Industry Briefs Feb. 17, 2023: Homes Bought with Cash Down from November Peak

Redfin: Share of Homes Bought With Cash Ticks Down From November Peak

Redfin, Seattle, said roughly one-third (31.2%) of U.S. home purchases were paid for with all cash in December, up from 28.8% a year earlier but down from the eight-year high of 31.9% hit in November.

The report said the share of homes bought with cash remains elevated above pre-pandemic levels because mortgage rates are high, averaging 6.36% in December. Nearly one in six (15.6%) mortgaged home sales nationwide used an FHA loan in December, up from 12.5% a year earlier and the highest share since May 2020. VA loans have also become more common, with 7.1% of homebuyers who took out a mortgage using one in December. That’s up from 6.2% a year earlier and the highest share since July 2020.

“Buyers are successfully using FHA loans more often now because sellers are eager to jump on any offer they get when their home sits on the market and gets just one or two showings a week,” said Redfin Senior Economist Sheharyar Bokhari. “That means buyers with less money in the bank are finally able to win homes. But it’s not all good news for FHA buyers: Their loans are getting accepted because the market is slow, and the market is slow because high rates and prices make it unaffordable for a lot of people.”

ATTOM: Home Prices in Opportunity Zones Fall in 4Q

ATTOM, Irvine, Calif., said median single-family home and condo prices decreased from the third quarter to the fourth quarter in 56 percent of Opportunity Zones around the country and went down by at least 5 percent in nearly half. Those declines closely paralleled drops in neighborhoods outside the zones as prices fell across the broader U.S. housing market during the second half of 2022 following a decade of almost continuous growth.

However, the report said some signs emerged during the fourth quarter revealing that Opportunity Zone markets were withstanding the national market retreat better than other neighborhoods, just as they outperformed nationwide increases by some measures during the boom period. For example, larger portions of Opportunity Zones saw typical values rise by at least 10 percent both quarterly and annually compared to the rest of the nation during the last few months of 2022.

“Home values inside Opportunity Zones are falling. But, on balance, they aren’t dropping any faster than in more well-off neighborhoods around the country,” said Rob Barber, CEO of ATTOM. “By a couple of metrics, they are even doing a little better. That speaks to the continued strength of Opportunity Zone housing markets and their potential allure for investors who still want to take advantage of the program’s tax breaks even in the current uncertain economic environment.”

TrustEngine Launches Borrower Intelligence Platform

Sales Boomerang, Owings Mill, Md., and Mortgage Coach, Irvine, Calif., announced their union under the new name TrustEngine, an identity that embodies the merged organization’s vision to help lenders drive value as clients’ trusted financial advisors.

The new name takes effect immediately and coincides with the beta release of the TrustEngine Borrower Intelligence Platform, a platform that wraps around the entire mortgage tech stack to drive volume by identifying loan opportunities and engagement strategies tailored to each borrower’s needs.

Compatible with every lender tech stack, TrustEngine magnifies the value of existing loan origination systems, customer relationship management platforms and marketing automation tools. Moreover, the TrustEngine Borrower Intelligence Platform automatically measures conversion at the branch and individual level across various loan types and borrower outreach strategies, driving continuous process improvement over the life of the platform. Learn how the TrustEngine Borrower Intelligence Platform can transform your business.

Barr Group Mortgage Closes First eNote Transaction through Click n’ Close’s Note Program

Click n’ Close, Addison, Texas, announced that Alabama-based mortgage banker Barr Group Mortgage completed the first eNote transaction through Click n’ Close’s non-delegated correspondent eNote program. Entities participating in the transaction include the registration of the eNote on the MERS eRegistry (the mortgage industry’s approved eNote system of record), Ameris Bank as Barr Group Mortgage’s warehouse lender and DocMagic as the eClosing and eVault tech provider.

Through the eNote program, non-delegated correspondents can decrease turn times on their warehouse line to 48 hours or less, ultimately saving them money in the form of reduced interest charges and enabling them to turn over their warehouse lines more frequently. Click n’ Close has established partnerships with multiple warehouse lenders, such as Ameris Bank, to expand warehouse line access to qualified program participants previously financially ineligible for these lines of credit. The approval process for program participants captures most of the relevant financial statements and insurance exhibits requisite to the warehouse approval process, thus materially accelerating the warehouse approval timeline.

MAXEX: Prime Jumbo Securitizations Rebound

MAXEX, Atlanta, released its monthly Market Report, showing prime jumbo securitizations returned to the market in January. Three prime jumbo RMBS deals priced in January for a total volume of $1.15 billion. These were the first prime jumbo securitizations since October 2022 and the first multi-issuance month since June 2022.

The report also noted mortgage rates trended lower across the board in January which helped spur mortgage application activity. Jumbo (securitization) rates were 7.00% on average for the month, creeping into the 6s in late January. Jan. 31’s 6.91% GWAC was more than 40-basis points lower than the end of October 2022 and close to 10-basis points lower than the end of December.

