Most-read mortgage news you might have missed

In the last few weeks, readers had their attention trained on updates in mortgage-related court cases, developments in AI and notable actions of government agencies. 

Here are the recent most-read stories from National Mortgage News you may have missed.

These articles were reported by Brad Finkelstein, Bonnie Sinnock, Maria Volkova, Andrew Martinez, and Spencer Lee, with additional writing from Courtney Hoff Dockerty.

Kind Lending brings on mortgage veteran as COO

Newly appointed COO of Kind Lending Tammy Richards has 35 years of experience in the industry, founding her own mortgage technology company, Lendarch, and serving as Loandepot's COO a few years prior. However, her departure from Loandepot was controversial and dueling lawsuits have been filed. Kind Lending, founded by Glenn Stearns, former CEO of Stearns Lending, was created in 2020. The mortgage shop is licensed to operate in over 48 states.

Read the full story here.

Waterstone poaching, theft of trade secrets case heads to trial

The next trial over allegations of mortgage employee poaching and theft of trade secrets is scheduled to begin June 3. Mutual of Omaha Mortgage sued Waterstone Mortgage, blaming the firm for the closure of three of its East Coast branches after enticing 60 employees to switch firms, according to case filings.

Read the full story here.

FHA resolves confusion over subordinate lien handling

The Federal Housing Administration released a FAQ to address concerns on how to handle subordinate liens on loans it insures after a recent court decision. The development provides consistency across the industry and more efficiency in the servicing process.

Read the full story here.

Survey finds most borrowers stick to their first mortgage offer

Over half of borrowers only received one mortgage offer, and for most, that's all they needed, according to a study by online financial services marketplace LendingTree. Borrowers could save a good amount of money by comparing different loans, but many are confident their first offer was the best deal.

Read the full story here.

Why prioritizing compliance is more important for lenders amid job cuts

Maintaining strong compliance standards helps lenders avoid buybacks and regulatory sanction. But as some companies make cuts to their staffs amid shrinking profit margins, they are seeing compliance as a stressful added cost. New compliance consultancies are offering strategies for keeping high standards amid lower headcounts.

Read the full story here.

Use of deepfakes is on the rise and lenders need to up their game in fighting them

Ease of access to state-of-the-art technology has accelerated the arrival of deepfakes to the mortgage industry, specifically in the form of fake video identity confirmations. The technology is still developing and a solution is unclear, but tech providers are educating businesses on methods to prevent becoming victims, emphasizing the importance of multifactor authentication in digital interactions.

Read the full story here.

Escrowed funds pose interest rate risk to servicers

Escrowed funds, the portion of borrower payments used for taxes and insurance, are increasingly vulnerable to interest rate risk, experts said at a recent housing finance industry conference. Following a recent surge in escrow balances due to property tax increases, it has become increasingly important for mortgage lenders to address that risk and support consumers facing payment adjustments.

Read the full story here.

CFPB renews warnings against deceptive contract terms

The Consumer Financial Protection Bureau reminded lenders and servicers on June 4 that it will be watching for the use of "unlawful or unenforceable" contract terms, specifically referencing the inclusion of non-bank arbitration requirements as an offense. The CFPB said companies and individuals have deceptively slipped coercive contract clauses that restrict consumer freedoms, which are banned by federal and state laws, into the fine print of their contracts. The Bureau told companies it would enforce these pre-existing laws and greenlighted a proposed registry of "repeating offenders." 

Read the full story here.

Gen Z leans into creative tactics to lessen housing costs

Gen Z has benefited from the rise of remote work and now, as home prices continue to rise, they're embracing an assortment of strategies in order to pay less for their housing costs, including residing with their parents and "house hacking" – renting out part of their property to pay the bills.

Read the full story here.

Freddie proposal to buy second lien mortgages prompts debate

Some industry members fear potential market distortion and crowding out of private capital if a government-sponsored enterprise second lien program was to get regulatory approval. Should Freddie Mac be able to offer this product, which is commonly available on the private market? If so, organizations want more safeguards.

Read the full story here.

Finance of America cuts jobs

The reverse-mortgage lender eliminated an unknown amount of positions in an ongoing effort to manage finances and meet the demands of its business model. Several rounds of layoffs, which began in 2022, were spread across departments including the retail and corporate divisions. The company ceased forward-mortgage lending in 2022 due to low volumes and now focuses exclusively on home equity-related products in reverse lending. By the end of last year, the company had slashed over 50% of its workforce. It plans to retire the brand of recently acquired AAG and create a new marketing strategy to reach an older client base. 

Read the full story here.

MBA’s policy advocate on impacts of 2024 election

The MBA's Senior Vice President for Legislative and Political Affairs Bill Kilmer spoke with National Mortgage News about how the November election and certain industry-related bills will impact mortgage professionals. He said the MBA will be pushing for measures to address production and affordability while encouraging rejection of policies that lob more taxes on housing providers. 

Read the full story here.

CFPB to examine steep increases in closing costs

"Junk fees" are going under the microscope by the Biden Administration. The next step: the Consumer Financial Protection Bureau's inquiry taking aim at the credit reporting industry issuing increases in fees for consumers. Some fear this action could lead to overregulation, while others praised the callout as those fees can harm consumers.

Read the full story here.

Hometown Lenders files for bankruptcy

The company that was once the largest mortgage banker in Alabama before spreading nationwide in recent years, filed for Chapter 11 bankruptcy June 3. It disclosed at least $40 million in debt to multiple parties. The firm's revenue has fallen 70% over recent years despite branch closures and employee layoffs. Business operations have been shut down since last October, an event that closely followed the firm's transition from a retail to broker model. 

Read the full story here.

Real estate agents not ready for August compensation changes: analyst

With the new broker compensation payment changes scheduled to take effect in August, one analyst from Keefe, Bruyette & Woods argued the new protocols planned by some multiple listings services will not be enough for them to avoid further regulatory scrutiny. KBW analyst Ryan Tomasello wrote that the industry is "overly optimistic in its consensus view that impacts will be limited." He said plans by the California Regional MLS and Bright MLS (which covers six Mid-Atlantic states and the District of Columbia) to add fields where brokers can list concessions in price may essentially be too similar to practices overturned in the NAR case. "If it looks like a duck, walks like a duck, and quacks like a duck, it's a duck," he wrote.

Read the full story here.
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