Mortgage – HousingWire |
- Blend: We plan to outperform the decline in origination volume
- Opinion: Is the lending market overcorrecting toward tech? Maybe
- MSR sales played a key role in nonbank profits in Q1
- Homepoint profits $12M in Q1 after selling operations and assets
- Almost 45% of homeowners are now equity rich
- Purchase mortgage rates increase to 5.30%
- Caliber sues CrossCountry after 80 employees left for rival
- Homepoint lends homebuyers the power of all-cash offers
- Fidelity’s title segment reports $2.4B revenue in Q1
| Blend: We plan to outperform the decline in origination volume Posted: 12 May 2022 11:07 PM PDT Blend Labs reported a $73.5 million loss in the first quarter, but pointed to the performance of its mortgage banking and title sectors as a positive sign for the rest of the year. The company’s revenue rose to $71.5 million, up 124% year over year, driven by $38.7 million in revenue from Title 365, which Blend acquired in 2021. Mortgage banking revenue dropped 7% year over year to $24.5 million. However, the company contrasted this with the 44% decline in industry origination volume. "The higher than expected result can be attributed primarily to better than expected Blend platform performance with the mortgage and consumer banking marketplace and lower than expected year on year decline in Title 365 revenue for the period," Nima Ghamsari, Blend's co-founder, said in its earnings call. “We are now anticipating a more pronounced decline of approximately 41% in 2022 Amid the challenging origination environment, Blend’s loss from operations rose to $69.7 million in the first quarter, up from $27.2 million a year ago. Within the Blend platform, consumer banking and marketplace revenue rose 55% to $7.2 million in the first quarter of 2022 driven by increasing adoption of digital closing solution Blend Close and digital income verification tool Blend Income Verification, the firm said. The figure was up from $4.6 million in the same period last year. Despite the shrinking mortgage market, Ghamsari said "Blend is well positioned to help our customers navigate this reset." Blend's strategy is to diversify its revenue base in the downmarket. The firm says it expanded its total consumer banking transactions by more than 100,000 transactions year over year to about 155,000 in the first three months in 2022. About one third of its total customers are using one or more of the firm's consumer banking products, Blend added. In April, Blend laid off 200 positions — 10% of its workforce — primarily within Title 365. A filing with the Securities and Exchange Commission showed the company expected about $35.4 million in annualized savings. "We expect to begin seeing the cost benefits of this action in the second half of the year," Ghamsari told analysts. While adjusting cost structures, Ghamsari highlighted the company's focus is on long-term growth – investing in fully integrated software, delivering consumer banking products, and building a platform that powers the end-to-end value chain and homeownership. In April, Blend rolled out three closing products that aim to shorten closing cycles and lower error rates. The new solutions include Blend eVault, a repository of electronic promissory notes available through the platform; Blend Signing Room, Blend's remote online notarization (RON) solution; and Blend RON Eligibility Engine, which provides RON-eligibility information. The company's expectation for this year's revenue remained unchanged from three months ago, ranging between $230 million and $250 million. With a high-single to low-double digit decline in mortgage banking revenue, the Blend platform is forecast to bring in about $150 million, the firm said. The Title 365 is forecast to bring up to $100 million in revenue. Blend’s shares closed on Thursday at $3.06, up 6.25% from the previous day. The stocks were down to around $3.00 as of 7pm following the earnings report. The post Blend: We plan to outperform the decline in origination volume appeared first on HousingWire. |
| Opinion: Is the lending market overcorrecting toward tech? Maybe Posted: 12 May 2022 01:25 PM PDT Rates are rising. Refinances are falling. Inventory is contracting. Application fallouts are worsening. It's getting harder out there. Worsening market conditions are only going to accelerate an already hyper-competitive mortgage lending industry that is still learning to adapt to post-pandemic homebuying behaviors. Technology has been the focal point of that evolution more out of necessity than some consensus that homebuyers don't want to interact with their lenders at all. Don't get me wrong—I'm a technologist at heart, but that doesn't mean the answer to every problem always has to be a new technology deployment—it can often be something as simple as a phone call and a timely response to a customer's question. Customer-facing technologies, particularly loan origination and decisioning software, are now standard in mortgage lending's tech stack. But it's also possible for a homebuyer to apply and receive approval on a mortgage loan without them ever actually speaking with another human. This is not an Amazon orderThere are