Top news of the week: Aug 2-6, 2021
August 6, 2021 5:31 PM
Homebridge merging with blockchain fintech Figure Technologies
Mortgage banker Homebridge Financial Services is merging with Figure Technologies just days after the fintech firm closed on a $200 million Series D financing round.
Figure uses itsblockchain technology to originate, finance, service and trade loans. It began with home equity loans in 2018 and now also handles mortgage refinancings, student loan refinancings and personal loans.
"We are bringing together the most robust, powerful and efficient technology ever seen in lending and pairing that with a $25-billion-a-year loan originator with 150,000 customers we can introduce to new payment and lending products," said Figure founder Mike Cagney in a press release. "We're going to deliver to this all-star loan origination team at Homebridge a tech platform on Provenance Blockchain that is going to double their capacity for fulfilling loans."
Read thefull story here.
Figure uses its
"We are bringing together the most robust, powerful and efficient technology ever seen in lending and pairing that with a $25-billion-a-year loan originator with 150,000 customers we can introduce to new payment and lending products," said Figure founder Mike Cagney in a press release. "We're going to deliver to this all-star loan origination team at Homebridge a tech platform on Provenance Blockchain that is going to double their capacity for fulfilling loans."
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LoanDepot earnings down significantly on lower margins, revenues
LoanDepot's second quarter net income slipped dramatically as competitive pressures drove margins and revenues lower, in what management calls a "transitional period" for the mortgage industry.
The company’s earnings dropped by more than 93% quarter to quarter, falling to $27.3 million, compared with $427.9 million in the first part of 2021.
This is the first full quarter for loanDepot as a public company, following itsFeb. 11 IPO.
Second quarter total revenue of $779.9 million was down from $1.3 billion fromthe prior quarter and $1.2 billion in the previous year. Over the same period, gain on sales margins fell to 228 basis points from 298 bps in the first quarter of this year and an outsized 539 bps in the second quarter of 2020. In the most recent period, loanDepot produced $34.5 billion, compared with $41.5 billion in the first quarter but just $21 billion in the second quarter of 2020.
Read thefull story here.
The company’s earnings dropped by more than 93% quarter to quarter, falling to $27.3 million, compared with $427.9 million in the first part of 2021.
This is the first full quarter for loanDepot as a public company, following its
Second quarter total revenue of $779.9 million was down from $1.3 billion from
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Chris Kleponis/Bloomberg
Biden issues new eviction ban for COVID-19 hot spots
President Joe Biden quelled for now a brewing confrontation with progressive Democrats with a new moratorium on evictions during the pandemic, but the order invites a legal fight with high-stakes consequences for public health that the government may well lose.
The Centers for Disease Control and Prevention’s order on Tuesday, following several days of legal wrangling within the administration, aims to keep tenants who are in arrears from losing their homes until Oct. 3. White House officials hope that’s enough time to stand up a long-delayed $47 billion rental assistance program.
(Read full story here .)
The Centers for Disease Control and Prevention’s order on Tuesday, following several days of legal wrangling within the administration, aims to keep tenants who are in arrears from losing their homes until Oct. 3. White House officials hope that’s enough time to stand up a long-delayed $47 billion rental assistance program.
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Ting Shen/Bloomberg
CFPB clarifies Juneteenth’s impact on mortgages
The Consumer Financial Protection Bureau has determined that for the purposes of certain mortgage rules, Juneteenth counted as a federal holiday or a business day this year depending on the start date of the compliance period involved.
For compliance periods starting on or before June 17, 2021, when the holiday was signed into law, it was a business day. Thereafter, it’s considered a federal holiday.
The bureau’sinterpretation applies to rules around business-day calculations for Regulation Z periods, in which loans can be cancelled and documents have to be received.
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For compliance periods starting on or before June 17, 2021, when the holiday was signed into law, it was a business day. Thereafter, it’s considered a federal holiday.
The bureau’s
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Ocwen, PHH review alleged abandoned property violations in 3 cities
Ocwen Financial and its subsidiary PHH Mortgage on Monday were reviewing allegations that they had not completed foreclosures in a timely manner on 18 abandoned properties in New York, the top state for so-called “zombie” real estate issues.
Albany, Schenectady and Troy have coordinated legal actions against Ocwen and PHH underNew York’s zombie property law, according to a press statement posted online July 28. Under the law, a civil penalty up to $500 may be issued for each day a violation exists on an abandoned property. New York enacted the legislation a few months before the COVID-19 pandemic hit the U.S., in December 2019. The properties involved have a total of 502 state building code violations, the cities allege.
