How Is The Market Really Doing?

Veros Real Estate Solutions (Veros), an award-winning industry leader in enterprise risk management, collateral valuation services, and predictive analytics, has released its second quarter 2018 VeroFORECAST, which predicts that over the next 12 months residential market values will appreciate at a national average of +4.4%, a slightly higher rate than predicted in the previous report.

Each quarter Veros releases a new VeroFORECAST report, developed by projecting the impact of various key predictors on real estate values at four future time horizons: 6, 12, 18 and 24 months. The report released today, which covers the 12 months from June 1, 2018 through June 1, 2019, integrates data from 1,005 counties, 354 metropolitan statistical areas (MSAs), and 13,877 zip codes that cover 82% of the U.S. population.

Featured Sponsors:

 

“Washington State and Nevada occupy six of the ten highest-appreciating MSAs in the U.S. and the remaining four are in California, Oregon and Idaho,” said Eric Fox, VP of Statistical and Economic Modeling at Veros. “This is the 24th quarter in a row where this index has forecast overall appreciation. Interestingly, the metro markets that are projected to appreciate the most over the next 12 months in this VeroFORECAST release are also among the most populated, while the markets that are expected to depreciate most are all among the least populated. For example, the average population of the top 25 metros is 1.7 million and the average population of the bottom 25 metros is 318,000.”

The new report reconfirms what has been experienced over the last several years: high demand for housing and historically low housing supply remain the key determinants of where any given market is expected to be on the appreciation-depreciation spectrum.

There is also a geographical component to real estate appreciation predictions. Not only are the projected top ten trending U.S. markets, as determined in the current VeroFORECAST, concentrated in the West, but the ten that are predicted to depreciate slightly or remain the same, are in the East and South.

For the 12 months beginning June 1, 2018, Veros predicts all ten of the highest-appreciating MSAs and 21 of the top 25 markets will be in seven contiguous far west states, from Washington and Idaho in the north, down through Oregon and California, and east to Nevada, Utah and Colorado.

Featured Sponsors:

“There are several factors driving up home prices in the Seattle area, including a thriving economy and a lack of buildable land,” said Economist Matthew Gardner, with Seattle-based Windermere Real Estate. “There is also growing demand for housing thanks to the substantial in-migration of technology workers from the Bay Area who are relocating to Seattle because of the robust job market and relatively inexpensive home prices when compared to those in San Francisco,” Gardner concluded.

Despite migration to Seattle from California’s Bay Area and Silicon Valley, the San Jose market is one of the top five markets for appreciation this quarter, ranked fourth at +9.5 percent.

“The San Jose market remains exceedingly strong with a supply of homes at an extremely low 1.0 months, while its population is continuing to grow steadily. Its unemployment is an extremely low 2.6%. The Silicon Valley continues to attract workers for high tech jobs, and there isn’t enough housing to fill demand, making this one of the strongest markets in the country,” Fox said.

Much like San Jose, this quarter’s fourth highest appreciating market Reno-Sparks is experiencing extremely low housing inventories in conjunction with rapidly growing population.

Featured Sponsors:

“For at least eight years now Reno-Sparks has been experiencing incredible growth, with an influx of companies in the technology space from California and other states,” said Craig King, TITLE, Chase International. “Tesla is currently building a 14 million-plus square foot gigafactory here, which, upon completion, is expected to be the biggest building in the world. With so many people moving into the area from higher equity regions, there is a great deal of pressure on the housing market to catch up and builders are still under building. This phenomenon has been going on for at least 5 to 6 years now and we are still 20,000 housing units behind what’s needed,” King concluded.

The supply of homes in Reno is 2.7 months and continues to fall. Combined with an unemployment rate of a low 3.8% and rapid population growth of 15%+, this is one of the forecast’s strongest markets in the country.

Nearly one-half of the bottom 25 markets are in the northeastern states of New Jersey, Connecticut, New York, Maine, Pennsylvania and Maryland, with eight others in the deep south: Louisiana, Alabama, Arkansas and Mississippi.