two critical problems with this. First, it's not necessarily what the buyer even wants—we're talking about one of the most important investments of a person's life, not a spur-of-the-moment Amazon order. Second, for all the value lenders place on delivering simplicity through technology, convenience doesn't always equal loyalty, and it certainly isn't the only factor that separates a great customer experience from a poor one. It's easy to assume what customers, especially younger ones, want in today's always-on, digital-forever lifestyle—and easier still to adopt business practices that remove the human-to-human dynamic from a transaction. If customers want digital experiences, who are we to deny them, especially when we can potentially trim a few costs, automate our deal flow and scale more quickly in the process? Now, you'll never hear me berate the role technology can and should play at critical moments in a homebuyer's journey. Yes, a customer should be able to fill out a pre-qualification application digitally. Yes, a customer should be able to upload documents to a portal or receive a digital approval letter. They should be able to explore rate options and educate themselves on the intricacies of buying a home. We're not cavepeople. But an overreliance on technology, as we've increasingly seen, has too many shortcomings to make a digital-exclusive homebuying experience sustainable. What a borrower wantsThe most obvious argument against a totally digital lending approach—and the one that requires the least amount of rationale—is that customers don't want it. When you're making the most important investment of your life, don't you want the option to talk to somebody who knows what they're doing? Of course you do. Market research backs that up. According to the 2021 J.D. Power U.S. Primary Mortgage Origination Satisfaction Study, only 3% of homebuyers relied exclusively on digital services to get a loan. John Cabell, financial services practice lead at J.D. Power, has the only quote I'll need to wrap this up quickly:,"Technology alone is not a magic bullet in this market; the key is knowing where to leverage it and where to layer in more traditional forms of one-on-one support." If customers don't want it, don't give it to them. Giant monsters of our own makingThere's a scene in "Captain America: Civil War" in which Paul Rudd's Ant-Man transforms into a 40-foot-tall giant. But he can only sustain it for a couple of minutes before he crashes out of the fight altogether and has to take a three-day nap to recover. Mortgage lending is facing the same disproportionate dilemma that technology, in many ways, can make worse. It also closely resembles the private equity mentality: Scale as fast as possible, focus on KPIs to secure more capital regardless of any underlying issues they might hide and, when costs need to be cut, start the layoffs. Technology can often be the catalyst for all three of these business tenets. It enables scale, makes KPIs like loan origination and volume look great on paper, and acts as a sort of proverbial safety net when costs need to be cut. Look a bit closer, though, and that mentality has more plot holes than a bad superhero movie (Ant-Man is great though). Scale for scalability's sake doesn't mean anything if a company has to contract at the first sign of market stress. Rate increases, declining inventory and fewer customers test lenders' resilience and sustainability as well as their ability to cater to the customers they do have. In such scenarios, human-to-human touchpoints are often the only service that can make a homebuyer feel comfortable and confident enough to sign on the dotted line. That means enough loan officers on staff to engage proactively with clients, to educate them and to build the trust that can only be achieved between two humans. That means reducing response times from days to hours. That means reflecting the values that customers share: community, empathy, timeliness and service. There's yet to be a piece of technology that can do those things better than people. And yet, an overdependence on technology often means fewer mortgage experts are on hand to delight customers and deliver a great homebuying experience. There's no one to answer questions about DTI ratios, the down payment amount or closing costs at the moments they matter most. Customer satisfaction goes down. Customer acquisition costs go up. KPIs take a hit. Layoffs ensue and you're back to where you started. We haven't seen a market like the one we're entering in more than a decade. Much has changed since then, most notably in how lenders service customers and loans. In the next year, we're going to find out exactly who is more susceptible to market shifts and who has tempered the rush to technology adoption with a model that relies as much on a human touch as it does on technology-driven convenience. Just look for those taking a three-day nap. Michael Bernstein is the co-founder and a branch manager of LendFriend Home Loans, an Austin-based mortgage lender. This column does not necessarily reflect the opinion of RealTrends' editorial department and its owners. To contact the author of this story: To contact the editor responsible for this story: The post Opinion: Is the lending market overcorrecting toward tech? Maybe appeared first on HousingWire. |