Whileforeclosure moratoria being phased out have prohibited action on occupied single-family properties, they generally allowed some exceptions for abandoned properties, or at least ones in progress prior to the pandemic. Recently, national zombie property volumes jumped almost 6% quarterly and 21% annually, but the number in New York, at 2,052, is down from the 2,226 seen at the time New York’s law was enacted, according to Attom Data Solutions.
Read thefull story here.
Albany, Schenectady and Troy have coordinated legal actions against Ocwen and PHH under
While
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Mortgage rate drops to 2.77%
Mortgage rates fell to their lowest levels in months, as the latest spikes in COVID-19 cases gave wary investors few reasons to make moves that might lead rates to increase.
The average 30-year fixed-rate mortgage dropped to 2.77% — the lowest since mid February — for the weekly period ending August 4, according to Freddie Mac’s Primary Mortgage Market Survey. The rate averaged 2.8% one week earlier and stood at 2.88% during the same week a year ago.
(Read full story here. )
The average 30-year fixed-rate mortgage dropped to 2.77% — the lowest since mid February — for the weekly period ending August 4, according to Freddie Mac’s Primary Mortgage Market Survey. The rate averaged 2.8% one week earlier and stood at 2.88% during the same week a year ago.
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Fannie Mae sets purchase mortgage acquisition record
Fannie Mae on Tuesday recorded a near-tripling of its second-quarter earnings on an annual basis to $7.2 billion, driven primarily by credit-related income as single-family purchase loan acquisitions jumped to a new high of $129.5 billion.
The government-sponsored enterprise’s net income was up from $2.55 billionthe same period a year ago , and the $5 billion it earned during the previous quarter. Its comprehensive income in the second quarter was $7.1 billion, compared to $2.53 billion a year earlier, and almost $5 billion in the first quarter.
Fannie’s net worth rose to $37.3 billion from $16.5 billion during the same period a year earlier, and from $30.2 billion in 1Q20. Net revenues rose to $8.4 billion from nearly $5.9 billion a year ago and $6.8 billion the previous fiscal period. Second-quarter purchase loan acquisitions increased from $92 billion a year ago and $99 billion the previous quarter.
Read thefull story here.
The government-sponsored enterprise’s net income was up from $2.55 billion
Fannie’s net worth rose to $37.3 billion from $16.5 billion during the same period a year earlier, and from $30.2 billion in 1Q20. Net revenues rose to $8.4 billion from nearly $5.9 billion a year ago and $6.8 billion the previous fiscal period. Second-quarter purchase loan acquisitions increased from $92 billion a year ago and $99 billion the previous quarter.
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Ocwen takes $10M loss in Q2 2021
Ocwen Financial returned to a net loss in the second quarter due in part to costs related to strategic moves aimed at producing future gains.
The company’s $10 million net loss followed areturn to profitability in the first quarter, when it earned $9 million. In the second quarter of 2020, Ocwen produced nearly $2 million in net income.
However, when Ocwen’s earnings are adjusted for non-recurring charges, quarterly numbers look more consistent, and its recent investments position the company for growth in the second half, executives said in an earnings call.
“We accomplished a lot in the quarter: record servicing additions and seller growth, improved scale in ... originations, cost reduction, strong operating execution growth in higher margin channels, services, and products; all of which have given us strong momentum,” President and CEO Glen Messina said.
Read thefull story here.
The company’s $10 million net loss followed a
However, when Ocwen’s earnings are adjusted for non-recurring charges, quarterly numbers look more consistent, and its recent investments position the company for growth in the second half, executives said in an earnings call.
“We accomplished a lot in the quarter: record servicing additions and seller growth, improved scale in ... originations, cost reduction, strong operating execution growth in higher margin channels, services, and products; all of which have given us strong momentum,” President and CEO Glen Messina said.
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Redfin adds predictive data on climate change to its local statistics
Redfin is providing predictive data on fire, heat, drought and storm risk for every location page of its site, to address homebuyer concerns regarding climate change.
In April, nearly eight in 10 respondents to a Redfin survey said the frequency and intensity of extreme weather eventsaffected their home search.
"A home is a huge financial investment, and these days consumers are seeing all too many examples of climate-related risks likefires , floods and heatwaves," said Redfin Chief Growth Officer Christian Taubman in a press release.
ClimateCheck, a company that measures risk for climate disasters by location, provides the information to Redfin. It calculates a score from 0 to 100 for the county, city, neighborhood and zip code where each property is located.
Those ratings are based on both an area's future risk and how such risk is expected to change over the length of a 30-year mortgage. The model forecasts a higher risk for areas expected to experience more dramatic changes — compared with ones already experiencing such hazards — as this reflects the challenges and cost of adjusting to climate change and the increased stress on local infrastructure.
