Mortgage – HousingWire

Freddie Mac rolls out $1.8 billion CRT note offering
Deephaven hires Gulotta to lead wholesale sales on East Coast
HW+ Member Spotlight: Eric Lapin
CFPB’s appeal to Ocwen suit off to a rough start
Now is basically the worst time ever to buy a house
New program features side-by-side comparisons of reverse & forward mortgages
This is the uncertain future of the PLS market
Better.com to employees: Please quit
Fannie Mae unveils $1.49 billion reperforming loan sale
Mortgage credit availability dips as home prices surge

Freddie Mac rolls out $1.8 billion CRT note offering

Posted: 08 Apr 2022 01:51 PM PDT

Freddie Mac has unveiled its third credit risk transfer offering of the year through its Structured Agency Credit Risk (STACR) program. This latest transaction will bring the total note issuance so far in 2022 through STACR to $5.1 billion secured by single-family mortgage reference loan pools valued in total at $121.5 billion.

This latest credit risk transfer (CRT) offering, STACR 2022-DNA3, involves a $1.8 billion note backed by a reference loan pool of 140,950 residential mortgages with an outstanding principal balance of $42.9 billion

The leading loan originators represented in the reference loan pool on a percentage basis for this third STACR transaction, according to Kroll Bond Rating Agency's [KBRA's] ratings report on the deal, are Rocket Mortgage, 9.1%; United Wholesale Mortgage (UWM), 7%; J.P. Morgan Chase Bank, 5%; and Pennymac, 4.8%.

KBRA's presale ratings report on the STACR 2022-DNA3 offering indicates that appraisal wavers were granted for nearly 40% of the reference pool loans, which were assessed instead through the agency's Automated Collateral Evaluator, or ACE, system.

"It should be noted that while the ACE program assesses the acceptability of a property value or sales price based on the use of proprietary models and market data, it does so without Freddie Mac having performed a property review or having obtained a valuation of the property," the KBRA report states. "As a result, KBRA applied a broad valuation haircut to such loans."

The KBRA report also mentions that the loan reference pool for the CRT offering has far more geographic diversity when compared to a typical residential mortgage-backed securities offering involving high-balance loans. The average loan balance in the reference pool for the current CRT offering is $304,267.

"When considering the average California percentage in KBRA-rated prime jumbo pools (approximately 45% to 50%), the California concentration in STACR 2022-DNA3 is relatively low at 16.0%," the KBRA report states. "… Geographic diversity helps mitigate the risk that a regional economic recession or natural disaster will have an outsized impact on default rates."

The initial STARC deal of this year, STACR 2022-DNA1 was a $1.4 billion note offering issued against a reference loan pool of 190,774 residential mortgages with an outstanding principal balance of $33.6 billion. In the second offering, STACR 2022-DNA2, Freddie issued a $1.9 billion note against a reference pool of 143,889 single-family mortgages valued at about $45 billion.

The leading originators for the loan pool in the first STACR offering of 2022, according to a KBRA ratings report, were UWM, 7%; Newrez LLC, 7%; Rocket Mortgage, 6.6%; Pennymac, 6.3%; and J.P. Morgan Chase, 5.9%. UWM also was the leading originator in the second STACR deal of 2022, at 9.1% of the loan pool. Rocket Mortgage also made a showing, at 8.3%, followed by Wells Fargo, 6.1%; J.P. Morgan Chase, 5.9%; and Newrez, 5%.

Freddie Mac earlier this year announced that its credit-risk transfer (CRT) program is projecting note-issuance volume of at least $25 billion in 2022.

Through Freddie Mac's STACR transactions, private investors participate with the agency in sharing a portion of the mortgage credit risk in the reference loan pools retained by the agency. Investors receive principal and interest payments on the STACR notes they purchase, but if credit losses exceed a predefined threshold per the security issued, then investors are responsible for absorbing the losses exceeding that mark.

