home warranty companies, we analyzed over 20 of the most popular home warranty companies. Our team spent hours reviewing each home warranty company. We examined many factors, but mainly focused on the following:
Home warranty plans and options
Pricing
Reputation and trustworthiness
Customer reviews
Pros of Home Warranties
Peace of Mind
One of the major benefits of a good home warranty is peace of mind. A home warranty can bring some real financial security against unexpected home repairs. While getting your home in ideal shape can be tough, maintaining that level can be even more stressful. A good warranty coverage can cut away a big chunk of that worry.
Convenience
One of the biggest problems people can encounter when faced with unexpected breakdown at home is finding good help. But a home warranty also reduces some of that stress, as your provider can provide you with a relevant licensed expert within their network.
Potential Savings
In many cases, standard home repairs – such as a new boiler, for example – can be a lot cheaper if replaced under warranty. While home warranties can’t guarantee savings, chances are you will see the benefits speak for themselves over time.
Transferable
Many home warranties are transferable, meaning you could carry your plan to a new home if you decide to move. Be sure to check whether transferability is a feature of any warranty before signing if that’s important to you.
Cons of Home Warranties
Wait Times
Unfortunately, wait times for claims can sometimes keep you waiting. If you need a quick fix or emergency repairs at home, you may have to wait longer than you would like. One thing that can help here is looking for a provider that provides an online claims process. This is because online claims are often processed faster than those done over the phone.
Coverage Exclusions
Home warranties don’t cover everything, and it can be hard in an emergency to remember your exact coverage limits. It’s important to read the details carefully before signing up, and put a plan in place if you need work that falls outside your warranty coverage.
Cost
Home warranty coverage isn’t cheap, especially if you want to secure protection across your property. You won’t necessarily be covered by service fees, even if you choose a plan with a high service fee. And of course, some maintenance and repairs can come with further costs on top of your plan. These high costs can make it difficult to discern whether a home warranty is the right thing for you.
Other Home Warranty Companies to Consider
Here are a few other home warranty companies that didn’t make our top 5 that you may still want to look into.
Like so many things in our lives, a home warranty is something that we don’t often think about until we absolutely need it. Sure, you have home insurance, maybe even flood insurance, but that only covers certain situations.
Homeowners Insurance
Homeowners or renters insurance can cover damage to your home from things like fire, theft, storms, and some natural disasters. In addition to your homeowners insurance plan, you should choose to purchase a home warranty to protect your belongings in a way that insurance lacks.
If you’ve ever purchased a large appliance, a computer, or even a television from a retailer, then you’re probably familiar with the concept of a warranty.
However, those are warranties sold at the time of purchase and cover only one product. The benefit of home warranty protection is that it can cover every product in your home and more.
Choosing a Home Warranty Plan
What a home warranty plan covers will depend on the plan you choose, and there are many to choose from. A home warranty can cover anything from your microwave oven to your plumbing and your electrical systems.
Deciding which plan is right for you will determine what items and systems it covers and how much it will cost. Typically, home warranties charge either a small monthly or annual fee that can save you a lot of money in the long run.
How to Choose the Right Home Warranty
Choosing the right home warranty is key. Let’s run through all the details you need to consider before making your decision.
Determine Your Coverage Needs
At the very least, it’s important to get at least an idea of what sort of coverage you need. Take the time to decide which items in your home you want to protect before comparing offers. You’ll find plans that cover appliances, home systems, and plans that cover both.
Compare Quotes
It’s worthwhile to shop around. Try to acquire at least three different quotes from plans that you’re genuinely interested in. And use this time to also prioritize clearing up any questions you have about the policies you’ve been offered.
Don’t forget to pay close attention to the various prices you’ll see for service call fees. Some companies are much more competitive than others, and some even offer a service fees range which you can choose from depending on your needs and budget.
Review Sample Contracts & Liabilities
The next step is to review any sample contracts carefully. You’ll want to identify the limitations and exclusions in the contract, especially.
Furthermore, be sure to double-check cancellation policy just in case you decide your warranty isn’t working for you later on.
Check Reviews
Finding the best home warranty company for you will require some further research. You can read customer reviews online to find a company that provides great customer service as well as competitive plans.
Be sure to look out for any record of previous legal action taken against the company, too.
Home Warranty FAQ
What is a home warranty?
A home warranty is a type of service contract purchased to cover breakdowns, repairs, and replacements of home appliances and systems. Home warranties are designed to cover normal wear-and-tear damage on covered items and systems.
When a covered item breaks down or otherwise requires attention, you file a claim with your warranty provider. They then send a licensed technician to your home to assess the issue. Instead of paying for the full cost of the repair, being under warranty generally means paying only a small service fee for necessary repairs. The price of service fees varies between providers.
Home warranties are popular because they offer homeowners maintenance coverage and emergency repairs without having to rely on savings. The home warranty market today is huge and can provide terms for homes and budgets of many shapes and sizes.
What does a home warranty cover?
