Mortgage – HousingWire |
- Finance of America to acquire Parkside’s wholesale biz
- White House aware of issues over investment properties
- CFPB looking at Mr. Cooper after withdrawal errors
- Broker lawsuit targets UWM’s ultimatum
- Suzy Lindblom named COO of Kind Lending
- Solving for fraud, biometrics are the future of mortgage
| Finance of America to acquire Parkside’s wholesale biz Posted: 27 Apr 2021 05:45 PM PDT Finance of America intends to acquire Parkside Lending‘s third-party origination channel operation for $40 million, the publicly traded lender and servicer announced Tuesday. It’s the latest in a string of big M&A deals in the mortgage lending space – and the growing wholesale channel in particular – over the past six months. The deal, which is expected to close in the second quarter, will boost Finance of America’s third-party origination coverage by more than 1,000 brokers with little customer overlap, the firm said in a statement. Finance of America said it puts the company on the path of becoming a “top-five performer” in the segment, which has grown to roughly 20% of the overall mortgage market. "This transaction aligns with our proven strategy of advancing our growth priorities through the acquisition of highly complementary businesses where we can leverage our platform and resources to drive enhanced operating and financial performance," said Patricia Cook, CEO of Finance of America. "Parkside Lending's philosophy is similar to our own in that the firm is able to pivot between products to maximize profits or minimize risk as market conditions shift. This approach should prove powerful in terms of fueling origination opportunities as we introduce our products to the firm's vast network of mortgage professionals." Parkside, founded in 2004 in San Francisco and led by CEO Matt Ostrander, also operates correspondent and retail channels. It was also not immediately clear if Parkside’s wholesale operation would maintain its existing branding and operations, or if it would be folded into Finance of America’s. The acquisition of Parkside’s wholesale business comes roughly one month after Finance of America’s acquisition of Renovate America's Benji business, an expansion into the home improvement lending space. The firm said Tuesday it expects to make additional acquisitions in the future. It originated roughly $30 billion in mortgages last year across its retail, correspondent and wholesale businesses. The company notably increased the number of wholesale employees by 100% in 2020, it said Tuesday. "Our TPO business is a part of our long-term growth strategy,” Bill Dallas, president of Finance of America Mortgage, said in a statement. “We pride ourselves on offering the widest range of products and tailored solutions designed to meet the needs of our valued broker partners and their clients during any economic and home buying cycle. We're excited about the enhanced scale this transaction provides as it will materially increase our production volume and enable us to distribute a larger number of proprietary products in the future, propelling continued growth.” The first big acquisition to rock the wholesale channel came when Guaranteed Rate bought Stearns Lending in January of this year for an undisclosed price. The deal gave the Chicago-based retail lender access to the wholesale channel. Similarly, New Residential Investment Corp. earlier this month announced a deal to acquire Caliber Home Loans, a top-three wholesale lender, for $1.7 billion. Other M&A deals in the mortgage lending space of late include Guaranteed Rate‘s acquisition of Owning, Ocwen‘s acquisition of Texas Capital‘s correspondent business, New York Community Bank‘s pending $2.6 billion acquisition of Flagstar, and Western Alliance‘s $1 billion purchase of AmeriHome. The post Finance of America to acquire Parkside’s wholesale biz appeared first on HousingWire.  |
| White House aware of issues over investment properties Posted: 27 Apr 2021 03:10 PM PDT The federal government is well aware that mortgage lenders and industry stakeholders are frustrated by the 7% cap on second homes and investment properties that was implemented as part of a broader series of amendments to Fannie Mae and Freddie Mac's Preferred Stock Purchase Agreements. In a conversation with Mortgage Bankers Association President Bob Broeksmit last week, Bharat Ramamurti, deputy director of the National Economic Council, acknowledged the issue, which was designed to provide more liquidity to the GSEs. “We recognize that the issues that you raised about second homes and so on, is a shorter-term issue,” Ramamurti said. “All I can say on that is we are aware of it, we will continue to engage with it and work on it, and are happy to talk to you and your members about it going forward, and have discussions with FHFA going forward. But we don’t have any new news to report on that.” Lenders and the MBA have opined that the 7% PSPA cap has caused disruptions, particularly since a key provision requires a 52-week look-back. Compliance will be difficult given that the market is producing north of 7% of those products, Broeksmith said in his conversation with Ramamurti during the MBA’s spring conference last week. Those products are “very profitable for the GSEs given the loan-level price adjustments on them. They actually create more capital, which of course, is Director Calabria’s priority for them. Yet, Treasury and FHFA have not given Fannie and Freddie the flexibility they need to get to those 7% levels more gradually, say by the end of 2021.” Broeksmit added: “The issue is time-sensitive since May GSE deliveries are affected and there are massive run-ups in price add-ons to second homes and investment properties in response to this policy.” FHFA Director Mark Calabria last week told MBA members that, although the agency is looking to introduce additional