CNA Equity Group Invests in Referral Accelerating Technology With Adwerx

CNA Equity Group automated its personalized, hyperlocal digital advertising through its collaboration with Adwerx.

As part of the program, CNA Equity Group is leveraging Adwerx-enabled retargeting campaigns. Unlike retargeting campaigns from other companies, the Adwerx service is individualized to the loan officer while also being fully automated so they don’t have to do anything for the ad to run.

The ads target potential home buyers and real estate agents, and appear across the social media platforms and premium websites visited by potential clients. They feature the photo, name and contact information of the nearby loan officer whose website they visited. Retargeting campaigns inspire a sense of confidence and familiarity at a local level, and the digital brand ads allow loan officers to reach home buyers directly, while staying top-of-mind with their referral networks.

Newfi Lending Partners with Tavant

Tavant, Santa Clara, Calif., and Newfi Lending, a technology-focused multi-channel mortgage lender, integrated Newfi’s digital mortgage experience with Tavant’s Touchless Lending Document Analysis. This partnership marks Tavant’s official expansion into Non-QM Lending and a significant step in the evolution of Newfi’s business and advancement in the mortgage industry.

Tavant’s partnership with Newfi to integrate Touchless Documents into its digital mortgage experience will feature machine-oriented classification, as well as handle Exception Processing for documents with low confidence rates, allowing for fully end-to-end document processing. Furthermore, documents processed through are sourced from Newfi’s Broker Portal (BLU), which is also integrated with Touchless Lending, specifically the platform’s Origination Experience designed for brokers and TPO partners.

Mesa West Capital Raises $1.37 Billion for Fifth Value-Add Debt Fund

Mesa West Capital, Los Angeles, the private U.S. real estate credit arm of Morgan Stanley Investment Management, announced it raised $1.37 billion for Mesa West Real Estate Income Fund V L.P.

Fund V is the latest and largest in Mesa West’s closed-end value-add series, which was established in 2005, and is the first successor vehicle raised by Mesa West since joining Morgan Stanley Investment Management.  Surpassing the $900 million in commitments raised for Mesa West Real Estate Income Fund IV L.P., Fund V’s investors include a group of domestic and international public and private pension funds, insurance companies and individual investors.  

Fund V has been established to originate, purchase and manage loans secured by value-add/transitional commercial real estate assets throughout the United States, which has seen increased demand due to regulatory changes resulting from the Global Financial Crisis and the current volatility and dislocation in the capital and property markets.  The Fund intends to create a diversified portfolio of investments designed to produce current income and attractive risk-adjusted returns.  

Black Knight: Rate Locks Rise in January on Rate Relief, Seasonal Tailwinds, Breaking 9-Month Decline

Black Knight, Jacksonville, Fla., issued its monthly Mortgage Monitor Report, showing rate lock volumes rose 32% in January, driven by declining rates and seasonal tailwinds, snapping a nine-month streak of declines.

The report said purchase (+32%) as well as both rate/term (+37%) and cash-out (+25%) refinance volumes increased proportionally, with refinance locks making up 15% of the month’s overall activity. Despite the improvement, rate and affordability pressures continue to challenge purchase lending, with the dollar volume of such locks down 44% year over year and 14% below January 2020 levels. 

“Mortgage rates declined in January, continuing a trend that began in early November 2022,” said Kevin McMahon, president of Optimal Blue, a division of Black Knight. “Conforming rates dropped 36 basis points from where they were at the start of the year, and we saw that rates associated with those FHA/VA/jumbo locks all came down in kind. Triggered by this pullback, rate lock volumes rose for the first time since March 2022, driven by declining interest rates and seasonal tailwinds, snapping a nine-month streak of declines.”

Ginnie Mae Makes Changes to Reverse Mortgage Securitization Program

Ginnie Mae issued an All-Participants Memorandum APM 23-04, which reduces the required minimum size for all Home Equity Conversion Mortgage-Backed Securities pool types from $1,000,000 to $250,000.

Ginnie Mae said the rapid rise of interest rates and the current economic climate is creating liquidity pressure for HMBS Issuers obligated to fund borrower draws and make timely payments to HMBS investors under Ginnie Mae’s Guaranty Agreement. Ginnie Mae is reducing the minimum HMBS pool size to relieve this pressure and decrease the amount of time Issuers must carry balances between the HECM loan origination disbursement and HMBS securitization.

In conjunction with the APM, Ginnie Mae is revising its MBS Guide, Chapter 35, Part 7 §D to incorporate the reduction in minimum pool size. These changes are applicable for April 1, 2023 issuances and thereafter. Each pool must still contain a minimum of three (3) participations, each of which is related to a distinct HECM loan in accordance with Ginnie Mae MBS Guide, Chapter 35, Part 7 §E. Additionally, all HMBS pool types are eligible for Ginnie Mae’s Platinum Certificate program which allows aggregation of small pools.