Industry Briefs Nov. 1, 2021

CFPB, DOJ, OCC Take Action Against Trustmark National Bank for Redlining  

The Consumer Financial Protection Bureau and the Department of Justice, in cooperation with the Office of the Comptroller of the Currency, alleged Trustmark National Bank of Jackson, Miss., engaged in redlining against Black and Hispanic neighborhoods in Memphis, Tenn.

The CFPB and DOJ allege that Trustmark discriminated against Black and Hispanic neighborhoods by deliberately not marketing, offering, or originating home loans to consumers in majority-Black and Hispanic neighborhoods in the Memphis metropolitan area. The CFPB and DOJ also allege that Trustmark discouraged consumers residing in or seeking credit for properties located in these neighborhoods from applying for credit.

If entered by the court, the settlement would require Trustmark to put $3.85 million into a loan subsidy program for impacted neighborhoods, increase its lending presence there, and implement proper fair lending procedures. The order would also impose a $5 million civil money penalty against the bank, and will credit the $4 million penalty collected by the OCC toward the satisfaction of this amount.

First American Completed ServiceMac Acquisition

First American Financial Corp., Santa Ana, Calif., completed its acquisition of ServiceMac LLC, a mortgage subservicing company.

ServiceMac provides lenders, investors and other mortgage servicers with customized platforms that enhance security, customer satisfaction, retention capabilities and profitability. Founded in 2017, ServiceMac offers data-driven technology and delivers loan-level transparency to their accounts. 

Dennis J. Gilmore, CEO of First American Financial Corp., said the ServiceMac mortgage subservicing business complements First American’s existing capabilities and will enhance First American’s ability to provide lenders and servicers with mortgage, settlement, post-closing services and servicing-related products and platforms. ServiceMac will have enhanced access to First American’s property and homeownership data and mortgage products.

ServiceMac’s management team, including President and CEO Bob Caruso, will continue to lead the company, which will now operate as a wholly owned subsidiary of First American.

FHA Extends Feedback Period for Proposed 40-Year Loan Modification Policy; Amends Single-Family Handbook

The Federal Housing Administration announced a 15-day extension to the feedback period for the draft Mortgagee Letter that proposes future addition of a 40-year loan modification combined with a partial claim. The draft ML was posted for public feedback on the Single-Family Housing Drafting Table (Drafting Table) as announced in FHA INFO #21-79 on September 27.

FHA also published updates to the Single Family Housing Policy Handbook 4000.1. The updates include enhancements and revisions to existing guidance as well as various other technical edits.

This update contains revisions and additions to Handbook 4000.1 Sections I, II, III, and IV, Appendix 7.0, and the Claim Filing Technical Guide. Handbook 4000.1 updates are effective as follows:

•           The Handbook 4000.1 Transmittal reflects the incorporation of certain Mortgagee Letter (ML) guidance, which is effective as previously announced in the corresponding ML.

•           Changes identified in Section II.A of Handbook 4000.1 may be implemented immediately but must be implemented for mortgages with case numbers assigned on or after January 24, 2022.

•           All other changes may be implemented immediately but must be implemented no later than January 24, 2022.

First American: Rising Rates Expected to Dull Housing Power

First American Financial Corp., Santa Ana, Calif., said year-over-year nominal house price appreciation reached 20.7 percent, the third consecutive month it has set a new record.

The company’s monthly Real House Price Index noted, however, affordability declined 16.6 percent. The growth in nominal house prices vastly outpaced the 3.5 percent increase in house-buying power compared with a year ago, yet real, house-buying power-adjusted house prices remain 37.5 percent below their 2006 housing boom peak. 

The report said real house prices increased 1.2 percent between July and August and by 16.6 percent year over year. Consumer house-buying power, how much one can buy based on changes in income and interest rates, increased by 0.5 percent between July and August and increased 3.5 percent year over year. Real house prices are 10.9 percent less expensive than in January 2000.

States with the greatest year-over-year increase in the Index are Arizona (+27.8 percent), Nevada (+20.6 percent), Florida (+20.5), Connecticut (+20.1) and Vermont (+19.8 percent). Metro markets with the greatest year-over-year increase were Phoenix (+29.7 percent), Jacksonville, Fla. (+25.1 percent), Tampa, Fla. (+24.9 percent), Charlotte, N.C. (+24.1) and Las Vegas (+21.4 percent).

•           Among the Core Based Statistical Areas (CBSAs) tracked by First American, there were no markets with a year-over-year decrease in the RHPI.

Mortgage Coach Hosts Free Student Loan Borrowers into Homeowners Webinar Nov. 3

Mortgage Coach and LoanSense will hold a free Webinar, How to Turn Student Loan Borrowers into Homebuyers and Increase Purchasing Power, on Wednesday, Nov. 3 at 11:00 a.m. PT (2:00 p.m. ET).

The Webinar will be hosted by Joe Puthur, President of Mortgage Coach; and Catalina Kaiyoorawongs, CEO of LoanSense. The webinar will help lenders improve home financing outcomes for the 42 million+ Americans with federal student loan debt.

Registration is available here.

