Industry Briefs Jan. 26, 2021

SitusAMC Acquires Assimilate Solutions

SitusAMC Holdings Corp., New York, acquired Assimilate Solutions LLC, a provider of mortgage and title knowledge process outsourcing and information technology outsourcing platforms.

The acquisition continues SitusAMC’s recent expansion of its offering for residential mortgage originators and further expands SitusAMC’s footprint throughout India. The Assimilate management team will be retained by SitusAMC.

Founded in 2012, Assimilate serves the U.S. residential mortgage industry. The firm’s service offering includes loan origination, closing and post-closing, loan servicing, secondary market activity and title and settlement support. Assimilate’s technology offering includes product development, data intelligence and analytics, integration management, test engineering, application development and digital acceleration.

Top of Mind Launches Mortgage Marketing University

Top of Mind Networks, Atlanta, launched Mortgage Marketing University, a free program designed to help mortgage professionals take their marketing skills to the next level.

MMU’s online curriculum features 15 courses covering a variety of topics, from how to build a lead-gen strategy to creating compliant content across multiple channels. Each course is designed to be completed in a single sitting, and students can earn a certificate of completion for each course by passing a multiple-choice assessment quiz.

STRATMOR: How Lenders Can Cushion the Fall after Last Year’s Record Volume

Mortgage lenders can look to the past to strategically prepare for the inevitable landing following 2020’s record origination volumes and production profit margins, according to the latest Insights Report from mortgage advisory firm STRATMOR Group, Greenwood Village, Colo.

The report’s lead article, “Bottle the Magic: Three Lessons for Mortgage Lenders to Help Soften the Landing,” by STRATMOR Founder Jeff Babcock, advises lenders to pay attention to historical trends and embedded risk factors when planning for the future.

“After 40+ years in this industry, I’ve been through many mortgage cycles and have witnessed firsthand the booms, which are invariably followed by a significant and unprofitable downturn,” writes Babcock, who is retiring this month. “I cannot recall a single ‘soft landing’ — when origination market conditions gradually normalized, allowing management time to develop an effective response.”

Babcock notes that historically, the average origination cycle lasts about three years. After a tough market in 2018, a good market in 2019 and a fantastic market in 2020, the mortgage industry is likely facing a tough market at some point in 2021, despite economists’ predictions that the Fed will sustain low interest rates until the pandemic retreats and economic recovery is confirmed. Along with lower originations will come compressed margins, he writes.

Babcock urges lenders to prepare a contingency plan in advance of the inevitable downturn rather than reacting after it happens. The good news, he writes, is that lenders can look at historical and macroeconomic trends to create their plan. Since there is rarely much lead time, Babcock recommends making such a plan “a first quarter 2021 priority so that decisions are not being made during subsequent periods of pressure-induced stress.”  

In a second article in the January Insights Report,How Can Originators Ensure a Profitable 2021?” Mike Seminari, director of STRATMOR’s MortgageSAT Borrower Satisfaction Program, provides  some simple ways originators can sustain profitability in 2021 and beyond. For example, originators should identify and repair the rusty spots in their loan process in part by carefully reviewing the post-close survey process. 

Click here for the January edition of STRATMOR’s Insights Report.

Zillow: Home Values Break New Growth Records as Demand Surge Presses On

Zillow, Seattle, said home value growth continued its meteoric rise in December as towering demand for homes carried on into winter. The company’s Real Estate Market Report said houses are going under contact quickly and sales far outpace the year prior as record-low mortgage rates help keep monthly payments manageable, despite rising prices.

The report said the typical home value in the U.S. climbed to $266,104, up 8.4% from a year ago — the highest annual increase since January 2014. Home value growth over the last quarter in the U.S. was 3.2% — higher than at any time since the Zillow Home Value Index (ZHVI) series began in 1996. Many metros took part in this late surge in appreciation as the nation’s housing market rode a wave of high demand deep into the winter. The Sun Belt produced growth standouts including Austin — the metro predicted to be hottest in 2021 — which saw 5.3% growth over the previous quarter, while Phoenix, San Diego and Salt Lake City all clocked 5.1% growth.

