The nation’s largest mortgage lender has agreed in principle to settle a longstanding lawsuit with the United States Department of Justice and the Department of Housing and Urban Development (HUD) over faulty FHA loans the company originated from 2001 until 2010.
In an SEC filing released this week, Wells Fargo said it would pay $1.2 billion to resolve certain civil claims that the Federal Government had lodged against it for making FHA loans that quickly soured.
It also covers “potential civil claims relating to the Company’s FHA lending activities for other periods.”
Reckless Trifecta
The bulk of the suit relates to a claim made in late 2012 that Wells took part in a the “reckless trifecta” of deficient training, underwriting, and disclosure, all while exploiting the backstop of government insurance.
Manhattan U.S. Attorney Preet Bharara claimed the bank aimed for quantity over quality, incentivizing volume with bonuses instead of making sure good loans were being originated.
This involved giving “improper bonuses” to underwriters to ensure they approved as many loans as possible, while also hiring temporary staff and failing to properly train them.
And even if the loans turned out to be bad news, Wells Fargo apparently hid that fact to avoid any scrutiny or indemnification.
Wells allegedly certified that some 100,000 FHA loans between May 2001 and October 2005 met HUD’s requirements and were eligible for FHA insurance despite knowing a substantial portion were unacceptably risky.
In fact, during some months nearly half of the FHA loans originated didn’t meet HUD’s requirements because the bank failed to determine if borrower’s could actually pay back the loans.
Wells Said Only 300 FHA Loans Were Bad
The suit also alleged that between October 2005 and June 2011, Wells Fargo only reported about 300 loans to HUD as “seriously deficient” despite thousands carrying that distinction.
And before that didn’t report a single loan as having material underwriting violations or fraud until after a HUD-conducted lender review took place in 2005.
Before that the company was self-reporting its FHA loan quality. By their own account, Wells internally identified 6,558 seriously deficient loans, but supposedly hid 6,320 of them from HUD.
That total included a whopping 3,142 loans that contained early payment defaults, or loans that were 60 days late within just six months. In other words, really bad loans that didn’t have a shot and probably shouldn’t have been approved.
As a result, HUD had to pay out roughly $190 million dollars in insurance claims for defaults on those loans. Apparently millions more was paid out due to Wells not disclosing the early payment defaults.
Will Homeowners Be Compensated?
The original suit makes no mention of whether borrowers or past homeowners will receive any compensation as a result of the settlement.
In fact, the word “borrower” was written only once and “homeowner” was never mentioned, so it’s unclear if individuals will receive any compensation as a result of this massive payout.
It sounds like Wells Fargo just made a bunch of bad loans, as most companies did at the time. Whether homeowners were injured as a result is another question.
Interestingly, Wells agreed to lower credit score requirements for FHA loans to 500 from 600 back in 2011 after pressure from HUD and housing advocates.
However, the bank only made the change in its retail channel and required a 10% down payment along with a maximum DTI of 31% to offset that terrible credit risk.
Whether this will affect their future ability/motivation to underwrite FHA loans remains to be seen, but it could certainly damage the relationship.
Quicken Loans, the self-described “nation’s largest FHA lender,” actually preemptively filed a suit against HUD and the Department of Justice last year to put to an end a three-year investigation.
In other words, you might be getting your FHA loan from a…smaller lender.
Is being branded by individual banks and mortgage lenders
Bank of America calls their version the “Affordable Loan Solution”
But it’s unique in that it’s backed by nonprofit Self-Help Ventures Fund
In what is looking a lot like a jab at the FHA, Bank of America is set to launch a 3% down payment mortgage nationwide with the help of Freddie Mac and nonprofit Self-Help Ventures Fund.
The new loan program, known as the “Affordable Loan Solution,” aims to help underserved borrowers obtain homes with very little down.
It counters the flagship FHA loan program, which requires 3.5% down payment and marginal credit scores, and appears to be quite similar to Freddie Mac’s Home Possible Advantage loan program.
Bank of America is rolling out the program as an alternative to the FHA, with many large lenders now shying away from the agency because of recent significant penalties.
His comments likely relate to a number of recent lawsuits with the Department of Housing and Urban Development (HUD) over faulty FHA loans.
Wells Fargo just agreed to pay $1.2 billion to settle claims it made reckless FHA loans, and Quicken has a pending lawsuit involving the quality of the FHA loans it originated.
Put simply, lenders are losing confidence in the FHA because they’re unsure of the potential liability/penalties they face if the loans are deemed defective.
Update: Bank of America has launched a zero down mortgage!
Unlike most other 3% down loan programs, but it could result in a higher interest rate
Bank of America’s new Affordable Loan Solution has some pretty liberal requirements, though the credit score needed to qualify is a bit more reasonable (with regard to not being completely dismal).
Borrowers are required to have a 660 credit score or higher to qualify for the loan, which is significantly higher than the 580 required at the FHA.
However, the down payment required is just 3%, as opposed to 3.5% at the FHA.
I believe the loan is only available on owner-occupied properties, though I don’t know if it’s limited to just single-family properties or condominiums as well.
Another pro to Bank of America’s low-down payment loan program is the lack of private mortgage insurance (PMI).
Because the loan will be originated by Bank of America and then sold to Self-Help Ventures, who will then sell it to Freddie Mac, PMI isn’t required.
Apparently Self-Help will take a “big chunk of the losses” if the loan defaults before Freddie Mac will step in. Still, that doesn’t mean borrowers won’t pay a premium to avoid PMI.
The bank says a $150,000 mortgage will cost about $782 per month for those with a credit score between 680 and 719, compared to $887 on a comparable FHA loan.
If we reverse engineer the math, the mortgage rate is 4.75% on the new loan program, which isn’t particularly low, even for a low-down payment mortgage.
So you can argue that the risk is built into the loan, even if the payment is lower than an FHA loan.
Borrowers must also make an income that is below the area’s median to ensure the loans go to those who actually need it most.
$500 Million Set Aside for the Affordable Loan Solution
Bank of America earmarked half a billion in annual funding
For the new Affordable Loan Solution program
They assume it’ll be a popular alternative to an FHA loan
With less money down and no MI
Bank of America is limiting the new loan program to $500 million in funding annually, at least initially.
Despite this, they still expect that three of four borrowers who get funding via the new loan would otherwise have gone through the FHA.
That could dent the FHA’s numbers and put more pressure on the agency to lower premiums again, though they recently said such a move was not in the works.
Bank of America only made a reported $1.36 billion in FHA loans, last year, per data from Inside Mortgage Finance, dropping to 22nd place among FHA lenders. The bank had been in the top 10 before pulling back.
Frequently Asked Questions
Where can I get the Affordable Loan Solution mortgage?
It is available in all of Bank of America’s sales channels, and you can apply at one of 4,700 financial centers nationwide, online, or by phone.
Do I have to be a first-time home buyer?
No, but if you are you must participate in home buyer education through Bank of America’s network of housing counselors.
