Industry Briefs Feb. 22, 2022: Constellation Mortgage Solutions Acquires ReverseVision

Constellation Mortgage Solutions Inc. Acquires ReverseVision

Constellation Mortgage Solutions Inc., Southfield, Mich., acquired ReverseVision Inc., San Diego, a provider of Home Equity Conversion Mortgage and private reverse mortgage sales origination software.

The acquisition includes ReverseVision’s core platform, ReverseVision Exchange; RVDOC Composer that provides customized and compliant reverse mortgage documents; and ReverseVision Sales Accelerator, which includes advanced loan modeling and comparison tools.

The acquisition marks CMS’s second in the mortgage space, following acquisition of LOS and LSS provider Mortgage Builder in 2019.

Terms of the deal were not disclosed.

New American Funding Signs 3-Year Renewal with BaseCap

BaseCap Analytics announced New American Funding signed a three-year renewal to continue using BaseCap Analytics’ Data Quality Manager, a life-of-loan platform used by financial institutions to catch, collaborate and correct loan defects.

In addition to continuing its use of BaseCap Analytics’ Data Quality Manager for Post Close QC, New American Funding is making plans to broaden its use within multiple departments.

Redfin: Vacation-Home Boom Continues Into 2022

Homebuyer demand for second homes rose by 87% from pre-pandemic levels in January, said Redfin, Seattle, marking the highest level in a year and just shy of the record 90% gain in September 2020.

Demand for second-home mortgages is outpacing demand for primary residences, which was up 42% from pre-pandemic levels in January. The report said home prices in seasonal towns–where second homes are often located–are up more than prices in non-seasonal towns. The typical home in a seasonal town sold for $501,000 in December–the most recent month for which data is available–a 20% year-over-year increase. That marks 18 straight months of double-digit price growth.

Fannie Mae: Economic Growth Expected to Slow as Fed Wrangles Inflation

Fannie Mae, Washington, D.C., said the combination of a less accommodative interest rate environment and an increasingly worker-scarce labor market led its ESR Group to downgrade its expectations for 2022 real GDP growth from 3.1 percent to 2.8 percent; however, its expectations for 2023 headline growth remained unchanged at 2.2 percent, a pace that approaches the long-run trend.

Fannie Mae said risks to the forecast include uncertainty over the future course of inflation, potential geopolitical developments in Eastern Europe, and currently unforeseen COVID-related disruptions to consumer behavior and the labor market.

In addition to a slowdown in economic activity, the ESR Group expects housing activity to moderate from 2021’s highs. Single-family home sales are expected to decline 2.4 percent in 2022 – a slightly steeper drop than the previously anticipated 1.2 percent dip – due to increasing affordability constraints associated with rising mortgage rates.

Fitch: U.S. RMBS Originators/Aggregators Eye More Activity in 2022

Fitch Ratings, New York, said while the overall level of expected residential mortgage-backed securities issuance activity for 2022 is somewhat uncertain, new and existing mortgage originators and aggregators are eying securitization opportunities.

Fitch said the market anticipates possible redirection of some of these loans into private-label securities. The market has also been more focused on non-QM from mortgage originators as rates have moved higher and GSE refinance opportunities are reduced; this may also result in additional RMBS securitization activity.

CFPB Launches New Way for Public to Petition Agency

The Consumer Financial Protection Bureau announced it has made it easier for the public to engage with the agency and request regulatory changes. Members of the public can submit petitions for rulemaking directly to the CFPB. The petitions will be posted on public dockets for review and comment.

The Bureau said these reforms will make it easier for individuals to directly submit a petition for rulemaking to the CFPB. Members of the public can request that the agency pursue a new rule, amend an existing one or repeal a rule. Former government employees and other individuals who are paid to influence the agency’s rulemaking agenda behind the scenes will be asked to submit their petition for public inspection instead.

Redfin: Real Estate Investors Buying a Record Share of U.S. Homes

Real estate investors bought a record 18.4% of the homes sold in the U.S. during the fourth quarter, according to a new report from Redfin, Seattle. That’s up from 12.6% a year earlier and a revised rate of 17.4% in the third quarter.

Although investor market share hit a record in the fourth quarter, the number of homes bought by investors declined 9.1% from the third-quarter peak–but it’s up significantly from pre-pandemic levels. Investors bought 80,293 homes in the fourth quarter, up 43.9% from a year earlier. The housing-supply crunch constrained home sales for all homebuyers, including investors. The drop from the third quarter is also due partly to seasonality.

The number of homes bought by investors jumped throughout 2021 as home prices rose rapidly–they were up 15% year over year in December–alongside a shortage of homes for sale. Investors are taking advantage of intense demand for rentals and increasing prices, with the average monthly rental payment for a new lease up 14% in December.

ATTOM: Housing Prices in Opportunity Zones Keep Up

ATTOM, Irvine, Calif., said median single-family home and condo prices rose from the third quarter to the fourth quarter in 56 percent of Opportunity Zones around the country and spiked by at least 20 percent annually in nearly half.

While the pace of increases slowed a bit in the fourth quarter, median values still went up in about half the zones by more than the 16.1 percent gain seen nationwide year over year.

Typical homes in Opportunity Zones did continue to cost just a fraction of those in most other neighborhoods around the nation in the fourth quarter. Median fourth-quarter prices sat below the national median of $315,648 in 76 percent of Opportunity Zones, about the same as in earlier periods last year.