Read thefull story here.
In April, nearly eight in 10 respondents to a Redfin survey said the frequency and intensity of extreme weather events
"A home is a huge financial investment, and these days consumers are seeing all too many examples of climate-related risks like
ClimateCheck, a company that measures risk for climate disasters by location, provides the information to Redfin. It calculates a score from 0 to 100 for the county, city, neighborhood and zip code where each property is located.
Those ratings are based on both an area's future risk and how such risk is expected to change over the length of a 30-year mortgage. The model forecasts a higher risk for areas expected to experience more dramatic changes — compared with ones already experiencing such hazards — as this reflects the challenges and cost of adjusting to climate change and the increased stress on local infrastructure.
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Bitcoin mortgage payment legislation proposed in Spain
If it feels like the mortgage industry has waited forever for Bitcoin integration , it’s because it has.
Price volatility and lack of centralization kept cryptocurrencies from gaining traction in U.S. lending, but that hasn’t stopped momentum abroad. A Spanish draft bill introduced in late July would legalize mortgage and insurance payments through crypto.
If the bill is passed into law, Spanish banks and companies engaging in blockchain technologies would receive major breaks on taxes and patent costs. The legislation also calls for establishing a council for public blockchain advisory. It’s part of Spain’s larger effort to regulate the crypto market and fight tax fraud.
Across the Atlantic, El Salvador made history on June 9 by becoming the first country in the world to adopt Bitcoin as legal tender. On the same day, the U.S.Federal Reserve proposed a central bank digital currency it designed, but was met with bipartisan apprehension.
Read thefull story here.
If the bill is passed into law, Spanish banks and companies engaging in blockchain technologies would receive major breaks on taxes and patent costs. The legislation also calls for establishing a council for public blockchain advisory. It’s part of Spain’s larger effort to regulate the crypto market and fight tax fraud.
Across the Atlantic, El Salvador made history on June 9 by becoming the first country in the world to adopt Bitcoin as legal tender. On the same day, the U.S.
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Improvement in performance slows for rent, mortgages, student loans
Reductions in the number of struggling tenants and people with school-related loan difficulties faltered a little in June compared to March, suggesting that the broader trend toward improvement in housing and educational debt performance is continuing, but has slowed.
Missing payments for mortgage borrowers had fallen to 2.19 million in June from 2.33 million in March, according to the Research Institute for Housing America. During the same time period, missing payments for renters rose to 2.86 million from 2.56 million. Arrears for student loan borrowers increased to 28 million from 26 million. However, those statistics include payments suspended throughpandemic relief programs , some of which are expiring. When all three months in the quarter are averaged, missing payments in all three categories are still falling.
The numbers reinforce othersigns that recovery isn’t moving quite as quickly as anticipated. While economic recovery and transitional government support like the more narrowly targeted eviction ban extension are likely to continue to drive improvement, the expiration of broader assistance and rising risk from COVID-19 variants are challenges.
Read thefull story here.
Missing payments for mortgage borrowers had fallen to 2.19 million in June from 2.33 million in March, according to the Research Institute for Housing America. During the same time period, missing payments for renters rose to 2.86 million from 2.56 million. Arrears for student loan borrowers increased to 28 million from 26 million. However, those statistics include payments suspended through
The numbers reinforce other
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Freddie Mac names Dionne Wallace Oakley chief HR, diversity officer
Freddie Mac announced the appointment of longtime personnel-management leader Dionne Wallace Oakley to head human resources and diversity initiatives at the organization.
A veteran of the insurance industry, Wallace Oakley will hold the title of senior vice president, chief human resources officer and chief diversity officer for the McLean, Virginia-based government-sponsored enterprise. She most recently held the role of executive vice president, human resources and strategy, at Erie Insurance. Prior to joining Erie in 2011, she held a variety of roles at State Farm Insurance for over two decades, including serving as its corporate human resources director.
Wallace Oakley is the third major corporate leadership hire at Freddie Mac in the past few months.Michael DeVito took over as CEO on June 1, and in July, the company promoted Jerry Mauricio to chief compliance officer.
Read thefull story here.
A veteran of the insurance industry, Wallace Oakley will hold the title of senior vice president, chief human resources officer and chief diversity officer for the McLean, Virginia-based government-sponsored enterprise. She most recently held the role of executive vice president, human resources and strategy, at Erie Insurance. Prior to joining Erie in 2011, she held a variety of roles at State Farm Insurance for over two decades, including serving as its corporate human resources director.
Wallace Oakley is the third major corporate leadership hire at Freddie Mac in the past few months.
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Home sale profits take rare dip in second quarter
U.S. home sale profit margins fell in the second quarter of 2021 but were still far higher than they were a year earlier.
