Mortgage – HousingWire |
- The cyclical nature of the mortgage industry
- Forbearance numbers drop for third consecutive month
- Wire Fraud: Are you the weakest link?
- Stavvy lands $40 million Series A for aggressive growth
| The cyclical nature of the mortgage industry Posted: 24 May 2021 02:17 PM PDT  The ability to look past the now and develop strategies that poise an organization for future success is key to any leadership position in almost any business. It's true for the mortgage industry and especially the long-term strategies we've developed to react to the current low-rate environment brought on by a global pandemic. One of the most fascinating factors that drove rates lower was the decoupling of duration and swap spreads for mortgage- backed securities, which, ironically, analysts expected to be short-lived in 2020. This rally caused rates to drop which lured millions of homeowners to refinance their current home loans throughout 2020, leading to unprecedented loan volume for the entire mortgage industry. While much of the mortgage industry fixated on low mortgage rates the past year, it's important to understand the anatomy of what drives rates. In the U.S., the federal funds rate refers to the rate that banks can charge other banks for lending excess cash from their reserve balances on an overnight basis. This rate can influence short-term rates on mortgages and credit cards in addition to impacting the stock market. This rate is also set by the Federal Open Market Committee. While they can't mandate a particular rate across the board, the Federal Reserve can adjust the money supply so that interest rates will move toward the target rate — when they increase the amount of money in the system, rates fall, when they decrease the amount of money, rates rise. This rate is set eight times a year based on economic conditions. Over the last year, Fed Chair Jerome Powell consistently pledged that the Fed would continue to buy mortgage-backed securities to stabilize the American economy, which increased the amount of money in the Federal Reserve System and drove rates lower. The post The cyclical nature of the mortgage industry appeared first on HousingWire.  |
| Forbearance numbers drop for third consecutive month Posted: 24 May 2021 01:00 PM PDT The total number of loans in forbearance managed to fall three basis points last week to 4.22% of servicers' portfolio volume, according to a report from the Mortgage Bankers Association. A drop-off in the number of exits did mark a slower decline than in recent weeks, however, Monday’s data still marks three consecutive months of downward trend for forbearance volume. Fannie Mae and Freddie Mac continued to boast the smallest share of loans in forbearance, down three basis points last week to 2.21% or their portfolio volume. Ginnie Mae loans also fell two basis points to 5.59%, while the forbearance share for portfolio loans and private-label securities (PLS) remained the same relative to the prior week at 8.26%. "Although the overall share is declining, there was another increase in forbearance re-entries. Currently, 5.3% of loans in forbearance are homeowners who had cancelled forbearance but needed assistance again," said Mike Fratantoni, MBA's senior vice president and chief economist. Another 82.9% of plans are in an extension while the remaining 11.8% are in the initial forbearance plan stage. Overall, the MBA estimates there are still approximately 2.1 million homeowners in some form of mortgage postponement. A recent early look at Black Knight’s delinquency numbers revealed there are still 1.8 million homeowners that are 90 days past due ― four times as many as there were prior to the pandemic. The data analytics giant reported the vast majority of those in this serious delinquency category are in some form of forbearance, putting the end of Q3 and beginning of Q4 as an inflection point in terms of understanding how things may shake out in a post-forbearance world. "The job market is recovering, but the pace of recovery thus far is slower than we had forecasted,” said Fratantoni. “Continued job growth is needed to help more struggling homeowners get back on their April’s job numbers were lackluster at best for an economy said to be rebounding with the U.S. Labor Department reporting that a mere 266,000 new jobs were created last month, far below projections. Following the report, Fratantoni said the trade group continues to expect robust job growth and housing demand through the remainder of the year, but April’s report suggests that the rate of improvement in the job market is going to be much less consistent than other indicators. The post Forbearance numbers drop for third consecutive month appeared first on HousingWire.  |
