Industry Briefs Feb. 1, 2023: Revolution Mortgage Partners with Silverwork Solutions

Revolution Mortgage Partners with Silverwork Solutions

Silverwork Solutions, Chicago, a developer of digital workforce BOTs, announced a partnership with Revolution Mortgage, Columbus, Ohio. The Silverwork suite of software robots will be used across production operations at Revolution Mortgage to enable a low-cost loan manufacturing process.

Silverwork’s Digital Workforce Solution combines industry knowledge and automation to reduce operating costs. It delivers operational cost reductions through execution of advanced intelligent automation and machine learning. The BOTs take on human mortgage personas that are intuitive and immediately fit in with current staff, reducing the time to deploy. The Digital Workforce BOTs can quickly be trained and deployed, adding digital labor to the mix enabling news ways to adjust and balance human capital and provide a new level of efficiency. With these advanced BOTs, lenders are seeing improvements in labor reduction, loan quality, compliance, tolerance cures, and processing speed delivered in a controlled digital environment.

TransUnion Study Finds New-to-Credit Consumers Similar, if Not Better, Risks Than Established Credit Users

TransUnion, Chicago, said new-to-credit consumers – those early in their credit journeys – generally perform as well or better than borrowers with established credit and similar risk scores, according to its global study, “Empowering Credit Inclusion: A Deeper Perspective on New-to-Credit Consumers.”

The study included data and insights about millions of consumers in varied global markets, including the United States, Brazil, Canada, Colombia, Dominican Republic, Hong Kong, India, Philippines and South Africa.

In the United States, 5.8 million consumers opened their first credit product and became new-to-credit (NTC) during 2021. And another 3.0 million became NTC through the first half of 2022. In 2021, Gen Z made up the largest part of this group with 59%, followed by Millennials (21%), Gen X (12%) and Baby Boomers (7%). One of the main takeaways from the study: NTC consumers around the globe are generally good risks when compared to other established borrowers with similar credit risk profiles. As well, credit cards are generally the first credit product opened by most NTC borrowers in the U.S. as well as many of the other regions studied.

MMI Receives Growth Investment from WestView Capital Partners

Mobility Market Intelligence, Salt Lake City, Utah, a provider of data intelligence and market insight tools for the mortgage and real estate industries, announced it received a growth investment from WestView Capital Partners, a Boston-based private equity firm focused exclusively on middle market growth companies.

The MMI platform combines accurate and real-time data with broad nationwide geographic coverage and an intelligent, user-friendly interface, allowing its users to access relevant information and draw actionable insights. MMI is used by mortgage lenders, loan originators and other real estate professionals to foster and manage referral relationships, facilitate informed recruiting decisions and aid in their outbound sales efforts.

WestView was represented by Latham & Watkins LLP with debt financing provided by Abacus Finance. MMI was represented by Horizon Partners and Buchalter PC.

Fannie Mae: Housing Sector Awaits Improvement in Affordability; Modest Recession Still Expected

Fannie Mae, Washington, D.C., said despite ending the year on a stronger-than-anticipated footing, the economy is still expected to slip into a modest recession beginning in the first half of 2023. The company’s ESR Group predicts Q4/Q4 GDP growth for 2023 to be negative 0.6 percent, one-tenth lower than its previous forecast. It expects the Federal Reserve is likely nearing its eventual terminal rate but notes that upside risk remains for tighter-for-longer monetary policy should a recession be delayed or avoided altogether, or, alternatively, if inflation measures fail to further cool.

Further, the ESR Group expects a cumulative 6.7 percent home price decline over the next two years as housing affordability remains unsustainably stretched. “There are economic signals pointing to recession but also signs that a ‘soft landing’ may be in the offing,” said Doug Duncan, Senior Vice President and Chief Economist, Fannie Mae.

Redfin: Home Prices Post Small Increase as Mortgage-Rate Drop Attracts Buyers

Redfin, Seattle, said the median U.S. home-sale price increased by 0.9% from a year earlier to $350,250 during the four weeks ending January 15. Prices remain elevated because buyer activity has started to pick up as mortgage rates decline due to slowing inflation.

The report also noted as demand inches back, some homeowners are less reluctant to sell. New listings of homes for sale fell 20% year over year during the four weeks ending January 15—but that’s the smallest decline in two months.

“The people who started browsing homes online and scheduling house tours at the end of 2022 are now turning into actual homebuyers,” said Redfin Deputy Chief Economist Taylor Marr. “Low competition, falling mortgage rates and seller concessions are bringing some buyers back to the market. That’s helping keep national home prices afloat, which is one bright spot for sellers. But many buyers are still sitting on the sidelines and demand could dip back down if inflation declines slower than expected or mortgage rates rise again.”