Can I use this loan program to finance a second home or investment property?
No, applicants must occupy the property being financed.
Are reserves or down payment required?
You may use secondary financing, including second mortgages or a grant, and reserves aren’t required in most cases.
Can I get approved with non-traditional credit?
Yes, Bank of America will consider applicants with non-traditional forms of credit to document acceptable credit history.
What is the maximum loan amount?
$453,100, the conforming loan limit.
Are there income requirements?
Yes, income cannot exceed 100% of the HUD median income for the area.
Will Bank of America keep the loans?
No. They will sell them and the servicing rights immediately to Self-Help’s designated specialty servicer.
Maxwell, the mortgage fintech backed by Wells Fargo and Fin Capital, has launched Maxwell Single-Sign On, an SSO (single sign-on) tool for lenders to enhance security and reduce the risk of data breaches, the company announced on Monday.
The tool is designed to address the issue of sensitive data being handled by lenders and loan officers on a daily basis, including social security numbers, paystubs, and tax returns. With cyber threats increasing in the financial sector, the company believes that lenders need to take proactive steps to safeguard their systems and data.
Maxwell Single-Sign On allows lending teams to sign in safely and securely using their existing authentication partner. The tool reduces the risk of unauthorized access to sensitive data and applications, simplifies access management, ensures only authorized users have access to consumer data, and improves usability by allowing teams to log in easily with one click.
The SSO tool is part of meeting the industry demands of ensuring an optimized process from the intake of the application to clear to close and beyond, the company said.
Founded in 2015 by homebuyers, Maxwell offers technology-powered solutions that address the entire mortgage loan process, from application intake to the secondary market, the company said. The company’s suite of technology products helps non-depository mortgage banks, credit unions, brokers, and local banks connect their communities with the benefits of homeownership.
The company believes that by applying technology to market challenges, they give local lenders powerful tools to remain competitive even as the industry evolves.
According to Maxwell, the company’s suite of tools have resulted in a 20% increase in loans closed per loan officer. In addition, the tools have resulted in 21 BPS saved in costs per loan, a 41% increase in net income, and closings that are held 13+ days faster than the average.
This content was generated using AI, and was edited and fact-checked by HousingWire’s editors.
Mortgage defaults in the Golden State dropped 24.3 percent in the fourth quarter compared to a quarter earlier, but were still 12.4 percent higher than a year ago, according to DataQuick.
A total of 84,568 Notices of Default (the first step in the foreclosure process) were recorded between October and December, compared to 111,689 in the prior quarter and 75,230 in the fourth quarter of 2008.
On primary mortgages, California homeowners were a median five months behind on payments when the lender filed the NOD, owing a median $13,510 on a median $325,818 loan amount.
The company said the drop in defaults may be the result of shifting market conditions and/or changing foreclosure policies among mortgage lenders and loan servicers.
In other words, it’s not necessarily a sign of a housing recovery.
“Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn’t necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners,” said John Walsh, DataQuick president, in a release.
NODs hit an all-time high of 135,431 in the first quarter of 2009; the low in recent years was 12,417 in the third quarter of 2004, when annual home price appreciation was around 20 percent.
Countrywide (5,588) originated the most loans that went into default last quarter, followed by Wells Fargo (3,482) and Washington Mutual (3,460).
Trustees Deeds recorded, which reflect the number of homes or condos actually lost to foreclosure, totaled 51,060 in the fourth quarter, up 2.1 percent from the prior quarter and 10.6 percent from the fourth quarter of 2008.
The good news, I suppose, is that 84.8 percent of the 328,310 homes foreclosed on statewide in the 18-month period ending last September had been re-sold by the end of 2009.
A year prior, the comparable number was just 66 percent, so at least they’re not adding as much to the inventory glut.
The racial gap in denial rates for home-purchase loans widened last year as the Federal Reserve began tightening credit conditions via interest-rate increases, according to new data from U.S. regulators.
Black Americans experienced denial rates of 16.4% in 2022, up from 15.7% the year before, the Federal Financial Institutions Examination Council said last week. Rates for non-Hispanic-identifying White applicants ticked up to 5.8%, from 5.6%.
Rising disparities in denial rates help underscore the impact of tighter credit on progress toward a more inclusive economy. Even before the Fed began raising rates, the homeownership gap had been widening over the previous decade. By 2021, homeownership for Black Americans was nearly 29 percentage points less than that for White Americans, according to National Association of Realtors data published earlier this year.
Banks have failed to live up to promises to support Black homeowners in recent years. Major home lender Wells Fargo & Co. pledged in 2017 to lend $60 billion to generate 250,000 Black homeowners in a decade, though in 2020 the lender approved fewer than half of Black homeowners’ refinancing applications.
Hispanic and Asian individuals also face challenges securing home loans. Hispanic-White applicants saw denial rates of 11.1% last year, and Asian applicants faced denials at 9.2%. “Hispanic-White” identifies individuals with Hispanic ethnicity and White race, while “non-Hispanic-White” identifies individuals with non-Hispanic ethnicity and White race.
The FFIEC data are based on mortgage-lending transactions reported by U.S. financial institutions and are reported for first-lien, one-to-four family, site-built, owner-occupied conventional, closed-end home-purchase loans.
North Carolina is experiencing a boom these days, with record employment growth and an increasing population. If you live in the state, you already know there’s plenty to offer, including beautiful tourist attractions, breathtaking scenery, and a rich history that makes it unique.
But North Carolina also has plenty to offer when it comes to banks and credit unions. Whether you’re looking for an interest-bearing checking account or retirement accounts that offer the biggest bang for your buck, the best bank is the one that suits your needs.
15 Best Banks in North Carolina
If you’re on the hunt for a new bank or credit union, you’re in luck. North Carolina has a little of everything when it comes to bank accounts, from that small local bank with a focus on community service to large banks with branches in the state. This list of the best banks in North Carolina covers a variety of areas to ensure you find the best place to park your cash.
1. U.S. Bank
U.S. Bank offers customers the unique combination of local access with the extensive services of a nationwide bank. By opening a Bank Smartly® Checking account with U.S. Bank, clients can potentially earn up to $300. The qualification process involves two steps within the first 90 days of opening the account online:
Ensure at least two direct deposits totaling $6,000 or more
Register for online banking or download the U.S. Bank Mobile App
This promotional offer is subject to specific terms and restrictions and will remain valid until July 11, 2023. As a member of the FDIC, U.S. Bank ensures customer deposits are protected up to the FDIC’s established limits.
Fees:
$0 – $6.95
No-fee overdraft protection
Balance requirements:
$1,500 minimum balance or $1,000 direct deposit to qualify for free checking
$25 opening deposit
ATMs:
No ATM transaction fees at U.S. Bank ATMs
No surcharge fees at MoneyPass® Network ATMs
Interest rates:
Up to 4.50% APY on money market accounts
Up to 4.75% on fixed-rate CDs
Additional perks:
$300 bonus
Competitive rates on money market accounts & CDs
2. First Citizens Bank
Founded in North Carolina in 1898, First Citizens Bank has expanded over the years. You’ll find First Citizens Bank branches in 21 states, but the majority of its locations are in North Carolina and South Carolina.
