Industry Briefs May 21, 2021

Quicken Loans is No More; Changing Name to Rocket Mortgage

Quicken Loans, Detroit, announced it will officially change its name to Rocket Mortgage on July 31. This change will bring alignment to the overall “Rocket” brand.

Rocket Mortgage was founded by Dan Gilbert in 1985 as Rock Financial, a regional branch-based mortgage broker in metro Detroit. In 1999, Rock Financial launched, a website to connect with its clients directly. In late 2015, Quicken Loans launched a fully digital, completely online, mortgage experience – Rocket Mortgage.

Clients will not see any difference to the digital experience. The only difference current clients will experience is documents, letters and other communications that previously were labeled “Quicken Loans” will instead come from “Rocket Mortgage.”

Redfin: Home Sales Continue to Skyrocket

Redfin, Seattle, said the median home-sale price increased 22% year over year to a record-high $350,750 during the four-week period ending May 9. The  typical home sold in a record of just 18 days on the market.

The report also noted a record high 49% of homes sold for more than their list price, up 21 percentage points from a year ago. It also noted a record-high 101.5% average sale-to-list price ratio, up 2.9 percentage points year over year. A record-high 58% of homes that went under contract had an accepted offer within the first two weeks on the market. And a record-high 45% of homes that went under contract had an accepted offer within one week of hitting the market.

“The housing market has gone from one extreme—the onset of the pandemic—to another—the rush to buy primary and second homes while mortgage rates remain near historic lows,” said Redfin Chief Economist Daryl Fairweather.

Black Knight: April Sees Lowest Total Lock Volume in Nearly a Year

Black Knight Inc., Jacksonville, Fla., released its monthly Originations Market Monitor report, showing overall rate locks were down across the board, falling 11.3% from March.

While purchase locks saw a 6% month-over-month decline, sharper monthly drops were observed among both cash-out (-13%) and rate/term (-20%) refinances. The refinance share of the market mix dropped again in April, accounting for just 45% of the month’s origination activity. On an annual basis, only rate/term refinance lending is down from last April (-34%), whereas both cash-outs (+27%) and purchase loans (+114%) are up year-over-year.

“Despite interest rates trending downward in April across all mortgage products, the decreases did not seem to be enough to bring borrowers – particularly refi borrowers – back to the table,” said Black Knight Secondary Marketing Technologies President Scott Happ. “April saw the lowest  overall rate lock volume since May 2020, with rate/term refinance lending the lowest since January 2020 – before the 10-year Treasury yield fell below 1% for the first time ever, setting off a yearlong run of interest rates hitting 14 separate record lows in 2020.”

Happ noted as volume tightened, average credit scores declined across all products and purposes, and conventional loans lost share to government-backed mortgages. “Neither are unexpected developments given that, when rates begin to rise, higher-credit borrowers tend to simply not engage,” he said. “Right now, though, rates are still hovering in a historically comfortable place, with approximately 14.5M homeowners who could still likely qualify for and benefit from a refinance. It will be interesting – and telling – to see both how rates move in the coming weeks, and whether or not we see refi volumes increase as a result.”

Redfin: 72% of Home Offers Faced Bidding Wars in April

Redfin, Seattle, said nearly three-quarters (72%) of home offers written by Redfin agents in April faced competition, up from a revised rate of 66.7% in March and 44.9% a year ago.

Bidding wars are so fierce that nearly half of homes are fetching more than their list prices, a recent Redfin report found.

Salt Lake City had the highest April bidding-war rate of the 45 U.S. metropolitan areas in Redfin’s analysis, with 83.5% of offers written by Redfin agents facing competition. Next came San Diego and Spokane, Wash., both at 83.3%. Boise and Phoenix rounded out the top five, with bidding-war rates of 81.8% and 80.5%, respectively.

Black Knight: Forbearance Share Continues to Fall

The latest Black Knight blog reported forbearance volumes fell another 61,000 (-2.7%) last week. Improvement was seen across the board, with GSE forbearance volumes declining by 13,000 (-1.9%), FHA/VA plan volumes declining by 19,000 (-2.1%) and PLS/portfolio forbearances declining by 29,000 (-4.6%) on the week.