Urban Institute: Older Americans Face Retirement Quandary

Older homeowners don’t have enough money saved for retirement, but home equity accounts for a disproportionate share of their total net worth, according to a new report from the Urban Institute. However, tapping home equity to improve retirement security is highly uncommon.

The report by Urban Institute’s Karan Kaul and Linna Zhu examines mortgage denial rates for older Americans. Older applicants experience much higher denial rates for forward equity extraction products such as cash-out refinances and home equity lines of credit than they do for reverse mortgages. This is mostly because of debt-to-income ratio, which skews higher for older homeowners.

The debt load carried by older homeowners has increased substantially over the past 20 years, driven mainly by primary mortgage debt. As limited retirement incomes and savings fail to keep up with rising debt levels, older homeowners will likely struggle to qualify for forward mortgages. This finding strongly suggests the need for equity extraction products whose underwriting is less dependent on incomes and debt, and more dependent on the value of home equity and household net worth as a way to improve retirement security for older Americans.

The report can be accessed at

Covius Completes Acquisition of NTC

Covius Holdings Inc., Denver, a provider of technology-enabled platforms to the financial services industry, completed acquisition of Palm Harbor, Fla.-based NTC.

NTC will continue to operate under its current brand as a Covius Solution at its Palm Harbor operations center. Evercore acted as Covius’ financial advisor and Willkie Farr & Gallagher as legal advisor in connection with the transaction. Carr, Riggs & Ingram acted as advisor to NTC.

Redfin Launches New Feature for Homebuyers to House Hunt Together While on a FaceTime Call

Redfin, Seattle, said homebuyers using the Redfin app can now house-hunt with their friends, family or real estate agent while using FaceTime.

This comes as Redfin adds support for SharePlay, a set of features that make it possible for iPhone and iPad users to share experiences completely in sync while on a FaceTime call. The new experience is available through the Redfin app on iPhone and iPad devices running iOS 15.1 and iPadOS 15.1 or later.

Mortgage Coach, HomeBinder Announce Partnership

Mortgage Coach, Irvine, Calif., a platform enabling lenders to create digital and accurate home loan options for consumers, integrated with HomeBinder, a centralized home management platform that keeps homeowners connected with mortgage lenders, realtors and other authorized professionals.

Powered by Mortgage Coach’s Total Cost Analysis presentations, the integration enables homeowners to compare refinance and home equity scenarios directly from the HomeBinder home management portal.

Marcus & Millichap Capital Corp. Enters Alliance with M&T Realty Capital Corp.

Marcus & Millichap, Calabasas, Calif., announced its financing subsidiary, Marcus & Millichap Capital Corp., entered into an alliance with M&T Realty Capital Corp., enabling MMCC to provide clients with access to M&T Realty Capital’s affordable and conventional multifamily agency financing through a highly streamlined process with dedicated resources.

As part of MMCC’s ongoing expansion, the alliance includes a preferred stock investment in M&T Realty Capital and the ability for MMCC to indemnify M&T Realty Capital for 50% of the credit risk losses for certain loans originated by MMCC through M&T Realty Capital’s Fannie Mae DUS platform. The alliance will enable MMCC originators to access M&T Realty Capital’s streamlined underwriting and transaction execution.

Redfin: Home Sales Speed Up, Atypical For This Time of Year

Redfin, Seattle, said one-third of homes that sold in the past four weeks went under contract within seven days of hitting the market. This rate has been on the rise for the past six weeks, during a time of year when the market typically slows down.

Redfin Chief Economist Daryl Fairweather said it’s likely that the market is speeding up now because homebuyer demand is holding steady and strong; home tours are up twice as much from January as they were at this time in 2019. Yet homes for sale remain few and far between.

The report said the median home-sale price increased 13% year over year to $358,125. This was up 30% from the same period in 2019. Asking prices of newly listed homes were up 11% from the same time a year ago and up 26% from 2019 to a median of $362,335, down 1% from the record high set during the four-week period ending October 3. Asking prices typically increase in September and then begin to decline in October through the end of the year.

Black Knight: Forbearances Fall by Another 19,000

Black Knight, Jacksonville, said its McDash Flash daily loan-level forbearance data showed a 19,000 total decline across all investor classes. The week’s strongest declines were seen among GSE and FHA/VA plans, which marked 7,900 (-2.1%) and 7,700 (-1.6%) declines, respectively. Plans among loans held in bank portfolios or private label securities were down 3,300 (-0.8%).

Black Knight said as of October 26, 1.22 million mortgage holders remain in COVID-19 related forbearance plans, representing 2.3% of all active mortgages, including 1.3% of GSE, 3.8% of FHA/VA and 3.0% of portfolio held and privately securitized loans.

New American Funding, CBC Mortgage Agency Partner

New American Funding, Tustin, Calif., announced a partnership with CBC Mortgage Agency to expand offering of its Chenoa Fund Down Payment Assistance program to affordable home buyers.

The program rollout focuses on offering New American Funding’s loan origination services to the numerous non-profit affordable homebuilders, veterans’ organizations and other community housing development organizations throughout the country.