Mortgage – HousingWire |
- Incenter acquires due diligence firm Edgemac
- Sagent, Freedom Mortgage extend software deal
- Fathom’s model is built for a low-inventory environment, execs say
- Mortgage applications jump 8.5% as Russia’s war pressures rates
| Incenter acquires due diligence firm Edgemac Posted: 09 Mar 2022 12:58 PM PST Incenter is adding a third-party due diligence review firm to its umbrella of companies. Edgemac, which Incenter acquired at the end of last year, does due diligencing for mostly non-QM and jumbo loans, as well as private label reverse mortgages that could eventually be securitized. The firm, founded in 2008, also provides document management services for closing, purchase, sale and securitization of residential and business-purpose mortgage loans. Edgemac and Incenter declined to disclose terms of the transaction. Edgemac's clients span banks, investment banks, Trustees, investors, government entities and mortgage companies. Its due diligence process looks at a loan from soup to nuts, verifying whether an appraisal is conducted properly, or making sure a loan meets the ability to repay standard. Edgemac assesses whether the loan can be securitized after the loan is closed. Lenders can then receive a "reliance letter," which allows them to securitize the loans more quickly. Robin Auerbach, president and CEO of Edgemac, said that in light of rate hikes and compressing margins, lenders are especially interested in ways to shift some processes — such as document management — to another party. What role does the servicer play in creating clients for life? Consumer-first lifetime retention is now a prevailing theme in servicing, which increases both MSR values and lifetime customer value. But how can servicers convert "customer for life" from theory to practice? Learn here! Presented by: Sagent Lending Technologies"Lenders are in a tough spot this first quarter," Auerbach said. Auerbach also said that being part of the Incenter umbrella of companies would allow Edgemac to draw upon expertise from Incenter’s other brands. “This will compliment what we do and allow us to continue to provide more services to existing and new customers,” Auerbach said. “We're different companies, but when customers ask us to engage someone else from our counterparties, we do not have to recreate the wheel.” Edgemac will be the 11th company acquired by Fort Washington, Pennsylvania-based Incenter, which offers an array of services related to mortgage, including appraisal management, property tax analysis and trading and advisory services for mortgage servicing rights. Rising rates tend to pull the value of mortgage servicing rights up with them, as the risk of mortgage prepayment declines. Mortgage rates are already on the rise, and despite being dampened in the short term by the conflict in Ukraine, will likely rise further as the Fed takes steps to reduce inflation. The MSR market is already flourishing, as lenders with MSRs on their balance sheet cash in on more favorable pricing. Bruno Pasceri, president of Incenter, said that Incenter is "well-positioned" to help institutions capitalize on the active MSR trading, securitization and purchase markets. "In an industry that is always balancing the competing needs for agility and risk management, Edgemac's services are a welcome addition to Incenter's offerings," said Pasceri. The post Incenter acquires due diligence firm Edgemac appeared first on HousingWire. |
| Sagent, Freedom Mortgage extend software deal Posted: 09 Mar 2022 09:38 AM PST Mortgage servicing software provider Sagent announced on Wednesday that it has extended its software partnership with Freedom Mortgage for another five years, the latest in a string of deals it has struck with some of America’s largest mortgage servicers. Freedom, the largest FHA and VA lender in America, will continue to use Sagent’s cloud-based technologies, including LoanServ (core servicing), Tempo (default management) and CARE (homeowner management). Freedom currently has about $400 billion in servicing UPB. "As a top ten servicer, Freedom Mortgage truly gets the need for a seamless customer experience across the entire homeownership lifecycle," said Sagent CEO Dan Sogorka in a statement. "Sagent's role as a long-term Freedom Mortgage partner is to help them create customers for life with a singular experience from push-button originations to always-engaged servicing and back to new push-button originations." Freedom Mortgage integrates and configures Sagent cloud-based technology across its systems – their native mobile app “hooks into their website,” as well as a proprietary system that uses Sagent’s APIs for “personalized target offers.” In February, Sagent announced that it had inked a deal to create a cloud-native servicing platform for Mr. Cooper, which has $710 billion in servicing UPB. Sponsored Video The agreement reached by both parties stipulates that Mr. Cooper will sell certain intellectual property rights related to its proprietary, cloud-based technology platform for mortgage servicing to Sagent. Meanwhile, Mr. Cooper will receive a minority equity stake in the fintech company. Additionally, under the terms of the agreement, Jay Bray, CEO of Mr. Cooper, as well as Chris Marshall, vice chairman of Mr. Cooper Group, will have a spot on Sagent's board. Sagent said that the Mr. Cooper deal runs seven years, and it expects the servicing platform to be ready for marketing by 2023. The software company also has a mortgage servicing deal with Mike Cagney’s Figure Technologies. Sagent will power Figure's mortgage servicing and help the lender accelerate its "transformative blockchain vision." Sagent was recently named a HousingWire Tech 100 winner. The post Sagent, Freedom Mortgage extend software deal appeared first on HousingWire. |
