Mortgage – HousingWire

Forbearance rate declines to 2.15%
Rocket Mortgage aims to expedite mortgage services to local banks and credit unions
Waiting for a big drop in home prices? It could be a while
LoanDepot profits surge in Q3 as margins rebound
Servicers prepare for $10B homeowner assistance fund

Posted: 01 Nov 2021 01:00 PM PDT

Forbearance declined at a steady pace across the board last week, with many borrowers having already reached the end of their 18-month period provided by the CARES Act.

The total number of loans in forbearance decreased by six basis points to 2.15% as of Oct. 24, according to the latest report from the Mortgage Bankers Association (MBA). In the previous week, the rate dropped seven basis points to 2.21%.

Just over one million homeowners are still in forbearance plans. The survey included data on 36.7 million loans serviced as of Oct. 24, 73% of the first-mortgage servicing market.

Fannie Mae and Freddie Mac loans in forbearance declined three basis points to 0.97%, below the 1% level for the first time since the beginning of the pandemic. Meanwhile, Ginnie Mae loans decreased by 7 bps to 2.65%

The most notable decline was in the private-label securities (PLS) portfolio, which dipped eight basis points to 5.13%. The share of independent mortgage bank loans in forbearance fell six basis points to 2.43%. For depository servicers, the percentage declined 4 bps to 2.07%.

Natural disasters and forbearance: What borrowers and mortgage servicers need to know

The United States is grappling with a sharp rise in natural disasters, including wildfires, an active hurricane season, floods, tornadoes and mudslides. The mortgage industry needs to be proactive in examining programs to help borrowers recover.

Presented by: Mr. Cooper

According to Mike Fratantoni, MBA's senior vice-president and chief economist, forbearance exits slowed at the end of October to the slowest pace since late August.

"With so many borrowers having reached the end of their 18-month forbearance term, we expect a steady pace of exits in November," he added.

The survey shows that 15.6% of total loans in forbearance were in the initial stage last week, and 74.2% were in a forbearance extension. The remaining 10.2% were re-entries.

Weekly call volume for servicers was down, from 7.7% of the servicing portfolio volume the week prior to 5.9%—average speed to answer decreased from 2.1 to 1.5 minutes.

During the last 15 months, MBA's data revealed that 29.1% of exits resulted in a loan deferral or partial claim. Also, 20.6% represented borrowers who continued to pay during the forbearance period. However, 16.7% were borrowers who did not make their monthly payments and did not have a loss mitigation plan.

Total requests were at 0.04% of servicing portfolio volume, while exits represented 0.09% of the total – in the previous week, the share was 0.10%, the report said.

Besides the forbearance plans, some borrowers struggling to pay their mortgages and bills will also be eligible for the $10 billion federal Homeowner Assistance Fund (HAF).

A component of the American Rescue Plan Act, the assistance fund was approved by Congress in March to prevent homeowners from falling behind on their mortgage, losing utility services, or being displaced.

The Department of Treasury is expected to begin approving state plans for the HAF in the coming weeks. However, the expectation is that many homeowners won't receive checks until 2022.

Consumer protection attorneys and servicers still have questions about how the money will be distributed and who will be left holding the bag if something goes wrong.

The post Forbearance rate declines to 2.15% appeared first on HousingWire.

Rocket Mortgage aims to expedite mortgage services to local banks and credit unions

Posted: 01 Nov 2021 12:49 PM PDT

Mortgage lending titan Rocket Mortgage is bringing its tech straight to financial institutions. The lender announced Friday a partnership with Salesforce to deliver Rocket’s mortgage origination capabilities directly to banks, credit unions and other FIs through Salesforce Financial Services Cloud.

Rocket is now the first mortgage lender to provide an end-to-end “mortgage-as-a-service” solution through Salesforce’s financial cloud.

Already the leading originator in the U.S. thanks to a near $84 billion dollars in volume in the second quarter, Rocket sees this program as an opportunity to further increase market share. It’s a significant lending play, as many of these smaller credit unions and community banks aren’t large enough to run their own mortgage operations. Jay Farner, Vice Chairman and CEO of Rocket Companies, said it was this lending chasm that Rocket saw as opportunity.

“We recognize the important and personal role local banks and credit unions play with so many Americans – they have a trusted relationship with their customers,” Farner said. “Financial institutions can now combine those relationships they’ve already established, while leveraging Rocket Mortgage’s transformational platform powered by Rocket technology.”

There are nearly 5,000 FDIC-insured banks and more than 5,000 credit unions in the U.S. While some have highly specialized mortgage operations, most have disparate partners and technology vendors that handle home loans for them, the lender said. Now, through this partnership, Rocket Mortgage plans to deploy its technology in Salesforce Financial Services Cloud regardless of how the financial institution chooses to offer mortgages – simplifying a potentially fragmented process.

According to the latest FDIC Community Banking Study, by the end of 2019, over 99% of community banks reported some level of family residential mortgages, a percentage that has held steady for many years. However, mortgages average just 20% for these community banks’ asset ratios, despite community banks representing 97% of all banks operating in the US.

According to Rocket, if financial institutions have licensed mortgage loan officers they will be able to use Rocket Mortgage’s technology, directly in Salesforce Financial Services Cloud, as their Point-Of-Sale (POS) and loan origination system (LOS). FIs will also be able to offer home loans without a hired underwriter, processor or compliance and closing teams as Rocket will handle the processing after the FI’s loan officer helps clients complete the application.

“We’re incredibly proud to expand our partnership with Jay Farner and his team at Rocket Mortgage with new innovations for the financial services industry,” said Marc Benioff, Chair and CEO of Salesforce. “Together, we are reimagining the mortgage experience for a digital-first and trust-first world, transforming the home buying process for thousands of financial institutions and their customers.”