Freddie Mac's overall single-family CRT program in 2021 issued some $18.7 billion in notes backed by mortgage pools valued in total at nearly $829 billion through 10 STACR offerings and 11 ACIS [Agency Credit Insurance Structure] transactions.

"Since the first CRT transaction in 2013, Freddie Mac's single-family CRT program has cumulatively transferred approximately $85.3 billion in credit risk on approximately $2.7 trillion in mortgages through STACR and ACIS," Freddie Mac announced in late February. "As of December 31, 2021, approximately 53 percent of the single-family mortgage portfolio was covered by credit enhancement."

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Deephaven hires Gulotta to lead wholesale sales on East Coast

Posted: 08 Apr 2022 01:42 PM PDT

Deephaven Mortgage hired Anthony Gulotta to lead wholesale sales on the East Coast, the non-QM lender announced this week.

Gulatta, based in Charlotte, will work to build the lender’s presence with mortgage brokers on non-agency products.

"Anthony combines a strong understanding of the business opportunities for mortgage brokers with a dedicated focus on education and client support," John Keratsis, president and CEO of Deephaven Mortgage, said in a statement. "This combination has led to his success building strong and profitable wholesale partnerships. We are delighted that he is bringing this expertise to Deephaven."

Gulotta has spent more than three decades on mortgage operations and wholesale sales, with stints at Movement Mortgage, Figure, Premier Lending, Quicken Loans (now Rocket Mortgage), and Wells Fargo.

"I believe that non-QM/non-agency lending represents the next phase of the mortgage industry, and I'm excited to influence it at Deephaven," Gulotta said in a statement. "This is the company that helped pioneer today's non-QM market, and they continue to advance the industry."

Deephaven, owned by alternate investment firm Pretium, shut down its non-QM operation and laid off all its workers in spring of 2020 when the pandemic sapped the market of liquidity. It returned in early 2021 and issued a $146 million security, its first issuance since it shut down.

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The company recently added Lisa Heitzmann as chief operating officer. Before joining Deephaven, Heitzmann was principal at LGH Consulting. She also held executive roles at Xome, Wells Fargo, Bank of America and IndyMac Bank.

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HW+ Member Spotlight: Eric Lapin

Posted: 08 Apr 2022 01:03 PM PDT

This week's HW+ member spotlight features Eric Lapin, who was recently appointed chief strategy officer at FormFree. Tapping into more than 25 years of experience, Lapin will strategically identify and execute growth opportunities at FormFree to drive the company forward. Prior to joining FormFree, Lapin served as first vice president of corporate development, national agency services, at Old Republic Title, and has also held leadership positions at Altisource, Black Knight, First American and Credit Suisse.

Below, Lapin answers questions about the housing industry:

HousingWire: What is your current favorite HW+ article and why?

Eric Lapin: I've been enjoying the HW+ team's coverage of Figure Technologies (including this recent piece from Flávia Furlan Nunes). I appreciate companies with the boldness and fortitude to drive the industry forward. That's what drew me to this role at FormFree, too.

HousingWire: What is the weirdest job you’ve ever had?

Eric Lapin: I attended Old Dominion University in Norfolk, Virginia. There was a row of clubs and restaurants right in the middle of campus, including O'Sullivan's Wharf on Colley Avenue where I waited tables during the day.

A few nights a week, I also worked DJ shifts at a bar on Hampton Boulevard called The Elbow Room. I had a blast playing all sorts of rock, dance and hip-hop music using the bar's turntables and my own CD collection. Being around that energy was enthralling and created a nice diversion from studying.

HousingWire: If you would have picked a different career, what would it be?

Eric Lapin: In a different life, I would be a professional musician or music producer. I currently play in two bands as a drummer in Charleston, South Carolina. One is a rock band, and the other is a jam band (complete with a horn section) that specializes in 90s and 2000s hip hop and funk.