Home warranties can cover a whole range of systems and appliances within your home. You can decide how much you want to spend and determine what items will be covered by your home warranty.
Most home warranty companies break down their offerings into good, better, and best options. The good option, and least expensive, is one that covers most if not all of your appliances.
Major Home Systems
More expensive on an upfront basis are plans that cover major home systems. These home warranty plans cover the systems within your home. If you’re renting, this may not be of concern to you. However, if you own your home, you know that a plumber or electrician can cost a lot more than replacing your refrigerator.
If you’re less concerned with appliances and worried about what keeps your home humming along, then you may want to consider a system plan.
Appliances
Appliances like your microwave, washer and dryer, dishwasher, and often a lot more are covered by the best home warranty companies. These are great options for those who are renting or want to spend the least amount of money.
Systems & Appliances
The most expensive plans, of course, offer the most coverage. The best plans cover both systems and appliances. So while they’re the most expensive, they’re also the best value. Covering your systems and appliances together will typically save you around 20% to 30% of your total bill.
Basic plans from the best home warranty companies will cover the majority of systems and appliances in your home but don’t cover everything. If you have a pool, for instance, you may have to choose additional coverage.
Some home warranty companies even allow you to add coverage to cover your homeowners’ insurance deductible. Combining appliance and system coverage may also include these additions.
There are exclusions to what a home warranty will cover. Unfortunately, no plan is a blank check to have every item in your home replaced. These are repair plans and not replacement plans.
What is not covered by a home warranty?
The extent of your warranty coverage will vary greatly between companies and plans available. Having said that, however, here is a list of the ideas that are usually not covered by a home warranty:
Structural issues, paint and flooring
Commercial-grade equipment or systems
Pre-existing conditions
Rust, corrosion and sediment problems
Improper maintenance, installation, design, or manufacturer defect
Detection and removal of asbestos and mold
Building and zoning code violations
How much does a home warranty cost?
Home warranty pricing varies greatly depending on the coverage you choose, the home warranty company, and the area in which you live. In general, though, if you’re just covering appliances, expect to pay around $30 a month.
If you’re looking for only system coverage, you’ll probably pay around $35 a month. However, if you combine your coverage to include both systems and appliances, expect to pay around $45 per month.
Adding things not covered by a typical home warranty plan can also increase your monthly bill. If you have an atypical appliance or system, it’s possible that basic plans do not cover it. Not everyone has a swimming pool, a septic tank, a whirlpool tub, or a spa.
Check with your individual plan to ensure that all systems and appliances you want to have covered are actually included. If they aren’t, see if you can add them separately.
Service Fees
In addition to your monthly fee, you’ll also need to pay service fees for a service call. This cost can vary greatly.
The best home warranty companies offer plans that will cost you around $50 to $125 per repair. This is based on the home warranty company, the plan, and the item that needs to be fixed. While this may seem like a lot, consider the cost of the average repair without a warranty.
What can you expect to pay without a home warranty?
The average repair cost of a refrigerator is $275 to $325. The igniter on an oven or range may only cost $110 to $200 to repair, but a control board could cost you more than $260.
Replacing a rubber gasket on your washer will set you back between $200 to $300. These expenses can quickly add up compared to the fee home warranty companies charge for a visit.
Bottom line: They’ll address the issues with your current item but won’t give you a new one.
Pre-Existing Conditions
Pre-existing conditions are not covered either. Unfortunately, if one of your major appliances breaks, you can’t just sign up for coverage and expect to have it fixed.
Most home warranty companies will cover an unknown pre-existing condition. However, you can’t have an appliance covered if you or the home warranty provider knows that it’s already broken. This is why it’s a good idea to think about purchasing home warranty coverage before your appliances break.
Coverage Waiting Period
Most companies impose a 15 to 30 day waiting period before coverage can begin. There are, however, exceptions to this rule. For instance, if you have a home warranty that is ending soon, you may be able to begin on the date your coverage stops.
It’s important to read the fine print of your service contract. Each home warranty company will have very specific coverage details.
While all will most likely cover your refrigerator, not all of them will cover wear and tear on the gasket that seals it. Typically, the more expensive the plan, the more it covers, but this is not always the case.
What is the process for having an item repaired?
When something breaks, especially if you have a home warranty, you’ll want it fixed as quickly as possible.
Going without a microwave for a week or two may be acceptable, but if it’s your refrigerator, you may not be so patient. When an item malfunctions or breaks, you’ll need to contact your home warranty company’s customer service and explain the issue.
Make sure you report the problem as quickly as possible. The faster you make the call, the faster you’ll get an appointment and have your issue resolved.
Independent Contractors
The home warranty provider will most likely assign an independent contractor to inspect and repair the item. Obviously, system repairs can take longer and be more labor-intensive.
For example, replacing a part on your furnace will be a lot easier than repairing electrical wiring or plumbing inside your walls.
Depending on what is wrong, the contractor may have to order parts or return with specialized equipment. You’ll be required to pay a service fee for each item you wish to have repaired. However, the contractor should ensure that the item returns to working order.