Among the ten MSAs projected to have the highest depreciation over the next 12 months, only three were in the previous VeroFORECAST bottom ten, and the rate of depreciation is significantly less. In the last report, Atlantic City was predicted to depreciate at nearly 3%, and it now is forecast to depreciate at -1.0%. Cumberland, Maryland-West Virginia MSA, which was not among the bottom ten MSAs in the last report, now has the worst forecast depreciation, albeit only -1.6%.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

You Need To Know About SEO

Search engine optimization (SEO) seems pretty straightforward. You pick a few keywords, and voilà! Your page is optimized for SEO, right? Not yet.

Many people understand the basic principles of SEO, but a lot has changed in the last decade, according to Rachel Leist, in her article entitled “The Definition of SEO in 100 Words or Less.”

Featured Sponsors:

 

She concludes that the SEO that we know and love today is not the same SEO that we knew and loved (or hated) 10 years ago. And that’s why SEO is something marketers should continue to define, and redefine. Here’s a brief definition in under 100 words:

SEO stands for search engine optimization, that much has stayed the same. It refers to techniques that help your website rank higher in search engine results pages (SERPs). This makes your website more visible to people who are looking for solutions that your brand, product, or service can provide via search engines like Google, Yahoo!, and Bing.

What hasn’t stayed the same are the techniques we use to improve our rankings. This has everything to do with the search algorithms that these companies constantly change.

SEO works by optimizing a website’s pages, conducting keyword research, and earning inbound links. You can generally see results of SEO efforts once the webpage has been crawled and indexed by a search engine.

Featured Sponsors:

Looking deeper: There are a ton of ways to improve the SEO of your site pages, though. Search engines look for elements including title tags, keywords, image tags, internal link structure, and inbound links (also known as backlinks). And that’s just to name a few.

Search engines also look at site structure and design, visitor behavior, and other external, off-site factors to determine how highly ranked your site should be in their SERPs.

Organic search refers to someone conducting a search through a search engine and clicking on a non-paid result. Organic search is a search marketing channel that can be used as part of inbound marketing to increase website traffic.

Looking deeper: In present-day SEO, you can’t simply include as many keywords as possible to reach the people who are searching for you. In fact, this will actually hurt your website’s SEO because search engines will recognize it as keyword stuffing, or the act of including keywords specifically to rank for that keyword, rather than to answer a person’s question.

Featured Sponsors:

Nowadays, you should use your keywords in your content in a way that doesn’t feel unnatural or forced. There isn’t a magic number, it all depends on the length of your keyword and article, but if you feel like you’re forcing it, it’s better to ignore it and continue writing naturally.

An SEO marketing strategy is a comprehensive plan to get more visitors to your website through search engines. Successful SEO includes on-page strategies, which use intent-based keywords; and off-page strategies, which earn inbound links from other websites.

Looking deeper: Before you create a new site page or blog post, you’ll probably be thinking about how to incorporate your keywords into your post. That’s alright, but it shouldn’t be your only focus, or even your primary focus. Whenever you create content, your focus should be on the intent of your audience, not how many times you can include a keyword (whether it’s long tail or short tail) in your content.

Organic traffic is unpaid traffic that comes from search engines such as Google or Bing. Paid search marketing does not increase your organic traffic numbers, but you can optimize your website using inbound marketing software to gain more visitors.

Looking deeper: One of the biggest changes in the last decade is the way other user behaviors shape the SERPs a user sees on search engines. And today, social media can have a big impact on your organic traffic trend line. Even just a few years ago, it didn’t make a difference who was finding your content through social search. But now SEO takes into account tweets, retweets, Google+ authorship, and other social signals.

Social search also prioritizes content and people that are connected to you. That could mean through a Facebook friend, Twitter follower, or connection through another social network. Sometimes social search will even prioritize content that has been shared by an influencer. Social search understands that you may be interested in content that your network feels is important to share, and therefore it’ll often get surfaced to you.

This all means when you’re thinking about your SEO strategy, you need to think about how your social media strategy fits into the puzzle, too.

Direct traffic consists of website visitors that come to your website by typing the URL into their browser, rather than coming from another website, a search engine, or social media.

Looking deeper: Think of search engine optimization as “search experience optimization.” It’s not just important for your users to find your website, it’s important for them to stay on your website, interact with your content, and come back later. Direct traffic doesn’t just increase your “page authority” in the eyes of Google; it creates more opportunities to turn someone, who first discovered you organically, into a customer.

SEO actually takes into account whether or not your visitors are staying on your website and engaging with other content. If you rank well for a keyword and attract a visitor who isn’t relevant, it won’t actually help your website.