PSPA amendments, they’ll have to manage for the time being. "I obviously wish that we were in a better capital position and had a stronger Fannie and Freddie that could support more of the market, and that's our objective" Calabria said. "The reality is there will be some short-run pinch, if you will, on the market, while we try to build a stronger Fannie and Freddie that can support the market. I do want to clarify because I think there's often some misperceptions out there, and to say, the PSPA are lines of credit, Fannie and Freddie cannot legally knowingly take risk against PSPAs. That would be like if Wells [Fargo] said, 'Well, we've got deposit insurance so who cares.’" The MBA has sought clarity on the PSPAs and the 7% cap on second homes and investment properties. In a letter written in March, the MBA outlined four specific areas of concern: 1. Reports that the GSEs may be implementing limits on a per-lender basis rather than across their aggregate books of business, which "represents an overly conservative method of achieving compliance," according to the MBA. 2. Disproportionate challenges for some lenders — especially smaller lenders — to meet lender-level requirements set by the GSEs, due to their footprints in certain geographic markets or their lack of access to non-enterprise outlets for these loans. 3. Reports that the GSEs are requiring some lenders to adjust loan deliveries as early as April. The MBA noted these loans are already locked and that lenders "cannot reasonably alter their delivery mixes on such short notice." 4. Inconsistencies in the requirements being communicated to different lenders, which raises concerns about equitable treatment of lenders of varying sizes, charters, or business models. In addition, the MBA also warned that cash window limits under the PSPA amendments could have unintended consequences for borrowers, lenders, investors, and Fannie and Freddie. The revised PSPAs require that beginning Jan. 1, 2022, the GSEs shall "not acquire for cash consideration from any single seller…during any period comprising four calendar quarters, Single-Family Mortgage Loans with an unpaid principal balance in excess of $1.5 billion." The MBA letter states that this requirement will force up to several dozen lenders to curtail their use of the GSEs' cash windows, which will in turn force the lenders to increase their use of mortgage-backed security swaps, sales of loans to correspondent aggregators, or shifting of their business mix to other loan products. The post White House aware of issues over investment properties appeared first on HousingWire.  |
| CFPB looking at Mr. Cooper after withdrawal errors Posted: 27 Apr 2021 02:51 PM PDT On Tuesday, the Consumer Financial Protection Bureau (CFPB) announced it was looking into a situation with mortgage servicer Mr. Cooper after the company made unauthorized withdrawals from borrower accounts over the weekend due to a vendor error. "The CFPB is taking immediate action to understand and resolve the situation that has affected hundreds of thousands of consumers,” said CFPB acting director Dave Uejio. “The CFPB will use all appropriate tools at our disposal to help ensure harmed consumers receive relief. Consumers affected by the incident should monitor their accounts and may contact Mr. Cooper directly.” On Monday Mr. Cooper announced that due to a payment processing issue, unauthorized mortgage payments were taken from a number of borrowers’ accounts on Saturday, April 24. The company pointed to an error in its electronic payments vendor as the source of the incorrect transactions, with some payments being posted the same day, while others did not process until Monday. In a public alert, Mr. Cooper said that because the issue occurred on Saturday, some transactions sat through the weekend, however, it expects the majority of customers’ account statuses to be up to date by Tuesday at the latest. According to the alert, all inaccurate charges are being corrected, and any impacted customers will not be responsible for any fees or other negative financial impact they may have caused. The company said that they are currently working with borrowers to reimburse them if any form of fee does occur from the withdrawals. “We value the trust our customers place in us, and we sincerely apologize to those impacted. We take the processing of these transactions very seriously, and we will continue to work with the payments vendor to understand the root cause and ensure this issue does not happen again,” Mr. Cooper said in the alert. The mortgage servicer reiterated that this was not the result of a hacking and no borrower bank accounts or accounts within Mr. Cooper’s system were compromised. Mr. Cooper did not disclose specifically which banks they were working with to reverse the incorrect charges, however, several heated borrowers took to social media after discovering the unauthorized withdrawals with the majority pointing to issues with JPMorgan Chase. Several users on both Reddit and Twitter said they witnessed multiple payments were removed from their accounts that left them some of them thousands of dollars in the negative. One Reddit user said five payments were removed from his account on Saturday, totaling a whopping $10,000 in one go. Another user mentioned how they had made a lump sump payment on their previous bill that totaled $25,000, and reported that total (which was three of their regular payments) was pulled again on the weekend. In December, Mr. Cooper settled with the CFPB for allegedly committing illegal foreclosures from Jan. 2012 to Jan. 2016 when the company operated under the title Nationstar. Mr. Cooper agreed to refund $90 million to the 115,000 customers affected and pay a civil penalty of more than $6.5 million. The same day that settlement was released, the Justice Department announced separate settlements over servicing errors with Mr. Cooper alongside U.S. Bank and PNC Bank. In all, the Justice Department said the three lenders didn't comply with federal bankruptcy procedures, which affected a total of 76,000 accounts beginning in 2011. The settlement stipulates that Mr. Cooper – again Nationstar at the time – will pay affected borrowers more than $40 million. The post CFPB looking at Mr. Cooper after withdrawal errors appeared first on HousingWire.  |
