Industry Briefs Apr. 19, 2022: Wells Fargo Expands Efforts to Advance Racial Equity in Homeownership

Wells Fargo Expands Efforts to Advance Racial Equity in Homeownership

Wells Fargo, San Francisco, announced an initiative to help advance racial equity in homeownership. The company will develop a Special Purpose Credit Program to help minority homeowners, whose mortgages are currently serviced by Wells Fargo, refinance those mortgages. Initially, through the program, Wells Fargo will identify eligible Black homeowners who could benefit from a refinance product.

Wells Fargo said it will commit $150 million to lower mortgage rates and reduce refinancing costs to help these homeowners further benefit from refinancing. It will also expand its partnerships with the National Urban League and UnidosUS to broaden community outreach efforts for this and other programs, provide homebuying readiness and counseling, and work to eliminate systemic obstacles that prevent many Black and Hispanic customers from achieving their homeownership goals.

Additionally, through the Wells Fargo Foundation, the company will commit $60 million in “Wealth Opportunities Restored through Homeownership” grants projected to support 40,000 homeowners of color in eight markets that have significant homeownership gaps between white and minority families. WORTH grants will run through 2025 and will fund public-private partnerships that develop and implement plans to address the root causes of those homeownership gaps.

LoanLogics Launches LoanBeam Wage Income Calculation Tool

LoanLogics, Jacksonville, Fla., launched LoanBeam Wage, an automated tool that enables lenders to calculate wage earner borrower income quickly and accurately, from paystubs and W2s.

LoanBeam Wage combines machine learning with layered optical character recognition technologies to automatically extract and interpret the variety of income data contained in a borrower’s unstructured paystub and W2 income documents, with no human involvement. In minutes, sales teams can see a single, summarized view of a borrower’s income that separates data into fixed and variable income streams. Underwriters can also review the borrower’s source income documents at any time and calculate any adjustments to a borrower’s income with an audit trail of all changes.

Redfin: Pandemic-Driven Second-Home Boom Coming to an End

Redfin, Seattle, said demand for vacation homes dropped sharply for the second month in a row in March, with mortgage-rate locks for second homes at their lowest level since May 2020.

The report said demand for vacation homes was still up 13% from pre-pandemic levels, but it’s declining after a pandemic-fueled second-home boom last year. Still, Redfin expects demand for second homes to remain above pre-pandemic levels in the future, as remote work is here to stay for many Americans. The slowdown in demand for vacation homes joins other early signals that the historically fast rise in mortgage rates and record-high home prices are pricing out some buyers.

“The pandemic-driven surge in sales of vacation homes is coming to an end as mortgage rates rise at their fastest pace in history, causing some second-home buyers to back off,” said Redfin Deputy Chief Economist Taylor Marr. “When rates and prices shoot up so much that a vacation home starts to look more like a burden than a good investment and a fun place to bring your family on the weekends, a lot of prospective buyers have second thoughts. The new second-home loan fees that kicked in on April 1 were also a deterrent. Plus, some buyers’ down payments—and their nerves—probably took a hit when the stock market dipped over the last few months.”

Staircase Launches Cloud-Based ‘Data Lake’

Staircase, Philadelphia, launched Staircase Persistence, a fully managed, cloud-based data lake and immutable ledger that leverages AWS Blockchain technology to help lenders store and manage mortgage data.

When combined with other Staircase products, Staircase Persistence allows lenders and their partners to share verified, high-confidence data while enabling faster automated workflows. Available through a single REST API, Staircase Persistence maintains a client’s mortgage data in its native format and delivers results in simple, easy-to-use structures. Staircase Persistence helps companies manage the complexity of data points used by their different partners by grouping data into sets, such as transactions, collections, blobs and client accounts. Data stored through Staircase Persistence can later be used for machine learning-trained data extraction and other mortgage processes, as well as translating data into different languages.  

Black Knight: Rate Locks Up 19% in March Despite 70 Basis Point Rate Jump

Black Knight Inc., Jacksonville, Fla., release its monthly Originations Market Monitor report, showing overall rate locks up 19.1% from February, driven by a 31.5% surge in purchase lending activity.

The report said while cash-out refinance locks remained relatively flat (+1.6%), rate/term refinance activity continued to slide, with March marking the sixth consecutive monthly decline. The continued decline in rate/term refinance locks pushed the refi share of the market down to just 28%, the lowest point since November 2018. Non-conforming loan products continued to gain market share at the expense of agency volumes as the pace of home price growth has reached new record highs. Pull-through rates – the share of locks that result in funded loans – fell on both purchase and refinance locks, with refi pull-through falling to just 65.7%.

“Mortgage interest rates spiked in March, with 30-year offerings climbing 70 basis points over the course of the month,” said Scott Happ, president, Optimal Blue, a division of Black Knight. “As home prices continue to climb – even in the face of sharply rising interest rates – we’ve seen the average loan amount rise as well.”