| MSR sales played a key role in nonbank profits in Q1 Posted: 12 May 2022 11:42 AM PDT  An ebullient market for mortgage-servicing rights (MSRs) helped to buoy the profitability of at least three major nonbank lenders that are publicly traded and abated losses for a fourth, based on their recently announced first-quarter financial results. Those lenders are UWM Holdings Corp., the parent of United Wholesale Mortgage; Rocket Companies Inc., the parent of Rocket Mortgage; Home Point Capital, the parent of Home Point Financial Corp. (Homepoint); and loanDepot — the only lender among the four to post a first-quarter 2022 loss. Each sold off a large cache of mortgage servicing rights (MSRs) during the first quarter of this year. In total, between Jan. 1 and April 1, 2022, the four lenders collectively brought in $1.86 billion in proceeds from those MSR sales — with UWM accounting for $871.8 million of that amount. In a rising-rate environment, loan prepayments ebb, as refinancing becomes less attractive. "This impacts origination volume negatively but provides for substantial pickup in value of MSR assets across all vintages," explained Tom Piercy, managing director of Incenter Mortgage Advisors, which provides trading and advisory services for MSR offerings. That rising value, in turn, can make sales of MSRs a lucrative option for supplementing otherwise dour revenue streams. During the first quarter of 2022, UWM sold MSRs “on loans with an aggregate UPB [unpaid principal balance] of approximately $56.6 billion for proceeds of … $656.7 million," UWM's first-quarter 2022 10Q filing with the U.S. Securities and Exchange Commission (SEC) states. "Additionally, on March 31, 2022, [UWM] entered into an agreement to sell MSRs with an aggregate UPB of approximately $16.1 billion for proceeds of approximately $215.1 million. …The initial proceeds were not received until April 1, 2022." Consequently, UWM recorded MSR sales of $656.7 million for Q1 2022, it’s SEC filing shows, with the $215.1 million in proceeds from the latter MSR sale expected to be reflected in UWM's second-quarter results — offering the lender an earnings booster shot for that quarter. The lender's SEC filing indicates that the related "MSR assets [from the second MSR sale] remained on the balance sheet as of March 31, 2022," which is the end of UWM's first quarter. UWM's filing reflects no MSR sales for the first quarter of 2021. For the first quarter of this year, the selling of MSRs did help to lift UWM's fortunes. It recorded net income of $453.2 million on net revenue of $821.8 million for the quarter, which was marked by rapidly rising interest rates that cut into loan production, particularly refinancing, for most originators. By contrast, in the first quarter of 2021, UWM recorded net income of $860 million on net revenue of $1.19 billion. The sale of the MSRs did contribute to trimming UWM's servicing-portfolio size a tad. "The unpaid principal balance of mortgage loans serviced approximated $303.4 billion and $319.8 billion at March 31, 2022, and December 31, 2021, respectively," UWM's SEC filing states. Still, given the strong MSR market currently, the "fair value" of the lender's MSR assets — the expected price the lender can command in the market for the assets — was up year over year, to $3.5 billion as of the end of the first quarter of 2022. That compares with $2.3 billion for the same period a year earlier. Homepoint’s parent company recorded net income of $11.9 million on net revenue of $158.2 million for the first quarter of 2022, compared with net income of $149 million on net revenue of $421.9 million for the same period in 2021. Homepoint’s bottom line also got a boost from the sale of MSRs during the first quarter of this year. “During the quarter, Homepoint completed sales of mortgage servicing rights portfolios of single-family mortgage loans for a total purchase price of approximately $434.5 million,” its SEC filing states. The value of the lender’s MSR portfolio decreased from $123.4 billion as of year-end 2021 to $102 billion as of the end of Q1 2022, the SEC filing indicates. However, the “fair value” of its MSR assets remained essentially flat over the period, even with the big selloff — $1.52 billion as of year-end 2021, compared with $1.49 billion as of the end of the first quarter of this year. “The MSR multiple [a measure of sales-price value] for the first quarter of 2022 of 5.6x increased from 3.8x in the first quarter of 2021 and 4.6x in the fourth quarter of 2021, primarily driven by slower prepayment speeds due to higher mortgage interest rates,” Homepoint’s financial filing with the SEC states. Homepoint reported that its mortgage servicing generated $83.2 million in the first quarter of this year, up from $64.8 million in the first quarter of 2021 and $74.4 million for the final quarter of 2021. The lender also announced that ServiceMac is expected to begin subservicing loans for Homepoint in the second quarter of this year. “Once ServiceMac begins subservicing loans