Zillow: Dearth of Inventory, Price Hikes Challenge Home Shoppers

The Zillow Home Value Index rose by 1.5% from December to January to $325,677, up 19.9% from a year ago. The annual growth rate represents record high over the past 20 years, and the monthly pace continued to accelerate after reaching a low of 1.2% in November.

“Home buyers today are making bids and closing deals despite some of the most challenging conditions ever: record-few homes for sale to choose from, priced at double-digit gains from last year, financed at sharply rising mortgage rates,” said Jeff Tucker, senior economist at Zillow. “It remains to be seen how long buyers can weather this storm, and how long homeowners will watch values rise before deciding to list. Neither have blinked yet. Expect another sizzling hot spring shopping season.”

Home shoppers hoping for an injection of options and relief from heightened competition after December’s inventory drought instead saw the biggest decline in at least three years. Active inventory dropped 13% — the second straight double-digit monthly drop. Though inventory typically dips in the winter, active inventory is now 22% lower than a year ago, and 42.4% lower than January 2020.

The report also noted monthly rent growth slowed dramatically, falling from 0.9% in November and December to a nearly flat 0.1% in January, the lowest rate seen since October 2020. Year-over-year rent growth was 15.9%, slightly lower than a record-high 16% in December, making typical rent $1,856 per month.

Ginnie Mae Enhances Multifamily MBS ‘Green’ Disclosure

Ginnie Mae, Washington, D.C., added a “Green Status” field to its multifamily disclosure, giving investors information that supports their sustainable investing decisions and solutions.

Ginnie Mae’s combined Multifamily Pool and Loan Disclosure Files for both daily/monthly new issuance and monthly portfolio data will have a new Green Status field (field L43) added to the loan section of the disclosure record. This third Ginnie Mae ESG/Green disclosure enhancement in less than one year is aimed at providing investors better Environmental, Social, Governance information on which to base their portfolio decisions.

Freddie Mac Announces First Automated Assessment of Direct Deposit Income

Freddie Mac, McLean, Va., launched an automated capability that allows mortgage lenders to assess a prospective homebuyer’s income paid through direct deposit to reduce the paper documentation burden on borrowers so they can close loans faster and simplify the lending process.

This income assessment is available to mortgage lenders nationwide through Freddie Mac’s Loan Product Advisor asset and income modeler. AIM for income using direct deposits provides these cost-saving efficiencies, while continuing to meet Freddie Mac’s strong credit underwriting standards.

Out-of-Town Buyers Have Nearly 30% More to Spend on Homes Than Locals in Migration Hotspots

Redfin, Seattle, said the average out-of-towner moving to Nashville in 2021 had $736,900 to spend on a home, 28.5% higher than the $573,400 average budget for local buyers.

Next comes Philadelphia, with an average out-of-town budget of $559,200—28.4% higher than the average local budget. It’s followed by New York City, where the average out-of-towner had a 26.5% higher budget than the average local; and Atlanta, where migrants had a 26.1% bigger budget. Miami rounds out the top five, with an average out-of-town budget 25.1% higher than that of locals. Out-of-towners have higher budgets than locals in 42 of the 49 cities included in Redfin’s report.

Black Knight: Purchase, Cash-Out Rate Locks Up in January

Black Knight Inc., Jacksonville, Fla., said its monthly Originations Market Monitor report found overall rate locks up 9.5% from December, driven by 19.9% and 9.2% increases in purchase loan and cash-out locks, respectively.

Continuing a long-running trend, rate/term refinance lending activity fell for the fifth consecutive month. Rate/term locks dropped another 16.5% – to the lowest level since May 2019 – marking an 80% year-over-year decline. The refinance share of the month’s origination mix fell to 43%, the lowest percentage of the market since July 2019. Non-conforming loan products – primarily jumbo loans – continued to gain market share at the expense of agency volumes in the face of reaccelerating home price growth. All in, non-conforming loan products now account for 16% of the origination market, up from 9% this time last year.

Mr. Cooper, Sagent Partner on Cloud-Native Servicing Platform

Mr. Cooper Group Inc., Dallas, and Sagent M&C LLC, Boston, executed a definitive agreement under which Sagent will buy certain intellectual property rights related to Mr. Cooper’s proprietary, cloud-based technology platform for mortgage servicing, and Mr. Cooper will receive an equity stake in Sagent.

This agreement will leverage Mr. Cooper’s mortgage servicing depth and Sagent’s software innovation speed to create a cloud-native, homeowner-first servicing platform. Mr. Cooper will also become a multi-year customer of Sagent.

New Jersey Bankers Association Signs with Promontory MortgagePath

Promontory MortgagePath LLC, Danbury, Conn., said the New Jersey Bankers Association endorsed its mortgage fulfillment services and proprietary point-of-sale technology Borrower Wallet. 

As an endorsed service provider, NJBankers recognizes Promontory MortgagePath’s mortgage technology and end-to-end fulfillment services to help banks maintain profitability and enter or reenter the mortgage business. Promontory MortgagePath’s platforms reduce mortgage origination expenses and infrastructure while enabling community banks to retain a full product suite. Through this technology, community banks can shift from fixed mortgage-operation costs to a variable cost model, providing the ability to maintain staffing and reduce impact from market cyclicality.