If you frequently travel, though, check the service area. You’ll pay a $2.50 out-of-network ATM transaction fee if you can’t locate a First Citizens ATM while you’re away from home.
Fees:
No monthly fees
$10 overdraft fee
Balance requirements:
$50 minimum opening deposit
No minimum monthly balance
ATMs:
Fee-free at 500+ First Citizens Bank ATMs
$2.50 for out-of-network ATM transactions
Interest on balance:
0.03% APY on savings accounts
Up to 0.15% APY on CDs
Up to 0.15% APY on money market accounts
Additional perks:
Credit cards offer generous rewards
Robust mobile banking solutions
3. Chime
Chime is ideal for those who do most of their banking virtually. While you won’t find any brick-and-mortar locations, Chime does offer 24/7 phone support and access to cash through more than 60,000 ATMs nationwide. You can also deposit cash at more than 90,000 retail partners, including CVS and Walmart.
Fees:
No service fee
No overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 for each out-of-network ATM transaction
Interest on balance:
2.00% APY on savings account balances
Additional perks:
Access to direct deposits up to 2 days early
SpotMe covers up to $200 in overdrafts
4. CIT Bank
North Carolina residents interested in online banks should take a look at CIT Bank, which is based in Raleigh, North Carolina. This national bank recently merged with First Citizens Bank, which means CIT Bank customers can enjoy brick-and-mortar banking at any CIT location.
You’ll get everything you need to manage your money in CIT’s mobile banking app, as well as refunds of up to $30 in out-of-network ATM fees each month.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
$25 minimum deposit to open
No minimum daily balance required
ATMs:
No ATMs provided
Up to $30 in ATM fees reimbursed monthly
Interest on balance:
Up to 0.25% APY on checking
Up to 4.736% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.538% APY on money market accounts
Additional perks:
Competitive rates on business loans
Award-winning customer service
5. Coastal Federal Credit Union
Credit unions tend to offer perks you won’t find with banks, and Coastal Federal is no exception. You can qualify if you’re with one of the employers or associations approved for membership or if you live or work in one of the North Carolina cities CFCU services.
As with many credit unions, though, CFCU’s real value comes with its interest rates. Not only will you enjoy an interest checking account, but you can also find great rates on share certificates, which are the credit union version of CDs.
Fees:
No monthly service fees
$31 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at CFCU ATMs
Fee-free at CO-OP ATMs nationwide
$2 out-of-network ATM fee (waived for first five per month)
Interest on balance:
Up to 3.00% APY on savings account balances
Up to 5.00% APY on share certificates
Up to 3.50% APY on money market accounts
Additional perks:
Competitive rates on loans
Financial planning assistance available
6. GO2bank
Another online-only bank is GO2bank, which stands out for its cash accessibility. Not only can you withdraw cash, fee-free, at any Allpoint ATM, but you can deposit cash at more than 90,000 retailers nationwide.
All you need to waive monthly maintenance fees is at least one direct deposit monthly, either from an employer or the government. Those looking to build credit should check out the secured credit card, which you can get with no credit check. Pay your bill on time each month and GO2bank will report your activity to the three credit bureaus, helping you boost your score.
Fees:
$5 monthly fee (waived with requirements)
$15 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum daily balance required
ATMs:
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
4.50% APY on savings accounts
Additional perks:
Deposit cash at 90,000+ retailers nationwide
Secured credit card helps you build credit with no credit check required
7. Ally Bank
Ally Bank is an online and mobile banking option that puts a priority on budgeting and wealth building. The fee-free checking account comes with no minimum requirements and gives you access to more than 53,000 ATMs nationwide. But one of the best features of Ally Bank is its annual percentage yield on savings and CDs. You’ll earn 4.00% APY on savings and up to 5.00% APY on CDs.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
No minimum opening deposit
No minimum balance requirements
ATMs:
Fee-free at 53,000+ Allpoint ATMs nationwide
No out-of-network ATM fees
Up to $10 in ATM fee refunds monthly
Interest on balance:
Up to 0.25% APY on checking accounts
4.00% APY on savings accounts
Up to 5.00% APY on CDs
4.15% APY on money market accounts
Additional perks:
Spending buckets make it easy to save money
Robo Portfolios help automate investing
8. Chase
Like Bank of America, Chase Bank is one of the biggest banks in North Carolina, with more than 4,700 branches and 16,000 ATMs across the country. Currently, Chase is offering a $100 bonus for new checking account customers as long as you complete at least 10 qualifying transactions within the first 60 days.
Whether you go with Chase for your regular banking or not, though, take a look at Chase’s credit card offerings. Chase has multiple card options, with each offering perks like bonuses and cash back rewards.
Fees:
$12 monthly maintenance fee
$34 overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 16,000 Chase Bank ATMs nationwide
$3-$5 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 3.75% APY on CDs
Additional perks:
$100 bonus for new checking accounts
Multiple credit card options with bonuses and generous rewards
9. First Horizon Bank
First Horizon Bank is a regional bank with branches in 11 states across the Southeast, including a heavy presence in North Carolina. One standout feature of First Horizon is its money market rates, which currently go as high as 5.38%. You’ll find ATMs throughout the Southeast, but you can also use your debit card at any Allpoint ATM nationwide without a fee.
Fees:
No monthly service fee
$37 overdraft fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at more than 600 First Horizon ATMs
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 2.78% APY on savings accounts
0.10% APY on CDs
Up to 5.38% APY on money market account
Additional perks:
Business banking options available
Wealth management help available
10. Truist Bank
In 2019, BB&T and SunTrust Banks merged to become Truist Bank. Although Truist has a limited ATM footprint, the Truist One checking account makes it worth it. You’ll get a 10% loyalty bonus based on your monthly balance in addition to a 10% bonus if you choose a Truist credit card.
The interest rates also make Truist a suitable option, since you’ll earn 5.00% APY on 7-month CDs. To waive the $12 monthly service fee on your checking account, you’ll need at least $500 in direct deposit activity each month.
Other options include a combined daily balance of $500 across all your Truist accounts, a Truist credit card or qualifying loan, or a linked business checking account. Students 25 and younger also qualify for a fee-free checking account.
Fees:
$12 monthly service fee (waived with requirements)
No overdraft fees
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at Truist Bank ATMs
$1 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings accounts
Up to 5.00% APY on CDs
Additional perks:
Generous cash rewards with Truist Bank credit card
Checking balances earn rewards
11. Mechanics & Farmers Banks
You may know it as M&F Bank, but it actually started under the name of Mechanics & Farmers Bank in 1907. Throughout the 1900s, it was known as one of the most influential Black-owned businesses in the state of North Carolina. Today, M&F has locations throughout North Carolina and access to 44,000 ATMs nationwide, thanks to partnerships with Bank of America, JPMorgan Chase, and Wells Fargo.