for Homepoint, they will perform servicing functions on Homepoint's behalf, but Homepoint will continue to hold the MSRs,” the lender’s SEC filing states. Rocket Companies SEC filing offers sparser detail on its MSR portfolio activity during the first quarter of this year, but it does reflect that the lender's "proceeds from the sale of MSRs" during the period totaled some $254 million, up from $10.2 million in Q1 2021. Rocket recorded net income of $1 billion on net revenue of $2.7 billion for the first quarter of the year, compared with net income of $2.8 billion on revenue of $4.5 billion for the first quarter of 2021. Even with the MSR sale, it appears Rocket — like UWM and Homepoint — still retained a healthy MSR portfolio, powered by rising interest rates. "The total UPB of mortgage loans serviced [by Rocket], excluding subserviced loans, at March 31, 2022, and December 31, 2021, was [$492.4 billion] and [$485.1 billion], respectively," Rocket's 10Q filing with the SEC states. "The portfolio primarily consists of high-quality performing agency and government (FHA and VA) loans." As of March 31, 2021, the figure stood at $431.5 billion, the lender's 10Q filing shows. Rocket lists the fair value of its MSR portfolio at $6.4 billion as of the end of the first quarter of this year, up from $4.3 billion as of the end of the first quarter of 2021, it SEC filing shows. Another nonbank bigfoot, loanDepot, recorded a net loss of $91.3 million on net revenue of $503.3 million on a consolidated basis for the first quarter of this year, compared with a net gain of $427.8 million on net revenue of $1.3 billion for the same period in 2021. The lender's first-quarter 2022 downturn may have been even worse, however, absent a rather large sale of MSR assets during the period. "The increase in cash and cash equivalents from December 31, 2021, [or over the first quarter of 2022] included $303.8 million in proceeds from the bulk sale of MSRs," loanDepot's first-quarter 2022 earnings filing with the SEC states. Despite the sale — and thanks to increasing MSR values — loanDepot's "servicing rights at fair value" stood at $2.1 billion as of the end of the first quarter of this year, up from $1.77 billion as of the same period in 2021. The lender’s total MSR portfolio, based on the unpaid principal balance of loans serviced, was recorded at $153.4 billion as of March 31, 2022, down from $162.1 billion as of year-end 2021. "The decrease in unpaid principal balance of our servicing portfolio was driven primarily by sales of $23.8 billion of unpaid principal balance [in serviced loans] during the quarter," a footnote in the lender's quarterly financial filing with the SEC states. The first quarter of 2022 "saw a fairly steep curve in the increase of MSR values from start to finish as reflected in every public company [mortgage lender] reporting improved MSR values to offset lower net income from originations," Incenter’s Piercy said. "…The result," Piercy added, "is a recent surge in offerings to the market with demand keeping up due to new buyers entering the space." The post MSR sales played a key role in nonbank profits in Q1 appeared first on HousingWire. |
| Homepoint profits $12M in Q1 after selling operations and assets Posted: 12 May 2022 10:51 AM PDT Home Point Capital, the parent company of wholesale lender Homepoint, continues to turn profits based on the selling of operations and assets as management adjusts the company to the shrinking mortgage market. The wholesaler reported on Thursday morning it notched a $12 million profit from January to March, a sequential decline from the $19.3 million in the fourth quarter of 2021 and $149 million in the first quarter of 2021. Willie Newman, Home Point Capital CEO, told analysts the industry built up the capacity to handle $4 trillion in originations during the past few years, which had lowered to $2.5 trillion, as refinancing volumes dropped off. "The dramatic increase in interest rates coupled with record-low inventories puts further pressure on the purchase origination market," the executive said. "We have taken actions to navigate through the industry-wide dislocation months in advance." One of the company's strategies is to reduce its servicing portfolio. During the first quarter, Homepoint completed sales of mortgage servicing rights (MSRs) of single-family mortgage loans comprehending $434.5 million. According to Newman, the company will continue to sell MSRs in the second quarter, which "enhances both leverage and liquidity positions." Consequently, the total servicing portfolio totaled $102 billion in unpaid principal balance as of March 31, 2022, down 3.6% quarter-over-quarter and 20.5% year-over-year. Homepoint had 349,261 servicing customers at the end of the first quarter, a sequential decline of 11.9%. In a February cost-cutting move, the wholesaler also migrated its mortgage servicing processing work to ServiceMac, a First American company. By doing so, Homepoint transferred about 300 employees to ServiceMac. Homepoint is also downsizing its origination business. In April, the company announced the exit of the correspondent channel by selling its division to Planet