Mortgage – HousingWire

eXp and Kind plan mortgage JV by October
OJO Labs expands into Canada’s “tight” housing market
Reverse mortgages improved, but issues remain says FHA
FGMC COO on why leaders invest in their greatest asset: their people

eXp and Kind plan mortgage JV by October

Posted: 16 Jul 2021 01:52 PM PDT

The second big mortgage joint venture announcement this week is a meeting of the Glenns.

Glenn Sanford's eXp World Holdings announced Thursday a mortgage joint venture with Glenn Stearns’s Kind Lending, called Success Lending. The declaration comes 48 hours after Compass and Guaranteed Rate told of a definitive agreement to begin their own mortgage joint venture, OriginPoint.

Compass and Guaranteed Rate were mum on their partnership's details, but more is known about Success.

The company is not ready to launch, an eXp spokesperson acknowledged, as it tries to license itself in each state. In an email to HousingWire, Stearns said he hopes to launch Success by October. A president of Success will be announced next week, Stearns said.

The company will be headquartered in Santa Ana, California, Stearns said, home of Kind Lending. But "Success lending will follow a similar path that eXp has done and be mostly virtual."

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By both companies' admission, a major key to Success's success will be hiring loan officers.

"Success lending is looking for the most qualified mortgage professionals in the country in the industry who are committed to top service and best customer experience," the eXp spokesperson said.

Many LOs still have a relatively full pipeline thanks to lower-than-expected mortgage rates and slowly climbing housing inventory – it will be a challenge convincing them to leave their current shops.

Kind Lending started in April 2020 with a focus on wholesale lending, after Stearns spent over two decades running his namesake mortgage firm, Stearns Lending. Stearns exited that company after it filed for Chapter 11 bankruptcy and bought by Blackstone Group, and he starred on the Discovery Channel's reality TV show "Undercover Billionaire" before founding Kind.

"Kind started out with its focus on wholesale because our team is not only very good at wholesale but because it was the easiest way to scale," Stearns said.

Kind has since started a retail channel and claims to have originated nearly $4 billion overall in its first 12 months as a company.

eXp, meanwhile, is following in the footsteps of not just Compass but most other national brokerages, including Realogy and HomeServices of America, that have their own mortgage arm.

During the pandemic, the 12-year-old Bellingham, Washington-based company became a darling of Wall Street, partly for its Sims-esque virtual brokerage. Nary a week went by where eXp was not announcing an influx of new agents (now over 50,000) or expansion into new countries (19 by the end of this September).

But eXp's stock has dipped from a high of $80 per share in February to $33 as of Friday. The company now has a $4.2 billion market capitalization, less than half of its previous market value.

Unclear is what pressure eXp's agents may feel to direct their clients to Success. Under federal law, real estate and mortgage transactions should be conducted separately, but that has not deterred the recent proliferation of joint ventures.

Asked if agents would be nudged to use Success, the eXp spokesperson said, "Our agents have the autonomy to recommend any mortgage lending options to their clients so that they can truly identify the best solution. But we are confident that Success mortgage lending will be a favored mortgage option due to their level of service."

The post eXp and Kind plan mortgage JV by October appeared first on HousingWire.

OJO Labs expands into Canada’s “tight” housing market

Posted: 16 Jul 2021 12:09 PM PDT

Real estate platform OJO Labs is expanding into Canada, the company announced this week.

Canadian customers can now work directly with the OJO concierge team to connect with local agents and mortgage professionals from Royal Bank of Canada, said Natalka Falcomer, who was named president of OJO Home Canada.

“OJO Labs provides intuitive, personalized consumer experience, streamlining the process by matching homebuyers and sellers with the insights, tools, and industry experts they need at just the right time,” Falcomer said. “This is crucial in Canada's nuanced marketplace, which is moving at lightning speed.”

Canada's housing market reached record heights over the last year due to increased demand for bigger living spaces combined with other factors, Falcomer said — leaving Canadian homebuyers facing the tightest market on record.

The price of the average Canadian home that sold in June was $679,000, a 25% increase from the prior year. As is the case in the U.S., while sale prices have skyrocketed, the number of sales is beginning to trail off, largely due to the combination of low inventory and record prices.