Workmanship Guarantee
Once you’ve had an appliance or system repaired, that item is covered under a workmanship guarantee. Think of it as a warranty within your warranty.
The home warranty provider guarantees the parts and labor of that particular repair for a specified amount of time. This is usually around 90 to 180 days after the repair. So, even if you cancel your plan, they will still cover the repair during that time.
Who should pay for a home warranty?
Many times the seller will buy a home warranty to make the purchase of the home more appealing. Sometimes a real estate agent will even purchase a home warranty as a courtesy to the clients they’re representing. However, buyers, sellers, real estate agents, and current homeowners can all buy a home warranty. It’s also important to note that buying a home warranty can be done at any time, before or after closing.
What should you look for in a home warranty company?
A home warranty can save you a lot of hassle and headaches, not to mention money, down the road—as long as you do your homework and think it through.
A home warranty covers many things that homeowners insurance does not. Having peace of mind knowing that costly home repairs won’t spring up unexpectedly is a great feeling.
Choosing the right type of coverage for you is the next step. When you think about the type of coverage you want, think about the items you want to protect in your home.
Renters
If you’re just renting, then plumbing and electrical work is not a concern for you. Your homeowners insurance should cover things like theft and fire, but you still want to be covered when something breaks that you actually own. Choosing an appliance plan is probably the right option for you.
If you live in an older home that you own, a more comprehensive plan may be the right choice for you. It’s comforting to have your home inspected before purchasing, but things can still go wrong. You can avoid costly maintenance as long as you plan ahead.
Are home warranties worth it?
The answer to this question will depend largely on your unique circumstances. Two of the biggest factors are the age of your home and the quality of your appliances. In addition, your own ability and comfort with repair and maintenance is a factor.
Almost every home appliance and system will eventually require significant repair or even replacement. Depending on your own DIY skills, you might be comfortable taking responsibility for most repairs. Others might want more comprehensive coverage. But even still, there could be plenty of reasons why you would prefer to have a home warranty.
How do I cancel my home warranty?
Your first step should be to review your contract and make sure you understand the cancellation policy. Most companies will charge a cancellation fee that can range from 5% to 10% of the outstanding fee.
Thereafter, you can contact the company and tell them you’re considering cancelling your warranty. If possible, try to speak to a sales rep with whom you’re familiar.
Some companies require you to send a written notice of termination. Remember to cancel any automated payments from your credit card or bank account, if necessary. It might also be a good idea to request a written confirmation of the cancellation for your records.
Which home warranty company has the lowest service call fee?
Service call fees can vary widely between companies, but it’s important to try to find the most competitive service call fee available to you. Service fees generally range from $50 to $150 per service call.
The trick with finding a competitive service fee call is making sure you don’t sacrifice the quality of service calls. Some of the top-rated home warranty companies charge a higher service fee. However, it could be worth it to have the security and confidence of quality home service.
Final Thoughts
To find the best home warranty company, you will need to read the contract thoroughly. Every company that you investigate will have a contract. In that contract, they’ll spell out exactly what they do and do not cover.
They’ll also explain the cost, who will fix your items if they break, and more. Comparing two or more home warranty companies can give you a sense that you’ve made the right decision. Always make sure you do your homework.
Furthermore, check to see if a home inspection is required before qualifying for a home warranty with a specific company. Many don’t require this extra step, but it’s wise to be prepared in case they do. You definitely want to consider both cost and convenience as part of your ultimate decision.
Full Reviews of Home Warranty Companies
Looking for more options? Check out our other home warranty reviews below.
Hedging, Renovation, Home Equity, Accounting Products; U.S. Population Stats; Fannie Earnings of $3.9 Billion
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Hedging, Renovation, Home Equity, Accounting Products; U.S. Population Stats; Fannie Earnings of $3.9 Billion
By: Rob Chrisman
Thu, Feb 15 2024, 11:01 AM
In my travels I’ve eaten some unusual foods, although maybe not this unusual, but here in Boise the talk is about how unusual it is that applications and locks have suddenly shot up in the last several business days. It is nice to hear and see the hustle and perseverance from originators pay off some. Taking a look at the big picture, per the U.S. Census Bureau, nearly 40 percent of all homeowners own their homes free and clear, or 33.4 million mortgage-free, single-family homes and condos. And some percentage of those have credit card debt that is 25 or 30 percent, so a tax-deductible loan at 7 percent can be pretty attractive. Sure enough, refis are hitting the numbers: as reported last month, 89 percent of people with mortgages have an interest rate below 6 percent, down from a record 93 percent in 2022. (Today’s Commentary podcast can be found here and this week’s is sponsored by Lender Toolkit and its AI-powered AI Underwriter and Prism borrower income automation tools. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar, which means more repeat and referral business. Hear an interview with Stavvy’s Angel Hernandez on industry and regulatory affairs, and the state of loss mitigation solutions.)