“The housing market ended 2020 with an exclamation point, as home values rose sharply near the end of the year at their fastest quarterly rate on record,” said Jeff Tucker, senior economist at Zillow. “Sales are taking place at a rapid clip as momentum gathering in the market since June is still pushing forward at full force and is expected to continue for the foreseeable future. Although prices are skyrocketing, record-low mortgage rates keep bringing buyers to the table by keeping monthly payments in reach.”   

Redfin: Homebuyers Undeterred by Declining Listings–Pending Sales up 32%, New Listings Down 10%

The median home sale price increased 15% year over year to $318,750, according to a new report from Redfin, Seattle.

For the four-week period ending January 17, pending home sales were up 32% year over year; new listings of homes for sale were down 10% from a year earlier—the largest decline since June; active listings (the number of homes listed for sale at any point during the period) fell 34% from 2020 to a record low; 40% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 30% rate during the same period a year ago; and the average sale-to-list price ratio increased slightly to 99.3%—1.6 percentage points higher than a year earlier.

“Even with prices soaring and the number of homes for sale at an all-time low, homebuyers are moving as quickly as they can to buy every home that comes on the market,” said Redfin chief economist Daryl Fairweather. “Many homeowners are staying put instead of selling, because of the difficulty of finding a new home, even though they could command top dollar for their listing. As we move forward, all eyes will be on mortgage rates which are historically low now but may not stay that way for long. The Biden administration plans to spend in the trillions to help support the economy and fight the pandemic. That could drive up rates, but the impact would likely be small as the Federal Reserve has signaled a commitment to keeping interest rates low for the foreseeable future.”

IDS Inks Preferred Partnership Agreement with Promontory MortgagePath

International Document Services Inc., Salt Lake City, announced it is fully integrated with Promontory MortgagePath LLC, a provider of digital mortgage and tech-driven fulfillment platforms, as part of a preferred partnership agreement signed with Promontory MortgagePath earlier this year.

The partnership includes the migration of Promontory MortgagePath’s client base to IDS’ flagship document preparation platform idsDoc. Throughout the implementation process, Promontory MortgagePath and IDS worked to test and prepare for Promontory MortgagePath’s lender-client needs, including common loan and document types and likely use scenarios, thus enabling Promontory MortgagePath to further support its clients with customizable document preparation services.

Blue Sage Solutions Announces Investment from Goldman Sachs

Blue Sage Solutions LLC, Englewood Cliffs, N.J., closed a financing round from Goldman Sachs Growth Equity, which focuses exclusively on investments in growth stage and technology-driven companies. The investment is Blue Sage’s first external round of funding since the company was founded by Carmine Cacciavillani, President and CEO.

Blue Sage will use the capital to continue investing in growth initiatives, including developing additional features that will further strengthen its Digital Lending Platform. “Goldman Sachs also brings a deep understanding of technology and operational expertise to assist in scaling our business,” Cacciavillani said. “Goldman Sachs’ expertise will contribute to executing our vision.”

ENACOMM, BLM Technologies Partner

ENACOMM, Tulsa, Okla., and BLM Technologies, a single-source provider of technology platforms, announced a partnership, implementing technologies needed to adapt can now be a turn-key process for banks, credit unions, credit card and payment companies.

The ENACOMM-BLM Technologies partnership will allow BLM Technologies to equip its roster of financial institution customers with ENACOMM’s intelligent interactions platforms.

The ENACOMM Fraud Control Module allows users to detect, track and respond to fraud across any channel for which ENACOMM’s data collection system Virtual Interactive Analyst is deployed.

Black Knight: Loans in Forbearance Rise

Black Knight, Jacksonville, Fla, released its latest blog, reporting mortgages in active forbearance rose slightly last week, continuing the trend of mid-month increases in active forbearance plans.

Overall, active plans increased by 17,000 (+0.6%) for the week through January 19. While the number of active plans is down 2.1% from the month prior, the rate of improvement continues to be relatively slow. A weekly decline of 3,000 GSE loans in forbearance was more than offset by a 15,000 increase in plans among portfolio-held and privately securitized mortgages and a 5,000 increase among FHA/VA loans.