The report noted 250,000 plans are still listed with May expiration dates. Another 860,000 plans are currently slated for review for extension/removal in June, the final quarterly review before early forbearance entrants begin to reach their 18-month plan expirations later this year.

The report said 38% of loans reviewed for extension/removal over the past month have been removed from forbearance, the highest such removal rate since mid-February. Total plan starts are down 13% month-over-month, and continue to slowly decline. As of May 11, 2.16 million (4.1% of) homeowners remain in COVID-19 related forbearance plans, including 2.5% of GSE loans, 7.3% of FHA/VA loans, and 4.6% of portfolio/PLS loans.

Genworth Financial Postpones Planned IPO of Enact

Genworth Financial Inc., Richmond, Va., postponed its previously announced initial public offering of its subsidiary, Enact Holdings Inc.  

“In light of the recent significant trading volatility in the mortgage insurance sector, Genworth’s Board of Directors determined that current market pricing for the planned offering does not accurately reflect Enact’s value. Therefore, we have decided to postpone the IPO and will continue to evaluate our options as market conditions develop,” said Tom McInerney, Genworth President and CEO. “Our primary objective has been and will continue to be protecting the value of Enact. We maintain our positive long-term outlook for the MI sector, given strong trends in the U.S. housing market and expected tailwinds as the economy recovers from COVID-19.”

Genworth’s liquidity position to meet its near-term obligations is not dependent on the IPO, with the holding company having approximately $757 million in cash and liquid assets as of March 31.

Federal Agencies Extend Comment Period on Artificial Intelligence RFI

Five federal financial regulatory agencies extended the comment period on the request for information on financial institutions’ use of artificial intelligence until July 1.

The agencies are seeking information from the public on how financial institutions use AI in their activities, including fraud prevention, personalization of customer services, credit underwriting, and other operations. More specifically, the RFI seeks comments to better understand the use of AI, including machine learning, by financial institutions; appropriate governance, risk management, and controls over AI; and challenges in developing, adopting, and managing AI.

The agencies extended the comment period to allow stakeholders more time to coordinate and prepare their comments, which were originally due by June 1.

Request for Information (RFI)

FHA Catalyst Releases Case Binder Module

The Federal Housing Administration implemented several enhancements to the FHA Catalyst: Case Binder Module, which enables mortgagees to electronically deliver case binders for single family forward mortgages and Home Equity Conversion Mortgage loans. The enhancements will allow mortgagees to respond more quickly, securely and accurately to FHA’s request for electronic case binders, while receiving updates on submission statuses.

In addition, all mortgagees may receive emails regarding case binder requests from FHA Connection (FHAC) to be uploaded to FHA Catalyst. To ensure receipt of these communications, mortgagees are encouraged to keep their email contact information current within the Lender Electronic Assessment Portal and FHAC as applicable.

FHFA: GSE Credit Risk Transfers Net Cost $15B from 2013-2021

The Federal Housing Finance Agency published a report on the performance of Fannie Mae’s and Freddie Mac’s single-family credit risk transfers. The report focuses on securities issuance and insurance/reinsurance credit risk sharing vehicles, which account for about 90 percent of all CRT issuance to date.

Between July 2013 and February 2021, $126 billion of risk in force, or the Enterprises’ maximum credit risk coverage, had been placed through securities issuance and insurance/reinsurance CRTs. As of February, $72 billion combined RIF at issuance remained in force on a reference pool of $1.7 trillion in unpaid principal balance.

Through February the Enterprises received $0.05 billion via investor write-downs and counterparty reimbursements and paid $15 billion in interest and premiums.

The report also noted CRTs remain untested by a serious loss event: “With the prospect of potential future losses at the onset of COVID-19, some investors suggested that their willingness to continue to invest in CRTs was contingent on the Enterprises’ amending or suspending certain contractual provisions of early fixed-severity securities issuances,” the report said.

The report can be accessed at

CFPB Takes Action Against Debt-Settlement Company for Charging Consumers Unlawful Fees

The Consumer Financial Protection Bureau (CFPB) requested a federal district court enter a final judgment and order that, if entered by the court, would require DMB Financial LLC to pay consumers at least $5.4 million for charging unlawful fees and failing to provide required disclosures to its customers, and a civil penalty. The CFPB alleges that DMB’s actions violated the Telemarketing Sales Rule and the Consumer Financial Protection Act.