We have an agent and play private gigs, clubs, corporate events, festivals and even the occasional wedding — though we politely refuse to do 'typical' wedding favorites like the Macarena, Brown Eyed Girl, and the Electric Slide.

People often say that when you do something you love, it won't feel like work. That is how I feel about playing music. I love being able to improv on the fly, translating the energy of my bandmates and the crowd into something new and different. It's even fun when one of us messes up. It's all part of the "live" experience, and you can’t recreate that.

HousingWire: What is the best piece of advice you’ve ever received?

Eric Lapin: When I was in my mid-20s, I worked for Provident Bank based in Cincinnati, which was later acquired by PNC. As my role with the bank grew, I was fortunate to have the opportunity to learn various areas of the lending business, including wholesale, correspondent and warehouse lending.

There was always a lot going on within the different divisions, and the business would ebb and flow depending upon the rate environment. The president of the mortgage division was a seasoned veteran in finance, and whenever he would hold company meetings, he would end the calls by taking questions from the audience.

I'll never forget when I asked him, "When do you think we will stick with an operational flow that works and will help drive more business"? He replied, "If it ain't broke, break it." His point was that complacency kills progress. Learning and improving is an ongoing process, so we should never stop augmenting our knowledge and trying new approaches.

HousingWire: What's 2-3 trends that you're closely following?

Eric Lapin: Here are the following:

Digital currency. Banking consortiums are emerging that seek to facilitate the trading of loan pools via stablecoins that are valued on par 1:1 with the U.S. dollar. By reducing the latency of asset transfers, these consortiums hope to enable real-time settlement at reduced cost and with greater security. This added efficiency has the potential to help financial institutions pick up a few basis points per transaction.
Blockchain. Distributed ledger technology has laid the groundwork for much more than just digital currency, especially as we get better at connecting legacy systems and data sources with blockchains. These connection points, called "oracles," make it possible — not just theoretical — for lenders to reduce compliance costs while conducting faster transfers of loan trades and assignments of transfers on loan servicing.
Investment in technology. Forward-thinking lenders see today's margin compression as a call to adapt and change, not hunker down. As volume slows, many are considering enhancements to their current tech stack as a long-term growth strategy.

HousingWire: What keeps you up at night and why?

Eric Lapin: I worry we're not making enough progress when it comes to creating opportunities for more renters to become homeowners. Housing inventory is low, interest rates are rising and median income isn't keeping up with rent inflation. I believe government and private actors alike need to move faster to address these trends and make generational wealth-building available to many more families.

HousingWire: What's one thing that people aren't paying attention to that you think they should be paying attention to?

Eric Lapin: We all need to pay better attention to what's going on outside of our respective 'bubbles.' Instead of saying "we don't do that here" or "we have never done it that way," leaders should pay attention to what is working well in other countries as relates to lending. Legacy thinking and well-intended regulation have kept industry innovation to a snail's pace, especially in the United States, when in reality data, technology and analytics exist today and could provide value right now.

The financial institutions that are thinking globally, learning from others' success stories and investing in research and development are the ones making the greatest strides and positioning themselves for future success.

Don’t forget, HW+ members receive exclusive pricing at HW Annual 2022, click here to learn more.

To become an HW+ member, click here.

For more information on HW+ benefits, click here.

To view past issues of our HW+ exclusive HousingWire Magazine, go here.

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CFPB’s appeal to Ocwen suit off to a rough start

Posted: 08 Apr 2022 11:58 AM PDT

The Consumer Financial Protection Bureau's attempt to revive a mortgage servicing misconduct lawsuit against Ocwen Financial Corp. is in choppy waters.

On Wednesday, the U.S. Court of Appeals for the Eleventh Circuit ruled that most of the watchdog's complaints against Ocwen that occurred from January 2014 to Feb. 26, 2017, are prohibited because of a 2014 consent order. The bureau can only advance claims for alleged misconduct that are not covered by the terms of consent judgement, the Court said.