| Broker lawsuit targets UWM’s ultimatum Posted: 27 Apr 2021 11:51 AM PDT  The controversial ultimatum United Wholesale Mortgage (UWM) issued to brokers in March constituted a violation of the Sherman Act and a series of anti-competition laws in the state of Florida, a St. Augustine-based mortgage broker alleges in a new lawsuit that seeks class-action status. Dan O’Kavage, president and founder of the O’Kavage Group, is the lead plaintiff in a lawsuit that claims UWM’s gambit was anticompetitive and illegal. "I am fighting back against UWM because my freedom and independence, the reason my clients choose to work with me, has been stripped away," O'Kavage said in a statement. "If I didn't want to operate in an independent fashion, I would work on the retail side of the industry and work in-shop for one of the major lenders. That was never something I considered nor wanted to do. I like being local. I like supporting my neighbors and community. UWM is stripping my freedom to be the best loan officer for my clients." The post Broker lawsuit targets UWM’s ultimatum appeared first on HousingWire.  |
| Suzy Lindblom named COO of Kind Lending Posted: 27 Apr 2021 10:49 AM PDT Wholesale lender Kind Lending has brought on mortgage veteran Suzy Lindblom as its chief operating officer, the company said Tuesday. Lindblom has 40 years of experience in the mortgage space, most recently serving as the COO of Planet Home Lending for three and half years. Prior to that, Lindblom served as the managing director of national fulfillment and operations at Stearns Lending — the first brainchild of Glenn Stearns, who happens to be the founder and CEO of her latest employer, Kind Lending. "Welcoming Suzy to Kind Lending feels like a homecoming," said Stearns. "She's a results-driven leader with four decades of experience in mortgage banking that many of us have had the pleasure of partnering with in the past. She brings an incredible wealth of knowledge, having created and led large-scale national operations with enthusiasm.” During her tenure within the mortgage industry, Lindblom has snagged a number of accolades, including HousingWire's Women of Influence award in 2015 and 2019, National Mortgage Professionals’ 2019 Most Powerful Women, Progress in Lending’s 2019 Most Influential Women in Fintech and National Diversity Council's Southern California Most Powerful & Influential Women of 2016, along with NEXT's 2020 Powerhouse list. In 2020, she was also named a HousingWire Vanguard, thanks to her help in doubling Planet Home Lending’s origination capacity and managing a 20% growth in the company as it navigated the pandemic. At Kind Lending, Lindblom will work alongside Yvonne Ketchum, president, in overseeing several of the corporate departments as well as working to help the lender set up its retail and joint ventures division. Lindblom will also assist in building and implementing new load product offerings amid its various channels. "I am thrilled joining Kind Lending and working with Glenn and Yvonne again,” Lindblom said. “This is the perfect company for me — great leadership, great employees, culture that befits their name and I am looking forward to helping it grow into the best company for all of our customers." The wholesale lender had a bang up start, originating $1 billion in the first six months of production in 2020— a feat that took Stearns' first company 15 years to accomplish. The post Suzy Lindblom named COO of Kind Lending appeared first on HousingWire.  |
| Solving for fraud, biometrics are the future of mortgage Posted: 27 Apr 2021 10:21 AM PDT Better, faster, cheaper has long been the promise of technology in the mortgage industry. Some may argue whether today's technology is that much better than the tools we used in the past, particularly in the servicing business where many still use platforms designed and first built decades ago. Likewise, others will argue over whether today's tools are cheaper, given the high cost of loan origination. No one argues about today's technology being faster. We can convert website browsers to prospective borrowers in seconds, with complete loan applications completed online in mere minutes. Underwriting has been a sub-minute-long process for years now. Electronic data gathering and automated verification services have made mortgage processing significantly faster. We can close loans today, if we choose to, faster than ever before. Some even now are closing purchase money loans in as few as 10 days. Technology has empowered our industry to move quickly, and that is the biggest risk we face today. Tripping over our own technologyNecessity is the mother of invention, we have been told. What sounds like a cliche is a truth that we see in the world all around us. We saw it last March when an obscure virus suddenly became a global pandemic. COVID did more for mortgage technology than 10 years of constant sales efforts taken by the top 100 industry technology companies. Overnight, tools that lenders had purchased and then left to gather dust on the shelf for years suddenly became mission-critical. The rush to digital was no longer just wishful thinking. It was the only way to keep the industry moving in a world infected by the coronavirus. In response, Remote Online Notarization, something that had been technically legal on a federal level since the turn of the century and for which technology already existed, became the hot issue of the day. Artificial intelligence, robotic process automation and machine learning were shoved out of the way as states rushed to pass laws enabling RON. Available in only a few states when news of COVID broke, within 30 days states all across the nation were in emergency sessions doing whatever was necessary to keep the real estate and home finance industries operating in their states. It wasn't until weeks later that the National Notary Association began asking how its members would actually identify signers for remote online notarizations. No one slowed down to consider the question carefully. After all, we already had an existing technology to fall back on. And fall is exactly what we did. An outdated tool posing risk for the mortgage industryKnowledge Based Authentication, or KBA, is a method of authenticating a person's identity by determining whether they know things that only the actual person would know. Proponents say that the method is becoming more sophisticated as the technology finds ways to know things that the person being authenticated should know. If these tools were actually interfacing with technology systems that had those data elements stored safely on disc and easily retrievable with a built-in search function, this might be the only form of authentication we would ever need. As it is, these tools interrogate humans to make their decisions. This is problematic because humans don't remember things very well, are easily confused by questions that aren't specific (or are too specific) and are easily frustrated by systems that seem to know intimate information about their lives that they may not have known was available to the public. A financial services company I recently contacted used KBA to authenticate me as a client by asking, "What Bank had your Auto loan that had a $344.00 payment amount in 2017?" I had two car loans with different banks during those years. I had a 50/50 chance of getting the answer right. The wrong answer I supplied locked me out of my account for 24 hours. It was annoying, but if I had been trying to close a real estate transaction and a mortgage loan, it would have delayed the closing and caused all manner of problems for me, the other party to the transaction, the real estate agent, the closing company and the lender. Business referral relationships, loan rate locks, moving company data and customer satisfaction are all sacrificed in the name of speed by using technology that is not fit for the purpose. KBA is not the tool the industry needs to move forward into the digital age. Delays and higher costs are two reasons. There is another that is more sinister. Opening the door wide for fraud with KBAAs COVID moves closer to the exit, technologies that have been put on hold during the pandemic are starting to get more attention. AI, blockchain and borrower-facing portals that finally make consumers feel like they have some control are getting attention again. But that won't last. Mortgage fraud and identity verification needs are increasing such that new solutions that truly solve those problems will soon have top billing. The primary reason for this is that KBA can be hacked. It should be obvious to any user of this technology that if they can find out financial facts about an individual then someone else can do the same thing. Which is exactly what is happening. To get this information, fraudsters aren't hacking into computer systems. They are going after the humans themselves. Social engineering involves exploiting human psychology to get information from people. It has been practiced for years, perhaps hundreds of years, but never as easily as in the age of online social networks. We've all seen the clever Facebook posts that promise to give you an Elf name if you just provide your birth date, or tell you which of the characters on Friends most resembles you if you'll only provide another bit of personal identification. In a short period of time, they can have enough information to begin buying the rest of your data from online brokers. The deeper the industry gets into digital lending, electronic loan closings and digital mortgage servicing, the more fraudsters will take until we find a suitable technology to authenticate our borrowers online. Fortunately, such technologies exist today. The rise of biometricsMission Impossible aside, there are aspects of each person that simply cannot be duplicated, at least not well enough to fool today's modern authentication technologies. Facial recognition technology, for instance, has now advanced to the point that not only can the system determine whether the face on the screen belongs to the person who must electronically sign the document, but it can actually tell if the image on the screen is alive or a photograph. This is an order of magnitude more effective than the best KBA process currently available. In fact, trying to stay ahead of fraudsters using public information will never work. Frankly, it's a wonder it was ever adopted in the first place. With modern biometric technology, anyone with a smartphone, tablet or desktop computer can look into a webcam and a lender on the other side of the country can know in an instant whether the person on screen is the actual person they intend to do business with. This changes everything and makes it possible for the industry to move as quickly as we want without the fear of falling. Anything less will trip us up, cost us more money and alienate everyone we hope to partner with or serve. This column does not necessarily reflect the opinion of HousingWire's editorial department and its owners. To contact the author of this story: To contact the editor responsible for this story: The post Solving for fraud, biometrics are the future of mortgage appeared first on HousingWire.  |
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