Marcus & Millichap Hires Auction Brokers to Lead Property Auction Services

Marcus & Millichap, Calabasas, Calif., announced Adam Sklaver and Phil Kates joined the firm as senior vice presidents specializing in property auction services. Sklaver and Kates will be responsible for commercial real estate auction sales. Sklaver and Kates most recently ran CBRE’s auction team.

Sklaver and Kates have 19 years of combined CRE auction experience and have assisted institutional and private clients in the sale of over 600 CRE properties spanning all asset classes via online auctions. Their 95% trade rate is among the highest in the CRE auction industry.

Redfin: Share of Sellers Dropping Asking Price Climbing Past Last Year’s Rate

Redfin, Seattle, said a fast-growing share of home-sellers are dropping their prices, another sign that the early 2022 housing frenzy is starting to ease as mortgage rates approach 5%.

The report said 12 percent of homes for sale had a price drop during the four weeks ending April 3, up from 9% a year earlier and the highest share since early December. The rate of sellers dropping their prices is growing faster month over month than it has since August.

“Price drops are still rare, but the fact that they are becoming more frequent is one clear sign that the housing market is cooling,” said Redfin Chief Economist Daryl Fairweather. “It goes to show that there’s a limit to sellers’ power. There is still way more demand than supply, and buyers are still sweating, but sellers can no longer overprice their home and still expect buyers to clamor at their door. That’s because higher mortgage rates are eating into homebuyers’ budgets.”

Paradatec Enhances Automated Document Processing Technology

Paradatec Inc., Cincinnati, released Version 8.0 of its enterprise software, which delivers touchless document classification and expanded data extraction audit trails for enhanced process automation.

Version 8.0 includes multiple enhancements, such as weighted averaging of different document characteristics within Paradatec’s recognition engine. The engine classifies documents based on machine learning-enabled rules trained on an extensive library of document types used across the real estate and loan lifecycle.

Chase Doubles Closing Guarantee To $5,000 For Homebuyers

Chase, New York, doubled its Closing Guarantee from $2,500 to $5,000. The program—initially launched in 2019—commits to on-time closing in as little as three weeks or customers get $5,000.

Chase’s Closing Guarantee is available to any customer who has a Chase checking account, credit card or car loan and is purchasing a home with a Chase mortgage. Customers must submit any financial documentation that Chase doesn’t already have plus a purchase agreement. Then, Chase will close the loan on or before the contract closing date or pay the buyer $5,000.

Scroll Finance Launches Greenfield U.K. Mortgage Offering on Mambu

Scroll Finance, London, launched its home equity loan and home equity line of credit products, powered by Mambu’s cloud banking platform.

Scroll enables UK homeowners to unlock equity in their homes for use cases, including home improvement, “green” upgrades, buying a holiday home, debt consolidation and deposit for property purchases. Customers can borrow between £25,000 and £1 million at competitive rates, up to an 80% loan to value ratio, and Scroll has already completed its first loan.

Insurance Office of America Launches SimplyIOA

Insurance Office of America, Lake Mary, Fla., launched SimplyIOA, an insurtech company with the nation’s first fully integrated digital platform for comparing, quoting and purchasing homeowners insurance completely online in three minutes or less.

SimplyIOA is designed for integration into point of sale systems, loan origination servicing and self-servicing platforms to ensure today’s borrower receives the maximum coverage for the lowest premium. The patent-pending technology is powered by data science and machine learning along with integration into multiple data verification sites to create a best-in-class customer experience.

Roostify Releases Analysis Assistant

Roostify, San Francisco, released Analysis Assistant, a new automated income, asset and credit analysis capability, to its Roostify Beyond offering.

Analysis Assistant uses data from documents uploaded by borrowers during the application process and loan application data to analyze a borrower’s assets and income. It reduces loan origination costs for lenders and shortens time to close for borrowers.

NTERSOL Launches Suite of Accelerators

NTERSOL, Irvine, Calif., launched a suite of custom accelerators designed to help lenders make progress on their digital transformation plans.

The accelerators contain 80 percent of a platform’s codebase, with the remainder custom-built to meet a lender’s unique needs in key areas of the lending process.

OptiFunder Expands Purchase Advice Connect

OptiFunder, St. Louis, enhanced Purchase Advice Connect, using automation technology to retrieve Purchase Advices from any investor. Purchase Advice Connect retrieves, reads, reconciles and uploads data from investors’ Purchase Advice documents to the originator’s Loan Origination System (LOS), eliminating manual processing time for Originators while reducing dwell time for loans on warehouse facilities.

OptiFunder WMS is a single platform that combines OptiFunder Select, a decision engine which uses proprietary optimization algorithms and AI/ML technology to allocate loans to warehouse facilities to achieve strategic objectives such as lowest cost of capital or specific funding targets, and OptiFunder Connect, which automates funding request and loan sale tasks—all made possible through secure partner integrations. 

Ginnie Mae Reports $51 Billion in March Issuance

Ginnie Mae-guaranteed mortgage-backed securities financed more than 189,000 homes and apartment units in March, with the month’s issuance volume reaching $51.18 billion.

