LoanDepot sues Movement Mortgage, insurers exit California, Facebook marketing discrimination suit and other stories you might have missed
July 4, 2023 4:00 AM
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LoanDepot sues Movement Mortgage for poaching loan officers
The lender accused Movement of unfair competition and is suing them for violating the Defend Trade Secrets Act. The lawsuit claims that Movement courted loanDepot employees with all-expense paid vacations and stole 25 employees over three months in 2021.
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What Fannie Mae is doing about climate risk's impact on mortgages
Tim Judge, Fannie Mae's chief climate officer, discussed with NMN how he predicts climate risk's impact on the government-sponsored enterprise, climate versus catastrophic modeling, Fannie Mae's community outreach and more.
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Fabio Balbi - stock.adobe.com
The non-QM product gaining steam in a low-volume market
Originators are turning to Individual Taxpayer Identification Loans, or ITIN products, during a slow market. These products, which provide home loans for nonresidents and resident aliens, are similar to conventional loans in both cost and closing time. Lenders say the borrowers are often hard workers with solid family structures, so they see shockingly low delinquency rates.
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David Odisho/Bloom
Allstate, State Farm home insurance exits in California worry lenders
The two giant insurers will no longer issue policies in the state due to rising construction costs and natural disaster risk. Together, Allstate and State Farm cover 3.2 million of the 6.6 million home insurance policies in the state. For borrowers, the decision could mean could mean hundreds more in monthly insurance payments and higher debt-to-income ratios.
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Joe Raedle/Getty I - Bloomberg
Condo lending standards post-Surfside cause consternation
After the Champlain Towers South condo building collapsed on June 24, 2021, government-sponsored enterprises and the Florida Building Safety Act imposed strict requirements on condos in order to prevent similar atrocities. Two years later, Florida condo boards are still struggling to find a way forward.
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Home price surge likely to follow construction freeze in Phoenix
After a government model predicted diminished groundwater supply in Phoenix, the Arizona Department of Water Resources said it would no longer allow subdivision developments to rely solely on wells for water. Real estate agents and home builders both say this'll likely cause home prices to spike, especially in suburban areas on the outskirts of the city.
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Lenders court Gen Z with ChatGPT-like tech
As more of this generation enters the workforce, lenders are finding new ways to attract young customers. Joe Welu, CEO of Total Expert, a customer relationship management software company, and Shashank Shekhar, CEO of InstaMortgage, a web-based lender partnering with Total Expert, discuss their strategies.
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Bloomberg
'But is it fair?': AI systems show promise but questions remain
Machine learning has been a trusted tool in mortgage lending assessment for years now, but ChatGPT's rise brought fresh scrutiny over its use. Some think it allows lenders to skirt credit score bias that favors white upper middle class borrowers. Others say machine learning also reinforces those biases.
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End of forbearance tests mettle of other foreclosure alternatives
The Mortgage Banking Association reported that only 0.5% of borrowers now have forbearance. Delinquency rates are still historically low, and servicers are looking to other forms of foreclosure prevention to maintain that trend amid rises in mortgage rates. One strategy implemented by the Federal Housing Administration: allowing 40-year modifications.
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Another trigger lead reform bill: what makes it different?
Tennessee Rep. John Rose just introduced a bill on trigger leads that looks similar to another that New York Rep. Ritchie Torres introduced this April. Both bills would switch trigger leads from an opt-out system to an opt-in system, but there's a clear difference between the two: Rose's bill includes an allowance for the sale of leads to lenders that have an existing relationship with the customer.
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Rhode Island law makes mediation upon request a permanent mandate
On June 14, Gov. Daniel McKee signed the The Foreclosure Mediation Act into law. Lenders in the state must now provide delinquent borrowers with mediation and loss mitigation options before foreclosing. The act is part of a larger trend of increasing foreclosure prevention efforts nationwide.
Read the full story here.
Bigc Studio - stock.adobe.com
Could mortgage reserve accounts reduce minority foreclosures?
Black homeowners have higher delinquency rates because of unplanned-for financial strains, like medical expenses, The Racial Accelerator for Homeownership, a series of research papers by the Federal Home Loan Bank of San Francisco and the Urban Institute, said. The study says reserve accounts, or "sidecar savings accounts on the mortgage," may solve this problem.
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Meg Roussos/Bloomberg
Marketing discrimination suit against Facebook gets a lifeline
The company's ad-selling platform has an "Exclude People'' feature that allowed landlords to exclude single mothers and disabled veterans from seeing their ads, the lawsuit alleges. The plaintiffs are suing under the Fair Housing Act as protected classes of consumers. A California court struck the lawsuit down in 2021, but the 9th U.S. Circuit Court of Appeals gave it a second chance.
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Chinnapong - stock.adobe.com
Borrower shedding a deadname? Expect failed credit checks
People who change their first or middle name often fail credit checks because credit bureau algorithms don't register the change. The solution? Borrowers must file paperwork to each national credit agency separately. The issue disproportionately affects transgender and nonbinary people, who often change their name to better match their gender identity.
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How to make small-balance mortgage lending profitable
A recent report by the Pew Charitable Trusts found that loans of $150,000 or less are dwindling: their share of mortgage portfolios decreased by 70% from 2004 to 2021. These loans have the same costs as larger loans, but make lenders less money on them. Bruce Marks of The Neighborhood Assistance Corporation of America, Alex Horowitz of the Housing Policy Initiative and Rob Zimmer of Community Home Lenders of America discuss how to increase small loan incentives for lenders.
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