The Canadian Real Estate Association, an industry trade group, said Thursday that home sales have fallen for three consecutive months after hitting an all-time high in March 2021. Just over 50,000 Canadian homes changed hands during June.

Markets in British Columbia and Ontario have surged over 30% over the last year, and it’s primarily the suburbs that have shown the biggest gains. The annual increase in Vancouver came in at around 14%, while in Toronto it was 20%, CREA said.

John Berkowitz, OJO Labs CEO, said the company will now offer coverage in the Greater Toronto Area, Southwestern Ontario, the Greater Ottawa Region, Calgary Metropolitan Region, Edmonton Metropolitan Region, Central Alberta, Saskatchewan, Nova Scotia, Newfoundland and Labrador, Vancouver, Fraser Valley, Okanagan-Mainline, Victoria and Vancouver Island.

This year alone, OJO Labs acquired real estate search site Movoto and personal finance platform Digs. It also launched in 2020 The OJO Select Network, which matches agents with home buyers and sellers based on customer needs.

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Reverse mortgages improved, but issues remain says FHA

Posted: 16 Jul 2021 11:42 AM PDT

While the Federal Housing Administration‘s Home Equity Conversion Mortgage program has seen improved performance, there are still several key areas of concern. That’s according to Julienne Joseph, the FHA’s deputy assistant secretary for single-family housing, who shared her perspective on the space with an audience of reverse mortgage professionals this week.

Joseph arrives in her new role with a useful background – she worked as a loan officer earlier in her career. At the National Reverse Mortgage Lenders Association‘s Virtual Summer Meeting this week, the FHA official offered a surprising level of encouragement about working with the industry in assisting cash-strapped seniors.

Joseph noted that HECM endorsement volume has remained over 4,000 units per month for most of 2021, a solid volume for what is still a relatively niche space. But she also quickly got to a few pain points: the growing trend toward HECM-to-HECM refinance transactions, as well as the transition away from using the London Interbank Offered Rate (LIBOR) index for adjustable-rate reverse mortgages.

Reverse mortgage industry performance

The FHA is encouraged by the performance of the HECM program, Joseph said at the NRMLA conference.

"Last month, FHA insured over 4,000 HECMs originated by many of you and others in your organization," Joseph said. "And as of June 30, we had active insurance on more than 418,000 HECMs with a maximum claim amount of almost $125 billion. And after declining in fiscal year 2019, our volume started to increase again last year. And this includes us seeing a significant increase in HECM-to-HECM refinance activity."

Some analysts have expressed concern about the volume of refinance transactions taking place relative to the origination of new HECM loans, but the FHA's focus appears to be more centered on the standalone capital ratio of the program. While acknowledging that significant progress has been made when comparing capital ratios publicized at the conclusion of recent fiscal years, FHA nevertheless remains somewhat concerned over the performance of the HECM portfolio, she said.

"While the financial performance of FHA's HECM portfolio has really improved significantly by the end of the last fiscal year, the fact that the portfolio still has a slightly negative standalone capital ratio of -0.78% is something that we need to continue to examine and understand," Joseph explained. "While we can’t make any predictions on where we’ll end fiscal year 2021, because of so many factors, right now, our HECM volume is on pace with last year’s numbers."

Last year's HECM volume finished on a strong note by rising 27.3% to 44,661 loans for the full 2020 calendar year, according to data compiled by Reverse Market Insight (RMI). Still, Joseph indicated that action to improve the program should happen as quickly as possible.

"For fiscal year 2021 through June, there have been almost 37,000 new endorsements," she said. "Future volume predictions aside, I don’t think we can wait for the future to be upon us before we act. The pandemic will subside at some point, and I believe we will take from it a stronger model for doing mortgage business in both times of crisis and in the times of prosperity."

Optimism on working with the reverse mortgage industry

Joseph relayed to the industry audience a great deal of optimism in terms of working with NRMLA and other stakeholders to help refine the HECM program, as well as appreciation for the work of the association, its membership and reverse mortgage professionals across the country.

"FHA has enjoyed a longstanding relationship with NRMLA," she said. "And although we are not always in perfect alignment with every issue, we respect the fact that your queries have the intent of doing what’s right for our nation’s seniors, and we appreciate that. We value that from you, and you’ve been right there with us. We’ve worked on the initial LIBOR transition, you’ve been nothing more than supportive of our work to publish the HECM section of the single family housing policy handbook, and we appreciate your support of our recent non-borrowing spouse (NBS) policy changes."

