Mortgage – HousingWire |
- United Wholesale Mortgage moves to dismiss broker lawsuit
- Blend CEO Nima Ghamsari to speak at Spring Summit
- Fannie Mae execs see path to exit conservatorship
- Embracing the future of mortgage servicing
| United Wholesale Mortgage moves to dismiss broker lawsuit Posted: 12 Feb 2021 11:01 AM PST United Wholesale Mortgage has filed a motion to dismiss a lawsuit filed by three independent mortgage brokers last year whom the lender accused of “churning.” The Pontiac, Michigan-based wholesale mortgage lender filed a motion this week saying that the three named brokers – Rishi Bhasin, Anne James and Nelson Otero – were among the 75 brokers it found to be abusing an early pay off provision (EPO) to bank more commissions. “In 2020, UWM became concerned the EPO period was not effectively curbing the potential for churning,” Miller Law Firm PC wrote on behalf of UWM. “(The company) noticed a tiny (number) of its independent brokers were refinancing loans three to five times faster than industry standards.” Crain’s Detroit first reported on the motion to dismiss. The drama began just as the COVID-19 pandemic was beginning to cripple the nation. On March 12, 2020, UWM executive Allen Beydoun appeared in a video sent to the roughly 100 mortgage brokers he claimed were responsible for higher-than-industry-average prepayment speeds. How to Diversify Your Brokerage to Weather Economic Hardship Diversification is one approach brokerages can adopt to help ensure stability in unavoidable times of uncertainty, work to protect their revenue and – ultimately – financially weatherproof their business. Presented by: Motto MortgageBeydoun said that the brokers were "making a negative impact" on prepayment speeds in the wholesale channel by refinancing "three-to-five times faster than the entire market." He characterized it as "churning," and said that United Wholesale Mortgage determined it was a combination of higher individual compensation plans, doing no-cost loans, or potentially charging the borrower a higher rate initially to set up a refinance later on. Later that month, UWM changed its policy so that brokers couldn't refi out of UWM loans that were less than 365 days old without paying back the commission or 1% of the mortgage (whichever was greater). Bhasin, James and Otero say UWM improperly applied the EPO to loans retroactively, punishing them for loans that were still in the pipeline and had conformed to the previous 180-day standard. "They've got contractual obligations just like everyone else has," Scott Glovsky, the plaintiffs' attorney, told HousingWire in December. "Just because they're a large corporation doesn't mean they get to cheat on the deal. The contract that they drafted has terms on them. They're required to comply." UWM has called the lawsuit, which seeks class-action status, as “frivolous.” In its motion, United Wholesale Mortgage lawyers said the firm amended its early payoff provision for a small percentage of brokers who they accused of churning. “UWM made this contractual change to protect consumers,” its attorneys wrote. “Within months of this contractual amendment, the vast majority of affected brokers changed their behavior and were returned to the 6-month EPO.” Bhasin, James and Otero are seeking damages between $10,000 and $77,000 in unpaid commissions. UWM, which works with over 11,000 mortgage brokers, went public last month at a valuation of $16.1 billion. It hauled in a record $182 billion in mortgage originations in 2020, with profits topping $3.37 billion. In the first quarter, the wholesale lender is projecting closed loan volume between $52 billion and $57 billion, and a total gain margin of between 200 and 235 basis points, which would be a significant increase over the 95 bps from the first quarter of 2020, but lower than that of the fourth quarter. The post United Wholesale Mortgage moves to dismiss broker lawsuit appeared first on HousingWire.  |
| Blend CEO Nima Ghamsari to speak at Spring Summit Posted: 12 Feb 2021 10:57 AM PST Tech giant Blend‘s CEO and Co-founder Nima Ghamsari will join other housing luminaries at HousingWire’s Spring Summit March 4 to discuss mortgage disruption and what’s coming down the road for those in housing. Even in the midst of a banner year, originators have to keep one eye on the technologies and competitors that could upend their carefully crafted business strategy. Ghamsari will be joined by Figure Technologies‘ CEO Mike Cagney to explore blockchain, where automation could be most disruptive (in good and bad ways) and the big consumer players adopting mortgage in a serious way. Earlier in his career when working on data projects for large banks, Ghamsari realized how data and technology could be used to improve the process and affect positive change across mortgages and consumer lending more broadly. Taking those lessons with him, Ghamsari decided to start Blend in 2012 along with his co-founders. The focus of the Spring Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, and with a demographic tsunami of Millennial homebuyers entering the housing market, this year is expected to be just as incredible. The summit brings together experts like Ghamsari who can speak to the topics that are critical to success in another unprecedented year, including:
The summit also features sessions on lessons from local markets, an economic update and more. As with all HousingWire events, we're bringing together some of the brightest and most successful people in mortgage, real estate, compliance, security, technology and regulation to offer their insights on what's happening right now and what's coming next. In addition to Ghamsari, the summit features UWM CEO Mat Ishbia, CoreLogic's Selma Hepp, Mortgage Champions CEO Dale Vermillion, Lead Analyst Logan Mohtashami, top Century 21 Realtor Xio Sandoval, and many more. The 2021 Spring Summit is designed for our HW+ premium members, who get access to all HousingWire virtual events, long-form digital content published weekly, an exclusive Slack community and more. Sign up for HW+ membership and register for the summit here, or get event-only access for your company or team here. The post Blend CEO Nima Ghamsari to speak at Spring Summit appeared first on HousingWire.  |