Home Lending for $2.5 million. "This recently announced sale also provides an opportunity for us to reduce our leverage as well as our corporate expense footprint and allows reallocation of resources to focus on our wholesale business," Newman said. The company had 8,376 broker partners as of March 31, 2022. Homepoint's total funded origination reached $12.5 billion in the first quarter, down from $20.5 billion in Q4 2021 and $29.4 billion in Q1 2021. Gain-on-sale margin rose to 61 basis points, up from 58 bps in Q4 2021 and 125 bps in Q1 2021. Revenue fell to $158 million in Q1, a decline from $180.5 million in the prior quarter and $422 million in the first quarter of 2021. Homepoint registered $137 million in expenses in the first quarter of 2021, a 9.8% reduction from the previous quarter, due mainly to an 18.9% decline in origination segment direct expenses. However, analysts highlighted during the call the increase from $35 million in Q4 2021 to almost $40 million in Q1 2022 in the corporate expenses. Executives said corporate expenses are less flexible than the others, but they expect them to be reduced due to the deal with ServiceMac. The company did not offer a precise forecast for upcoming quarters in its Q1 earnings statement. Mark Elbaum, chief financial officer, told analysts the market volatility and competitive pressure the industry faced in the first quarter has persisted for the second quarter of 2022. "We expect our volume level and gain-on-sale margin to be relatively consistent with what we saw in the first quarter." Homepoint’s share were trading at $3.26 on Thursday around 2:00 PM EST, down 0.45% from the previous close. The post Homepoint profits $12M in Q1 after selling operations and assets appeared first on HousingWire. |
| Almost 45% of homeowners are now equity rich Posted: 12 May 2022 10:48 AM PDT Soaring home prices continue to serve existing homeowners, with nearly 45% of all property owners now considered equity rich, a year-over-year jump that boosted 13% more homeowners into the prime position. A homeowner is considered equity rich when they have at least 50% equity in their home, a feat more easily accomplished when skyrocketing home price appreciation widens the gap between what someone owes on their mortgage and the value of their house. About 44.9% of mortgaged residential properties in the first quarter of 2022 had at least 50% equity in their property, according to ATTOM. The portion of mortgaged homes that were equity rich rose from 41.9% in the fourth quarter of 2021 and from 31.9% during the same period in 2021. "Homeowners continue to benefit from rising home prices," Rick Sharga, executive vice president of market intelligence for ATTOM, said in a statement. "Record levels of home equity provide financial security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008. But these higher home prices and rising interest rates make it extremely challenging for first time buyers to enter the market." In the first quarter of 2022, just 3.2% of mortgaged homes, or one in 31, were considered seriously underwater – meaning the owner owed at least 25% more than the property's estimated market value. While that figure is largely unchanged from the 3.1% of seriously underwater homes in the prior quarter, it was a marked improvement from 2021’s 4.7%, or one in 21 properties. The decade-long housing marketing boom, which continued from late 2021 into early 2022, largely has been attributed to the rise in home equity. But across the country, the median home price rose 2% during that period – to another record of $320,500, according to ATTOM. Market analysts say a glut of home buyers chasing a historically tight supply of properties also brought up prices even higher. ATTOM expects the latest home equity trend to slow in the remaining months of this year. "It's likely that equity will continue to grow through the rest of 2022, although home price increases should moderate as the year goes on," Sharga said. "Rising interest rates, the highest inflation in 40 years, and the ongoing supply chain disruptions due to the war in Ukraine are likely to weaken demand and slow down home price appreciation." Nationwide, 45 states saw equity rich levels rise from the fourth quarter of 2021. However, at the same time, the percentage of mortgaged homes that were seriously underwater increased in 28 states. Idaho had the highest level of equity-rich properties with 68.8%, while Vermont (68%), Utah (63.6%) and Washington (60.9%) followed. Meanwhile, Mississippi ranked first for having the country’s biggest portion of mortgages seriously underwater at 17%. It was trailed by Louisiana (11.3%) and Wyoming (10%). The post Almost 45% of homeowners are now equity rich appeared first on HousingWire. |