Think about your visitors and the content they are looking for more than how many people you can attract to your website.

SEO is important because it helps people find information and discover pages on the world wide web. SEO is especially important for businesses as it ensures they’re answering their audience’s biggest questions on search engines, while driving traffic to their products and services.

Looking deeper: In the past, SEO success was measured by whether or not you were ranked high on the first page of Google. But even if you ranked well for a term, does that actually mean you’re going to see results?

Not always. You might rank really well for terms that aren’t ideal for your business. So you appear high on search engines, get a ton of traffic, but then your website visitors realize your company isn’t what they were looking for. You don’t convert customers from this traffic, and ranking high for this particular keyword is essentially fruitless.

Also, you don’t necessarily need to be in the top three slots to be successful. In fact, if you rank well on subsequent pages, you may still have a high click-through-rate. That’s great news for marketers who can’t seem to bring pages into those top slots or off the second page.

We said it before and we’ll say it again: The amount of traffic to your page is less important than how qualified that traffic is.

SEO can cost between $100 and $500 per month if you do it yourself with a keyword research tool. It can cost between $75 and $150 per hour for a consultant, and up to $10,000 per month if you hire a full-service marketing agency. Small businesses generally spend less on SEO than big brands, but they can still get the same or better results if they focus on SEO and align with experts that can help them along.

About The Author

Michael Hammond

Michael Hammond is chief strategy officer at PROGRESS in Lending Association and is the founder and president of NexLevel Advisors. They provide solutions in business development, strategic selling, marketing, public relations and social media. He has close to two decades of leadership, management, marketing, sales and technical product experience. Michael held prior executive positions such as CEO, CMO, VP of Business Strategy, Director of Sales and Marketing and Director of Marketing for a number of leading companies. He is also only one of about 60 individuals to earn the Certified Mortgage Technologist (CMT) designation. Michael can be contacted via e-mail at mhammond@nexleveladvisors.com.

Taking LOS Integrations Further

By now, most lenders can agree that there are countless benefits to integrating their Loan Origination System (LOS) with a technology provider’s software. For one, it eliminates the front-end data entry of having to visit multiple vendor websites and rekeying data they have already entered into the LOS. With a true “lights out” integration, the lender doesn’t have to ever leave the LOS; they can order everything they need within one system, saving valuable time.

In addition, LOS integrations eliminate copying and pasting on the back-end of the process once the order is complete. When the report is delivered back to the lender, not only is the PDF imported to the “manage files” section of the LOS, but key data elements populate important data fields. When done correctly, the LOS automatically populates the legal description and vesting information from the title work, the value of the property from the Automated Valuation Model (AVM), desktop valuation or appraisal, and valuable flood zone and HMDA data from the flood certification. Populating these key data fields saves the lender from copying, pasting or rekeying the information into the LOS. It also mitigates the risk of potential human errors associated with manual data entry; for example, the “w” and “e” keys, located right next to each other on the processors keyboard, could be accidentally keyed incorrectly which would present a problem for legal documents and recordation if “E. MAIN ST.” inadvertently becomes “W. MAIN ST.”

Featured Sponsors:

 

Lenders partnering with a provider that enables a true “lights out” LOS integration surely experience benefits. However, if their provider is not a middleware aggregator, they are still missing out on ways to improve their loan processing. By partnering with an aggregator, lenders can take their LOS integration a step further and distinguish themselves among competition.

In most LOS integrations, a technology provider integrates into a lender’s LOS in order to enable access to their own brand of products and services. An aggregator, on the other hand, provides lenders access to all brands within one platform. Even if a lender wanted to integrate with multiple providers, the process to include all of their vendors could take months to complete. With an aggregator, lenders can go live with hundreds of vendor choices available to them on day one.

Featured Sponsors:

Some aggregators even give lenders the ability to add their own vendors that may not be integrated with the aggregator; such as small, local title companies or appraisers. With User Defined Vendor (UDV) technology, the lender selects which vendor they would like to utilize and the aggregator delivers the order to the preferred vendor. Local vendors looking to access an aggregator’s system on the back-end can easily upload their documents to the system with data elements and the PDF so that the aggregator can convert the forms to XML and deliver them back into the LOS. UDV technology enables lenders to add their preferred companies into their LOS in days as opposed to months.