Lender and Broker Services, Products, and Software
Ready to sprint? After successfully automating the front end of the mortgage loan process, is the industry ready to conquer what remains? To those with the vision of responsible innovation, the answer is ‘yes.’ Much of the mortgage lifecycle is still reliant on outmoded, labor-intensive processes and fragmented legacy technology. To address this disconnect, FHFA convened industry participants to explore data digitization as the vehicle for change. Clarifire’s current blog, “Responsible Innovation – A Future Vision for the Mortgage Industry,” looks at the five correlating challenges that continue to impact lenders, vendors, and regulators. It’s time to implement responsible automation with CLARIFIRE® promoting borrower engagement, 24/7 self-serve access, dynamic automated rapid results, operational efficiencies, and meaningful cost savings. Meet us at MBA’s Servicing Solutions Conference & Expo and learn how to deliver cohesive innovation with a better approach, better results, and better software. CLARIFIRE®, truly BRIGHTER AUTOMATION®.
“When it comes to delivering a seamless mortgage experience, 2024 borrowers are looking for a swift, accurate and modern approach. How can you deliver on all three? That’s where automation comes in. In this new article from ICE Mortgage Technology®, we uncover common automation misconceptions and share the steps lenders can take to transform their mortgage processes and meet today’s borrowers where they are. Read the full article to learn how leveraging ICE Data and Document Automation™ in Encompass® can help lenders reduce manual efforts so they can reignite, reinvent, and refocus their business strategy to ensure its future-proof.”
Make your general ledger profitable and run your business more efficiently with Loan Vision and LV-PAM. Instead of “staying alive until ‘25”, with Loan Vision, a software built by the mortgage industry for the mortgage industry, you can “produce more in 24!” Customers on Loan Vision see improvements of 30 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. Interested in learning how Loan Vision can help you run a more efficient and profitable company? Contact Carl Wooloff to schedule a call today.
Managing incoming referrals from a branch network is a pain… but not with LiteSpeed by LenderLogix! With LiteSpeed, each branch can have its own online loan application that seamlessly integrates into Encompass® by ICE Mortgage Technology™. All the tracking you need to make sure you’re getting the most out of your branch network. See why banks and credit unions are making the switch to LenderLogix.
TPO Products for Brokers and Correspondents
“Button Finance is excited to launch our new home equity loan offerings tailored for investor properties and those qualifying via bank statements, exclusively for our broker partners. We’re extending loans up to $500k with competitive CLTVs, up to 80 CLTV for investor properties and 85 CLTV for bank statement loans. Our flexible terms accommodate up to 50 percent DTI and extend up to 30 years, ensuring a fit for a wide range of financial situations. Importantly, these additions come without any changes to our existing programs, which continue to offer rates as low as 8 percent, with correspondents earning up to 7.85 percent of the loan balance. Please email us for more information or to sign up!”
Renovation lending fuels loan production, boosts profits, and fortifies housing inventory in competitive markets. Explore the rising demand for renovation loans with Planet Home Lending’s Guide to Renovation lending, tailored for correspondent lenders. From seizing opportunities to fostering robust partnerships, it offers a step-by-step roadmap. Request your exclusive copy today.
AmeriHome Mortgage, the 2nd largest correspondent investor in the country, is officially the #4 Overall Lender according to Inside Mortgage Finance! Backed by the strength of Western Alliance Bank, AmeriHome wants to speak to you about how a relationship with it will help you navigate and succeed in this ever-changing industry. By combining Western Alliance Bank’s Warehouse Lending and MSR and Note Financing tools, as well as its Treasury Management expertise, with AmeriHome’s industry leading loan purchase platform, this is a “must-have” relationship for mortgage bankers of all shapes and sizes. AmeriHome recently enhanced key overlays, including removal of their max cash out overlay on VA loans and their Best Efforts Relock policy… Connect with your sales rep for details. Don’t miss AmeriHome in Houston for TMBA Southern Secondary later this month as well as MCT Exchange in March! Check Upcoming Events for details, find your sales rep here, or send them an email to learn more about partnering with AmeriHome!
“Citibank N.A. remains committed to sustainable growth and responsible expansion of the Correspondent Lending channel. One of the elements we’re focused on is building new and existing relationships with Non-Delegated, Best-Efforts lenders who have a passion for supporting consumers in underserved markets. Following a significant investment in our Non-Delegated platform featuring enhanced capabilities and increased capacity, Citi Correspondent Lending is working to create opportunities for smaller mortgage bankers wanting to make a sustainable impact in their local communities. We offer a robust set of Community Reinvestment Act (CRA) pricing incentives (available at point of sale through Optimal Blue and ICE’s EPPS pricing engines) as well as a growing suite of community lending-focused programs. To learn more about these and all that Citi Correspondent Lending has in flight, contact us or complete and return our Prospective Correspondent Questionnaire.”