| Purchase mortgage rates increase to 5.30% Posted: 12 May 2022 06:52 AM PDT Purchase mortgage rates this week averaged 5.30%, up three basis points from a week ago, causing homeowners’ monthly payments to increase by about one-third year-over-year, according to the latest Freddie Mac PMMS. Borrowers continue displaying resilience, but higher rates expected in coming months could reduce the overall appetite for mortgage loans. "In the months ahead, we expect monetary policy and inflation to discourage many consumers, weakening purchase demand and decelerating home price growth," said Sam Khater, Freddie Mac's chief economist, in a statement. This time a year ago, the 30-year fixed-rate purchase rates were at 2.94%, the report shows. The government-sponsored enterprise (GSE) index accounts for just purchase mortgages reported by lenders during the past three days. Another index shows rates hovering at a higher mark. The Black Knight's Optimal Blue OBMMI pricing engine, which considers refinancings and additional data from the Mortgage Bankers Association (MBA), measured the 30-year conforming mortgage rate at 5.51% Wednesday, up from 5.52% a week prior. Meanwhile, the 30-year fixed-rate jumbo was at 5% Wednesday, down from 5.04% the previous week. So far, according to Khater, homebuyers have shown a willingness to adapt to changing conditions. How to make digital marketing easy and effective for mortgage professionals The shift to a purchase market makes effective digital marketing even more important, and collaborative marketing technology can generate more demand while reducing time spent on marketing. This white paper explains what collaborative marketing is and how forward-thinking lenders are already using it to drive growth. Presented by: Evocalize"Several factors are contributing to this dynamic, including the large wave of first-time homebuyers looking to realize the dream of homeownership," he said. This week, mortgage applications rose 2% from the past week: Refi applications were up 0.2% and purchase apps increased 4%, according to the MBA. The report found the adjustable-rate mortgage share increased to 10.8% of total applications, consisting of 19% of dollar volume. Mortgage rates are following the Federal Reserve's (Fed) inflation-fighting monetary policy. The central bank raised the interest rate by a half percentage point May 4 and announced a plan to reduce the $9 trillion asset portfolio, which ballooned during the pandemic. The Fed repeatedly has signaled it would raise rates six times this year with several more planned in 2023. According to Freddie Mac, the 15-year fixed-rate purchase mortgage averaged 4.48% with an average of 0.9 point, down from 4.52% the week prior. The 15-year fixed-rate mortgage averaged 2.26% last year. The 5-year ARM averaged 3.98% with buyers on average paying for 0.3 point, up slightly from last week's average of 3.96%. The product averaged 2.59% a year ago. The higher rate landscape is provoking lenders to cut costs, mainly via layoffs. California-based Owning Corp., a direct-to-consumer lender acquired by Guaranteed Rate in February 2021, cut 108 jobs in three rounds from February to April. But it intends to add another 81 to the list. Guaranteed Rate is just the latest lender to implement layoffs, following others such as Interfirst, Mr. Cooper, Union Home Mortgage, Flagstar, Wells Fargo and Better. Rocket has not laid off workers but has offered a voluntary buyout to some of its staff. The post Purchase mortgage rates increase to 5.30% appeared first on HousingWire. |
| Caliber sues CrossCountry after 80 employees left for rival Posted: 11 May 2022 01:50 PM PDT Texas-based multichannel lender Caliber Home Loans is accusing Ohio-based CrossCountry Mortgage of executing an “illegal scheme of unfair competition” by targeting its employees, stealing trade secrets and diverting customers. The accusations are part of a lawsuit filed in May in the U.S. District Court for the Western District of Washington in Seattle. National Mortgage News first reported the case. Caliber claims its rival hired more than 80 of its employees, among them 40 loan producers, beginning in February 2021. The staff worked across 18 different branch offices in six states: Washington, Oregon, Texas, Florida, Tennessee and California. “The departed employees were responsible for more than $2.3 billion in annual mortgage loan origination for Caliber, which generated millions of dollars in profit annually,” Caliber alleged. “CrossCountry wanted to convert those offices, production, revenue, and profits to its own.” A spokesperson for Caliber said the company has no comments at this time. A CrossCountry spokesperson told HousingWire they don’t comment on legal matters. Caliber filed the lawsuit in Seattle because many of the employees whose departures spurred the litigation were in that jurisdiction. Staying nimble in a fast-paced market with the right mortgage technology In the rapid-fire, volatile mortgage marketplace, lenders need technologies to help them remain nimble and successfully navigate constant change. Advanced product, pricing and eligibility technology creates efficiencies and helps lenders compete in a fast-paced market. Presented by: Black KnightIn the Pacific Northwest city, the lender alleges that Scott Forman, executive vice president of CrossCountry, conspired with Mark Everts, a former branch manager at Caliber, to provide significant financial benefits to attract him and other Caliber employees to the rival. Caliber requires their sales staff to agree not to ask other employees to