Another important tool that lenders should look for when choosing an aggregator is escalation intelligence. This type of technology programs the systems to automatically know what the lender wants to do next if orders receive a “no hit” or if the underwriting guidelines dictate that a more robust type of product needs to be ordered. For example, if a lender orders an instant property valuation and there is not enough information on the property for the system to return an AVM, the system will automatically order a desktop valuation, drive-by appraisal or full appraisal, depending on the underwriting guidelines, risk tolerance and cost savings objectives of the lender. The same technology can be applied to instant title searches, full property reports and title insurance products.

Featured Sponsors:

Finally, an aggregator has the ability to mimic the lender’s underwriting guidelines to provide additional efficiency and “automated decisioning” technology. They provide configurations that intelligently know what products to order based on credit scores, loan amounts, LTV and other underwriting criteria, then auto-order the appropriate products and services that are required for that specific loan. This type of technology eliminates the need for the processors to determine what to order and when to order it, thereby reducing the risk of human error.

LOS integrations with middleware aggregators result in reduced processing and closing times for lenders. The aggregator delivers faster integrations with more vendors, manages vendor turnaround time on behalf of the lender and even calculates Loan to Value (LTV) and Combined Loan to Value (CLTV) to automatically populate on the lender’s system. While general LOS integrations are beneficial, it is clear that the most competitive lenders use middleware aggregators to take their integrations to the next level.

About The Author

Tedd Smith

Tedd Smith is chief executive officer of Austin, Texas-based FirstClose, provider of end-to-end technology solutions to mortgage lenders nationwide. The FirstClose reporting suite is the first, comprehensive solution with capabilities to deliver title, flood, valuation and other important data elements in one report. For more information, visit www.firstclose.com.

A New Era Of Lending Emerges

According to recent data from TransUnion, the size of the personal lending market has more than doubled over the last five years. The reasons for this staggering growth can be attributed to a number of factors, but most notably, it has been a result of higher total employment coupled with rising household incomes. Megabanks, fintechs and alternative lenders have dominated this increase in personal lending, and as a competitive reaction, TransUnion predicts that we will likely see more personal lending activity from community banks and credit unions. The challenge for them, however, will be how they differentiate their lending experience.

Interest Rates & Speed No Longer Enough to Attract Borrowers

Historically, loan products have all looked the same, leaving community financial institutions with little to compete on. In fact, most institutions have focused on rate and speed of application process, which is necessary to staying competitive based on what consumers have indicated as primary drivers of choice, but these are not the only factors driving their decisions. We know that rate ranks among the most important, with minimum monthly payment following close behind. Application experience and fast lending decisions are also important, but they are not what drives a consumer to choose one institution over another.

Featured Sponsors:

 

In a recent report, “Reinventing Consumer Loans: How Community Based FIs Can Win the Millennial Lending Market,” released by Cornerstone Advisors, Ron Shevlin, Director of Research, emphasizes the need for community financial institutions (FIs) to find new strategies to better compete with large banks in the lending markets. While many mid-size FIs believe they have superior rates and service, millennials, for instance, are often selecting the megabanks and large regional banks they already bank with for their borrowing needs.

If community-based FIs can no longer differentiate themselves based on price, and borrowers are finding less value in application ease or speed of approval, how should FIs attract borrowers? The answer, as Cornerstone discovered, is that community FIs can compete by offering loan features that improve the borrower’s experience during the life cycle of the loan.

Featured Sponsors:

New Take-Back Concept The Key to Differentiate Loan Products

Cornerstone outlines three tactics in its report, which include providing flexible credit terms, bundling accounts and offering access to future funds – a new concept called a take-back loan. A take-back loan allows borrowers to pay ahead to reduce debt, but take that extra back if they need it, eliminating the fear of parting with ‘extra money’ while also enabling the borrower to make better financial decisions like paying down debt faster.

Access to a borrower’s own extra payments or take-backs is important, but actually seeing the impact of those changes is critical. Combining this concept with a sleek, mobile dashboard allows borrowers to manage debt by showing the loan’s status instantly. One step further – borrowers can also see the impact of payment changes before making them, giving them even more control and enabling them to make better financial decisions.