Fees:
No service fee
$35 overdraft fee
Balance requirements:
$50 deposit to open
No minimum balance required
ATMs:
Fee-free at M&F Bank ATMs
Fee-free at Bank of America, JPMorgan Chase, and Wells Fargo ATMs
$3 for each out-of-network ATM transaction
Interest on balance:
Rates not publicly disclosed
Additional perks:
Rewards on debit card transactions
Robust business banking options
12. First National Bank
First National Bank has branches throughout North Carolina, as well as in DC, Maryland, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia. The free checking account is Freestyle Checking, but it does come with overdraft fees, and the exact fee amount isn’t disclosed until you sign up for an account.
You’ll also only get fee-free transactions at First National Bank ATMs, and they’re limited to the First National Bank service area.
Fees:
No monthly fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 1,500+ First National Bank ATMs
Interest on balance:
Up to 0.05% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.25% APY on money market account
Additional perks:
Cash and check deposit available at Smart Deposit ATMs
The site makes ordering banking products and scheduling branch appointments easy
13. PNC Bank
PNC Bank has branches in 29 states, including 107 branches in North Carolina. Currently, new customers are eligible for bonuses of up to $400. You’ll get a $50 bonus simply for opening a Virtual Wallet with a basic checking package, but that bonus bumps up to $200 if you add a Performance Spend checking account and $400 if you upgrade to a Performance Select account.
The PNC Bank basic account only requires $500 in monthly direct deposits or a combined $500 balance between accounts.
Fees:
$7 monthly fee (waived with requirements)
$36 overdraft fee
Balance requirements:
$25 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at PNC Bank ATMs
Fee-free at 60,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 0.03% APY on savings accounts
Up to 4.00% APY on CDs
Additional perks:
Up to $400 bonus for new virtual wallet customers
Financial planning tools built into the app
14. Fifth Third Bank
Fifth Third Bank focuses operations on the Midwest and Southeast U.S. regions, with 1,087 full-service locations in 11 states. You’ll find a variety of banking products, from savings and checking accounts to investment and retirement accounts. Fifth Third Bank offers competitive interest rates on CDs, with a 7-month CD currently offering 5.00% APY.
Fees:
No monthly maintenance fee
$37 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 2,100+ Fifth Third Bank ATMs
Fee-free at 40,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 5.00% APY on CDs
Additional perks:
Early Pay gives you access to direct deposit two days early
Grace period to resolve overdrafts
15. Bank of America
If you prefer what national banks have to offer, you can’t go wrong with Bank of America, which is one of the biggest banks in the country. You’ll find ATMs and branches across the country, as well as a wide variety of services. Although Bank of America does have competitive interest rates on CDs, the basic checking account comes with a $12 monthly fee and a $100 deposit to open.
Fees:
$12 monthly fee
$10 overdraft fee
Balance requirements:
$100 deposit to open
No minimum balance required
ATMs:
Fee-free at 15,000+ Bank of America ATMs nationwide
$5 for each out-of-network ATM transaction
Interest on balance:
Up to 0.04% APY on savings account balances
Up to 4.75% APY on CDs
Additional perks:
Generous bonus on new credit cards
Wealth planning services available
Our Methodology: How We Chose the Best Banks in North Carolina
North Carolina has a large selection of banks, some paying more in interest than the national average. In putting together this list, we kept in mind that each person has different criteria when choosing savings and checking accounts. Your choice of bank will largely depend on your own banking habits. If you tend to do all your banking online, a user-friendly app might be a top priority, while those who prefer the in-person experience might put nearby branches first.
Our top goal was to bring a variety of banking options to this list. We’ve combined local, regional, online, and national banks to help you choose. We also looked at fees and interest rates to help you protect and grow your earnings.
Frequently Asked Questions
You have questions, and we have answers. Here are some of the most frequently asked questions about banks in North Carolina.
What is the safest bank for your money?
Lately, financial security has been a top priority for account holders in search of a new bank. The top thing to look at is a bank’s Federal Deposit Insurance Corporation coverage. This insurance protects each deposit holder for up to $250,000 if a financial institution goes belly up.
Once you’ve verified a bank is FDIC insured, pay attention to any news of mergers or buyouts involving your bank. Selling can be a sign of financial distress.
See also: Safest Banks in the U.S. for 2023
What is the best bank in North Carolina?
That’s a tough question because the definition of “best bank” can vary from one person to another. If you think the best checking accounts come with an annual percentage yield and a mobile app to manage it all, you’ll be looking at different criteria from someone who wants a local bank with personalized customer service.
If you’re going for customer satisfaction ratings, J.D. Power gives high marks to both Capital One and Chase, which both have a heavy presence in North Carolina. But if you’re looking for that local banking experience, you can’t go wrong with First Citizens Bank or M&F Bank.
What is the best credit union in North Carolina?
There are several credit unions in North Carolina, but the one that impressed us most was Coastal Federal. CFCU’s fee-free checking and annual percentage yield on savings and share certificates makes it stand out. But it’s also important to take a look at the interest rates on personal loans and compare them to banks in the area to make sure you’re getting the best deal.
One issue with credit unions is that they tend to come with strict membership requirements. You may find you’re limited to only those that will accept your employer or city of residence, and those credit unions might not have financial accounts that meet your needs. However, there are also some credit unions that anyone can join.
Which bank has the most branches in North Carolina?
If you do most of your banking in North Carolina, you might not care if your debit card works at ATMs across the country. In that case, you’ll need a bank with plenty of branches and ATMs in the areas where you work and live.
When it comes to sheer branch numbers, take a look at Truist Bank and Wells Fargo. Both have a heavy branch presence throughout the state. For smaller banks, First Citizens and First Horizon both have substantial branch coverage in North Carolina.
However, you’ll also need to check your neighborhood. If you’re interested in that in-person bank experience, you’ll be disappointed if you have to drive a half hour or more to get to the closest branch.
What banks are in Charlotte, NC?
North Carolina isn’t just a thriving state filled with business opportunities. The state is a financial center in itself. Not only does Charlotte have smaller banks like M&F Bank and First Citizens Bank, but both Bank of America and Truist Bank are headquartered in North Carolina, as well.
This heavy financial presence has made North Carolina great for finding banking services. The many banks in the state are eager to win your business and offer competitive rates to ensure it happens. That means it’s more likely that checking accounts come with low fees and savings accounts earn top-dollar interest rates. When combined with the many online bank options, the biggest issue will be narrowing the list to just one.
From high-yield savings accounts to fee-free checking accounts, North Carolina has it all. Shopping around will help you choose from the best banks so that you can find the perfect banking partner for you.
If you’re wondering which mortgage company originated the most home loans last year, stop wondering and take a look.
Most people know Wells Fargo is king when it comes to mortgages, and 2015 was no different. But what about the other top 39 lenders?
Well, thanks to some great visualization software from Tableau and some generosity from Richey May and Co., we can see who the major (and slightly less major) players are.