"This middle-course reading avoids the problem of rendering the settlement agreement's enforcement mechanism meaningless, while preserving the CFPB's authority to enforce the law," the court’s opinion read.

CFPB's suit against Ocwen has been thrown back to the District Court where the bureau's nine claims against Ocwen will be evaluated on a claim-by-claim basis. The Appeals Court mentioned in its decision that out of the nine claims, one claim – that Ocwen botched escrow accounts – may have some legs and isn’t covered by an on-point servicing standard.

This claim by the CFPB alleges that Ocwen in 2014 failed to conduct escrow analyses and sent some borrowers’ escrow statements late or not at all.

The CFPB did not immediately respond to a request for comment.

Mortgage servicers: If you're not obsessed with customer service, you're falling behind

To take full advantage of the current market conditions, lenders and servicers must obsess over customer service.

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In a statement this week, Ocwen said it will continue to "vigorously defend itself."

"We are pleased that the appellate court adopted our position and acknowledged that the CFPB cannot unilaterally ignore the provisions of the prior settlement agreement," the servicing giant said.

Ocwen added that it "looks forward to engaging with the District Court and providing analysis that demonstrates that each of the remaining counts in the CFPB's complaint is barred by the 2014 consent judgement."

In 2017, the agency announced that it was suing Ocwen for "failing borrowers at every stage of the mortgage servicing process."

The CFPB's lawsuit alleged that Ocwen cost borrowers money, and in some cases, their homes, as a result of years of "widespread errors, shortcuts, and runarounds" dating back to January 2014.

The bureau alleged that Ocwen botched "basic functions like sending accurate monthly statements, properly crediting payments and handling taxes and insurance."

The current dispute stems from now-settled allegations by the CFPB that date to the early days of the watchdog agency.

In 2013, the CFPB accused Ocwen of "engaging in significant and systematic misconduct that occured at every stage of the mortgage servicing process." The CFPB alleged that the mortgage servicer failed to timely and accurately apply payments made by borrowers, and that it charged borrowers authorized fees for default-related services.

Those accusations were resolved with a consent order issued Dec. 17, 2013, shielding the servicer from future actions arising from the alleged practices up to that point. Ocwen also agreed to pay $2 billion in consumer relief as part of the settlement.

In recent months, the CFPB notified the mortgage industry that it is closely monitoring servicers and how they conduct themselves to help borrowers avoid foreclosures.

It's at least the fifth time the CFPB has issued a similar warning to servicers as they navigate the end of forbearance and loss mitigation. It’s not clear if any enforcement actions have resulted from the promise of increased scrutiny.

The post CFPB’s appeal to Ocwen suit off to a rough start appeared first on HousingWire.

Now is basically the worst time ever to buy a house

Posted: 08 Apr 2022 10:53 AM PDT

It's a depressing combination. A stunning rise in mortgage rates, historically low levels of inventory, and skyrocketing housing prices are fueling consumer pessimism.

Fannie Mae‘s Home Purchase Sentiment Index, which tracks the housing market and consumer confidence to sell or buy a home, dropped by 2.1 points to 73.2 in March from the previous month. Compared with the same period a year ago, the index fell 8.5 points.

Of the six index components, a survey-high of 69% of respondents expect mortgage rates to continue their upward trend over the next 12 months. About 73% of the participants said it's a bad time to buy a home, setting a new survey-low.

“The ‘Good Time to Buy’ component of the index reached yet another record low, with high home prices, rising mortgage rates, and macroeconomic uncertainty serving as consumers’ chief concerns,” Mark Palim, Fannie Mae's vice president and deputy chief economist, said in a statement.

Consumers expect their financial situations to worsen over the next year. These concerns will likely diminish mortgage demand from move-up buyers, which in turn will translate into fewer available entry-level homes, Palim said.

Respondents worried about job losses increased 2 percentage points to 11% in March from February. About 13% of the survey participants said their household income was significantly lower in March than the past 12 months, a percentage point increase from the previous month.