Reggora 2022 Appraisal Performance Index Finishes Strongly

Reggora, Boston, issued its 2022 Appraisal Performance Index on appraisal operations trends across the mortgage industry, noting an “exceptional” year to begin the Index. The increase in rates caused mortgage volumes to plummet, creating a unique scenario where the number of loan originations went from too many for appraisers to handle to a manageable number and a reasonable flow of work.

“Tepid home sales and refinances in 2022 put less strain on the fulfillment logistics and allowed appraisal turn times to improve from the difficulties in 2021,” said Brian Zitin, Co-Founder and CEO of Reggora. “The data reveals that with a heavy caseload, appraisers require multiple days to complete each appraisal. When appraisers can accept fewer assignments, the work is manageable and appraisals can be completed more quickly with greater satisfaction from the lender and the borrower.”

The average appraisal fee slowly dropped during 2022. The year began with an average fee of $620 per appraisal, peaked in March at $635 and fell to $592 by November (see Figure 1). This declining average is tied to fewer fee escalations as the year went on. With a reasonable caseload, appraisers do not need to raise fees to expedite orders. The average fee escalation rate peaked at 9% in April and May, likely due to both seasonality and a surge in loan applications facing a trend of rising interest rates, adding up to an average of $232 to an initial estimate in April.

Sales Boomerang releases Q4 2022 Mortgage Market Opportunities Report

Sales Boomerang, Owings Mill, Md., and Mortgage Coach, Irvine, Calif., released their latest Mortgage Market Opportunities Report. With mortgage volume continuing to decline, the Q4 2022 report highlights pockets of opportunity still available to motivated and innovative loan originators.

The report noted although Credit Improvement, Equity and FHA MI Removal alerts were down from Q3, they outperformed other alert types, signaling that opportunities remain for lenders to reconnect with previously denied loan applicants and help homeowners with untapped equity improve their financial situation.

“As the trends from Q3 continued, and in some cases intensified, in Q4, lenders need to remain proactive and creative in order to keep their pipelines from drying up,” said Sales Boomerang and Mortgage Coach Chief Visionary Officer Alex Kutsishin.

CFPB Issues Guidance to Root Out Tactics that Charge People Fees for Subscriptions They Don’t Want

The Consumer Financial Protection Bureau issued a new circular affirming that companies offering “negative option” subscription services must comply with federal consumer financial protection law.

Negative option programs include subscription services that automatically renew unless the consumer affirmatively cancels, and trial marketing programs that charge a reduced fee for an initial period and then automatically begin charging a higher fee. Companies risk violating the law if they do not clearly and conspicuously disclose the terms of their subscription services and obtain consumers’ informed consent, or if they make it unreasonably difficult for consumers to cancel. Drawing from the Federal Trade Commission’s (FTC) recent policy statement and the CFPB’s past enforcement cases, the circular highlights examples of unlawful behavior by companies that have used dark patterns and other manipulative tactics to trick consumers into paying recurring charges for products and services they do not want. 

“Consumers shouldn’t have to jump through hoops to cancel subscriptions they don’t want, and they shouldn’t have to worry about a trial marketing offer turning into an unwanted monthly charge,” said CFPB Director Rohit Chopra. “The CFPB has made it clear that misleading consumers about products or subscription services they don’t want is not only dishonest, but also a violation of law.”

Fortuna Finance Introduces Home Sale Assurance Program

Fortuna Finance, Chicago, launched its Home Sales Assurance program, which works with real estate agents to provide a guaranteed purchase offer on a client’s current property, which allows the client to make a non-contingent offer on their new home while deducting their mortgage debt from their DTI ratio when qualifying for a new loan.

Fortuna’s Guaranteed Backup Contract ensures the client’s current home is sold within 90 days, during which time the real estate agent can stage and sell their client’s home at the highest possible price. If the home does not sell after 90 days, Fortuna will buy and relist the home for sale with the current agent. When the home is sold, 90% of the proceeds go back to the original homeowner, as Fortuna only keeps enough to cover the costs of the transaction.

Fannie Mae Selects Five Proposals to Help Advance Racial Equity in Housing through $5 Million Innovation Challenge

Fannie Mae, Washington, D.C., announced selection of five organizations to receive deliverable-based contracts under the Sustainable Communities Innovation Challenge, a nationwide competition to help advance racial equity in housing. Through the Innovation Challenge 2022, the company sought innovative, scalable proposals to remove barriers that currently prevent many households, including Black households, from purchasing or renting a home.

IC22 Contract Awardees include:

•           ReBUILD Metro is a Baltimore-based nonprofit that works with community members to revitalize neighborhoods block by block and help prepare Black residents for first-time homeownership.

•           Southside Community Development & Housing Corp. is a non-profit housing developer in the Richmond Metro Area. SCDHC creates viable, thriving, and sustainable communities across Central Virginia by providing residential and commercial development, homeownership and financial counseling and coaching, employment services, and supportive programs to low-income families.

•           Twin Cities Habitat for Humanity brings people together to create, preserve and promote affordable homeownership and advance racial equity in housing by connecting families with their communities through neighborhood revitalization projects.

•           The Community Builders is a mission-driven real estate development corporation transforming communities with affordable rentals and properties for purchase across the Northeast, Midwest, and Mid-Atlantic regions.

•           Module, a prefab housing company based in Pittsburgh, started with the goal of making good home design more accessible and a mission to support customers’ health and wellbeing in well-designed, energy-efficient, highly functional homes that will last 100 years. In partnership with Enterprise Community Partners, Module will demonstrate the feasibility of locally owned modular construction micro-factories to complete energy-efficient affordable housing in urban communities of color.

FundingShield Enters into Partnership

FundingShield LLC., Newport Beach, Calif., entered into a partnership to deliver its consumer wire fraud prevention technology to clients of Milestones.AI, protecting homebuyers from real estate wire fraud. 

FundingShield provides cyber-security risk management, fraud prevention and transaction closing automation tools to lenders and real estate firms to protect their closings.  FundingShield’s CWAVs product protects homebuyer’s and real estate investor clients through an easy-to-use mobile/tablet responsive product to confirm the settlement wire account information for any closing, settlement, escrow, or attorney account in the country.  

Main Street Alliance Announces Partnership with Biz2Credit

Main Street Alliance, New York, a non-profit organization that works with small businesses across the country to create an equitable economy, announced it partnered with Biz2Credit, an online financing resource, to provide working capital and other commercial financing to its business owner members across the U.S.

Main Street Alliance is a national organization that supports and develops small business owners’ leadership skills, critical analysis of neoliberal ideas and alternative approaches for a more equitable economy. MSA conducts campaigns to win policies that reduce concentrated economic and political power and establish a set of public goods.

MCT Integrates with Freddie Mac’s Income Limits API

Mortgage Capital Trading Inc., San Diego, integrated with Freddie Mac’s Income Limits application programming interface, created for the first-time home buyer area median income limits.

The API, a critical technological advancement for AMI-based pricing, allows the connecting party (either a lender or Secondary Markets Advisor (SMA)) to send income information and the property address through the API to return an answer on whether the borrower qualifies for the Credit Fees waiver. The API provides a more accurate confirmation than can be derived with a ZIP code estimation. The Credit Fees waiver is based on borrower income being less than 100% of AMI, and the API can also confirm whether the subject property is in a high-cost county, which allows for 120% of AMI. Other Duty to Serve elements are supported in this API, including rural and high needs rural areas.

Fitch: U.S. RMBS Servicers Focus on Borrower Assistance Strategies as REOs Increase

Fitch Ratings, New York, said mortgage servicers continue to work with struggling homeowners to avoid loan default as REO volumes have increased in the post-pandemic environment, according to Fitch Ratings’ 3Q22 U.S. RMBS Servicer Metric Report.

“While loan portfolio delinquencies for Fitch-rated bank and non-bank servicers were stable for the third consecutive quarter, the impact of four consecutive quarters of new foreclosure filings post-moratoria is now being felt in new REO volume,” said Fitch Director Richard Koch.

REO inventory trends during the last three quarters reflected a continuing decrease in highly aged inventory of greater than 360 days as servicers continue to work through their post-pandemic REO inventory. However, servicers reported a 14.5% increase in REO properties in the 1-179 day category, reflecting the resumption of active foreclosure filings that commenced in 4Q22. Bankruptcy and foreclosure filings and 60-90+ day delinquencies showed no significant change quarter over quarter for bank servicers, while non-bank servicers reported a 1% increase in new foreclosure filings.

Indecomm Becomes Fitch-Approved Third-Party Review Firm

Indecomm, Edison, N.J., has been added to Fitch Ratings’ list of approved Third-Party Review firms. Indecomm is now approved for residential mortgage-backed securities with Fitch, DBRS Morningstar and has completed a review with Moody’s Analytics.

Indecomm has been providing quality control and third-party reviews for 20 years, pairing its proprietary AuditGenius SaaS and automation technology with experienced review staff to deliver next-level loan-level and portfolio analyses. The company’s overall review services support pre-close and post-close origination QC, servicing QC, MI reviews and secondary market due diligence.

Ncontracts Launches Risk Performance Management Suite

Ncontracts, Brentwood, Tenn., released its Risk Performance Management Suite. It combines four of Ncontracts’ platforms for financial institutions – Nrisk, Ncomply, Nvendor and Nfindings – into one suite that expands on the enterprise risk management framework by leaning into improvements in efficiency and speed to improve resiliency, responsiveness and growth.

RPM Suite is designed to help clients navigate uncertainty by transforming data points into timely, actionable insights that inform strategic decision making. Leveraging knowledge as a service, these customizable platforms combine software with business intelligence and services to ease the burden of risk and compliance management with data for quicker decision-making, greater efficiency and the foundation for the risk management culture.