| Fathom’s model is built for a low-inventory environment, execs say Posted: 09 Mar 2022 06:38 AM PST Fathom Holdings Inc., the M&A-hungry parent of cloud-based real estate brokerage Fathom Realty, achieved supercharged growth in 2021. But it still has a bit of work to do to turn a profit, not that executives seem to be in a rush. In its quarterly earnings report on Tuesday, the company revealed a $12.5 million GAAP net loss for 2021, despite having increased revenue 87% to $330.2 million. In 2020, flat-fee absolutist Fathom lost $1.3 million. On a call with investors Tuesday evening, CEO Josh Harley said the firm is looking to achieve profitability "in the near future." "A lot of companies sacrifice profitability for growth, but I am proud to say, we do not have to operate that way," Harley said on the call, exclaiming that the growth strategy will attract more investors and real estate agents over the long haul. "We believe that we can generate strong profits over time while continuing to grow our business at high rates." The firm, which is attempting to build a real estate search portal similar to that of Zillow, attributed its losses to "investments in future growth, operational and overhead costs related to acquired companies, incremental costs due to transitioning to being a public company, and to increases in non-cash stock compensation expense and non-cash amortization of acquired intangible assets." All told, Fathom made six acquisitions in 2021, including Naberly Solutions, a cloud-based tech firm that adds CRM and website functionality; Georgia real estate brokerage Red Barn Real Estate; Idaho-based brokerage Epic Realty and the Woodhouse Group; hyperlocal data and tech platform LiveBy; and E4:9 Holdings, a residential mortgage lender. During the fourth quarter, Fathom's general and administrative expenses rose to $9.1 million, representing 9.5% of total revenue for the quarter. This is up from $3.6 million a year ago. Fathom executives said they expect general and administrative expenses to continue to rise going forward due to "acquisitions and costs related to scaling and integrating the Company’s business lines." However, the firm did note that it expects that, as a percentage of revenue, these expenses will decline over the long-term as revenue increases. Leaders optimistic about future of brokerageDespite these challenges, Harley and Fathom’s president and CFO Marco Fregenal expressed optimism about the firm's rising transaction and agent count. During the fourth quarter Fathom Realty agents completed 10,800 transactions — a 43% year-over-year increase. The brokerage's agent count also grew 48% year over year to 8,100 agents. Although the brokerage increased its agent fees in January due to inflation and growing expenses — increasing its annual agent fee 20% to $600 per year and the transaction fee 11% to $500 for the first 12 completed transactions — Harley said they have not seen a rise in attrition or had pushback from agents. As housing inventory continues to tighten, making it harder to agents to complete transactions and earn commissions, Harley believes that Fathom's flat fee model will help the brokerage attract even more agents, leading to an increase in the overall number of transactions closed. "If home prices fall, many of our competitors may see a strain on their profitability because they take a percentage split on every transaction, but that would not be the case for Fathom," Harley said. "We earn the same transaction fee regardless of if the agent earns a $10,000 commission or an $8,000 commission. We believe that this should allow us to capture market share from real estate with old, traditional commission models." Core services to bring profitabilityHarley and Fregenal also cited Fathom's growing mortgage, technology and title insurance sectors as sources of profitability in the future. Fathom's title firm is currently licensed in 29 states and, while the exact attach was not disclosed, Harley did note that the title firm's Q4 earnings were equivalent to its earnings for all of 2020. Frenegal told investors that the overall attach rate for all of Fathom's ancillary services was 5-6% and that they hope to increase this to 10% in the next 12-18 months. According to Harley, this increase coupled with a rising agent count will lead to an uptick in revenue. "As our agent base grows, those agents generally bring more transactions with them and as we add more transactions we have more opportunities to capture mortgage, title and insurance revenue," Harley said on the call. Looking ahead, Harley said that Fathom hopes to expand to all 50 states and Canada (it currently operates in 36 states and Washington, D.C.). In addition, the firm is aiming to generate between $425 million and $435 million in revenue in 2022. "We believe Fathom has a clear, visible and long runway with tremendous growth prospects," Harley said. "No matter what the market holds, we believe our model is positioned to win." The post Fathom’s model is built for a low-inventory environment, execs say appeared first on HousingWire. |
| Mortgage applications jump 8.5% as Russia’s war pressures rates Posted: 09 Mar 2022 04:00 AM PST Mortgage applications jumped 8.5% for the week ending March 4, as mortgage rates dropped for the first time in three months as a result of Russia's war in Ukraine, the Mortgage Bankers Association (MBA) reported on Wednesday. Borrowers' demand for mortgages increased across the board. The MBA's seasonally adjusted refi index rose 8.5% from the previous week, with a larger gain in government refinances. Meanwhile, the purchase index was up 8.6% in the same period. Compared to the same week one year ago, mortgage apps overall dropped 35.8%, with a sharp decline in refi (-49.9%) compared to purchase (-7.4%). The survey, conducted weekly since 1990, covers over 75% of all U.S. retail residential mortgage applications. The trade group estimates that the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) decreased to 4.09% from 4.15% the week prior. For jumbo mortgage loans (greater than $647,200), rates dropped to 3.79% from 3.88% the week prior. The survey showed that the refi share of mortgage activity decreased to 49.5% of total applications last week, from 49.9% the previous week. VA apps rose to 10.4% from 10.2% in the same period. How should the current market impact lenders’ tech adoption? HousingWire recently sat down with Polly CEO Adam Carmel to discuss how lenders can break old habits and redefine the mortgage process through innovation and modern, advanced technology. Presented by: PollyThe FHA share of total applications increased to 8.7% from 8.6% the prior week. Meanwhile, the adjustable-rate mortgage share of activity rose from 5.3% to 5.2%. The USDA went from 0.4% to 0.5%. Experts told HousingWire that the turmoil could lower mortgage rates at least in the short-term, because investors often flee to safer options during periods of conflicts, such as U.S. Treasury notes, bonds and mortgage-backed securities. On Thursday, Freddie Mac PMMS Mortgage Survey showed its rates at 3.76% for the week ending March 3, down from 3.89% in the previous week. Buyers on average bought 0.8 mortgage points. "Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other," Kan said in a statement. The post Mortgage applications jump 8.5% as Russia’s war pressures rates appeared first on HousingWire. |
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