end their employment with the lender; remove loans in process; or retain, use, or disclose confidential business information, the company said. To Everts, CrossCountry supposedly offered a $1 million bonus, with an additional $500,000 when his branch achieves $600 million in loan origination, according to the lawsuit that includes a copy of an email between the executives. Caliber claims Everts allegedly signed an offer letter from CrossCountry but remained in the company for three weeks without notifying his supervisors. During this time, he was “uprooting his team” and stealing borrowers’ information. HousingWire sent an email to Everts and contacted Everts and Forman via LinkedIn but had not heard back by press time. Caliber sought a jury trial and compensatory damages over $5 million for eight different alleged counts, among them unfair competition, misappropriation of trade secrets, tortious interference with contract, and civil conspiracy, CrossCountry has been a target of lawsuits regarding its hiring practices before. In June 2021, California-based loanDepot, led by CEO Anthony Hsieh, accused seven ex-employees and the rival company of “hatching and implementing a scheme to loot loanDepot’s business.” loanDepot alleged that an internal investigation revealed a “coordinated, premeditated and illicit plan” to lure its employees away and “systematically begin the transfer of an entire existing pipeline of loans originated at loanDepot to CrossCountry Mortgage.” CrossCountry was the 17th biggest mortgage lender in the country in the first quarter, according to Inside Mortgage Finance. Caliber, acquired by the real estate investment trust New Residential Investment Corp. in April 2021 for $1.675 billion from the hedge fund Lonestar Funds, was No. 6. Following the acquisition, Caliber’s CEO Sanjiv Das, who was in the position since 2016, stepped down in January 2022, as industry analysts and observers expected. NewRez’s mortgage arm laid off 386 employees in the following month, about 3% of the division’s workforce. The post Caliber sues CrossCountry after 80 employees left for rival appeared first on HousingWire. |
| Homepoint lends homebuyers the power of all-cash offers Posted: 11 May 2022 12:20 PM PDT In this hot housing market, Michigan-based wholesale lender Homepoint understands the key to originating more home loans is ensuring more sellers accept offers made by its buyers. To do that it relies on the two words sellers increasingly want to hear: “All cash.” But how does an all-cash offer benefit a mortgage lender? Dubbed the “Homepoint Cash Compete,” the fintech platform provides home shoppers with the cash needed to compete with investors and other more attractive offers, according to the lender. It also plans to hook prospective homebuyers by boosting their bottom line: They get to lock in lower wholesale mortgage rates that can cost the homebuyer an average of $8,000 less over the life of the loan. Homepoint partnered with fintech mortgage company Accept.inc, which upgrades offers from qualified buyers to an all-cash bid. The firm expects homebuyers to close a cash home purchase loan as fast as 10 business days without an appraisal or financing contingency. “All-cash offers from competing buyers or investors are the biggest obstacle that financing homebuyers face in today’s hyper-competitive markets," Phil Shoemaker, president of originations at Homepoint said in a statement. “By combining all-cash offers with the lower rates and fees associated with wholesale lending, independent originators give homebuyers and their real estate agents the best shot at closing deals and saving money,” Shoemaker added. How lenders can continue to serve borrowers despite housing affordability challenges Potential borrowers who've been priced out of the housing market need to be able to compete with an increasingly growing share of cash buyers and investors who are beating them in bidding wars. Presented by: Finance of AmericaWith the lower wholesale mortgage rates and other expenses and fees, borrowers can save an average of $8,000 over the life of their loan with the Homepoint offer compared to big banks or direct-to-consumer lenders, according to Home Mortgage Disclosure Act data. After the cash purchase is complete, the homebuyer will refinance. He or she will apply for a conventional loan and complete the underwriting process with their loan originator – turning the cash home purchase loan into a permanent traditional mortgage loan, according to Homepoint. Homepoint Cash Compete is offered in five states including California, Oregon and Minnesota, with plans to expand. Its business strategy has focused on wholesale, originations business and reducing expenses. Planet Home Lending entered into a $2.5 million cash deal last month to buy assets from Homepoint following a huge drop in profit in the correspondent channel last year. While the lender had $20.7 billion in volume in the correspondent channel in 2021, the gain-on-sale margins in the correspondent channel were 31 basis points compared to 234 basis points in the wholesale channel. In a move to focus on growing its origination business and reducing costs, Homepoint