Industry Briefs Aug. 23, 2021

Fannie Mae: U.S. Economy Again Limited by COVID, Supply Chain Concerns

Fannie Mae, Washington, D.C., revised its full-year 2021 real GDP growth forecast modestly downward due in part to the expectation that COVID-related disruptions to consumer spending and supply chains will more greatly hinder economic activity in the second half of the year than previously forecast.

In its monthly commentary, the Fannie Mae Economic and Strategic Research Group said a weaker than previously anticipated second quarter real GDP reading also contributed to the downward revision to the full-year 2021 growth outlook from last month’s 7.0 percent to this month’s 6.3 percent. However, the downgrade was offset partially by an upgraded 2022 growth forecast from 2.8 percent to 3.2 percent. The ESR Group continues to expect inflation, as measured by the Consumer Price Index, to remain around 5 percent by the end of 2021, as broader inflationary pressure from wage and home price growth replaces some of the more transitory factors driving the recent upward movement. By the end of 2022, the ESR Group forecasts CPI to decelerate meaningfully to a still-elevated level nearer 3 percent.

The ESR Group also downgraded its forecast for single-family home sales through the second half of 2021 due to ongoing inventory and supply chain constraints. On a full-year basis, the ESR Group expects total home sales of 6.66 million, down from last month’s projected 6.71 million – which would still represent a 3.1% increase compared to 2020.

“While the recent surge of COVID-19 cases appears to be affecting consumer behavior, the economic response so far has been modest compared to last year’s outbreak, and its impact on our latest forecast is similarly slight, albeit to the downside,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist. “For the housing market, at current case levels, the lack of inventories of homes for sale and continued supply chain bottlenecks experienced by homebuilders remain the primary constraints on home purchase activity. Moreover, while mortgage rates have drifted downward and in theory provide greater purchasing power to potential borrowers, in practice, given current supply-side and affordability challenges, we expect that benefit to be limited.”

ICE Mortgage Technology Enhances Encompass Platform

ICE Mortgage Technology, Pleasanton, Calif., released additional enhancements to its Encompass platform. The Encompass 21.2 release supports the recently updated General Qualified Mortgage final rule enabling lenders to calculate eligibility for QM loans using the new price-based thresholds that the government-sponsored enterprises will require to sell loans to the secondary market.

The new Encompass 21.2 release offers flexibility for lenders to use both existing and new QM rules before the mandatory switch (October 1, 2022) to accommodate GSE and investor requirements seamlessly. More information on the General QM rule as part of the product release can be found here: https://files.consumerfinance.gov/f/documents/cfpb. 

CFPB Takes Action Against Debt Collector

The Consumer Financial Protection Bureau filed a proposed settlement to resolve a lawsuit against a debt collection enterprise and its owner. The CFPB alleges that Fair Collections & Outsourcing violated federal law by failing to establish or implement reasonable written policies and procedures regarding the accuracy and integrity of the information it furnished to credit reporting agencies and failed to conduct reasonable investigations of indirect consumer disputes, resulting in inaccurate information remaining on consumers’ credit reports.

The CFPB also alleges that FCO and its owner, Michael Sobota, violated federal law when FCO represented that consumers owed certain debts when, in fact, FCO did not have a reasonable basis to assert that the consumers owed those debts. If entered by the court, the settlement would require FCO and Sobota to put in place reasonable policies and procedures to prevent future violations and pay a $850,000 civil money penalty.

FCO, which collectively comprises FCO Holding, Inc. and its subsidiaries, Fair Collections & Outsourcing, Inc., Fair Collections & Outsourcing of New England, Inc., and FCO Worldwide, Inc is a non-bank debt collector based in Maryland. The proposed settlement seeks to resolve the CFPB’s pending lawsuit against FCO and Sobota, filed in federal district court in Maryland in September 2019.

LodeStar, Dytrix Partner on Access to Rates, Fees from Qualified Counterparties

Counterparty risk management platform producer Dytrix, Philadelphia, partnered with national closing cost fee provider LodeStar Software Solutions. The integration will allow loan origination system users to authenticate and qualify counterparties based upon each lender’s requirements while receiving instant access to rates and cost estimates as well.

With the partnership, mortgage lenders will now have assurance that any title agency they receive fees from via the LodeStar platform is fully insured and licensed for that transaction. At the same time, Dytrix clients will now have access to all of their title agency pricing in one location.

Black Knight: Forbearances Edge Slightly Higher

Black Knight, Jacksonville, Fla., said loans in active forbearance increased by 11,000 in the past week, continuing a “well-established mid-month trend.”

The company’s McDash Flash forbearance tracker reported an 11,000 overall increase in active forbearance plans last week, driven entirely by a 12,000 rise in plans among portfolio/PLS loans and offset by a 1,000 decline in GSE forbearances. FHA/VA plan volumes held flat from the week prior. The report said 1.75million (3.3% of) borrowers remain in COVID-19 related forbearance plans as of August 17, including 1.9% of GSE mortgages, 5.8% of FHA/VA and 4.0% of portfolio-held and privately securitized mortgages. This puts overall plan volumes down 110,000 (-5.9%) from the same time last month, with the rate of improvement slowing slightly in recent weeks.

HomeScout Intel Partners with Aidentified

HomeScout Intel, Austin, Texas, announced a partnership with Aidentified, a tech industry provider, in which HomeScout Intel clients can process and enrich data by harnessing the power of AI and increasing connection-based conversions.

Through predictive analytics, machine learning and AI techniques, HomeScout Intel enhances data associated with lender databases and their new lead contact records to help reveal the best paths to connect and engage with qualified prospects. By mapping relationships, HomeScout Intel is able to link together Mortgage Lenders with prospects who are qualified and ready to take the leap and buy a new home.

Finance of America Mortgage, Closepin Partner to Streamline Settlement Process

Closepin, Plymouth Meeting, Pa., announced Finance of America Mortgage selected its cloud-based platform to streamline approvals and verifications of its network of third-party settlement and closing agents.

Closepin’s automated platform simplifies the closing process for consumers, lenders and closing agents. Through their online Closepin profile, settlement agents ensure accurate information is provided to Finance of America Mortgage and any lenders with whom they close loans. This saves the settlement agent time and effort with compliance approvals and ensures verified and accurate data is used in the origination process.