Industry Briefs Jan. 18, 2021

CFPB Sues 1st Alliance Lending

The Consumer Financial Protection Bureau filed a lawsuit against 1st Alliance Lending LLC, Hartford, Conn., and its officers, John Christopher DiIorio, Kevin Robert St. Lawrence and Socrates Aramburu for allegedly engaging in various unlawful mortgage-lending practices. 

The Bureau alleged since at least 2015, in the course of its mortgage-lending business, 1st Alliance used unlicensed employees to engage in mortgage-origination activities and interactions with consumers that required them to be licensed under state law, in violation of TILA and Regulation Z, its implementing regulation. The Bureau further alleges that 1st Alliance’s use of unqualified sales employees to deprive consumers of critical, accurate, and timely loan information was unfair. The Bureau also alleges that 1st Alliance violated Regulation Z by requiring consumers to submit documents verifying information relating to the consumer’s residential-mortgage-loan application before providing them a Loan Estimate.

FHFA Further Extends GSE COVID-Related Loan Flexibilities

The Federal Housing Finance Agency announced Fannie Mae and Freddie Mac will extend several loan origination flexibilities until February 28. The changes are to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on January 31.

Extended flexibilities include:

–Alternative appraisals on purchase and rate term refinance loans;

–Alternative methods for documenting income and verifying employment before loan closing; and

–Expanding the use of power of attorney to assist with loan closings.

Fannie Mae Multifamily Closes 2020 With Record Volume

Fannie Mae, Washington, D.C., provided $76 billion in financing to support the multifamily market in 2020, the highest volume in the history of its 32-year-old Delegated Underwriting and Servicing program.

Multifamily Affordable Housing volume rose more than 9 percent to $7.8 billion last year from $7.2 billion in 2019.  Structured Transactions volume totaled $11.6 billion, up nearly 34 percent from $8.6 billion in 2019, helping support multifamily affordable housing, particularly workforce housing. Our Manufactured Housing Communities financing program also helped support affordable housing, reaching a record $5.5 billion, a 120 percent increase from $2.5 billion in 2019.

Freddie Mac Quarterly Forecast: Housing Market Continues to Perform Strongly, Driven by Historically Low Mortgage Rates

Freddie Mac, McLean, Va., issued its Quarterly Forecast, noting the current low mortgage interest rate environment is projected to continue with the 30-year fixed-rate mortgage averaging below three percent through the end of 2021.

“Despite the uncertainties of the pandemic, the housing market performed well in the second half of 2020,” said Sam Khater, Freddie Mac Chief Economist. “Low mortgage rates and the ability to work remotely continued to support the demand for housing, which is reflected in home sales reaching levels not seen since 2006.”

According to Freddie Mac’s forecast:

•           The average 30-year fixed-rate mortgage is expected to be 2.9 percent in 2021 and 3.2 percent in 2022.

•           House price growth is expected to be 5.4 percent in 2021. In 2022, that rate is expected to decrease to 3.0 percent.

•           Home sales are expected to reach 6.5 million in 2021 and decrease in 2022 to 6.2 million homes.

•           Purchase originations are expected to increase to nearly $1.6 trillion in 2021 before dropping to $1.5 trillion in 2022.

•           Refinance originations are expected to be nearly $1.8 trillion in 2021 before falling to $895 billion in 2022.

•           Overall, the forecast expects annual mortgage origination levels to be $3.3 trillion in 2021 and $2.4 trillion 2022.

Black Knight: Loans in Forbearance Down 9,000 from Previous Week

Black Knight, Jacksonville, Fla., issued its latest Blog, reporting mortgages in active forbearance declined by 9,000 (-0.3%) from the previous week. Total active plans are now down just 1.5% from the month prior, continuing the trend of very slow improvement. “This further sets the stage for a great many plans to still be active when the first wave of forbearance plans begin to expire at the end of March,” Black Knight said.

The week’s decline was driven by a 13,000 drop in the number of active forbearance plans among loans held in private label securities or banks’ portfolios, countered by a 4,000 rise in plans among FHA/VA loans. GSE forbearance plans held steady week-over-week.

Overall, as of January 12, 5.1% of all mortgages (2.73 million) are in forbearance. Together, they represent $545 billion in unpaid principal. Some 15% of homeowners in active forbearance remain current on their mortgage payments. 83% of plans have been extended at some point since last March.

ReverseVision Lowers Lenders’ Costs to Originate Reverse Mortgages

ReverseVision, San Diego, restructured its technology plans and pricing matrix to ease lenders’ entry into reverse lending and support their success. The restructured technology plans will deliver greater value to lenders and align its product offerings with the company’s overall objective of enabling lenders to adequately serve senior borrowers with all FHA lending programs.

Under the changes, ReverseVision offers a four-tiered pricing model with entry, retail, premium and enterprise plans tailored to meet the needs of common lender profiles. Lenders at every product tier, from entry to enterprise, will be able to qualify borrowers with RV Sales Accelerator’s advanced modeling tools, originate reverse mortgages within RV Exchange, and measure customer satisfaction with STRATMOR Mortgage SAT, a borrower feedback program that empowers lenders with actionable data and peer-to-peer performance benchmarking.