The report said 2.74 million homeowners were in active forbearance as of Jan. 19. The population has been vacillating between 2.71 and 2.83 million since early November, when the country began seeing new coronavirus case spikes and resulting shutdowns. Together, they represent 5.2% of all mortgage holders, including 3.3% of GSE loans, 9.4% of FHA/VA loans and 5.2% of portfolio-held/privately securitized loans.

Indecomm Client UCBI Implements BotGenius to Automate Middle Office

Indecomm and United Community Bank Inc. implemented the BotGenius suite of middle office automation solutions, a tool to help ensure a positive and holistic borrower experience for UCBI 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. 

FHFA Issues RFI on Climate and Natural Disaster Risk Management at Regulated Entities

The Federal Housing Finance Agency on Jan. 19 issued a Request for Input on the current and future natural disaster risk to the housing finance system and to Fannie Mae and Freddie Mac and the Federal Home Loan Banks.

The information FHFA is requesting will enhance the Agency’s ability to fulfill its statutory mission to ensure that the regulated entities operate in a safe and sound manner. The RFI raises questions about two broad sets of issues: identifying and assessing climate and natural disaster risk and enhancing FHFA’s supervisory and regulatory framework.

FHFA invites feedback on all aspects of the RFI within 90 days of publication, no later than April 19. Comments should be submitted electronically or via mail to the Federal Housing Finance Agency, Office of the Director, 400 7th Street, S.W., 10th floor, Washington, D.C., 20219.

Fannie Mae: Economic Growth Expected to Accelerate as Vaccine Deployment Quickens and Warmer Weather Approaches

The U.S. economy is expected to grow 5.3 percent in 2021, a substantial improvement from the currently projected 2.7 percent contraction in 2020, with a strong pick-up in growth projected to commence over the spring months, according to the latest commentary from the Fannie Mae Economic and Strategic Research Group.

The latest forecast of full-year 2021 real GDP growth is an upgrade of 0.8 percentage points from the previous month’s forecast, reflecting the ESR Group’s view that the expansion of COVID-19 vaccination efforts and the approach of warmer weather will likely reverse the economic weakness experienced at the end of 2020. The ESR Group also noted that the continued recovery will likely be considerably faster than the recovery following the Great Recession and upgraded its 2022 growth forecast by 0.4 percentage points to 3.6 percent. Immediate risks to the forecast center around the path of the pandemic and progress on vaccination distribution. Impediments to that process could result in meaningful, adverse impacts to the timeline of projected growth. Otherwise, the ESR Group believes that conditions are favorable for a strong recovery, with inflationary pressure and higher interest rates being the most significant longer-term risks to growth.

The forecast said housing activity is expected to remain strong in 2021, but sector growth will likely decelerate from the torrid pace set in the second half of 2020. While the ESR Group expects home sales to rise 3.8 percent in 2021, the monthly pace is likely to slow through much of the year. Home price appreciation is also expected to slow along a similar timeline. Purchase mortgage originations are expected to rise in 2021 to $1.8 trillion from 2020’s projected $1.6 trillion, while refinance origination activity is forecast at $2.2 trillion in 2021, down from the projected all-time high of $2.8 trillion in 2020. With mortgage rates near historic lows, the ESR Group estimates that 67 percent of outstanding mortgages have at least a half-percentage point incentive to refinance.

Redfin: 63% of 2020 Homebuyers Made an Offer Sight Unseen, Shattering Previous Record

Redfin, Seattle, said nearly two thirds (63%) of people who bought a home last year made an offer on a property that they hadn’t seen in person, the highest share since at least 2015. That’s up from 32% a year earlier, and 45% in July, which was previously the high point. 

“The virtual home tour is here to stay,” said Redfin chief economist Daryl Fairweather. “Homebuyers who are searching for a home out of town and don’t have the time or ability to view the home in person will use virtual tours as their primary means of viewing a home. The increased use of this technology, coupled with more people relocating, mean the sight-unseen trend will continue, and the majority of homebuyers will make offers sight unseen during their search for a home in 2021.”

Video tours with a Redfin agent have surged this year, from less than 1% of Redfin tour requests at the beginning of 2020 to about 1 in 10 today. Similarly, monthly views of 3D walkthroughs on have increased 563% since February.