DMB Financial is a Massachusetts-based debt-settlement company that operates in at least 24 states. In December 2020, the CFPB filed a lawsuit against DMB Financial in federal district court in Massachusetts alleging that the company had charged unlawful upfront frees before it performed its promised services, and before consumers began making payments under any debt settlement. 2/3 of Millennials Have New Homebuyer Regrets

Millennials in particular have the most regrets after buying a home, according to a new Bankrate survey. Buyer’s regrets are even more of a factor in the pandemic, with sight-unseen offers and contingencies waived to win the bid. The survey highlights some of the most common regrets new homeowners have and which demographic groups are most likely to have them.

That desperation to land a home leads some buyers to settle for properties that aren’t quite right for them. Homebuyer regrets broadly fell into two major categories: financial and physical. In general, the survey found that the older the buyer, the less likely they were to have misgivings about their purchase after the fact. In all, 64 percent of millennial homebuyers (ages 25-40) have some regrets about their purchase compared with just 33 percent of baby boomer buyers (ages 57-75).

By far the biggest regret among recent homebuyers was not being prepared for maintenance and other costs associated with homeownership. More than 20 percent of millennial homeowners said they felt the costs of homeownership were too high, and that number jumped to 26 percent among younger millennials, ages 25-31.

Millennials were also the most likely to say they didn’t get a good mortgage rate, or that they overpaid for property. For example, 12 percent of millennials said their rates were too high, and 13 percent said they agreed to a sale price that was more than it should have been.

Millennials again were the most likely to be unhappy with their new home’s physical characteristics. According to the survey, 15 percent of respondents from that generation said they disliked their new property’s location. Meanwhile, around 30 percent felt the home was not the right size.

QuoteWizard: 1 in 4 Americans Worried about Foreclosure/Eviction in Coming Months

QuoteWizard, Seattle, released a report on growing housing fears showing nearly 25% (1 in 4) of Americans are worried they will face foreclosure or eviction in the next two months.

“We have rising housing costs, prolonged unemployment and stagnant income and when you combine those three things people are really worried about not being able to afford to keep a roof over their heads,” said Nick VinZant, Sr. Research Analyst and Insurance Expert with QuoteWizard.

The survey said nearly 18% of renters and 7% of homeowners are worried they will soon lose their homes. Nearly 6% are behind on their mortgage payments. Rhode Island, Louisiana and Arkansas have the highest numbers of people facing foreclosure, while Maine, Arizona and Colorado have the highest numbers of people facing eviction.

MCT Launches BAM Marketplace, Open Mortgage Loan Exchange

Mortgage Capital Trading Inc., San Diego, launched BAM Marketplace. Originally launched to support existing MCT sellers during the 2020 pandemic liquidity crisis, BAM Marketplace now welcomes new buyers and sellers as an open loan exchange between unapproved counterparties.

Sellers benefit by reducing liquidity constraints, growing investor outlets, and increasing loan sale profitability. MCT clients have noted materially improved execution across all loan types. The average spread to cover bids on BAM Marketplace is thirty-two basis points, with that spread extending to forty-six basis points for government production and eighty-nine basis points for low-FICO government loans. Sellers are also finding new outlets for non-owner occupied and second home loans – a key focus area given the new agency limits on such production.

Buyers benefit through efficient access to a community of sellers and the ability to bid on loans offered by unapproved lenders. Agency-approved lenders can now find unique buying opportunities, even without the prior experience or cost calculations typically associated with launching a correspondent lending channel. MCT’s AutoBid bid tape pricing solution supports every BAM Marketplace buyer, allowing them to provide automated, algorithm-based live pricing that can be fine-tuned to each seller and loan characteristic.

Opus Capital Markets Consultants Now Wipro Opus Risk Solutions

 Following the transition to a new operating model, Opus Capital Markets Consultants LLC, Lincolnshire, Ill., has been fully integrated with Wipro Limited, a global information technology, consulting and business process services company and is now Wipro Opus Risk Solutions LLC.

The newly formed company will continue to provide risk management, capital markets and compliance services. Wipro purchased Opus in 2014, and connected Opus’ products, services and platforms to new markets, increased brand awareness and unlocked new business opportunities.