The graphs below are based on Home Mortgage Disclosure Act (HMDA) data, which covers about 95% of all residential mortgages. The raw data was made readable thanks to the pair mentioned above.
Wells Fargo Remained Mortgage King in 2015
Unsurprisingly, San Francisco-based Wells Fargo retained its crown as the top residential mortgage originator in 2015, registering volume of $119.2 billion.
That gave it about 7.3% of the total market share in the United States. While it might not seem like a lot, its closest competitor had nearly half that share.
For the record, its market share has fallen for the past couple years, from 10.5% in 2013 to 7.8% in 2014.
Before we talk about the others, let me add that Wells’s production was 88% conventional and just 5% FHA. There was a sliver of USDA lending in there too.
As far as transaction type, 52% was for a home purchase and 48% was for a refinance.
Quicken Grabbed the Second Spot
Coming in a relatively close second was Quicken Loans, with $74.6 billion in total volume representing a 4.6% market share.
The nonbank mortgage lender saw its market share rise just slightly from a year earlier, but volume was way up from the $55.8 billion seen in 2014.
While conventional loans made up the lion’s share of its production (70%), FHA accounted for a decent chunk (19%) and VA home loans accounted for 11%.
After their very public lawsuit with the Department of Justice over alleged faulty FHA underwriting, my guess is FHA lending will be a lot lower in 2016.
More interestingly, 80% of their total production was refis, with just 20% of volume involving a home purchase. We’ll see if Rocket Mortgage can eventually propel them to the top.
Chase took the third position overall with $62.7 billion in total production, representing a 3.8% market share. That was up from $42.2 billion and 3.5% a year earlier, respectively.
The big New York City-based bank doesn’t seem to like FHA lending seeing that 98% of their production was conventional. It was split fairly evenly between refi (56%) and purchase (44%).
Bank of America came in fourth with $51.9 billion and 3.2% market share. Production was actually up from 2014 but market share still slipped slightly.
They too eschewed FHA, with 96% of production coming via the conventional route. Refis accounted for 59% of production with 41% purchases.
Rounding out the top five was Loan Depot, a nonbank that managed to grab about 1.6% of total market share on a healthy $25.8 billion in production.
The company exhibited a solid mix of lending, with 68% conventional, 18% FHA, 14% VA, and a bit of USDA as well.
They too had a heavy share of refis (67%) versus purchases (33%), which is common with the nonbanks.
People tend to get purchase mortgages from the big banks they already do business with, though it’s not always the case.
The lower half of the top 10 included the likes of US Bank, Flagstar, Citi, Freedom Mortgage, and Caliber Home Loans.
You can see the rest of the names in the graphic above.
Independent Mortgage Lenders Saw Gains in 2015
As you can see from this graph, independent mortgage lenders have been chalking gains over the past few years as the big boys lose market share.
The indie group saw its market share rise from 36% in 2013 to 45% last year. Part of that had to do with the rising number of independent mortgage companies. Perhaps they’ll surpass 50% in 2016.
Meanwhile, the large commercial banks saw their market share fall from 54% in 2013 to just 45% in 2015. The number of commercial banks has also dwindled, which could explain some of the decline.
Credit unions have held a fairly steady ~5% share for the past several years and mortgage companies owned or affiliated with a depository have held a similar share.
And now a few more interesting tidbits:
Top conventional mortgage lender in 2015: Wells Fargo Top FHA mortgage lender in 2015: Quicken Loans Top USDA mortgage lender in 2015: PrimeLending Top VA mortgage lender in 2015: Freedom Mortgage Top purchase mortgage lender in 2015: Wells Fargo Top refinance mortgage lender in 2015: Quicken Loans
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Decision fatigue is a real thing for folks in the market for a new rewards credit card. If you’re tired of evaluating the ins and outs of credit card rewards programs, there’s no shame in settling for a simple, easy-to-understand alternative.
The SoFi Credit Card is just such an alternative. And it doesn’t require much in the way of settling. It earns a flat 2% cash back on most eligible purchases and 3% back on select travel purchases — plenty generous for a no-annual-fee credit card.
The SoFi Credit Card can’t be everything to everyone, of course. Before you apply, make sure it has all the features and benefits you expect from a rewards credit card.
What Is the SoFi Credit Card?
The SoFi Credit Card is a cash-back credit card with no annual fee. It earns 2% cash back on most eligible purchases and 3% cash back on eligible purchases through SoFi Travel, which uses Expedia’s booking engine.
The SoFi Credit Card is somewhat unusual in that it doesn’t require applicants to have a U.S.-based bank account to qualify. If you’re approved for the card and don’t have a bank account, you can make payments through the SoFi app. You don’t need to use any other SoFi products to qualify for the SoFi Credit Card.
The SoFi Credit Card has some benefits beyond its rewards program, including up to $1,000 in cell phone insurance and monthly credits against eligible Lyft purchases.
What Sets the SoFi Credit Card Apart?
The SoFi Credit Card stands out from comparable cash-back credit cards for a few reasons:
Up to 3% back on eligible travel purchases. You earn unlimited 3% cash back when you book travel through SoFi Travel, which uses Expedia’s travel booking platform. Travel purchases not booked through SoFi Travel earn unlimited 2% back.
Up to $1,000 in cell phone protection. This cell phone protection plan is more generous than most credit cards’, which top out at $600 to $800 per claim.
No bank account needed to qualify. You can qualify for this card without a bank account, though you still need the SoFi app to make payments.
No sign-up bonus. One notable drawback of the SoFi Credit Card is its lack of a sign-up bonus for new cardholders. This could change in the future, but it’s an issue as of now.
Key Features of the SoFi Credit Card
The SoFi Credit Card has a straightforward rewards program and some notable benefits beyond it. Take a few minutes to familiarize yourself with its features before moving ahead with your application.
Earning Rewards
Most eligible purchases earn unlimited 2% cash back. There’s just one exception: Travel purchases made through the SoFi Travel platform earn unlimited 3% cash back.
Redeeming Rewards
You can redeem your accumulated cash-back rewards for:
Cash deposited into a linked external bank account or a SoFi checking account
Investments (including stocks and exchange-traded funds) purchased through SoFi’s investing platform
Payments on eligible SoFi loans
Statement credits against prior SoFi Credit Card purchases
Redemptions for cash, investments, and loan payments are worth $0.01 per cash-back point. Statement credit redemptions are worth only $0.005 per point, so they’re best avoided.
Cell Phone Protection
This card comes with a complimentary cell phone protection plan that reimburses you up to $1,000 per claim. A deductible and annual claim limits may apply.
Other Benefits
This card comes with some other potentially valuable benefits, including:
Up to $5 in monthly credits against eligible Lyft purchases
A complimentary annual membership to Shoprunner, which offers free two-day shipping on eligible online purchases
A complimentary three-month subscription to DoorDash DashPass, which offers a $0 delivery fee on qualifying orders and other perks
Important Fees
The SoFi Credit Card has no annual fee or foreign transaction fee. Other fees may apply, including for balance transfers and cash advance transactions.