Demographics for Originators
The U.S. Census Bureau projected that the U.S. population has increased 1,759,535 (0.53 percent) from Jan. 1, 2023, and 4,443,957 (1.34 percent) from Census Day (April 1) 2020. In January 2024, the United States is expected to experience one birth every 9.0 seconds and one death every 9.5 seconds. Meanwhile, net international migration is expected to add one person to the U.S. population every 28.3 seconds. The combination of births, deaths and net international migration increases the U.S. population by one person every 24.2 seconds. The projected world population on Jan. 1, 2024, was 8,019,876,189, an increase of 75,162,541 (0.95 percent) from New Year’s Day 2023. During January 2024, 4.3 births and 2.0 deaths are expected worldwide every second.
The 2024 NextGen Homebuyer Report, a research project developed in partnership with National MI to provide practical insights into the behavior and preferences of the next generation of homebuyers, is out. “In partnership with National MI, Kristin Messerli has surveyed over 5,000 NextGen homebuyers over the past 4 years to bring fresh insights to the mortgage industry.
The 2024 report analyzes data from a January survey of 1,000 Gen Z and Millennial respondents to gain a deeper understanding of NextGen homebuyers’ challenges, motivations, and behaviors. Common themes of this report include skepticism about the market, lack of confidence in experts, and a desire for education.”
Per the survey, over half of Gen Z and Millennials are not confident homeownership will be accessible to the next generation. 51 percent of them are not confident in their knowledge of homebuying, and 54 do not trust lenders to help them make smart decisions about their future. So, if you’re a lender, you know where to put some resources!
Conventional Conforming Updates
Yesterday Freddie Mac announced its earnings, and today it was Fannie Mae’s turn. Fannie saw $17.4 billion in annual net income for 2023 and $3.9 billion in fourth quarter 2023 net income, with net worth reaching $77.7 billion as of December 31. Net income increased $4.5 billion in 2023 compared with 2022, primarily driven by a $7.9 billion shift to a benefit for credit losses in 2023 from provision for credit losses in 2022.
Freddie Mac announced that Eric Wilson and Jonathan Kunkle have been named vice presidents of Seller Engagement for the Single-Family Division. In their roles, Eric will oversee Eastern Regions of the country and Jonathan will lead Western Regions. Both will establish strategic direction and provide the primary source of market intelligence and seller business perspective within Freddie Mac for their regions.
Fannie Mae February Selling Guide SEL-2024-01 includes multiple topics such as expanding the value acceptance + property data offering to include condos, clarifies the qualifying rate for 7- and 10-year ARMS, allows cash-out refinances for manufactured homes with terms up to 30 years, updates eligible types of nontraditional credit references, clarifies policies for the use of business income, clarifies property insurance coverage requirements, updates mortgage origination definitions, and includes other miscellaneous updates.
Effective March 28, the process for submitting contribution credits with capitalized modification expenses with Fannie Mae will change. The new line-item Contribution to Cap Advances must be used for this type of contribution. In the interim, servicers may utilize the Escrow Balance line item. Fannie Mae’s Servicer Expense Reimbursement team offers fast and efficient reimbursement of expenses incurred while servicing Fannie Mae loans.
With AmeriHome Mortgage Announcement Number 20240204-CL, AmeriHome clarified that Texas Section 50(a)(6) loans are not eligible for temporary interest rate buydowns with Fannie Mae loan programs.
Capital Markets
Are you looking for tools to improve profitability and efficiency in your mortgage loan sale process? In a recent case study, Vellum Mortgage describes how they were able to save $50,000 through AOTs, add three new investors, and save twelve hours a month with MCT. “I always send my bid tapes out to my approved and unapproved investors in MCT Marketplace,” said Ashley Puckett, Senior Capital Markets Analyst at Vellum Mortgage. “It’s great to see those shadow bids come in and then decide if we want to sign up with a certain investor because their executions have been strong lately.” Vellum Mortgage was able to leverage MCT’s software and expertise to achieve their goals after switching from their previous hedge advisor. Read the full case study or join MCT’s newsletter for information on how MCT is helping clients achieve their goals.
Investors hoping for early and aggressive Fed rate cuts in 2024 sit disappointed, with the hotter than expected reading for both the headline and core inflation numbers forcing those investors to once again reconcile with a higher for longer interest rate environment.
Mortgage rates are on the rise, and now sit at a two-month high after a CPI-inspired selloff for risk assets earlier this week. Blame investor (over)optimism or blame the Fed, but the true blame lies with sticky inflation. The core inflation rate has been steadily rising on a month-over-month basis since the summer. Pricing in Fed Fund futures now implies between three and four 25 basis point cuts for the year, beginning in June, a significant departure from the seven rate cuts that were priced in just a month ago. The risk now is that inflation continues to accelerate, sending bond prices lower.
Bonds rebounded somewhat yesterday from the sell-off triggered by Tuesday’s inflation data and reset in Fed rate cut expectations. It’s much needed after U.S. mortgage rates rose last week to a two-month high. You may be asking yourself what is giving the Fed pause before it is willing to cut rates? There are a few key points of uncertainty for policymakers: A hot economy, geopolitical risk, and financial decisions. Fed Governor Barr said yesterday that the Fed needs to see more data indicating inflation is approaching 2 percent before it begins easing, supporting Fed Chair Powell’s cautious approach. Chicago Fed President Goolsbee said a few months of slightly higher prices would still be consistent with a path back to target. There was some assistance in bond pricing yesterday after the Bureau of Labor Statistics’ downward revision to December PPI to -0.2 percent from -0.1 percent.