Presented by: SRE.com

"The big opportunity here is the aging demographic," said Savage. "The boomers are a massive population and there’s going to be a record number of families that want to look at a reverse mortgage."

The post New program features side-by-side comparisons of reverse & forward mortgages appeared first on HousingWire.

This is the uncertain future of the PLS market

Posted: 08 Apr 2022 03:00 AM PDT

The pace of deals in the private-label securities market has started to slow as the second quarter of the year gets underway and interest rates continue their upward climb — with rising inflation and the war in Ukraine, which is impacting supply chains, helping to fuel uncertainty over the future.

That's what it looks like to some of the experts behind the scenes who are responsible for rating and conducting due diligence on private label securities (PLS) offerings. With that said, the pace and volume of deals in the PLS market so far this year has still outstripped last year's market performance over the same period.

What the future holds, however, is less certain.

"If you compare the first quarter of this year to last year, yes, the volume is still higher [this year]," said Sonny Weng, vice president and senior credit officer at ratings firm Moody's Investors Service. "We also saw that on our end. So, generally that’s correct. I think the harder question is what will happen going forward."

Michael Franco, CEO of third-party due-diligence review firm SitusAMC, explained that it usually takes two to three months for loans originated in the primary market to make their way through the residential mortgage-backed securities (RMBS) pipeline. "Therefore, you would expect the loans being securitized in transactions during Q1 2022 to have been largely originated during late 2021," he explained.

But the precipitous rise in interest rates over a very short time — up 1.5 percentage points over the past three months — has made it difficult to price PLS deals in a cost-effective way for some issuers, according to Weng. The volatile rate environment affected deal volume in the first quarter of this year, even if it exceeded the mark set in 2021 over the same period.

It is likely to continue to impact PLS deal count and volume in the second quarter, so long as rates continue to rise. That's being driven, in large part, by the fact that many of the mortgages being pooled for PLS deals now were originated two to three months ago at rates lower than current market rates.

"We begin to notice that because there’s just too much supply in the market, and because of inflation and the expectation that the [Federal Reserve] will increase the rates, that investors were demanding a higher coupon," Weng said. "And obviously, when your mortgage pool has a lower [interest] rate, and you also have to cover certain fees, a higher coupon translates into a higher funding cost for the issuers.

"So, we saw a couple of deals pushed [postponed] in January and February, and as time went on, more deals got pushed — and of course, the war in Ukraine didn’t help at all. Issuers either cancelled their deals or pushed the timing of the deals further down the road in hopes of better market conditions, and that will obviously have an impact on the issuance volume."

Padma Rajagopal, also a vice president and senior credit officer at Moody's, said the slowdown in the PLS market was not predictable. She noted that it's a byproduct of external factors such as rapidly rising inflation and interest rates, and a brutal war in Ukraine that is exacerbating inflation because of its impact on supply chains.

"I think the driver of this — the decisions to cancel or move some issuance to another time — is driven a lot by the volatility with respect to [interest rate] spreads, which is happening in the market due to many reasons, including the war [in Ukraine], and also because of rate movements," Rajagopal said. "But there were still [PLS] deals that went out after pausing because maybe they [the issuers] found an investor to buy it, and it just took them more time."

Franco added that the current rising-rate environment is likely having the greatest impact on smaller players hoping to access the PLS market.

"We expect the volatility in the market to shake out some of the less-capitalized origination entities that may have been interested in issuing PLS," he said. "…They don't have the balance sheet to hold onto assets longer term if the securitization window isn't open when they need it to be."

Franco said that will likely result in some smaller issuers become less active in the PLS market.

"Expected [PLS] volumes were usually being predicted in the $200 billion range [in 2022] coming from prime, non-QM, reperforming/non-performing [securitizations]; CRT [credit-risk transfer transactions]; single-family rental [deals]; agency investor loans and other areas," Franco said. "Some of those projections have come down a bit over the course of March. [However,] many players still expect overall securitization volumes in the non-agency space to be $175 billion-plus for 2022."