Credit Required
This card requires good to excellent credit. You’re unlikely to qualify with a credit score significantly below 700 on the FICO scale.
Pros & Cons
These are the most notable upsides and downsides of the SoFi Credit Card.
No annual fee
Up to 3% cash back on eligible purchases
Up to $1,000 in cell phone protection per claim
No external bank account needed to qualify
No sign-up bonus
No 0% intro APR offer
Few benefits beyond the rewards program
Pros
The SoFi Credit Card is a low-cost, relatively high-reward credit card with some potentially valuable benefits.
No annual fee. This card has no annual fee. You won’t pay anything out of pocket to keep it active, even if you rarely use it.
2% cash back on most eligible purchases. This card earns a flat, unlimited 2% back on most eligible purchases. That makes it an above-average credit card for everyday spending.
Up to 3% back on select travel purchases. You earn 3% cash back when you book travel through SoFi Travel, an online travel portal powered by Expedia. There’s no limit to how much you can earn on eligible purchases.
Unusually generous cell phone protection. This card’s cell phone protection plan covers more than the average credit card’s. It tops out at $1,000 per claim, against $600 to $800 elsewhere.
Credits against Lyft purchases and other potentially valuable perks. You get $5 off Lyft purchases each month, plus a free annual membership to Shoprunner, which could save you a bunch on shipping if you buy a lot online from participating merchants. The three-month complimentary DoorDash DashPass benefit is appealing if you regularly order delivery.
No foreign transaction fee. This card has no foreign transaction fee, so it’s useful if and when you travel abroad or make purchases with overseas merchants.
No bank account needed to qualify. You don’t need a bank account to qualify for the SoFi Credit Card. You can make payments through the SoFi app instead.
Cons
The SoFi Credit Card lacks the more generous features common to top cash-back and travel rewards credit cards.
No way to earn more than 3% cash back. There’s no way to earn cash back at a rate higher than 3% with this card. Some competing cash-back cards offer 5%, 8%, even 10% cash-back tiers.
No sign-up bonus. The SoFi Credit Card has no sign-up bonus. This is a notable drawback for new cardholders eager to start earning rewards.
No 0% intro APR offer. Unlike many competing credit cards, the SoFi Credit Card has no introductory interest-free period. This is a drawback if you need to pay down high-interest balances accrued on another card or you’re planning to make a big purchase that you’d rather not pay off all at once.
Limited travel perks. The SoFi Credit Card has little in the way of travel perks, such as discounts or rewards at participating hotels and airport lounge access.
How the SoFi Credit Card Stacks Up
The SoFi Credit Card is similar to numerous other cash-back credit cards that earn 2% back on most or all eligible purchases. Before you apply, see how it compares against another popular option: the Wells Fargo Active Cash Card.
SoFi Credit Card
Wells Fargo Active Cash
Sign-Up Bonus
No
Yes
2% Cash Back
Eligible purchases except SoFi Travel
All eligible purchases
3% Cash Back
SoFi Travel purchases
None
Annual Fee
$0
$0
0% Intro APR
No
Yes, 15 months on purchases and balance transfers
The SoFi Credit Card is the clear winner if you travel regularly thanks to its 3% cash-back rate on SoFi Travel purchases. But Wells Fargo Active Cash is a better choice if you’re seeking a sign-up bonus or 0% intro APR offer as a new cardholder.
Final Word
The SoFi Credit Card is a straightforward cash-back credit card that’s easy even for credit card novices to understand and use effectively. And that’s a good thing if you’re tired of comparing the minutiae of credit card rewards programs — or don’t want to start doing that in the first place.
Then again, the SoFi Credit Card has some important missing elements. It has no sign-up bonus or 0% intro APR offer, and it lacks some of its peers’ more generous travel perks. It’s not a bad card by any means, but you can do better if you’re willing to shop around.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
SoFi Credit Card
The SoFi Credit Card is a straightforward cash-back card that earns 2% back on most purchases and 3% back on eligible travel purchases. With no annual fee and potentially valuable perks beyond its rewards program, it easily pays for itself. But the missing sign-up bonus and 0% intro APR offer lessen its appeal.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Today, we’ll dig into the details over at Wyndham Capital Mortgage, or WCM for short, which promises no hidden lender fees and competitive, below market mortgage rates.
What’s not to like about that, especially since they bundle certain third-party services to potentially save you thousands in closing costs.
They say their preferred settlement agents can offer better rates than the competition on things like title insurance, which can often be quite expensive.
On top of all that, Wyndham offer a digital mortgage experience for those who prefer to talk less and type more. Read on for additional details.
Wyndham Capital Mortgage Fast Facts
Direct-to-consumer retail mortgage lender
Founded in 2001 by current CEO Jeff Douglas
Headquartered in Charlotte, North Carolina
Licensed to lend in 46 states and D.C.
Funded over $18 billion and served 60,000+ customers since inception
Offer home purchase loans and mortgage refinance loans
Acquired by SoFi in April 2023
Wyndham Capital Mortgage was founded around the turn of the 21st century by its current CEO Jeff Douglas.
The company is headquartered in Charlotte, North Carolina where they also happen to do the most mortgage lending.
Last year, Wyndham Capital did about 12% of its total loan volume in NC, with almost the same amount of volume across the U.S. in California.
Overall, they originated more than $2 billion in home loans, with a near equal proportion of home purchase loans, rate and term refis, and cash out refis.
They appear to be licensed in 46 states and the District of Columbia, with Alaska, Hawaii, Massachusetts, and New York the exceptions.
In April 2023, Wyndham Capital Mortgage was acquired by SoFi.
How to Apply with Wyndham Capital Mortgage
They say it’s so easy you can start and finish your home loan all by yourself
Offer a digital mortgage application powered by fintech company Blend
Allows you to link financial accounts, scan/upload paperwork, eSign documents, and close virtually
You get 24/7 access to your loan status and a dedicated loan team if you have questions along the way
One thing I like about Wyndham Capital Mortgage is the ability to apply for a home loan directly from their website.
You don’t need to search a loan officer directory (although they have one) or wait for someone to call you back after completing an obligatory rate quote request.
Instead, simply cruise over to their website and click on “Apply Now” and you can begin filling out their digital mortgage application powered by Blend.
Lots of mortgage lenders use Blend’s technology, which allows prospective borrowers to complete a home loan application from anywhere on all types of different devices.
Wyndham Capital Mortgage also takes part in Fannie Mae’s Day 1 Certainty, which makes applying for a mortgage even easier and potentially a lot faster too.
This includes things like home appraisal waivers, and automated income, asset, and employment verification thanks to AccountChek by FormFree.
You may even be able to schedule a virtual closing as opposed to having to go anywhere or interacting with someone face-to-face.
Basically, their goal is to make it as quick and painless as possible to obtain a home loan, leveraging the latest technologies available.