Indecomm Client UCBI Implements BotGenius to Automate Middle Office Mortgage Operations

United Community Bank Inc. and Indecomm Global Services, Edison, N.J., announced implementation of Indecomm’s BotGenius suite of middle office automation platforms for United Community Bank customers. BotGenius is a collection of software robots pre-built to emulate human computer interaction for specific, standardized middle office tasks, processes and workflows in the mortgage industry.

Indecomm’s collection of out-of-the-box bots are configured for a variety of mortgage workflows, including loan set-up, processing, communications and other middle office tasks. By automating repeatable and high-volume tasks such as ordering third-party services, combined with reviews of reports (e.g., flood, fraud, credit, appraisal, etc.), validation and generation of disclosures and adverse action communication,

Mid America Mortgage Expands Access to Down Payment Assistance Program to Its Correspondent Partners

Mid America Mortgage Inc., Addison, Texas, added down payment assistance to the slate of mortgage products and services offered through its correspondent division. This is an expansion of the DPA program Mid America created for its retail channel in 2019 in partnership with the Rosebud Economic Development Corp.

The program combines an FHA-insured first mortgage with a five-year second lien up to 5% of the home’s purchase price. Borrowers can use the second-lien funds for their down payment and/or to cover closing costs. Interest does not accrue on the second lien, and borrowers do not need to make monthly payments on the second lien. If the borrower remains in the home and stays current on their first mortgage, the second lien is fully forgiven after five years.

Black Knight’s Seller Digital Platform Helps Correspondent Lenders

Black Knight Inc., Jacksonville, Fla, launched Seller Digital, a new correspondent lending platform that helps lenders track commitment pipelines, manage conditions and validate pricing to register and lock Best Efforts loans and allocate Mandatory loans to commitments.

Focused on delivering a simple, easy-to-navigate user experience, Seller Digital’s functionality fosters two-way communication between the seller and purchaser to help manage correspondent transactions. The platform is fully integrated with Empower, Black Knight’s loan origination system, as well as the company’s loan product, pricing and eligibility engine.

Seller Digital supports the lender’s processes and requirements by giving purchasing lenders the ability to manage loan conditions systematically for each purchase transaction. Lenders can filter conditions based on categories and create on-demand notifications for any exceptions that may need attention. Lenders can subscribe to notifications that alert them of any new conditions and can easily upload documents to satisfy these conditions directly from the pipeline view. Decisions regarding the loan are updated to the Empower LOS.

Stavvy Integrates with Encompass Digital Lending Platform

Stavvy, Boston, announced its eSigning and eClose platforms are now available through ICE Mortgage Technology’s Encompass Digital Lending Platform. The integration allows lenders to access Stavvy’s products directly through the Encompass Digital Lending Platform to drive quality and efficiency in the loan origination process. 

With Stavvy’s eClose functionalities, the majority of real estate closing documents can be eSigned, requiring only one in-person or virtual meeting for the promissory note and select documents that require notarization depending on the jurisdictional requirements and laws. By simplifying and expediting these processes, in-person closings that used to last hours can now be seamlessly completed in 10 to 15 minutes. Stavvy’s native eClose tools allow closing agents to perform hybrid closings in addition to remote ink-signed notarizations. Stavvy’s RIN product has been available and widely used in markets that do not have permanent laws for fully digital remote online notarization (RON), such as New England, New York, and New Jersey. Stavvy’s native RON product is expected to be available in the first quarter.

CBC Mortgage Agency Launches Initiative to Increase Homeownership Within Urban Indian Community

CBC Mortgage Agency, Cedar City, Utah, launched the Kani Urban Indian Housing Initiative to increase homeownership within the urban Indian community. The National Urban Indian Family Coalition, an advocacy group for American Indian families living in urban areas, partnered with CBCMA on the initiative to address the housing needs of Native Americans living in urban areas.

CBCMA, a wholly owned subsidiary of Cedar Band Corp., offers the Chenoa fund down payment assistance program. Cedar Band Corp. is a federally chartered tribal corporation wholly owned and operated by the Cedar Band of Paiute Indians. NUIFC will promote the Kani Urban Indian Housing Initiative’s message through its existing affiliated urban Indian centers by hosting webinars and homebuyer workshops with CBCMA. These workshops aim to provide support to Native American urban communities with guidance and down payment assistance programs.

Fitch: RMBS Servicer Metric Report Reflects Industry Stability During Pandemic

Fitch Ratings, New York, issued its third quarter 2020 U.S. RMBS Servicer Metric Report, showing a continued upward trend in hiring full-time employees that emerged in the second quarter report. Both bank and non-bank servicers have been staffing up in response to an increase in the volume of coronavirus-related relief requests from borrowers. However, the trend was more modest in the third quarter.

Fitch-rated bank and non-bank servicers reported several performance trends worth noting:

–Bank servicers experienced a modest decline of about 6% in active forbearance agreements as a percentage of all loss mitigation plans while non-bank servicers reported a decline of about 10%.

–Loan modifications as a percentage of all loss mitigation alternatives increased for both bank and non-bank servicers from last quarter as some initial forbearance relief periods expired.

–Borrowers on a repayment plan continue to trend downward as a percentage of all loss mitigation alternatives year over year.