When rates in the housing market will stabilize is an unknown at this point, however. Weng said the market has clearly shifted to a purchase cycle as rate-and-term refinancing has declined in the face of rising rates. That, in turn, has led to an overall decline in mortgage originations, which is the collateral fuel that drives the PLS market.

Non-QM player Angel Oak Mortgage Solutions caught flak from brokers when it announced last week that it would break locks and have borrowers re-lock at current rates, instituting a new 30-day rate lock policy. The company said it was forced to make rapid adjustments to ensure liquidity in a highly volatile market.

"The sharp rise of the 2-year swap rate along with the rapid increase in credit spreads of the securitization market have led to an unusually fast increase in non-QM rates that the industry has not seen before," an Angel Oak spokesperson said.

"The 30-year fixed mortgage rate increased for the fourth consecutive week to 4.90% [as of the first week of April] and is now more than 1.5 percentage points higher than a year ago," said Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association. "As higher rates reduce the incentive to refinance, [mortgage] application volume dropped to its lowest level since the spring of 2019. The refinance share of all applications dipped to 38.8%, down from 51% a year ago."

Freddie Mac's chief economist, Sam Khater, points out that rates have actually "increased 1.5 percentage points over the last three months alone," which has increased the monthly payment for those seeking to buy a home by 20% compared to a year ago and consequently "softened purchase activity."

Weng said that if inflation remains untamed, then potentially rates can go up even higher. "So, that’s why it’s hard to say where that stability is" at this point, he added.

"Mortgage rates have moved higher after being very low for an extended period of time, so prime rate-term refi activity will naturally slow unless something pushes rates back down again," said Roelof Slump, managing director of U.S. RMBS at Fitch Ratings. "However, this seems unlikely given where we are in the rate cycle and against the inflation backdrop."

Still, rates don't have to drop for the PLS market to thrive. They just need to stay put for a while.

"Once this volatility settles out, rates could moderate somewhat, and the stabilization may also spur more activity," Slump added.

For example, he said "there may still be opportunity for some borrowers to credit cure and refinance into conforming or prime mortgage products, at lower coupons versus where they are today."

And although the non-QM market, which serves non-agency borrowers, such as the self-employed, also faces challenges in a rising rate environment, Slump said "non-QM needs aren't likely to go away."

Franco echoed that sentiment, saying expanded-credit products — such as non-QM loans — will likely "increase as a percentage of total mortgages moving forward."

Year to date as of the beginning of April, a total of 29 non-QM securitizations were completed or underway valued at $12 billion, compared to 17 deals valued at $4.8 billion over the first full three months of 2021, PLS data compiled by Kroll Bond Rating Agency (KBRA) show.

An additional eight non-QM securitization offerings were active over the first three months of this year as well but didn't show up among the deals tracked by KBRA — although they were rated by other agencies, such as Fitch Ratings. If those eight non-QM private label transactions are added into the mix, the total number of deals over the period rises to 37 valued at $15.2 billion.

"Home prices are moving up and rates are moving up, so people will be spending a higher percentage of their income on housing, which means more loans moving into expended credit non-agency programs," Franco said.

Rajagopal added that one sector that appears to be less affected by the current volatile rate environment is the single-family rental market, "where we are seeing more new issuers showing interest in the space."

In fact, year to date through April 12 of this year, according deal data tracked by KBRA, there were a total of 62 prime and non-prime RMBS transactions backed by loan pools valued in total at nearly $32 billion. RMBS deals backed by investment properties accounted for 18 of those offerings valued at $8.4 billion, or a 26% share.

In addition, over the same period, a total of seven single-family rental (SFR) offerings valued at nearly $5 billion were in the PLS pipeline — for a total of 25 investment-property deals across both sectors backed by loan pools valued in total at $13.4 billion.