| Fannie Mae execs see path to exit conservatorship Posted: 12 Feb 2021 08:03 AM PST Fannie Mae, the largest mortgage financier in the U.S., said Friday that its net income in the fourth quarter of 2020 checked in at $4.6 billion – up 8% from the third quarter. The government-sponsored entity’s total net income for the full year was $11.8 billion, and executives on Friday’s earnings call spoke enthusiastically about an eventual exit from forbearance. However, that nearly $12 billion in net income is down 16% year over year due to a shift from $3.5 billion of credit related income in 2019 to nearly $900 million in credit related expenses in 2020. Regardless, Fannie Mae’s full year net revenues increased 16% to $25.3 billion thanks to record acquisition volumes. For single-family, those acquisitions more than doubled to nearly $1.4 trillion, the highest level on record, of which refi volume made up $948 billion, the highest level since 2003. According to a release, Fannie Mae’s guaranteed book also grew by over 8%. “A decade plus of work to strengthen our risk management was evident in 2020’s financial results and health and the resiliency of America’s housing system, in the face of the pandemic stands in stark contrast to 2008 when housing was a key driver of the financial crisis,” said Celeste Brown, Fannie Mae’s chief financial officer, in a Friday earnings call. If consumers aren't holding lenders back, then who or what is? The challenge for mortgage lenders and investors is understanding how to meet borrowers where they are without layering on risk or getting bogged down in third-party intermediation. And now, there’s a way to make that happen. Presented by: FormFreeBrown attributed a great deal of Fannie’s capital growth to the amendments made to the senior preferred stock purchase agreement by the Federal Housing Finance Agency and the U.S. Department of the Treasury that would allow Fannie and Freddie Mac to retain more of their earnings. The new agreement allows for an aggregate of about $283 billion in GSE capital retention, a move the GSEs applauded and one that Fannie Mae CEO Hugh Frater said was a significant milestone. According to Brown, this amendment was critical for the GSEs to build their capital and achieve adequate capitalization under the new framework. “This is essential, as building substantial GSE equity and capital remains a key unfinished aspect of our transformation under conservatorship. Additionally, the amendment formerly creates a foundation for exiting conservatorship,” Brown said. While Fannie’s net worth at year end was $25.3 billion, the Enterprise estimated total capital requirement under the new rule would have been approximately $185 billion, including $135 billion in common equity tier one capital. Looking forward Fannie Mae expects the market to continue to boom in 2021 – averaging $3.9 trillion in originations compared to the $4.4 trillion last year. However, the GSE said there is still much uncertainty as new COVID variants appear, and it is difficult to forecast the success of the vaccine rollout and the effectiveness of fiscal intervention in addressing economic strains relating to the pandemic. Brown also revealed the Fannie Mae has adopted hedge accounting, which it said will reduce reported earnings volatility related to interest rate exposure, although it will continue to have exposure to spreads. “I firmly believe that a responsible exit from conservatorship and the recapitalization of Fannie Mae is the best way to support our mission to serve America’s housing needs for future generations, protecting the taxpayer and creating a substantial layer of loss absorbing capital,” said Fannie Mae CEO Hugh Frater. “We continue to believe that a Fannie Mae that is reformed, well regulated, capitalized and out of conservatorship, thus serve the needs and interests of our nation’s housing markets and our housing mission,” Frater said. Freddie Mac noted a similar trajectory in the fourth quarter. In total, the company's net income at the end of 2020 was $7.3 billion, a 2% increase from 2019. Its net worth increased to $16.4 billion, from $9.1 billion at December 31, 2019. The post Fannie Mae execs see path to exit conservatorship appeared first on HousingWire.  |
| Embracing the future of mortgage servicing Posted: 12 Feb 2021 07:22 AM PST  This year has brought plenty of disruption to mortgage servicing, from regulatory and economic uncertainties, to a long-term shift toward remote work environments. Meanwhile, the past decade has seen an explosion of digital solutions in mortgage origination, and servicing will inevitably follow suit. In this context, it's natural to consider digital transformation; as all our processes are upended, this is perhaps an ideal time to rethink the business, and the technologies that support that business. But this is a decision to make with care. About 70% of digital transformations fail. The cause of these failures can often be traced back to not keeping the business goals at the forefront of the transformation process, or overlooking how technology impacts and interacts with the entire operational ecosystem. It's important to remember that digital transformation isn't just about implementing new technology. It's about strategically using technology to help you achieve your business goals. If your organization is looking for digital transformation, these tips will keep you on track for success. The post Embracing the future of mortgage servicing appeared first on HousingWire.  |
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