While supportive of the recent NBS provisions, NRMLA did submit a letter in hopes of receiving some key clarifications on the guidance. Nevertheless, Joseph acknowledged that the industry is awaiting additional word on how the LIBOR index will be applied to the existing HECM book of business, and also said that additional operational changes will continue to be discussed with industry stakeholders.

"It’s often said that it takes a village to raise a child. So, I say it takes all of us to make FHA’s HECM program a viable one for senior homeowners who want or need to use the equity in their homes to maintain and sustain their lives post-retirement," she said. "And I want to say to you that FHA appreciates the many letters and other correspondence you send to us on behalf of your constituency. And we hear you, we’re listening to you, and we take under serious advisement the recommendations that you make. So, please continue to stay in communication with us, we value it. That’s the only way that we can continue to get better is to receive that feedback from you all."

Joseph also provided some additional perspective on the Biden administration's overarching attitude toward the HECM program, which appears to be focused on efficiency and serving an often underserved population according to the thoughts shared.

"Like all HUD and FHA programs under the new administration, we need to look at the HECM program, both its benefits and where we have areas of operational challenge," she said. "But I firmly believe that with that challenge comes opportunity. And I view that working on them will allow HUD, FHA and our Office of Single Family Housing to be a part of a real, sustainable solution that will carry all involved in the reverse mortgage industry forward in many new ways."

Earlier, Joseph shared that she has direct experience with the HECM program by working as a loan originator, and had seen firsthand how a HECM had the ability to help a couple accomplish their goals of aging in place, and to pass on home equity to their children after satisfying their loan's balance. She ended her initial thoughts looking back at that experience.

"If not for FHA’s HECM program, it’s unlikely that scenario would have played out the way that it did," she said, referring to the couple who successfully used a HECM in retirement. "So I look forward to working with you today, tomorrow and in the future, just to make meaningful changes to housing and housing-related policies that affect our nation’s senior population."

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FGMC COO on why leaders invest in their greatest asset: their people

Posted: 16 Jul 2021 11:00 AM PDT

As Chief Operating Officer at First Guaranty Mortgage Corp, Sarah Gonzalez has modernized the FGMC brand, recruited top talent and implemented operational efficiencies that significantly reduce the cost per loan across all production channels. During her third year at FGMC, Gonzalez was recognized by HousingWire as a 2020 Vanguard. The HW Vanguard awards program recognizes C-level industry professionals and business unit leaders who have become leaders in their respective fields within housing and mortgage finance — those whose leadership is moving markets forward, each and every day.

We reached out to Gonzalez to hear her take on how FGMC is tackling the current market and see what she’s looking forward to for the rest of 2021.

HousingWire: As you think about your career, what moments and experiences really prepared you for this current market?

Sarah Gonzalez: After 25 years in the business, I have learned to adapt to change easily. Specifically, 2008 gave a lot of us, including myself, the gumption to pretty much get through anything in our industry. My overall experience managing different channels has prepared me for the moments where we look critically at the market and decide where to invest or pull back.

HW: Growing new leaders is critical to any business. What is your company doing to develop the next generation of leaders?

SG: Investing in our Mortgage Mavericks is a top priority for FGMC. They are our largest asset and we work diligently to identify key talent, develop career pathing, and invest in overall human capital. Part of that investment is in training. By combining role-based training in our systems, cross-training and market education we empower our employees to understand the "why" behind everything they do. Another part of investing in our Mortgage Mavericks is creating a culture where they can thrive with robust communication, mentorship, and the chance to pursue professional development opportunities.

HW: What are you looking forward to the most for your organization for the rest of 2021 and beyond?

SG: This year FGMC's motto is 'Delivering Excellence' and I look forward to continuing to live it out and make an impact on all of our partners and borrowers. I am also looking forward to leading the industry in telling the unique stories of today's borrowers through our Maverick Solutions product line. These products allow us to reach more borrowers with products that are designed with them in mind with bank statement qualifications, jumbo offerings, and more.

Nominations for the 2021 Vanguards close Friday, July 23rd. Click here to nominate someone today!

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Saturday, July 17, 2021