TCN Worldwide Expands into Four New Markets

TCN Worldwide Real Estate Services, Dallas, added four new TCN Worldwide offices in Columbus, Pittsburgh, Buffalo and Rochester. Expanding its TCN Worldwide footprint, Hanna Commercial Real Estate/TCN Worldwide will be serving these markets alongside TCN Worldwide’s newest member firm, Jabe Companies Commercial Real Estate, who will represent TCN Worldwide as the retail commercial real estate specialist in Pittsburgh.

Hanna Commercial Real Estate is one of the largest independent full-service commercial real estate brokerage firms in the Northeast. Key services include commercial real estate brokerage, corporate services, appraisal and consulting, property management, accelerated marketing (auctions), and research.

Located outside of Pittsburgh, Jabe Companies works with prominent retailers and developers nationwide. Pairing technology with a boots-on-the-ground model, Jabe Companies is TCN Worldwide’s newest member firm and will serve as the exclusive affiliate representing the retail commercial real estate sector within the Greater Pittsburgh area.

STRATMOR Group Defines Keys to Measuring ROI on Tech Spending

In the just-released January issue of STRATMOR Group’s Insights Report, Senior Advisor Sue Woodard analyzes how mortgage lenders can assess their technology ROI more accurately.

Woodard’s article, “Unlocking the ROI of Mortgage Technology,” compares the experiences lenders have with technology to how consumers use Peloton’s popular line of interactive exercise equipment. In both cases, the best results are achieved when users commit to change and adoption.

According to her article, there are typically four categories of benefit that contribute to overall ROI: profitability, productivity, people and risk prevention. Lenders would like to see a return in all these areas, but when they don’t get it, they often blame their technology partners. “Here is an uncomfortable truth: the lender and the vendor both share responsibility for making technology deliver,” Woodard says.

The issue can be accessed here.

Ginnie Mae Revises Requirements for Pooling Re-Performing Mortgage Loans

Ginnie Mae, Washington, D.C., announced effective February 1, it is shortening the re-pooling seasoning requirements for re-performing loans from six months to three months and allowing issuers the option to pool re-performing loans into TBA eligible Ginnie Mae II Multi-Issuer Pools. 

Effective with pools submitted February 1, and thereafter, the following changes have been made to re-performing loan securitizations: (1) The borrower has made timely payments for the three (3) months immediately preceding the issuance month associated with the mortgage-backed securities (MBS), and (2) The Issue Date of the MBS is at least 120 days from the last date the loan was delinquent.

Re-performing loans must also meet all other applicable pooling parameters. Since the inception of the C-RG pool-type in February 2021, $39.5 billion of the securities have been issued through year end 2022. 

Freddie Mac Adds Diversity, Equity to its Single-Family/Multifamily Credit Risk Transfer Programs

Freddie Mac, McLean, Va., announced its Single-Family and Multifamily Credit Risk Transfer programs acquired credit protection of $833 million on more than $50 billion unpaid principal balance of mortgage loans, brokered by Aon plc, a leading global professional services firm, and sub-brokered by certified minority-business enterprise Protecdiv in 2022.

“We actively seek out third party-certified and self-certified minority businesses capable of meeting our demanding requirements as part of our overall effort to bring greater equity to the housing finance industry,” said Freddie Mac’s Jeff Shue, senior director of Single-Family CRT.

Cognizant, CoreLogic Extend Relationship  With $1B, 10-Year Services Agreement

Cognizant, Teaneck, N.J., a provider of information technology, consulting and business process services, today announced a new, 10-year services agreement valued at $1 billion with CoreLogic, Irvine, Calid., a global property information, analytics and data-enabled platform provider.

This new agreement features expansion of Cognizant’s services and anticipated value for CoreLogic, leveraging Cognizant’s digital transformation expertise particularly in cloud migration, automation, and industry-specific platform innovations; significant commitment to innovation and automation expected to benefit CoreLogic through lower technology and operations costs over the lifetime of the agreement; and focus on driving customer experience improvement.

PMI Rate Pro Pricing Tool Now Integrated with MCP

PMI Rate Pro, Kansas, City, Mo., a fintech firm founded by loan originators to help build stronger relationships with mortgage borrowers, completed a new integration with the Mortgage Cadence Platform, the newly released cloud-based digital lending platform from Mortgage Cadence, Denver.

Through the integration, users of the next-generation LOS can easily check pricing for Private Mortgage Insurance from all six major underwriters and get a best execution result. MCP is a flexible and intuitive cloud-based LOS designed with an open architecture to meet the needs of a wide range of lenders, across all products and channels. Featuring advanced automation, analytics and open services strategy, MCP delivers a seamless experience from application to closing.