Featured Sponsors:

For the FI, the take-back functionality coupled with a mobile user interface not only provides a competitive advantage during a time when lending becomes more competitive (rising rates), but it also reduces the risk of delinquency because the consumer is able to make better financial decisions – better for FIs, better for consumers, better for the economy.

Consumers Love This Concept

According to a recent consumer study conducted by Kasasa, nine out of ten consumers prefer a loan where you can take extra payments back over comparably prices loans. Moreover, 98 percent of consumers say they would refinance existing debt at the same rate to get the take-back functionality. Consumers also say they are willing to put more money into a loan and willing to pay more for the ability to take back extra payments if needed. Clearly, rate, minimum monthly payments and speed are not the only factors consumers are considering when shopping for loans.

Megabanks and alternative lenders do not offer take-back loans at all, giving traditional lenders a true competitive edge. Instead of talking to prospective borrowers about having the cheapest rates, now they can talk about something completely new and unique.

As the personal lending market continues to get more competitive, offering a lending experience that allows borrowers to take back extra payments and then see the impact – something megabanks and other lending competitors do not offer – is a game-changer that will only fuel greater growth.

About The Author

John Waupsh

John Waupsh is Chief Innovation Officer of Kasasa, an award-winning financial technology and marketing technology provider. For more information on Kasasa, visit www.kasasa.com, or visit them on Twitter @Kasasa, @KasasaNews, Facebook, or LinkedIn.

Compliance Auditing And Monitoring Matters

Lenders can’t forget about compliance. But technology vendors are helping. For example, Mortgage Cadence, an Accenture company, has integrated ComplianceAnalyzer, a compliance solution from ComplianceEase, with the Enterprise Lending Center (ELC), Mortgage Cadence’s proprietary loan-origination platform. The integration enables ELC users to systematically audit loans for regulatory compliance without leaving the platform.

Featured Sponsors:

 

ELC facilitates lending for forward and reverse mortgages in retail, wholesale and correspondent lending channels and across a multitude of mortgage products, including home equity lines of credit. The integration of ComplianceAnalyzer provides a comprehensive, real-time auditing and monitoring solution within the ELC.

Featured Sponsors:

“The cost to produce a loan has been on the rise, largely because of compliance demands that have given way to inefficiencies and slower speed to close for many lenders,” said Trevor Gauthier, Mortgage Cadence’s president and chief operating officer. “Mortgage Cadence is committed to providing lenders with the tools to help solve for these increased compliance demands, and our integration with ComplianceAnalyzer will do just that.”

Featured Sponsors:

ComplianceAnalyzer enables lenders of all sizes to improve asset quality and value, reduce compliance risk, negotiate better execution with secondary market investors, and capture the data needed to prepare lenders for regulatory exams. The solution performs audits for federal high-cost and higher-priced loan regulations, the Secure and Fair Enforcement for Mortgage Licensing Act, state high-cost and anti-predatory regulations, and state license-based consumer lending laws and regulations, as well as compliance guidelines from secondary market investors and government-sponsored enterprises. It also performs TRID, RESPA 2010 and pre-2010 forms tests to validate California’s per diem interest calculations, a key differentiator in the market, as compliance for California originators remains a top priority to avoid penalties and fees.

“Our automated loan-level compliance technology helps lenders comply with federal and local regulations and minimize operational risks,” said John Vong, ComplianceEase’s president. “We’re pleased to partner with Mortgage Cadence to help more lenders improve loan quality, reduce risk and increase profitability.”

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

May 2018 Sees Second Fewest Foreclosure Starts In 17 Years

Data from Black Knight showed that May saw the second fewest foreclosure starts in more than 17 years (only December 2017 had fewer…by about 500), and the number of loans in active foreclosure continues to fall. Just 303K mortgages are currently somewhere in the foreclosure process, a 15-year low. At the current rate of improvement, foreclosure activity will be back at pre-crisis averages (2000-2005) early in Q3 of this year.

Featured Sponsors:

 

 
Meanwhile, improvement continues among hurricane-affected mortgages. In fact, delinquency improvements in hurricane-affected areas more than offset slight increases seen elsewhere, bringing the national delinquency rate down to its lowest level in 15 months. All in, hurricane-related delinquencies fell by nearly 30K in May (-20%) with the highest rates of improvement in Irma-affected areas of Florida (-27%).

Featured Sponsors:

 

Featured Sponsors: