Thursday, June 30, 2022

Mortgage – HousingWire

Mortgage – HousingWire

CoreVest finalizes $313M securitization

Posted: 29 Jun 2022 04:51 PM PDT

Redwood Trust's CoreVest division has closed a $313 million private-label offering backed by 82 loans that are in turn collateralized by some 1,800 properties located in 24 states and the District of Columbia.

The transaction, CAFL 2022-1, represents CoreVest's second securitization deal this year and its 21st to date. The collateral includes single-family rental (SFR) properties (70%), along with multifamily properties (22%) and some mixed-use properties (8%).

CoreVest provides financing to real estate investors across the country and boasts more than $15 billion in loans closed and some 125,000 units financed, according to the lender.

Liquid Mortgage Inc., in which Redwood Trust holds a minority stake, will act as the distributed-ledger agent for the deal. The blockchain company offers daily loan-level reporting services.

"The Liquid Mortgage technology allows near-real time visibility into payments and repayments on loans for investors and other end users," CoreVest's announcement of the transaction states. "CAFL 2022-1 is the first SFR transaction to include this technology."

The deal also represents CoreVest's first securitization that is in alignment with the Sustainability Accounting Standards Board's (SASB's) environmental, social and governance guidance, according to CoreVest.

"Innovation has always been fundamental to our long-term strategy, and we are excited to issue a securitization that both leverages blockchain technology as well as includes enhanced data aligned with SASB standards," said Christopher Hoeffel, president of CoreVest. "We believe that this additional information will benefit investors in our securitizations."

Morgan Stanley served as lead bookrunner and structuring agent for the offering, with Goldman Sachs and Wells Fargo acting as joint bookrunners.

Last fall, Redwood Trust announced a separate $449 million residential mortgage-backed securities private-label offering via its Sequoia platform that was backed by 497 jumbo residential loans and securitized with the help of Liquid Mortgage. As part of that deal, Liquid Mortgage also is leveraging its blockchain technology to provide loan-level payment and transaction-reporting data for borrowers and lenders.

The post CoreVest finalizes $313M securitization appeared first on HousingWire.

Angel Oak Home Loans hires vice president of correspondent sales

Posted: 29 Jun 2022 01:36 PM PDT

Angel Oak Home Loans named Steven Valladares as vice president of correspondent sales, a move that comes as the firm increasingly works to grow its correspondent channel.

Valladares will be responsible for creating a sales infrastructure to support the internal and external sales teams as Angel Oaks expands its focus to include both the agency and non-qualified mortgage (non-QM) markets, company reps said in a release. The correspondent business line is focused on purchasing and servicing home loans in the secondary market.

"Angel Oak will act as a multifaceted correspondent capable of satisfying the needs of the massive agency market as well as non-QM," Valladares said in a statement. 

Since the third quarter of 2021, Angel Oak has been purchasing agency mortgages to offer a one-stop shop approach for the sale, servicing and securitization of all home types to lenders, the firm said.

Valladares has almost 20 years of direct sales experience focused on correspondent sales and relationship management. Most recently, he was managing director head of sale at digital mortgage exchange Maxex for more than a year. His previous experience includes vice president positions at Wells Fargo and Fannie Mae, where he oversaw national sales and capital markets teams. 

Despite the downsizing mortgage market, the full-service retail mortgage lender is expanding its branches across the country. Angel Oak opened four new branches in California, Missouri and Nevada on Wednesday, bringing the total to 47 locations across the country. Since the company said it plans to have a larger presence in the Western region of the country, Angel Oak launched three branches in California, Nevada and Utah in December.

Angel Oak has two firms under its residential lending business: Angel Oak Home Loans and Angel Oak Mortgage Solutions. Angel Oak Mortgage Solutions offers non-QM and specialized mortgage solutions for brokers and correspondents.

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US housing market is at a crossroads

Posted: 29 Jun 2022 01:01 PM PDT

rent falling
The real estate market is cooling down

Reports released this week by several respected market observers point to less good and increased bad and ugly ahead for the housing market.

For some of the good, a U.S. Census Bureau report released late last week spurred a bout of optimism when it revealed that new-home sales jumped by nearly 11% month-over-month in May on a seasonally adjusted basis, after declining by 12% in April. 

Moody's Investors Service, in a housing-market report released this week, puts some ugly back into the home-sales figures for May, however.

"At 696,000 units, May new home sales were around 17% below the recent peak of 839,000 units in December last year," the Moody's report notes. "[On June 21], the National Association of Realtors said that existing-home sales declined for the fourth consecutive month. 

"Existing-home sales fell in May by 3.4% on a seasonally adjusted basis to 5.41 million, the lowest since June of 2020 and similar to pre-pandemic levels."

Those figures, along with "sharp recent increases in mortgage rates" and other supporting data, lead Moody's to conclude that the "U.S. home-price boom is over." The firm, which rates securitization offerings and provides other capital-market services, predicts "material declines" in both new- and existing-home transactions this year, compared with 2021.

Supporting the ugly outlook for the housing market is the release today, June 29, of the quarterly CFO Survey, conducted jointly by Duke University's Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. The survey of more than 300 U.S. financial executives conducted between May 25 and June 10, shows optimism about the broader U.S. economy continuing to decline.

The average index score for the current survey was 50.7, compared with 54.8 in the prior quarter and 60.3 two quarters ago.

"Price pressures have increased, real revenue growth has stalled and optimism about the overall economy has fallen sharply," said John Graham, a Fuqua finance professor and the survey's academic director. "Monetary tightening [by the Federal Reserve] is one of several factors dampening the economic outlook." 

The CFO Survey's findings are echoed by a revised first-quarter 2022 gross domestic product (GDP) estimate released Wednesday by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA). It shows that a drastic economic slowdown is already underway.

"Real gross domestic product [a measure of all goods and services produced in the economy] decreased at an annual rate of 1.6 percent in the first quarter of 2022 …," the BEA report states. "In the fourth quarter of 2021, real GDP increased 6.9 percent."

The BEA's first-quarter GDP estimate, it's third to date, was revised downward from -1.4% and -1.5% in the two prior estimates. The grim data led Mortgage Capital Trading (MCT), a San Diego-based capital market software and services firm, to broach the "R" word in its daily market-overview report.

"Concern over a slowing economy and aggressive interest rate hikes from the Fed are beginning to dominate market sentiment," the MCT report states. "This morning's GDP release [on June 29] came with a downward revision for the last reading, further supporting views that a recession is either in progress or coming soon."

What does all this mean for the housing market in the months ahead? The Moody's report attempts to frame some of the expectations.

"We expect some increases in existing-house prices over the next 18 months, though for appreciation to be well below the general rate of inflation," the Moody's report states. "After that, we expect home appreciation to settle in at levels somewhat lower than the rate of overall U.S. inflation."

The report even indicates that there "is risk that existing home prices will have a minor correction over the next two years, similar to housing markets in many other developed counties facing risks after recent booms." 

The "moderation" in the U.S. housing market is ongoing and the full effects of recent rate increases have yet to be fully realized, the Moody's report adds, especially with respect to housing prices.

Moody's predicts that housing demand will "dampen significantly" in the months ahead due to the doubling of rates for 30-year fixed mortgages since the start of the year, which is fueling a huge jump in monthly mortgage costs. Freddie Mac's most recent Primary Mortgage Market Survey shows the average 30-year fixed rate mortgage at 5.81% as of June 23. 

"The monthly costs of new mortgages on existing homes sold at median transaction prices [are] more than 60% higher than a year ago," the Moody's report states. "Although higher mortgage rates do not always drive home prices lower, they typically affect sales activity and drive down the rate of price appreciation. 

"We also expect higher rates to restrict for-sale supply because current homeowners will be reluctant to lose low-rate fixed borrowing costs."

So, in effect, moderating or even declining home prices could be neutralized by rising borrowing costs, leading the housing market toward stagnation — the doldrums — in the worst-case scenario.

There is some good news mixed in with all this bad and ugly, however. Moody's points out that some "fundamental housing strengths" will likely help to mitigate the degree of any market correction, at least over the next 12 to 18 months.

Those strengths include "favorable demographic trends, solid underwriting of outstanding mortgages and lingering housing supply constraints from a period of underbuilding," according to the Moody's report. Also on the bright side, according to Moody's, is that a moderate decline in housing prices could be good for the market longer-term. That's assuming the Federal Reserve wins the fight to tame inflation, now running at 8.6%,  without causing a major spike in unemployment, which was at 3.6% in May for the third month in a row, according to the Bureau of Labor Statistics.

In short, the housing market has reached a fork in the road, based on the Moody's analysis — with one path leading to the doldrums, or even decline, and the other toward resurgence and a new normal.

"If U.S. home prices were to decline modestly, it would increase affordability for potential homebuyers and improve demand, including for individuals who were priced out of the market in the recent months because of rapidly rising interest rates," Moody's reasons in its report. "However, sustained large increases in mortgage rates or a material weakening in the labor market could lead to sharper declines in housing activity and prices."

The post US housing market is at a crossroads appeared first on HousingWire.

Freddie Mac to include on-time rent in underwriting

Posted: 29 Jun 2022 10:21 AM PDT

Freddie Mac announced Wednesday that on-time rental payments will be included in its underwriting system. The government-sponsored enterprise said that it hopes to incentivize “responsible” renters to make a leap into homeownership.

According to Freddie, this option will be available starting July 10 and will allow mortgage lenders to submit a borrower's bank account data that shows a 12-month streak of on-time rent payments to its automated underwriting system.

Michael DeVito, CEO of Freddie Mac, said in a statement that millions of potential borrowers have been blocked off from homeownership because they lack a credit score, or have a limited credit history.

"By factoring in a borrower's responsible rent payment history into our automated underwriting system, we can help make home possible for qualified renters, particularly in underserved communities," DeVito said.

Freddie said in its announcement that a borrower's bank account data – with a borrower's permission—can be plucked from apps such as Zelle, Venmo or PayPal. The government- sponsored enterprise added that additional requirements for submitting rent payment data to its underwriting system will be announced sometime in July.

Freddie Mac has been eyeing different ways of incorporating on-time rental payments to help borrowers qualify for a mortgage.

How lenders can accelerate access to credit for marginalized communities

For those in marginalized communities, it can be much more challenging to achieve the American dream of homeownership. Here’s a look at a lending technology that can help forge a pathway for underserved populations to build generational wealth through homeownership. 

Presented by: Equifax

In November 2021, Freddie Mac announced that it wanted to encourage multifamily landlords to report positive rental payments to the credit bureaus to give renters a better shot at qualifying for a mortgage.

The government-sponsored enterprise said at the time that it would provide closing cost credits on multifamily loans for rental landlords who agree to report on-time rental payments through Esusu Financial.

As a result of this initiative, 70,000 households across 816 multifamily properties are enrolled in the program and more than 15,000 credit scores have been established, Freddie said.

Freddie Mac is following in the footsteps of Fannie Mae, which announced in August 2021 that on-time rental payments would factor into its underwriting calculations.

Fannie said that for first-time homebuyers’ a history of consistent rent payments makes a “significant difference” in helping an applicant qualify for a mortgage.

Per its research conducted last year, in a sample of mortgage applicants who were denied a mortgage, 17% could have received an approval if their rental payment history had been considered.

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Knox Financial to expand loan products with $50 million in funding

Posted: 29 Jun 2022 09:14 AM PDT

Boston fintech firm Knox Financial plans to expand its lending business and loan products with $50 million in funding it received from a real estate advisory firm. 

New York-headquartered Saluda Grade provided the funding in forward flow capital which Knox will use to expand its lending business into Georgia, Knox representatives said Wednesday. The fintech also will offer additional loan products, including home equity lines of credit (HELOCs), new purchase loans and cash-out refinancings. 

"A homeowner's best investment is the home they live in — far better than the returns we’ve seen from the stock market in 2022, and a great hedge against record-high inflation," said David Friedman, co-founder and CEO of Knox Financial. 

Established in 2018, Knox aims to help manage residential rentals with its algorithm-based platform. Its rental pricing and projection model also calculates the rate of return an investment property is expected to produce over time. When a property is enrolled in the platform, Knox automates and oversees the property’s finances and taxes, insurance, leasing, banking and bill pay, according to the company’s website. 

The funding comes shortly after Knox launched its first mortgage product, dubbed the Knox equity access program (KEAP), in April. KEAP loans give homeowners access to capital, based on the equity in the home, to turn it into an investment property with Knox. Homeowners can then use their KEAP loan to fund a downpayment on their next home and to pay for repairs on their investment property.

In return, Knox charges an origination fee and third-party costs to the borrower. Knox also keeps 10% of the rental income generated from properties listed on its platform. 

Prioritizing home equity solutions in a rising rate environment

The 2022 housing market has been underscored by interest rate spikes and refi decline and lenders are working hard to adjust to new borrower trends. HousingWire recently spoke with Barry Coffin, managing director of home equity title/close at ServiceLink, about the ways lenders can capitalize on these trends by revving up their home equity solutions.

Presented by: ServiceLink

Knox’s expansion comes amid a shrinking mortgage origination market. As mortgage rates began increasing this year, lenders, mortgage tech firms and real estate brokerages started laying off employees, often citing rapidly declining market conditions. 

With rising mortgage rates, company representatives said Knox has seen growing interest in second lien products such as home equity loans or HELOCs from borrowers who have tappable equity but don't want to refinance. 

"As mortgage rates have risen, more inventory will become available at more competitive pricing," said Matt Marra, chief growth officer at Knox.

Knox Financial raised $10 million in Series A funding in April 2021, led by G20 Ventures, following a $3 million seed round in January 2020. The largest markets for Knox are metropolitan areas of Boston, Atlanta, Houston, Dallas and Austin, Texas. According to Marra, Knox oversees a portfolio of $150 million in combined value.

The post Knox Financial to expand loan products with $50 million in funding appeared first on HousingWire.

Mortgage startup Tomo offering 120-day rate locks

Posted: 29 Jun 2022 08:52 AM PDT

Fintech startup Tomo will allow borrowers to lock in a mortgage rate for up to 120 days, about twice as long as most lenders.  

The lock-in period complements a new product dubbed “Lock & Shop,” which does not require a property address to guarantee a mortgage rate, according to the company.  

“Homebuyers have struggled in a volatile housing market throughout the pandemic and rising mortgage rates will make things even more difficult,” Greg Schwartz, CEO and co-founder, said in a statement this week. 

Since January, mortgage rates have risen quickly due to high inflation and the Federal Reserve’s plan to tighten monetary policy. That has put pressure on mortgage lenders with extended lock-in periods. 

When rates are surging, lenders’ capital markets teams have trouble selling loans that were locked at a lower rate because investors demand higher returns. That often forces lenders to sell at par or take a loss.

Tomo, offers jumbo loans in Washington, Texas, Colorado, Florida and Connecticut says it can provide lock-in periods up to 120 days because it is originating the mortgage, not depending on these investors. 

Founded in 2020 by former Zillow executives Greg Schwartz and Carey Armstrong, the fintech focuses on the $1.6 trillion purchase mortgage sector. Last summer, the company launched the platform after raising $70 million in seed capital and achieving ‘unicorn’ status.   

In 2022, the fintech announced raising $40 million in a Series A round led by SVB Capital, which more than doubles the company’s valuation to $640 million.  

Tomo, however, is not immune to the volatility in the markets. The digital mortgage lender laid off nearly one-third of its workforce in late May. "The recent shift in the mortgage and venture capital markets due to the rapid increase in interest rates has impacted Tomo's business plans, and led us to make changes to our near-term strategy," Schwartz said in a statement at the time.

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Mortgage apps flat even as refis tick up

Posted: 29 Jun 2022 04:00 AM PDT

A drop in mortgage rates led refinancing applications to increase slightly last week, back to a 30% share of the total, according to the latest Mortgage Bankers Association (MBA) survey for the week ending June 24.

Overall, mortgage apps increased 0.7% on a seasonally adjusted basis from one week earlier, though they came in 49.4% lower than the same week in 2021.

"Mortgage rates continue to experience large swings. After increasing 65 basis points during the past three weeks, the 30-year fixed rate declined 14 basis points last week," Joel Kan, associate vice president of economic and industry forecasting for the trade group, said in a statement. "The decline in mortgage rates led to a slight increase in refinancing, driven by an uptick in conventional loans."

Refis rose 1.9% from the prior week and declined 74.5% year-over-year. Meanwhile, the seasonally adjusted purchase index was relatively flat, increasing only 0.12% from the prior week, but 4.7% down from the same week a year ago.

"Purchase activity has weakened in recent months due to the quick jump in mortgage rates, high home prices, and growing economic uncertainty," Kan said. "Purchase applications were essentially flat last week but were supported by a 6% increase in government loans."

Kan noted that the average purchase loan amount, after reaching the $460,000 record in March 2022, declined to $413,500 last week.

How lenders can navigate a shifting market with non-QM loan options

In an effort to counter margin compression and satisfy a new generation of homebuyers, lenders are looking to offer loan options that better fit the average borrower. HousingWire recently spoke with John Keratsis, President and CEO of Deephaven Mortgage, about the potential benefits of non-QM lending in today's tight housing market.  

Presented by: Deephaven 

On Tuesday, another index, Black Knight‘s Optimal Blue OBMMI had rates for a 30-year fixed-rate mortgage at around 5.93%.

Refis were 30.3% of total applications last week, increasing from 29.7% the previous week, the survey shows. The adjustable-rate mortgages (ARM) share of applications declined from 10.6% to 10.1%, still demonstrating continued popularity among borrowers. The average interest rate for a 5/1 ARM fell to 4.64% from 4.78% a week prior, according to the MBA.

The FHA share of total applications remained unchanged at 12%. Meanwhile, the VA share went from 10.7% to 11.2%. The USDA share of total applications increased to 0.6% from 0.5% the week prior. 

The trade group estimates the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) decreased to 5.84%, from 5.98% the previous week. For jumbo mortgage loans (greater than $647,200), it went to 5.42% from 5.49%.

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As FGMC shuts down, lender partners question fate of loans in pipeline

Posted: 28 Jun 2022 01:52 PM PDT

HW+ empty office

Tech-fueled mortgage lender UpEquity just wants answers. Roughly a year ago, the Austin-based fintech began to sell its loans to First Guaranty Mortgage Corporation (FGMC), a lender that specializes in non-qualified mortgage loans and is controlled by behemoth investment management firm Pacific Investment Management Company (PIMCO). 

UpEquity sent between 30 and 40 loans per month to FGMC, worth about $60 million in total volume, executives said. Depending on the month, FGMC bought between one-fourth and one-third of the loans UpEquity sold to investors through the correspondent channel.

One week ago, problems emerged: FGMC’s loan approval, which usually took one business day after due diligence was completed, was taking four days. Questioned by UpEquity, FGMC answered that nothing was wrong; they would approve and buy the loans. 

Then, without apparent notice to its correspondent partners, FGMC on Friday cut most of its workforce, and former high-level employees said the company has essentially shuttered.

It’s caused frustration for FGMC’s lending partners.

“We have about 14 loans, $5 million worth of loans, in the process of being purchased by them,” said Louis Wilson, co-founder and chief operating officer at UpEquity. “On Friday, we stopped getting responses via email. Then, we read about the layoffs. On Monday, no one responded to my email.” 

He added: “We’re sitting here wondering what will happen to those loans. We’ll probably sell to another investor. For us, it’s nowhere near life-threatening, but it’s a painful day.”  

A West Coast-based lending executive told HousingWire that FGMC said it can’t or won’t honor locks in its correspondent pipeline, even loans that were cleared for funding and underwritten by FGMC.

“I have done this 30 years and not seen it done this poorly,” he said.

A spokesperson for FGMC, which stopped taking mortgage applications late last week ahead of the mass layoff, declined to answer HousingWire’s questions. However, the spokesperson said that the company is continuing to fund loans, engaging proactively with its customers and “working closely with financial stakeholders to navigate this challenging moment.” 

Mispricing at FGMC? 

Two mortgage executives whose companies sold loans to FGMC said the firm often paid 20 basis points higher than other investors on 30-year fixed-rate mortgages.

However, mortgage rates rose sharply in the last few weeks, largely due to news of higher-than-expected inflation and the anxiety leading up to the Federal Reserve‘s 75 basis point hike. 

FGMC approved loans to purchase at a rate of 5.3%, locked 20 days ago, according to Wilson, but now rates are around 6%. And investors are asking for higher premiums to invest in these assets amid a flight to quality caused by the expectation of higher U.S. Treasury rates.  

Days before the layoffs, FGMC was negotiating to purchase loans with more lenders, and all seemed business as usual, multiple sources told HousingWire. 

“We signed up with them as a correspondent; we signed the paperwork on Monday, June 20. Then, on Friday, the 24th, they went out of business,” said Rich Weidel, the CEO of multichannel lender Princeton Mortgage. “This happens when companies get desperate, and they try to win loans by mispricing.”

According to Weidel, Princeton signed the papers but did not sell loans to FGMC. 

Funding falls through 

FGMC sent a WARN Notice to the Texas Workforce Commission on Friday, explaining the company has decided to terminate the employment of 428 of its 565 employees on June 24, 76% of the total workforce. 

“FGMC has experienced significant operating losses and cash flow challenges due to unforeseen historical adverse market conditions for the mortgage lending industry, including unanticipated market volatility,” Cassie Vacante, senior vice-president of Human Resources, wrote in the document. 

Vacante added that “in addition, FGMC’s recent efforts to obtain funding that could have prevented this layoff have proven unsuccessful.”   

Former employees told HousingWire on Friday that they were laid off without severance pay. A spokesperson wrote that FGMC has paid salaries, accrued paid time off, and commissions that have come due. However, the spokesperson said, the company is in the process of making severance payments to those who are eligible.

The post As FGMC shuts down, lender partners question fate of loans in pipeline appeared first on HousingWire.

Two more MSR deals valued in total at $2.5B hit the market 

Posted: 28 Jun 2022 01:19 PM PDT

The Prestwick Mortgage Group, an Alexandria, Virginia-based advisory and brokerage firm, has unveiled an offering for a $1.6 billion package of Fannie Mae, Freddie Mac and Ginnie Mae mortgage-servicing rights (MSRs).

The bulk of the 7,189 loans in the MSR offering put out to bid this week were originated in Florida and the Midwest, according to the offering documents — which list Prestwick as the exclusive broker and indicate bids are due July 12. The seller is identified only as an “independent mortgage banker.”

By volume, the loans included $583 million from Fannie Mae; $322 million in Freddie Mac loans and $737 million in loans backed by Ginnie Mae, according to the offering documents.

Prestwick's offering comes on the heels of a separate bulk offering announced recently by Denver-based Incenter Mortgage Advisors that involves a $915.8 billion package of Fannie Mae and Freddie Mac MSRs. Bids on that package were due on June 23, with an anticipated sales execution date of July 31. The seller was not identified.

The bulk of the nearly 4,000 loans in that MSR package by volume ($686.1 million in Fannie Mae loans and $229.7 million in Freddie Mac loans) were originated in the Northeast and California.

Denver-based Incenter has been staying extremely busy with MSR offerings, even if many of its deals are off the public radar. Tom Piercy managing director of Incenter, said the firm "is currently working on multiple deals totaling in excess of $60 billion that are not out for public auction." 

The weighted average interest rate for the $1.6 billion MSR offering being marketed by Prestwick is 3.175%. For Incenter's $915.8 billion deal, the average interest rate is 3.148%. 

For the Prestwick offering, the average net servicing fee (a slice of the overall interest rate) is 0.2927%; for the Incenter deal, it's 0.2505.

As interest rates rise — with the Federal Reserve on June 15, adding a 75 basis-point accelerant to the mix — loan-prepayment speeds drop for lower-rate loans due to diminished refinancing activity. That, in turn, amplifies the value of MSRs because they pay out over a longer period. 

Those dynamics sparked some major MSR bulk offerings over the first quarter of the year, as HousingWire reported previously. That trend continued in the second quarter as well.

In addition to the latest MSR deals announced by Prestwick and Incenter in late June, three MSR sales offerings were announced earlier in the month by Prestwick and a separate advisory firm, New York-based Mortgage Industry Advisory Group (MIAC) that together are valued at more than $1.4 billion. 

The Prestwick Mortgage Group served as the exclusive broker for a $618 million offering of Fannie Mae and Freddie MAC MSRs with bids due June 2. 

In addition, MIAC came out with two large MSR offerings earlier this month involving a $4.8 billion loan pool and a separate $816.7 million package, both composed of Fannie Mae and Freddie Mac loans. 

The post Two more MSR deals valued in total at $2.5B hit the market  appeared first on HousingWire.

Fix-and-flip lender Kiavi finalizes $218M private-label offering

Posted: 28 Jun 2022 12:07 PM PDT

Kiavi, formerly LendingHome, recently closed a $218 million private-label securitization of unrated short-term mortgages — described as "residential transition loans" (RTLs) by the lender, which serves the fix-and-flip market.

The deal represents Kiavi‘s ninth such securitization under its LHOME shelf since launching its revolving securitization program in 2019, according to the company. The offering includes a two-year revolving term during which principal payoffs on the underlying loans can be reinvested in purchasing additional newly originated loans.

"The transaction is estimated to provide capital to support approximately $750 million in loan originations over the life of the deal and will help real estate investors revitalize aged homes across the country," Kiavi said in announcing the deal. "The $218 million total deal size includes $207 million in offered notes in three classes, A1, A2 and M, all of which were sold."

Nomura Securities International Inc. served as the sole structuring agent of the securitization. Nomura, Barclays Capital Inc. and Performance Trust Capital Partners, LLC acted as the joint bookrunners and co-lead managers. 

"Executing in today’s challenging market environment demonstrates our investors’ continued confidence in our products and performance, and it extends our position as a leading issuer of RTL products,” said Arvind Mohan, chief operating officer at Kiavi. “This enables us to continue to be a dependable partner to real estate investors as they rehabilitate America’s aging housing stock at a time when over two-thirds of U.S. homes are over 30 years old.” 

Kiavi ranked as the top short-term lender in the fix-and-flip space in 2021, with $2.7 billion in originations, up nearly 78% from 2020, according to a recent report by Inside Mortgage Finance (IMF). After a slowdown in lending due to the pandemic, fix-and-flip lenders came roaring back in 2021, boosting originations by more than 73% year over year, to $18.5 billion, according to IMF.

Could renovated foreclosure resales help solve the nation's increasingly complex affordable housing puzzle?

An estimated 140,000 renovated properties purchased at foreclosure auction or bank-owned auction were resold to owner-occupant buyers between January 2020 and December 2021

Presented by: Auction.com 

Since it was launched in 2013, Kiavi has funded more than $10 billion in loans to real estate investors, according to the company. This past April, Kiavi completed a $271 million securitization of RTLs — its eighth deal at the time — that also is expected to support some $750 million in loan originations over the life of the deal.

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Mortgage – HousingWire

Mortgage – HousingWi...