Today’s economic calendar is jam-packed with data, including some of the “first-tier” variety. It is already under way with retail sales for January (-.8 percent, worse than expected, ex-auto -.6). Sales were expected to slip 0.1 percent month-over-month versus 0.6 percent previously in December. We’ve also received Empire manufacturing for February (-2.2 percent), import and export prices for January (), Philadelphia Fed manufacturing for February (5.2 percent, higher than expected), and weekly jobless claims (212k, down from 220k). Later today brings industrial production and capacity utilization for January, December business inventories, the NAHB Housing Market Index for February, various Treasury auctions headlined by 20-year bonds, 30-year TIPS, and reopened 2-year FRNs, and Freddie Mac’s latest Primary Mortgage Market Survey. Two Fed speakers are scheduled, Governor Waller and Atlanta President Bostic. We begin the day with Agency MBS prices better by about .125 and the 10-year yielding 4.21 after closing yesterday at 4.27 percent. The 2-year is at 4.53.
Employment
Spring EQ’s Retail & TPO divisions continue to experience rapid growth as demand for home equity solutions accelerates. To meet this demand, Spring EQ is hiring licensed MLOs in Pennsylvania, New Jersey, and Ohio for its retail channel and remote Senior Account Executives for its Wholesale and Correspondent channels. Explore Spring EQ job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages. So, think of us first for all your seconds. Don’t wait, start the application process today!
In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.
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MISMO, the real estate finance industry’s standards organization, is calling for industry professionals to join a new development work group aimed at creating a servicing data standard for Federal Housing Agency (FHA) loans. The initiative, named the Federal Housing Agency Servicing Dataset workgroup, is powered by Sagent. According to a Press release, a coalition comprising … [Read more…]
Wholesale, HELOC, Marketing Products; STRATMOR on Customer Experience; More Strong Data Driving Rates
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Wholesale, HELOC, Marketing Products; STRATMOR on Customer Experience; More Strong Data Driving Rates
By: Rob Chrisman
Fri, Feb 16 2024, 10:42 AM
It was a sad day earlier this week for anyone who likes food out of a toaster as the inventor of Pop-Tarts passed away at age 96. (Yes, Pop-Tarts were invented… they don’t grow naturally in the wild.) Something else that isn’t found naturally is airline seat pricing. We’re in mid-February, and conference activity will increase, and families will start thinking about summer vacations. That often means flights. Prices do go up significantly 21, 14, and seven days before a flight, so keep that in mind. (For anyone who is genuinely interested, here’s an easy to read scholarly article on the awkward way in which airlines set seat prices.) And while we’re talking about dollars, recent Commentaries have mentioned the shift in regional manager’s pay to more profit-based rather than strictly volume, as well as how it is illegal to pay LOs on profits under TILA’s LO Comp Rule. Addressing management pay, attorney Steve Lovejoy with Shumaker Williams pointed out that, “If the branch manager is a producing manager, meaning he/she originates, or so much as talks to consumers, their compensation cannot be based on profitability of a loan, the branch or the company.” (Today’s Commentary podcast can be found here and this week’s is sponsored by Lender Toolkit and its AI-powered AI Underwriter and Prism borrower income automation tools. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar, which means more repeat and referral business. Hear an interview with Figure’s Anthony Stratis on trends in home buying and the HELOC space.)
Lender and Broker Services, Products, and Software
Technology and operations leaders: what’s better than a free consultation from a mortgage tech expert? Getting the advice of six. That’s what’s in store if you join “Strategies to Master the Market Now with the Right Mortgage Technology,” next Wednesday, Feb. 21, at 2 pm ET. This free webinar, co-sponsored by Floify and Truv, Christy Soukhamneut, chief lending officer at UFCU; Raven Johnson, VP business systems at Legacy Mutual Mortgage; Craig Ungaro, COO AnnieMac Home Mortgage; features Jodi Hall, founder & CEO of DandaRoad, LLC; Richard Grieser, vice president of marketing at Truv; and Sofia Rossato, president & GM of Floify. Click here to register.
To gain the repeat, referral and refinance business coming in 2024, many lenders are beginning to think like a healthcare provider. Similar to a patient portal for health management, what if you could offer a home care portal that assists homeowners in managing their home? Milestones offers home finance insights, home improvement suggestions, storage for home records, and direct access to home service providers in one portal that is completely white labeled to you. Learn how to keep your lending products and partners top of mind with Milestones.