Once your loan is approved, you can check status at any time via the loan portal and get in touch with your loan team if you have any questions.
Wyndham Capital Mortgage Loan Programs
Home purchase financing
Mortgage refinances: Rate and term, cash out, and streamline
Conventional home loans backed by Fannie Mae and Freddie Mac
Government home loans: FHA loans and VA loans
Fixed-rate and adjustable-rate mortgages in various loan terms
One of their claims to fame is that they offer the “widest array of products and programs” in the industry, so my assumption is you shouldn’t have an issue getting whatever it is you need mortgage-wise.
However, they don’t appear to offer USDA loans, and it’s unclear if they offer renovation loans such as the FHA 203k or Fannie Mae HomeStyle.
But they seem to have all the other, more common stuff, including home purchase financing and all types of refinance loans.
Those purchasing a home can take advantage of their “Priority Purchase Program,” which is an actual underwritten mortgage pre-approval that works similar to a cash offer.
And once you’ve got it, you can generate real-time pre-approval letters for specific properties you’d like to make an offer on.
This shows home sellers and their real estate agents that you mean business, and more importantly, that you actually qualify for a mortgage.
If you’re an existing homeowner looking to refinance, you can take advantage of their low rates by way of rate and term refinance, or tap equity via a cash out refinance.
They also offer streamline refinances for those looking to lower monthly payments, without all the usual hoops to jump through.
In terms of specific loan types, you can get a fixed-rate mortgage in a 15-, 20-, or 30-year term, or an adjustable-rate mortgage in a 5-, 7-, or 10-year term.
Wyndham Capital Mortgage Rates
You can see Wyndham Capital Mortgage rates on their website if you click on “Compare Rates,” which is a nice touch.
They allow you to toggle between conventional rates, FHA rates, and VA rates, with 30-year fixed and 15-year fixed options.
Wyndham also shows you the rates of select competitors, such as Bank of America, Chase, loanDepot, Quicken Loans, Wells Fargo, and others.
As you might expect, their listed rate is the lowest relative to those other lenders, at least on the day I checked them.
What’s more, they list their rates with $0 lender fees, so the APR you see listed is basically the interest rate.
Wyndham Capital Mortgage $10,000 On-Time Closing Guarantee
Those who are purchasing a home can take advantage of their $10,000 On-Time Closing Guarantee, assuming certain conditions are met.
That works out to up to $5,000 for you and $5,000 for the home seller if Wyndham Capital Mortgage is unable to fund the loan by your closing date.
In order to qualify, you must use the Priority Purchase Program along with their digital loan portal, and meet various timelines along the way.
Additionally, you must select Wyndham’s preferred settlement service provider to guarantee title is clear to close by your closing date
If you select a non-preferred settlement agent, it’s still possible to qualify for a $5,000 closing guarantee.
In any event, they seem to believe their “speed team” will be able to meet your closing date. So if anything, it’s added peace of mind and a boost of confidence that they can gets things done quickly.
Wyndham Capital Mortgage Reviews
On Zillow, they have a 4.81-star rating out of 5 based on more than 1,000 customer reviews, which is an excellent score. A lot of the recent reviews said the interest rate was lower than expected.
Over at LendingTree, they’ve got a 4.8-star rating out of 5 from almost 7,000 reviews, which is quite a statement in terms of customer satisfaction. And 99% of customers would recommend them.
They also have a 4.8-star rating out of 5 on Google based on over 1,500 reviews, so it appears they’re consistently making folks happy.
Wyndham Capital Mortgage is Better Business Bureau (BBB) accredited, and has been since 2002. They currently have an ‘A-‘ rating based on customer complaint history.
Somewhat amazingly, they also have a 4.97-star rating out of 5 on the BBB website, which is surprising given customer reviews on the BBB website are typically very negative.
In summary, the combination of low mortgage rates, no lender fees, and a tech-backed mortgage loan process seem to be driving high levels of customer satisfaction.
Wyndham Capital Mortgage Pros and Cons
The Pros
They appear to offer low mortgage rates
You can get a mortgage with no lender fees
They don’t charge origination fees
Offer a digital mortgage application powered by Blend
Can apply directly from their website without human interaction
Excellent customer reviews
BBB accredited since 2002 (currently hold ‘A-‘ rating)
$10,000 On-Time Closing Guarantee
Free mortgage calculators and mortgage glossary on site
Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
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Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
By: Rob Chrisman
8 Hours, 39 Min ago
A “crisis” is a time of intense difficulty, trouble, or danger. Think calamity, catastrophe, or disaster. The word makes for attention-grabbing headlines, and a scan through the news shows a mental health crisis, child care crisis, migrant crisis, China property crisis, a climate change crisis, an opioid crisis, a housing crisis… Eventually people become immune to seeing the word, and it loses its effectiveness, especially when nothing pans out from the “crisis.” I mention this because, despite a lot of predictions to the contrary, the banking “crisis” from March seems to have been contained to a few well-known banks. (Let’s hope so.) The Federal Reserve Board, released its results of annual bank stress test, which demonstrates that “large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession.” Of course, not every bank is large, and Ken Sonner telexed over the “The 100 Largest U.S. Banks by Consolidated Assets” which is of interest to anyone who has money in a bank or has a bank for a client. Yes, Chase now equals Wells Fargo plus Citi. (Today’s podcast can be found here and is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Through its top-rated Broker Program, Visio brokers can earn up to 5 percent. Hear an interview with Optimal Blue’s Erin Wester on both Product and Pricing Engines (PPE) and how pricing in the secondary market flows into the primary market.)
Lender and Broker Services, Products, and Software
In 2021, Procter & Gamble won the title of largest advertiser in the world, spending a jaw-dropping $8.1 billion on ads. While the company’s monumental ad budget is impressive, enterprising individuals who find creative ways to succeed with limited resources are doubly inspiring. Mortgage brokers are a perfect example of these types, as the majority of these lone wolves have to juggle customer service, relationship management, marketing, processing, compliance and more. To help brokers run their one-person show more effectively, Surefire by Black Knight has compiled an eBook detailing the marketing strategies and tools needed to succeed in a high-cost market. Download A Mortgage Broker’s Comprehensive Guide to Mortgage Marketing now for free.
“Learn About Current QC Trends and Industry Insights in Our Latest Webinar! With upcoming QC requirements on the horizon, now is the time to familiarize yourself with how they will impact your business. In our highly anticipated webinar, you will hear from ACES Quality Management’s President, Phillip McCall and EVP, Nick Volpe on an analysis of recent Mortgage QC Industry Trends Report, a deep dive into mortgage quality control trend reporting and how it aligns with the current state of the industry, and industry insights and how to best navigate through the volatile financial landscape. Walk away with a better understanding of what’s to come and how you can best prepare for the future. Watch Now.