| Wire Fraud: Are you the weakest link? Posted: 24 May 2021 12:16 PM PDT  It's the moment everyone fears: in the frenzy to close a house sale, commitment to fraud preventions falters. Busy professionals involved in the sale override their own cautions about fending off wire fraud by reverting to tried-and-true email addresses to convey the most sensitive financial information. Trying to keep with the drive to the finish line, the harried consumer let down their guard. Instead of questioning email directions from their agent, title insurer or lender, the consumer hits 'reply.' And just like that, coordinates for a wire fraud transfer of tens of thousands of dollars — even a lifetime of home equity — disappear. A digital thief hijacked the transaction, redirected the money, and disappears, leaving the shocked consumers, real estate agent, title insurer, lender and others to pick up the pieces. Fraud prevention was slowly escalating as an industry priority when 2020's strange confluence of factors hit. The pandemic accelerated the use of digital tools and platforms to effect closings, while also tangling many house sales in a patchwork of paper and online functions. As the pandemic recovery takes hold, a robust housing market has pulled fraud prevention back on track. Houses are selling faster than ever, and for more money than ever. COVID-catalyzed changes are formalizing into new fraud prevention standards, even though some in the residential real estate industry have yet to fully come on board. Digital fraud comes at real estate transactions in several forms. Released in March, the 2020 report of the Federal Bureau of Investigations' internet crimes operation documents significant increases in each of the categories most pertinent to residential sales: The post Wire Fraud: Are you the weakest link? appeared first on HousingWire.  |
| Stavvy lands $40 million Series A for aggressive growth Posted: 24 May 2021 07:25 AM PDT Stavvy, a Boston-based fintech, announced Monday that it landed a $40 million Series A funding round led by Morningside Technology Ventures. The company says the round is the largest Series A for a New England fintech and it plans to use the capital to double or even triple its staff by the first quarter of 2022. "We are adding resources to engineering, security and trust, product, industry relations, legal, compliance and more. The goal is to hire the best and brightest in the industry, as well as brave and curious engineers and product leaders that don't just build but innovate," said Stavvy Co-founder Kosta Ligris. Stavvy has already been focused on targeted hires, most recently adding Shane Hartzler, former director for eMortgage strategy and operations at Fannie Mae, as chief strategy officer. Notable in light of the current servicing challenges facing the industry, Stavvy's eClosing technology is designed to facilitate faster borrower communication and closings as servicers work through loan modifications, referrals and forbearance. "Our first goal was to make mortgage lending easier and more accessible, but we've been intentional in recognizing that our technology can be used to facilitate so much more, including commercial lending, servicing, foreclosure and more," Ligris said. "COVID19 certainly accelerated development and focus on servicing, coming out of 2019 with record low default and foreclosure." How modernized servicing creates customers for life We're a year into the pandemic, and while smart policy has delayed a default wave, the threat still looms large. Servicers must be powered by nimble technology to be heroes to borrowers, stalwarts to investors, and stewards of consumer protection to regulators. Presented by: Sagent Lending TechnologiesIn addition to the funding round, Stavvy also announced its alliance with Flagstar Bank, the sixth-largest bank mortgage originator in the country, to provide remote loan modification services. "Stavvy's digital technology has helped Flagstar efficiently and securely assist homeowners seeking relief with their mortgage payments due to COVID-19," said Ken Creech, CIO of servicing for Flagstar. "Thanks to Stavvy, we can process more requests to help customers more quickly, reduce errors in the signature process, and even better, walk homeowners through their loss mitigation closing during this difficult time." The funding caps a period of intense growth period for Stavvy. In January the company integrated with ICE Mortgage Technology's Encompass Digital Lending Platform and in March, Stavvy became a MISMO Certified Remote Online Notarization Provider. The company was recognized as one of the 2021 HW Tech100 winners for its native eSign and hybrid transaction tools. "When we launched Stavvy in late 2019, we had no idea what was in store for the world in 2020. We're proud of the technology we've developed to help homeowners and buyers in this challenging time, and grateful for this opportunity to amplify our services and impact," said Stavvy Cofounder Josh Feinblum. The lead investor in the Series A round, Morningside Technology Ventures, is a private equity and venture capital investment firm based in Cambridge and Hong Kong. "Stavvy has the technology, team, and strategy to be at the forefront of the global digital transformation of financial services," said Gerald Chan of Morningside Technology Ventures. "We are confident in Stavvy's ability to change the lending and banking experience for both institutions and consumers. We are especially proud to support the company's efforts to enable COVID loan relief during these unprecedented times." The post Stavvy lands $40 million Series A for aggressive growth appeared first on HousingWire.  |
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