The post Rocket Mortgage aims to expedite mortgage services to local banks and credit unions appeared first on HousingWire.

Waiting for a big drop in home prices? It could be a while

Posted: 01 Nov 2021 12:45 PM PDT

With mortgage rates falling during the COVID-19 crisis, many households were able to refinance to lower payments. Because a mortgage payment is almost always the most prominent payment households make each month, lower payments have allowed homeowners who bought homes to have better cash flow over the last few years. This means mortgage holders who have refinanced their homes to lower payments while their wages have also grown look great on paper.

In general, homeowner households were financially solid going into the crisis. When COVID-19 happened, some sellers were able to sit back and watch the market. We didn't see any mass hysteria to sell. It was just a matter of weeks before the buyers returned and sellers sold their homes, leading home sales to get to pre-cycle highs in 2020 and 2021.

And then home prices took off, and total inventory levels dropped toward all-time lows. The housing market prevailed during COVID-19, and this was a positive outcome not only for the U.S. housing market but for the American economy.

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LoanDepot profits surge in Q3 as margins rebound

Posted: 01 Nov 2021 10:58 AM PDT

Nonbank heavyweight loanDepot reported strong results in the third quarter of 2021, with the lender growing its market share to 3.5%.

Anthony Hsieh, founder and CEO of loanDepot, said that the results are "just a preview of what is to come."

According to loanDepot's quarterly earnings report released on Monday, net income jumped to $154.3 million compared to $26.3 million in the second quarter.

The growth was fueled by the lender’s gain-on-sale margins rising to 2.84% from 2.28% the previous quarter. The lender also said in their earnings report that the quarter -over-quarter increase was driven by a rise in rate lock volume and a $20 million decrease in personnel expenses.

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Servicers prepare for $10B homeowner assistance fund

Posted: 01 Nov 2021 04:00 AM PDT

Roughly seven months after it was established, the $10 billion federal Homeowner Assistance Fund is expected to begin approving state plans in the coming weeks. But many homeowners won’t receive checks until 2022.

A component of the American Rescue Plan Act, the assistance fund was approved by Congress in March and allocates $10 billion to prevent homeowners from falling behind on their mortgage, losing utility services, or being displaced.

But consumer protection attorneys and servicers still have major questions about how the money will be distributed and who will be left holding the bag if something goes wrong.

According to the program rules, states and eligible territories are tasked with administering the money, subject to the Treasury Department approval. Each state must also submit its own HAF plans to the Treasury for approval. For servicers, it means that they may have to follow different rules – far from an easy task.

"I think [with] this program it's not going to help enough people. But the ones it does, it is going to help a bunch. And you're (servicers) going to be dealing with 50 states," said Jason Kwasny, executive vice-president of Servicing at The Money Source Inc., during a panel in the Mortgage Bankers Association Conference in San Diego.

How Freddie Mac is addressing affordable housing challenges

As part of Freddie Mac's mission to provide liquidity, stability, affordability and equality to the housing market, Freddie Mac created its Housing Solutions team in 2020 to reduce barriers to homeownership and provide solutions to some of the nation's toughest housing challenges.

Presented by: Freddie Mac

Nanci Weissgold, the financial services & products group co-chair at Alston & Bird, LLP, said that the mortgage servicing industry is attempting to hammer out a deal with the states so it can have one uniform cooperative agreement to distribute the funds.

"It is always easier to have these plans as consistent as possible among the states because the servicers will have to operationalize it,” she said. “And if you have 50 different plans, it makes it very challenging."

Initially, states and eligible territories received 10% in upfront payments to develop pilot programs that are already in place in 12 states, including California, Ohio, and Tennessee.

At the moment, states are waiting to have their plans approved to receive the bulk of the funding. The Treasury Department told HousingWire this week that it has begun to send feedback to states on their HAF plans. The expectation is the agency will begin approving plans in the coming weeks.

Marina Walsh, the Mortgage Bankers Association‘s vice president of industry analysis, said the sooner the funds are spent, the more successful the program will be.

"If you're a struggling borrower, you need the money now," she said.

Borrowers, however, may start not receive checks until 2022, according to Weissgold. There remain outstanding questions about eligibility, such as who will be responsible for approving borrowers and how HAF funds will be applied to their payments, she said.

"Servicers don't want to be put in that place of having somebody possibly second-guess their decisions," she said.

Under the Biden administration, regulators at the CFPB and other agencies have loudly said they won’t tolerate servicers who don’t do right by borrowers coming out of forbearance this fall. “Unprepared is unacceptable,” the agency warned in one letter. Then, in late June the CFPB laid out the rules for mortgage servicers to follow in a 200-page guidebook.

The guidelines to the HAF program require that homeowners document and describe their financial hardship — and it has to have occurred after Jan. 21, 2020. They must also have incomes that do not exceed 150% of either the area median income or 100% of the median income for the United States, whichever is greater.

The funds can be used for mortgage payment assistance or mortgage principal or interest rate reductions. It can also be used to cover utility payments — including electric, gas, home energy (including firewood and home heating oil), water and wastewater.

Homeowners are also permitted to use the funds to pay for broadband internet, flood or mortgage insurance, homeowner's association expenses, condo association fees, co-op fees.

The Treasury said it had discouraged participants from imposing additional eligibility criteria – such as foreclosure status, credit score, bankruptcy status, the existence of liens on the property, or previous cash-out refinances. If they do, they must explain how they would help the program reach eligible homeowners.

"All programs can be helpful. The key is making sure that the servicers and the investors are aware and understand the eligibility; then, in turn, that the customer is made aware of it," said Perry Hilzendeger, president of servicing at Homepoint.

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Loans And Mortgage

Tuesday, November 2, 2021