In a single-family rental, or SFR, transaction, a single borrower, such as a corporation with an ownership interest in thousands of rental properties, issues securities that are backed by a single loan, which is, in turn, secured by a pool of rental-property mortgages. The typical RMBS private-label transaction, by contrast, involves issuing tranches of securities that are backed directly by a large pool of residential mortgages.

"PLS is now a diverse market, and mortgage-financing needs continue in many areas," Franco said.

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Better.com to employees: Please quit

Posted: 07 Apr 2022 02:25 PM PDT

HW+ vishal garg — Better.com CEO Vishal Garg

After becoming the poster child for callous mass layoffs, mortgage originator Better.com has adopted a new approach to reducing its workforce: the company is now asking staff if they want to leave voluntarily with benefits.

The New-York based lender, which has laid off 4,000 workers since December, launched a voluntary separation program, with a two-month severance payment and health insurance for those who leave their jobs, according to an email sent on Wednesday afternoon to the company from Richard Benson-Armer, Better's chief people, performance and culture officer.

"As many of you know, the uncertain mortgage market conditions of the last couple of weeks have created an exceedingly challenging operating environment for many companies in our industry," the executive wrote.

He added: "This is requiring many of them to make difficult decisions in order to sustain their businesses. Despite ongoing efforts to streamline our operations and ensure a strong path forward for the company, Better is no exception."

The program is focused on United States-based employees in corporate and PDE who are level 10 and below. HousingWire asked how many employees Better.com plans to reach with the program, but received no answer.

On March 8, Better laid off 3,000 employees, roughly 35% of its staff in the United States and India. In December, the company was criticized when its CEO, Vishal Garg, fired 900 workers via Zoom and chastised their work ethic to remaining employees.

TechCrunch obtained a video in which Garg addressed the staff shortly after the layoffs in December.

"We are going to be leaner, meaner and hungrier going forward. We will not be spending time trying to raise capital,” he said. “We will not be spending time focused on what investors think. We will be spending time grinding this business forward in what will likely be a bloodbath in the mortgage industry in the next year or two."

Garg also admitted to not being disciplined in managing the company’s capital and in its hiring strategy, which prompted the second mass layoff in March.

Better.com made a killing in 2020 thanks to low mortgage rates and a homeowner rush to refinance, but the second half of 2021 and the first quarter of 2022 have not been as kind.

Interest rates have climbed to 5%, turning the mortgage market to purchases, which Better isn't well positioned to capitalize on.

The reputational damage from the December layoffs also hinders the company's ability to develop relationships that lead to purchase business.

For the employees who decide to stay, Benson-Armer wrote in the email that the company is returning to in-office mode in the coming weeks. "Given the headwinds facing our industry, collaboration and innovation – the hallmarks on which Better built its success – will be more essential than ever," he said.

Benson-Armer joined Better.com in March to help create and protect its culture, the company said. Before serving as Better’s interim CHRO and a partner at the investment firm Activant Capital, he was a senior partner at McKinsey and the chief strategy officer of The Thomson Corporation (now ThomsonReuters).

Garg, Better.com’s CEO, said in a statement that Benson-Armer comes to the company "as we move towards Better's next phase as a public company."

A document filed by Aurora Acquisition Corp. with the Securities and Exchange Commission (SEC) in late December said that the special purpose acquisition company will keep a proposed merger with Better, despite the recent layoffs. "Aurora remains confident in Better and the proposed transaction," the company said in the document.

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Fannie Mae unveils $1.49 billion reperforming loan sale

Posted: 07 Apr 2022 11:20 AM PDT

Fannie Mae is marketing its 25th sale of reperforming loans since its first offering six years ago and its second sale so far in 2022. The offering is comprised of 7,600 mortgages with total unpaid principal balance of $1.49 billion.

The sale of reperforming loans (RPLs) is being marketed in collaboration with Citigroup Global Markets, with bids due by May 3, 2022. The offering is part of Fannie's ongoing efforts to reduce the size of its retained mortgage portfolio, the agency said.