TPO Products for Brokers and Correspondents
Merchants Bank of Indiana continues to grow and recently announced the addition of a Mini-Correspondent offering to its BCU Mortgage Services platform. BCU Mortgage Services offers a dedicated Wholesale and Mini-Correspondent channel to Banks and Credit Unions. If you are a financial institution tired of Investor churn, check out Merchants. They are a strong and committed counterparty. Having recently reached $17 Billion in assets, they continue to leverage their diversified business model to grow market share and assist their lending partners. In addition to BCU, they also offer a full Correspondent Lending platform to Banks and IMBs offering Non-delegated and Delegated underwriting. Their commitment goes further, they are a top 3 Warehouse provider and are looking to grow their retail footprint. Contact Ron Berry, Retail Sales Leader to learn more about their LO opportunities. Contact Rob Wilson, Correspondent Sales Executive to learn more about their Correspondent or BCU Mortgage Services offering for Financial Institutions.
Rocket Pro TPO is continuing to support broker partners by providing professionally designed marketing toolkits & customizable flyers tailored to brokers’ specific needs, saving time and effort. For first-time homebuyers living within the 21 eligible metros, Rocket Pro TPO’s Purchase Plus product has no AMI limits and provides a $5,250 grant assistance which can be a powerful benefit paired alongside the customized open house flyers. Recently at IGNITE Live, Rocket Pro TPO announced that by utilizing Credit Upgrade, broker partners were able to save clients a combined total of over $21 million in 2023! Those are savings clients and brokers alike would all want to contribute to in 2024. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.
“Transform your brokerage with The Loan Store, a catalyst for broker owners in pursuit of seamless growth. Picture your loan officers effortlessly earning a remarkable 200 basis points with minimal effort, ensuring unwavering borrower engagement amid market fluctuations. Our forte lies in lightning fast HELOC closings, no appraisals, no processing headaches, and approvals in minutes. Our pledge is simple: empower your team to focus on cultivating relationships. By streamlining the loan process, we empower your loan officers to outpace the competition in today’s dynamic landscape. The Loan Store stands as your ally, propelling your brokerage to unprecedented heights where speed, efficiency, and remarkable earnings effortlessly converge. Ready to redefine success? Connect with us or explore our website to embark on a journey of unparalleled success with The Loan Store.”
Exciting times lie ahead for American Financial Resources, LLC (AFR) as the recent change in ownership to a fund led by members of Proprietary Capital, LLC is now finalized. Keen observers may have noticed changes in pricing, and this trend’s expected to continue. AFR, known for its excellence in specialized loans, is poised to elevate its position even further. The infusion of capabilities from the expertise from the team at Proprietary Capital opens doors to broader product development, execution, and market growth. While AFR will remain a leader in specialized loans, the discerning eye will observe a notable expansion beyond the specialty niche. This ownership change marks the beginning of a new era for AFR, promising enhanced offerings and a commitment to the experience of our customers in all channels. Stay tuned for a journey of growth and innovation with AFR at the forefront. Contact AFR Today!, 1-800-375-6071.
Now that we’ve entered the new year, it’s time to set new goals and meet updated production targets. Axos Bank’s Wholesale & Correspondent Lending program offers unique financing solutions to help you reach those goals. Qualify more buyers with Pledged Assets for loans of up to $30MM Closed-End Seconds with a CLTV of 85%, buy-before-sell options, and Reverse Exchanges. For more information, reach out to your AE. Don’t miss our free webinar, Buy Before Selling Options, on Feb. 20, for valuable mortgage origination tips to help you reach your goals. Our Axos Residential Warehouse Lending team is also available to provide strategic direction and support your business growth. Schedule a call today! Email Eric Nelepovitz or call the Warehouse Lending team at 888-764-7080 to learn more about our warehouse program.
STRATMOR’s Customer Experience Workshop
It’s the CONSUMER experience that matters most… Price, product and technology only go so far in driving profitable relationships for banks and lenders. So how is your company employing customer experience strategy to drive revenue growth in today’s challenging market? Join STRATMOR Group customer experience experts and peer lenders March 12-14 for the three, two-hour-session virtual Customer Experience Workshop to learn how to optimize your loan processes to maximize repeat and referral business and achieve your growth goals. This highly interactive virtual workshop is designed to give lenders specific, actionable ideas to optimize the customer experience and create raving fans, especially in challenging market conditions. Click here to learn more and reserve your spot today.
Capital Markets
The Bank of Oklahoma’s trade desk reminded everyone who deals with margin requirements that FINRA 4210 is coming, effective May 22, 2024. “We want to make it clear to our originator clients that BOK is not subject to FINRA’s 4210 rule. We are a bank dealer that is governed by the OCC, not FINRA.”
A common email that I am receiving now from lenders is, “Is the economy hot or cold. Which way is it pushing rates?” Mortgage rates are inching up after reports of hotter-than-expected inflation data showed continued strength in the U.S. economy. The Federal Reserve doesn’t set mortgage rates, but with inflation still over its 2 percent target alongside a robust job market, the market continues to focus on when the Fed will start cutting its benchmark interest rate, which is currently keeping mortgage rates elevated.