announced it’s outsourcing servicing operations to ServiceMac in the second quarter. The firm has been working to lower the cost to originate a loan to $900 per loan this year, down from $1,700 in the first quarter of 2021, through headcount reductions and process improvements. In June, Homepoint also rolled out “Homepoint Amplify,” a new regionalized staffing model for broker partners meant to create fewer touch points and enhanced efficiencies. The company expected the change in operational structure to result in an elimination of less than 10% of its workforce, which sources said is believed to be around 4,000 workers. Homepoint is the third-largest wholesale mortgage lender in the country, originating $96 billion in mortgage volume last year, up 55% from 2020, according to the firm. The company is scheduled to report its first quarter earnings Thursday. The post Homepoint lends homebuyers the power of all-cash offers appeared first on HousingWire. |
| Fidelity’s title segment reports $2.4B revenue in Q1 Posted: 11 May 2022 11:35 AM PDT Title insurers big and small can’t seem to escape rapidly deflating refinance volume, but Fidelity National Financial still pulled out the second-best quarter ever for title revenue in Q1 2022. Fidelity‘s title sector saw the number of refinance orders opened per day during the first quarter of 2022 drop by 57% compared to Q1 2021. The number of purchase orders opened per day dropped 1% year over year, while the number of commercial orders opened per day rose 6% compared to a year prior. The increase in commercial volume led to a 46% year-over-year increase in commercial revenue to $347 million. A total of 522,000 direct title orders were opened during Q1 2022 compared to 770,000 direct title orders a year prior. Despite the drop in the number of title orders, Fidelity's title segment recorded $2.4 billion in revenue and $437 million in adjusted pre-tax earnings. This is only slightly lower than the $2.5 billion in revenue and $513 million in earnings recorded in Q1 last year. The firm attributed the title sector's solid showing in the midst of a drastic decrease in refinance volume to strong residential purchase and commercial revenue, which have significantly higher fees per file than refinance orders. Fidelity recorded an average fee per file of $2,891 during the first quarter of 2022, a 49% year-over-year increase. Overall, Fidelity (not just the title sector) generated a total revenue of $3.165 billion during the first quarter of the year, slightly up from the $3.1 billion recorded a year ago. On the firm's first-quarter earning's call with investors, executives stated that this was Fidelity's best first quarter on record for revenue. Net earnings, however, were another story, dropping from $605 million in Q1 2021 to $397 million in Q1 2022. RON is here to stay – Here’s what you need to know From understanding the importance of RON in the title industry and discovering the potential business benefits to learning how you can start offering RON closings to your clients, here's the need-to-know info to get started. Presented by: SoftProJust as with many other earnings calls this quarter, rising mortgage rates and their impact on the future of the housing market was a hot topic on Fidelity's call. "We have seen steady levels of residential purchase origination demand, although given the current environment, we’re not seeing the typical increase heading into the spring selling season,” Mike Nolan, Fidelity CEO, said. “While current residential purchase demand is trailing last year, 2021 was a record year for the US residential purchase market and current forecast indicate 2022 will still be one of the strongest purchase origination markets in the last decade." Nolan told investors that in April 2022 the number of purchase orders was down 6% year over year, while refinance orders were down 63% and commercial volume was down 2%. Despite this drop in commercial order volume, the first quarter of 2022 marked the fourth month in a row with over 1,000 commercial orders opened per day. Looking further into 2022, Nolan said he expects to see purchase order volume remain relatively flat before slightly dropping in the later half of the year, as rising interest rates impact homebuyers' purchase power. However, the firm expects commercial volume to remain strong. "The second quarter we still expect to see a very healthy commercial environment," Nolan said. "Purchase maybe not as good as the original forecast thought, but still actually a very good purchase market in a historical context standpoint." To combat changing market conditions, Nolan said that Fidelity, like Doma, would be investing in expanding and improving its purchase order service. In the past 12 months the firms has made 10 acquisitions in the title space coming in at approximately $92 million. Nolan said the firm is considering future M&A activity. In 2021, Fidelity was the largest title insurance underwriter by market share according to the American Land Title Association. The post Fidelity's title segment reports $2.4B revenue in Q1 appeared first on HousingWire. |
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