The March issuance includes $48.71 billion of Ginnie Mae II MBS and $2.47 billion of Ginnie Mae I MBS, which includes $2.31 billion of loans for multifamily housing. As of March 31, Ginnie Mae’s total outstanding principal balance rose to $2.186 trillion, up from $2.175 trillion in February and $2.095 trillion in March 2021.

CFPB Charges TransUnion, and Senior Executive with Violating Law Enforcement Order

The Consumer Financial Protection Bureau filed a lawsuit against TransUnion, two of its subsidiaries and longtime executive John Danaher for violating a 2017 law enforcement order.

The order was issued to stop the company from engaging in deceptive marketing, regarding its credit scores and other credit-related products. The CFPB alleged after the order went into effect, TransUnion continued its unlawful behavior, disregarded the order’s requirements and continued employing deceitful digital dark patterns to profit from customers. The Bureau’s complaint also alleges that TransUnion violated additional consumer financial protection laws.

The CFPB also alleged John T. Danaher, a former top executive of TransUnion Interactive, repeatedly failed to ensure that TransUnion took certain required steps and refrained from prohibited conduct. It said Danaher determined that complying with the order would reduce the company’s revenue, so he created a plan to delay or avoid having to implement the order.

Biz2Credit Finds Approval Rates Rise Again at Banks, Some Non-Bank Lenders

Biz2Credit, New Yori, said small business loan approval percentages at big banks ($10m + in assets) rose from 14.7% in February to 14.9% in March, and small banks’ approvals also increased from 20.5% in February to 20.6%.

The Biz2Credit Small Business Lending Index said among several categories of non-bank lenders, approval percentages also climbed. Institutional lenders approved 25.3% of funding requests in March, up one-tenth of a percent from 25.2% in February. Alternative lenders’ approval rates rose from 26.5% in February to 26.6% in March. However, Credit unions fell one-tenth of a percent to 20.6% in March after being stagnant for two months.

“When the COVID-19 pandemic began in March 2020, loan approval percentages were almost double what they are today for banks and non-bank lenders,” said Biz2Credit CEO Rohit Arora. “Two years later, small business lending still has not fully rebounded. This is disappointing news for companies looking to grow their businesses.”

Fannie Mae Launches National Home Price Index

Fannie Mae, Washington, D.C., published the Fannie Mae Home Price Index, a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States, excluding condos.

The FNM-HPI accelerated in Q1 2022 to its fastest annual pace in the 47-year history of the index, measuring 20.0 percent year over year, non-seasonally adjusted, up from the 19.1 percent annual rate recorded in Q4 2021. On a quarterly basis, home prices rose a seasonally adjusted 4.8 percent in Q1 2022.

“Recent homebuying demand was augmented by many homebuyers pulling forward their home purchase plans in anticipation of rising mortgage rates,” said Fannie Mae Chief Economist Doug Duncan. “Now, with rates having sharply risen since the start of the year – and some of that homebuying demand now met – we expect price growth to begin cooling as the year progresses.”

Redfin: Home Sales Fell 4% in March Amid Rising Buying Costs

Redfin, Seattle, reported the hottest March ever for the housing market, with homes selling at their fastest pace and for more above list price than any other March on record. The median home-sale price rose 6.2% in March, the fastest month-over-month gain at this time of year since 2013, to a record-high $412,700.

“Although pricey coastal markets began showing early signs of a slowdown in late March, nationwide sales data for the full month reflects the hottest March market on record, since homes that sold last month mostly went under contract in February,” said Redfin chief economist Daryl Fairweather. “We expect the combination of surging mortgage rates and record-high home prices to cause more homebuyers to drop out of the market. Unfortunately, homeowners are turning their back on the market too. Instead of being motivated to list before prices weaken, potential home sellers may be choosing to wait-out the impending market cooldown.”

Median sale prices increased from a year earlier in all of the 88 largest metro areas Redfin tracks. The largest price increases were in Tampa (+29%), Phoenix (+27%) and McAllen, Texas (+27%).

HUD Releases Equity Action Plan

HUD on Apr. 14 released its first-ever Equity Action Plan in coordination with the Biden-Harris Administration’s whole-of-government equity agenda.

The decision to focus on homeownership reflected several priorities, such as the need to address a history of racial discrimination in federal programs – as reflected in the President’s Memorandum on Redressing Our Nation’s and the Federal Government’s History of Discriminatory Housing Practices and Policies –; the Federal Housing Administration’s role in supporting homeownership for first-time buyers; and the importance of homeownership for wealth building amongst all communities.

The Department is also focusing on advancing equity in its delivery of homelessness assistance programs. The Plan emphasizes how homelessness is experienced in cities, suburbs, rural areas, and tribal lands; across races and ethnicities; by individuals and families; young and old; male, female, transgender, and gender non-conforming. Even within homeless populations, some groups are less likely to have safe access to homeless shelters, and some are likely to experience homelessness for more extended periods.