Mortgage – HousingWire

Black Knight looks to court brokers with new LOS
Treasury removes restrictions on investment properties
Is Mike Calhoun still in the running for FHFA director?
Alt equity firm Point says it won’t abandon reverse mortgage space

Black Knight looks to court brokers with new LOS

Posted: 14 Sep 2021 09:01 PM PDT

Black Knight is looking to hook mortgage brokers with a new loan origination system designed specifically for them.

The Florida-based mortgage tech and analytics behemoth on Wednesday unveiled “LoanCatcher” to mortgage brokers, which it described as an “end-to-end” solution that is integrated into its Surefire CRM and mortgage marketing engine. The direct integration will allow brokers to improve recapture and retention rates, Black Knight said.

"Entrepreneurial brokers have been driving an increasing share of mortgage lending, and Black Knight is committed to serving that community and further enabling their growth," Rich Gagliano, president of Black Knight Origination Technologies, said in a statement. "By providing anytime, anywhere access to advanced LOS technology, LoanCatcher meets brokers when and where they are, giving them the freedom to expand their business and better serve their customers."

The mortgage tech firm said LoanCatcher is entirely cloud-based and can be used on any internet-connected device. It also has API connectivity to Black Knight’s companion product, Loansifter PPE, which many brokers use to shop pricing from 120 different wholesale lenders.

The data stored on the LOS is encrypted and continuously backed up on a secure cloud.

After the loan is originated, LoanCatcher enables the lender to download the file and deliver to whichever lender they choose, regardless of system, Black Knight said in a statement.

The product news follows a series of acquisitions designed to improve the company’s LOS capabilities.

Black Knight’s acquisition of NexSpring Financial in March was credited as an effort to beef up its broker product offerings. And in July 2020, the company paid $1.8 billion for Optimal Blue, just weeks after it went up for sale. The company's integration combined Optimal Blue's PPE capabilities into its offerings and analytics engine.

The mortgage tech space is rapidly becoming a crowded one. Black Knight and ICE Mortgage Technology (formerly known as Ellie Mae) remain the two market leaders, but a slew of well-capitalized startups are nipping at their heels. Blend, a lending platform primarily for mortgage companies, went public in July. The company went public at a $4.6 billion valuation, largely on the belief that it can snag marketshare from the two entrenched powers and expand into other lines of business.

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Treasury removes restrictions on investment properties

Posted: 14 Sep 2021 02:43 PM PDT

The Treasury Department and FHFA announced Tuesday that they are suspending certain requirements that were added in January to the Preferred Stock Purchase Agreements (PSPAs) between Treasury and Fannie Mae and Freddie Mac.

Under those requirements, Fannie Mae had restricted its acquisition of loans secured by second homes and investment properties to 7% of its total single-family acquisitions and applied stricter underwriting to those loans.

Treasury's statement on the suspension sought to clarify its reasoning for the change.

"The suspension of these PSPA requirements recognizes that FHFA has the authority and responsibility for the Enterprises' safety and soundness and to foster housing finance markets that support sustainable homeownership, and is not intended to stimulate aggregate housing demand given current conditions in the housing market," the Treasury stated in a Tuesday afternoon press release.

"Home prices have been accelerating rapidly, with the annual rate of national home price growth at multi-decade highs," the Treasury release continued. "A principal challenge for the U.S. residential housing market today is inadequate housing supply. The Administration is focused on promoting housing stability, which includes advancing housing policies that can sustainably increase the stock of affordable housing units for rent and ownership."

Lenders and trade group officials raised strong objections to the changes, which were made a week before the Trump administration left office. Objectors noted that the 7% PSPA cap had caused disruptions, particularly since a key provision required a 52-week look-back.

They also complained that the restrictions on the cash window would force lenders to send mortgage-backed securities to the private market, fattening Wall Street’s coffers.

In a March letter to the Treasury, the Mortgage Bankers Association stated: "It is not clear that private market participants currently have the capacity or resources to absorb the entirety of the gap between the Enterprise limits and the volume needed to satisfy underlying demand.

"Based on reports MBA has received from a broad cross-section of lenders, it does not appear that the Enterprises have developed clear details or timelines associated with their plans to ensure compliance with these limits. Lenders have reported, for example, different requirements communicated to them by Enterprise personnel regarding their per-lender limits, the dates by which they must be compliant, and the timeframe over which they are being measured," the letter states.

in the spring, demand for investment properties and vacation homes had risen 84% year over year – more than double the demand for a primary home, according to a report from Redfin.

Early industry reaction to the suspension was very positive.

The Community Home Lenders Association put out a statement of support: "CHLA commends in the strongest possible way FHFA Director Sandra Thompson for suspending the January PSPA restrictions on higher risk loans, investors and second homes, and small lender cash window access."

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Is Mike Calhoun still in the running for FHFA director?

Posted: 14 Sep 2021 12:14 PM PDT

HW+ Mike Calhoun — Mike Calhoun is president of the Center for Responsible Lending

This week the Biden administration announced several high-level nominations, including Alanna McCargo to lead Ginnie Mae. But missing from those announcements was the White House’s widely expected pick for the next permanent director of the Federal Housing Finance Agency(FHFA), Mike Calhoun.