“Experience unrivaled mortgage lending expertise for your next audit. At Richey May, we don’t just hire from the mortgage industry, we have the top experts who build it. We have defined what it means to be a mortgage expert for almost 40 years and are proud of our team members like Jennifer Hannah, CPA, AMP, who leads our Mortgage Banking Audit practice. As leaders in the mortgage lending industry, we provide extensive education for our clients while forging genuine relationships, communicating effectively, and resolving issues before they become problems. Our team’s extensive knowledge in mortgage technical accounting and audit acumen ensures top-quality service delivery. Guided by strong values, we strive to significantly impact our clients’ success. Reach out or visit our website to learn more about how we can help your audit drive growth, not just check a box.”
Products and Tools for Loan Production
Interest rates may tick up again next month, with experts predicting that mortgage rates will remain around mid-6 percent in the near term, but buyers are still out there. The loan officers with the right tools in place will be the ones to secure their business. With Percy’s homeownership engagement solutions, you can maintain connection with customers even after they’ve closed on a home. Percy’s captivating Equity Insights offer details on a home’s value and show how this value can be leveraged to fund home improvement projects or finance the next move. Need to work more with agents? Percy has 250,000 agents waiting to work with you. With Percy in place, our clients are reaping an average 400 percent ROI… and you can too. Learn more here about how you can use Percy to gain a competitive edge.
“In California, Golden State Finance Authority (GSFA) celebrates 30 years paving a path to homeownership for low-and-moderate income California households, having helped over 85,000 individuals and families to purchase a home and provided more than $660 million in down payment and closing cost assistance. Join us this June and July as we showcase our beginning, our mission, and the many achievements of the past three decades. ‘Golden State Finance Authority, Where Affordability Meets Flexibility®.’ Join our lending team! Start helping more homebuyers in California to Achieve the Dream. Visit www.gsfahome.org and follow us on Facebook, LinkedIn or our YouTube channel.”
“Did you know that OptifiNow provides wholesale Account Executives with an amazing tool that can double their funding volume? OptifiNow TPO is a CRM that expertly manages your wholesale lending sales team, but our Loan Scenario Ticketing Module is an absolute game changer. This module integrates with many popular Product and Pricing Engines (PPE) to enable your AEs to provide instant quotes to broker loan scenarios. OptifiNow automatically emails loan scenario quotes to brokers and follows up with them using a sequence of emails or SMS messages designed to ensure consistent engagement. Every Loan Scenario Ticket is tracked, so you know how frequently brokers are engaging with your AE, the types of products they are interested in and the pricing that was available at that time. AEs using OptifiNow’s Loan Scenario Ticketing module have been shown to double their monthly fundings. Interested? Contact OptifiNow for more information.”
The Fabled “Cost of Hedge”
Home lending is one of the few industries where the customer can lock in a future rate & price. Put another way, if you went to the local gas station, or grocery store, and told them you wanted to pay now for a gallon of petroleum or milk two months from now, you’d be stared at in disbelief. But the futures market is alive and well with companies and individuals locking in prices now for things like bacon, orange juice, wheat, gold, and corn in the future, hedging any impact of prices on their profits. There is a cost, usually the bid/ask price spread, the drop in price from one month to the next, and commissions paid in actually trading the contracts.
I periodically receive questions about the “cost to hedge” for mortgage bankers with locked pipelines. It is not an easy question to answer, like the cost of unleaded gas down at the corner. Hedging is a loan level activity where each loan’s program, interest rate, lock period, etc., is analyzed. It is tricky because company policies like extensions and renegotiations enter into it. Specifically, extensions and renegotiations increase it, and while the production team is helped, the capital markets department usually incurs the expense. And the price drop in the securities market often changes during the lock period. And then there’s always the “what is the cost of a loan that falls out?”
Capital markets vet James Hedvall recently weighed in. “Manufacturing loans faster, and bringing loans to market quicker, reduces a lender’s interest rate exposure to some degree. Thus, the reason bond loans can be an issue for some lenders. Unfortunately, I think many hedge vendors look at the problem 2-demonsionally, when it’s a 3-D issue. The problem isn’t necessarily all “speed-to-originate,” but rather “hedge model efficiency.” What assumptions are being made about the duration/beta of the hedge instrument, and pull through, broken down by product groups and cross referencing at what stage in the loan life cycle loans have fallen out in the past. Volatility in the To Be Announced (TBA) markets will kill a lender’s gain on sale. Lenders can be profitable in a rising rate environment, and profitable in a falling rate environment, but sudden swings in the bond market, and therefore interest rates, will kill you every time and all models break down.
“The cost to hedge is constantly changing. Viewed in a vacuum, I can say right now our hedge cost is around $X per loan, while the market is behaving rationally and my pull through acts as it has historically. This is also assuming I’m sending loans to market at the right time, I’m using broker/dealers that aren’t trying to pick off an additional +, and all the while having a stable ‘best efforts to mandatory’ spread. Ask me in six months how much my hedge is running and I’ll no doubt have a different answer. I believe that the real value of originating the loan quicker is a reduction in your finance fees from your warehouse bank, and not necessarily on your hedge side.” Thank you, James.
Capital Markets
Are long onboarding processes stopping you from making a switch? In a recent case study, NBH Bank describes their process getting started with MCT and how they were able to get mortgage pipeline hedging and best execution loan sales up and running in just ten days. “MCT exceeded our expectations for this onboarding process,” said Ajay Timothy, Vice President and Director of Secondary and Capital Markets at NBH Bank. “We were in a compromised position with our previous hedge provider and needed to get this done quickly…we got this done in about 10 days.” NBH Bank relied on MCT to come together with multiple teams to support them in a safe, effective way outside of normal processing times to ensure there were no gaps in their hedge coverage. Download the case study to learn how MCT is innovating the onboarding experience for clients.
Rate-wise, the main economic headline yesterday was Fed Chairman Powell’s remarks at an ECB event in Portugal, where he said that core U.S. inflation won’t hit 2 percent until 2025. He also said that there is significant disinflation in the pipeline, but that the dot plot is projecting another couple rate hikes. On a separate note, as noted in the opening paragraph, the Federal Reserve released the results of its annual stress test of banks and Wall Street’s biggest banks passed, clearing a key hurdle for returning billions of dollars to investors. The 23 largest U.S. lenders showed they can withstand a severe global recession and turmoil in real estate markets.
Fed Chair Powell once again spoke in Europe before the open to kick off today’s economic calendar. Besides Chair Powell, Atlanta’s Bostic is scheduled to speak and Sweden’s Riksbank will also be out with its latest monetary policy decision where a 25-basis points hike is expected. We’ve also received the final look at Q1 GDP (+4.1 percent) and weekly jobless claims (down to 239k, down 26k, very strong; continuing claims 1.742 million). The core PCE (personal consumption) deflator came in at +4.2. Later this morning brings the Pending Home Sales Index for May, Freddie Mac’s Primary Mortgage Markets Survey. We begin the day with Agency MBS prices worse .250-.375 and the 10-year yielding 3.79 after closing yesterday at 3.71 percent; the 2-year is up to 4.84, up .13 on the news.
Jobs
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