Typical single-family home and condo sales across the United States during the second quarter of 2021 generated a profit of $94,500, up from $90,000 in the first quarter of 2021 and from $60,572 in the second quarter of 2020, according to a reportreleased by Attom Data Solutions July 29.
Read thefull story here.
Typical single-family home and condo sales across the United States during the second quarter of 2021 generated a profit of $94,500, up from $90,000 in the first quarter of 2021 and from $60,572 in the second quarter of 2020, according to a report
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Foreclosure risk expected to spike in September
A ban that stopped distressed borrowers from losing homes has just ended, but the processing of at-risk loans won’t loom large until September when 18,000 people per business day exit forbearance, according to Black Knight.
To be sure, government-related agenciesstreamlined some of the new borrower-related protections against home loss and forborne payments are still shrinking on a net basis even with a recent jump in new payment suspensions. However, the sheer number of borrowers who will exit forbearance in the fall, complexity involved in new rules to workflow and timelines for suspended payments are now particularly daunting, according to Black Knight’s analysis.
Read thefull story here.
To be sure, government-related agencies
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Heartland Financial offers home improvement loan to low-income clients
Heartland Financial USA Inc., or HTLF, a bank holding company based in Dubuque, Iowa, is offering a home improvement loan product designed for low- and moderate-income homeowners through its 11 chartered units in 12 states.
This fixed-rate installment loan is secured by the borrower's primary residence. It has a 60-month term, with dollar amounts between $5,001 and $14,999.
"This is another way we can help serve the communities that we're in," said Brian Jensen, senior vice president, segment marketing director at HTLF. "We know that a lot of larger national banks have announced they'rediscontinuing some lending , pulling back on some lending, but we're actually doing the opposite."
Read thefull story here.
This fixed-rate installment loan is secured by the borrower's primary residence. It has a 60-month term, with dollar amounts between $5,001 and $14,999.
"This is another way we can help serve the communities that we're in," said Brian Jensen, senior vice president, segment marketing director at HTLF. "We know that a lot of larger national banks have announced they're
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Mortgage applications drop in late July
Following a one-week jump in mortgage applications driven by elevated refinance activity, volumes edged down again, even as interest rates continued to favor borrowers.
The Mortgage Bankers Association’s Market Composite Index, which tracks applications through a weekly survey of MBA members, declined a seasonally adjusted 1.7% for the period ending July 30. On an unadjusted basis, the decrease equaled 2%. Compared to volumes for the same week in 2020, the seasonally adjusted index was 8.1% lower.
Although low interest rates have frequently led to surges in refinancing activity in 2021, the Refinance Index decreased 2% on a week-over-week basis and came in 3% lower than the same week a year ago.
After dipping to its lowest level since May 2020 the previous week, the Purchase Index slid a further 2%, seasonally adjusted. On an unadjusted basis, purchases were down 2% compared to a week earlier and 18% lower year-over-year.
Read thefull story here.
The Mortgage Bankers Association’s Market Composite Index, which tracks applications through a weekly survey of MBA members, declined a seasonally adjusted 1.7% for the period ending July 30. On an unadjusted basis, the decrease equaled 2%. Compared to volumes for the same week in 2020, the seasonally adjusted index was 8.1% lower.
Although low interest rates have frequently led to surges in refinancing activity in 2021, the Refinance Index decreased 2% on a week-over-week basis and came in 3% lower than the same week a year ago.
After dipping to its lowest level since May 2020 the previous week, the Purchase Index slid a further 2%, seasonally adjusted. On an unadjusted basis, purchases were down 2% compared to a week earlier and 18% lower year-over-year.
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Sterling Bancorp’s mortgage-related legal expenses hamper Q2 earnings
Expenses related to a number of legal woes limited second quarter earnings for Sterling Bancorp, company representatives said on an earnings call Monday.
After losing $13 million over the course of 2020, Southfield, Mich.-based bank drew profit for the opening two quarters of 2021, reporting a second quarter net income of $2.57 million, or $0.05 per diluted share. This rosefrom $2.33 million in the first quarter of this year and marked a decline from $2.87 million in the second quarter of 2020.
Last year, Sterling faced alawsuit over disclosures and repurchased mortgages it sold under its discontinued Advantage Loan Program. Repurchases totaled about $80 million in the quarter and it committed to another $100 million in loans over the next several quarters.
Read thefull story here.
After losing $13 million over the course of 2020, Southfield, Mich.-based bank drew profit for the opening two quarters of 2021, reporting a second quarter net income of $2.57 million, or $0.05 per diluted share. This rose
Last year, Sterling faced a
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