"All purchasers are required to honor any approved or in-process loss mitigation efforts at the time of sale, including forbearance arrangements and loan modifications," Fannie's announcement of the reperforming loan sale states. "In addition, purchasers must offer delinquent borrowers a waterfall of loss mitigation options, including loan modifications, which may include principal forgiveness, prior to initiating foreclosure on any loan."

The transaction involves three loan pools — with pool 1 composed of loans with about $603.5 million in unpaid principal balance; pool 2 is at $514.5 million; and pool 3, $367.4 million.

"Loans in Pools 1 thru 3 are being serviced by Wells Fargo or Chase," Fannie's fact sheet on the deal states. The sale is slated to close by mid-June 2022, after due-diligence period.

Fannie Mae i nitial sale of reperforming loans this year, announced in early February, involved an offering of more than 8,000 mortgages with an aggregate unpaid principal balance of $1.3 billion — also divided into three loan pools.

"The winning bidders of the three pools for the transaction were Pacific Investment Management Company LLC (PIMCO) for Pools 1 and 2 and MCLP Asset Co. Inc. (Goldman Sachs) for Pool 3, each awarded individually," Fannie states in an an nouncement about the results of the loan sale. "The transaction is expected to close on April 18, 2022."

Reperforming loans are defined by Fannie Mae as mortgages that were previously delinquent but are performing again because payments have become current — with or without the use of a modification plan. Fannie Mae began selling reperforming loans in October 2016.

On Thursday, GSE counterpart Freddie Mac announced the offering of a $1 billion securities issuance of reperforming loans through its SCRT program. The underlying collateral consists of about 6,700 seasoned fixed-, step-, and adjustable-rate reperforming loans, and includes both loans that were modified to assist borrowers at risk of foreclosure and loans that were never modified. The loans are serviced by NewRez LLC, d/b/a Shellpoint Mortgage Servicing and Specialized Loan Servicing LLC.

The post Fannie Mae unveils $1.49 billion reperforming loan sale appeared first on HousingWire.

Mortgage credit availability dips as home prices surge

Posted: 07 Apr 2022 11:11 AM PDT

Mortgage credit availability dropped in March, a sign that lenders tightened credit standards amid insufficient inventory of homes for sale and rising mortgage rates.

The monthly Mortgage Credit Availability Index fell by 0.7% to 125.1 last month, according to the Mortgage Bankers Association. A decline of the index, benchmarked to 100 in March 2012, indicates that lending standards are tightening while an increase suggests loosening credit.

"Overall credit availability was down slightly in March, driven by a reduction in higher LTV, lower credit score programs," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. "Credit availability has gradually trended higher since mid-2021 but remains around 30% tighter than it was in early 2020.”

While the Conventional MCAI, which does not include loans backed by the government, rose 0.3%, the Government MCAI, which examines FHA, VA, and USDA loan programs, fell by 1.6%.

Of the two component indices of the conventional index, the Jumbo MCAI climbed by 1.5% and the Conforming MCAI dropped by 1.9%.

The jumbo index rose for 10 consecutive months over the past 12 months with lenders scaling back on jumbo supply at the onset of the pandemic. The index is still 40% lower than the pre-pandemic level, Kan said.

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The drop in mortgage credit availability follows a free fall of refinance applications driven by rising mortgage rates, now around 5%. Refinance applications fell 10% for the week ending April from the previous week and 62% compared with a year ago, according to a separate report from the MBA earlier this week.

Despite the recovery in the job market and rapid wage growth, surge in mortgage rates and home price appreciation are restraining purchase activity, Kan said in a release.

Home price appreciation rose 20% in February over the previous year, continuing its double-digit gains for 12 consecutive months, according to CoreLogic. While low housing inventory continues to drive up prices, the real estate analytics firm forecast home price appreciation is expected to slow down to about 5% this year with sellers returning to the market.

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