The 30-year fixed-rate mortgage averaged 6.77 percent as of Feb. 15, according to data released by Freddie Mac and up 13 basis points from the previous week. (One basis point is equal to one hundredth of a percentage point.) Mortgage rates were last at this level in mid-December when rates fell below 7 percent for the first time since August. For perspective, a year ago, the 30-year mortgage rate was averaging 6.32 percent. So, the economy has been performing well so far this year and rates may stay higher for longer, not helping the spring homebuying season or production numbers.
That said, a drop in U.S. retail sales yesterday helped soothe traders’ nerves about an overheated economy after this week’s inflation print came in above expectations. Retail sales declined 0.8 percent month-over-month in January compared with a 0.2 percent downwardly revised decline in December. Factory production decreased in January for the first time in three months, pointing to a loss of momentum. These reports were unduly influenced by weather-related issues over the course of the month. Weekly jobless claims also unexpectedly declined by 8k to 212k, indicative of a growing economy. However, the rising level of continuing jobless claims displayed the challenge in currently finding a new job after a layoff.
Today’s economic calendar contains some first-tier data, including the producer price index, which will be closely watched as it should help define the Fed’s next steps. PPI in January, +.3 percent, ex food and energy +.5 percent, versus expectations of increasing 0.1 percent month-over-month and 0.7 percent year-over-year. We’ve also had housing starts (-14.8 percent, but thought to be weather-related!) and building permits (-1.5 percent), seen increasing to 1.465 million and 1.510 million from 1.460 million and 1.493 million; later is the preliminary February Michigan sentiment number. Three Fed speakers are currently scheduled to close out the week: Richmond President Barkin, Vice Chair for Supervision Barr, and San Francisco President Daly. We begin the day with Agency MBS prices worse .250 than Thursday evening, the 10-year yielding 4.31 after closing yesterday at 4.24 percent, and the 2-year at 4.67.
Employment
Kind Lending, LLC is pleased to announce that Will Fisher has joined Kind as the Executive Vice President of Non-QM. Will brings with him over 11 years of experience in building and designing Non-QM platforms and products. He has served in executive roles at LoanStream where he successfully built a non-QM-focused operations and sales teams. Additionally, Michael Falce has joined the team as the Director of Capital Markets, Non-QM Division. He boasts an award-winning background in Non-QM lending spanning over 15 years, with a strong focus on Capital Markets. Kind Lending is extremely excited for the experience and skills that both Will Fisher and Michael Falce bring to the team and the direct contribution they will have in the continued focus and growth of Kind’s in house Non-QM product offerings. To learn more about opportunities at Kind Lending, visit us here.
Steve Adamo, President of Residential and Consumer Lending looks to continue to expand OceanFirst Bank’s Residential Lending division. In 2023, the Bank saw top producing Loan Officers join the team as well as expanding its geography in the new metropolitan market of Washington D.C. OceanFirst Bank blends the benefits of an independent mortgage company with the stability of a banking environment. The Bank provides their Loan Officers with a strong portfolio, direct agency lending, retained servicing, innovative marketing and technology products and services, and the ability to lend nationally as a National Association bank. Additionally, our NeighborFirst program has benefits such as a low-down payment, no Private Mortgage Insurance (PMI), and no LLPAs based on credit score or loan amount. Contact John Costa, Senior Vice President and Head of Mortgage Sales or 609.444.6121 to take your business to new heights. FDIC | Equal Housing Lender | Equal Opportunity Employer
US Mortgage Corporation proudly celebrates 30 years of unwavering excellence. Founded by Steven A. Milner on February 17, 1994, the company has evolved into a national leader in the mortgage sector and continues to invest in growth fueled by its deep ‘YOU&US’ Culture and commitment to its Mission that ‘everyone deserves a roof over their head’. From its inception, US Mortgage has been committed to transforming homeownership dreams into reality. It’s remarkable journey from a local lender to a nationally recognized mortgage leader has been propelled by the trust of its amazing team who focuses on longevity through putting others first. US Mortgage is thrilled to announce an ambitious expansion plan that underscores their commitment to growth. “As we celebrate 30 years of excellence, we are energized by the possibilities that lie ahead. Our expansion signifies not just growth but an unwavering commitment to serving our clients, referral partners, and each other with the highest standards of professionalism,” said Steven A. Milner. For info, contact: Mike Veli, VP of Strategic Growth.
I have not conducted a formal study of the matter, but it seems like few people actually retire from our business. Many hang on, doing their jobs or consulting into their 70s or even 80s. Not so with Susan Semba of the Idaho Housing and Finance Association who is retiring after 40 years in the trenches. Susan has supported her local MBA Chapter, Idaho Mortgage Lenders Assoc., for 30+years included being President, chairing the Pacific NW Lenders Conference, and always willing to be a speaker. She has been a mentor and strategic partner for HFAs across the country. As Susan heads to Las Vegas for a little golf Chuck Kracht will assume the role of VP of Homeownership Lending and Servicing. Congratulations all the way ‘round.
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