Sources told HousingWire at the end of last week that Calhoun’s nomination was likely to be announced on Monday, and some media sources preemptively published that information. However, the White House did not release an FHFA announcement in concert with McCargo’s nomination. This latest intrigue is just the latest in a turbulent few years for the agency's leadership.

Calhoun is president of the Center for Responsible Lending (CRL), and if confirmed by the Senate will take over the post from Sandra Thompson, who was appointed acting director by President Joe Biden in June. Calhoun has spent 25 years at CRL, a nonpartisan, nonprofit research and policy institute focusing on consumer lending issues. First serving as general counsel for 10 years, Calhoun has been president of CRL for the last 15 years.

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Alt equity firm Point says it won’t abandon reverse mortgage space

Posted: 14 Sep 2021 07:26 AM PDT

Point, a shared equity reverse mortgage firm that gives homeowners the ability to sell a small fraction of their equity, recently announced that it has raised over $1 billion in new capital commitments from real estate and mortgage-backed securities (MBS) investors. These companies include Atalaya Capital Management (which made a prior investment in 2018), Kingsbridge Wealth Management, Palisades Group, and Redwood Trust.

Point's primary product offering is a home equity investment, which centers on the sale of a small fraction of a customer's home equity, typically in the range between 15-20% of the home's current value. Within 30 years, the homeowner can then sell the home and pay Point through escrow, or buy back the company's investment to remain in the home. A potential customer must retain at least 20% of their home's equity after Point makes its investment.

Alternative equity tapping companies including those offering shared equity investments as well as sale leasebacks have alternated in their postures toward reverse mortgage companies between potential partners sharing information with clients who may only qualify for one over the other, or as direct competitors in terms of relaying potential benefits to borrowers. In an interview with RMD, Point co-founder and chief business officer Eoin Matthews says that the company remains committed to working with reverse mortgage industry participants as opposed to directly competing with the industry.

More than $1 billion in new capital

Point describes the attitudes among customers as enthusiastic in light of many of the events which have caused economic shock to millions of Americans, according to the announcement.

"Point has seen Home Equity Investment (HEI) fundings surge over 100% in the first eight months of 2021, with more homeowners than ever looking for alternatives to traditional home equity loans, HELOCs, and cash-out refinances," the statement reads. "These recently announced investments in Point's HEI platform enable the company to support demand as homeowners emerge from the COVID-19 pandemic keen to tap into their home equity."

Similarly to the reverse mortgage industry, which saw a spike in product interest as a result of the pandemic, Point's statement is somewhat corroborated by the generally heightened activity on the reverse side as seniors appeared more open to exploring alternative options for facilitating cash flow.

Some of the company's new investors also commented on their enthusiasm for Point's platform, including Bo Stern, head of portfolio strategy and risk for Redwood Trust.

"Redwood believes that Point's innovative solution to enable homeowners to participate in the benefits of home price appreciation without having to sell their homes can significantly improve the quality of life for many households," Stern said. "We believe this financing alternative for homeowners squarely aligns with our mission to make quality housing accessible to all American households. Redwood is excited to partner with Point."

Co-founder on working with the reverse mortgage industry

When reached by RMD to ask if this new capital has changed Point's position in terms of its previously-stated desire to work in a collaborative capacity with the reverse mortgage industry, co-founder and CBO Eoin Matthews said that Point still sees the reverse mortgage business as a potentially valuable partner especially in terms of educating homeowners about the responsible use of home equity in financial matters.

"These capital commitments give us the opportunity to bolster our relationships with partners in the reverse mortgage industry," Matthews told RMD. "The HEI product is proving itself highly complementary to the Home Equity Conversion Mortgage (HECM) and the proprietary reverse solutions in the market. Point has hundreds of active partners today and a significant portion come from the reverse mortgage industry."

The capital, he continues, simply provides another opportunity for Point to signal to its partners that there is a degree of camaraderie between the two industries due to the core component of both business models: the home.

"This capital announcement is just one more way for us to signal to partners that we are in this together for the long haul to build a new product class," Matthews added.

Matthews also describes general feelings of gratitude for the reverse mortgage industry players that Point has partnered with in the past, citing those relationships as key components of Point's success in recent years.

"From Point's earliest days, our friends in the reverse mortgage industry have been instrumental to the company's success," Matthews says. "The leadership teams at many of the largest RM operators have provided advice, made important introductions, and helped bring the HEI product class to where it is today. These industry leaders recognized early how symbiotic the HEI product is with reverse mortgages, and it's difficult to underscore just how impactful that support has been."

Echoing thoughts he shared one year ago at RMD's event "HEQ: The Future of Home Equity in Retirement," Matthews describes that home equity investments and reverse mortgages share many of the same goals and that a collaborative posture between the two industries will ultimately help to better serve more seniors seeking options outside of "traditional" forms of financing.

"Ultimately, we're all trying to serve homeowners and the Home Equity Investment is designed to plug the gaps around the reverse mortgage UW box — HEIs can serve younger homeowners, work in junior lien positions, and are not limited by HUD rules on property eligibility," Matthews says. "These are just some of the reasons why we've seen many reverse operators embrace the HEI — they want to help homeowners they otherwise couldn't serve. We've seen many homeowners use a HEI as bridge financing to a HECM and that's going to become more common over time. It's a big opportunity."

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Loans And Mortgage

Tuesday, September 14, 2021