July New Home Purchase Apps Increased 31.2%

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for July 2019 shows mortgage applications for new home purchases increased 31.2 percent compared from a year ago. Compared to June 2019, applications increased by 11 percent. This change does not include any adjustment for typical seasonal patterns.

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“July’s strong new home sales increase on a monthly and annual basis was driven by the ongoing decline in mortgage rates, combined with steady housing demand and a still-healthy job market,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The average loan size decreased last month, likely influenced by the increase in the first-time homebuyer share, as these buyers are likely to choose lower-priced, entry-level homes.”

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Added Kan, “MBA estimates that the pace of new home sales in July increased over 16 percent.”

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MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 754,000 units in July 2019, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

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The seasonally adjusted estimate for July is an increase of 16.7 percent from the June pace of 646,000 units. On an unadjusted basis, MBA estimates that there were 63,000 new home sales in July 2019, an increase of 8.6 percent from 58,000 new home sales in June.

By product type, conventional loans composed 69.1 percent of loan applications, FHA loans composed 18.1 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 11.7 percent. The average loan size of new homes decreased from $329,593 in June to $325,457 in July.

Study Identifies Key Differentiators Of High-Performing Lenders

A new study from Mortgage Cadence, an Accenture (NYSE: ACN) company, identifies several key factors that differentiate high-performing lenders from others in today’s mortgage market, which is characterized by an industry-wide housing supply shortage and all-time-high costs to originate a mortgage.

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Mortgage Cadence’s seventh annual Lending Performance Benchmarking Study draws on the analysis of data from mortgage lenders across the country that use the full suite of Mortgage Cadence loan origination technologies.

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The report notes that high-performing lenders share three characteristics. First, they benchmark their performance against the competition, identifying areas for growth and improvement. Second, they optimize their staffing models and cross-train their teams so they can quickly adapt to the ebb and flow of loan volume without hiring additional team members, thereby maximizing profitability. Finally, high performers perfect their processes then map their loan journeys from application to close to eliminate bottlenecks, optimize technology and clarify ownership of touchpoints. 

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A key element of the study is Mortgage Cadence’s benchmarking of the year-over-year performance of its clients. The data compare individual lender performance year-over-year using five critical key performance indicators:

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  • Velocity — the amount of time it takes to close a loan;
  • Borrower Share — the ratio of applications taken to total customer base in the same calendar year;
  • Pull-Through — the ratio of closed loans to applications taken;
  • Cost-to-Close — the total cost of manufacturing a single mortgage; and
  • Productivity — the measure of closed loans per mortgage production employee per month.

The study notes that although Productivity improved to an average of 3.33 loans per employee in 2018, up from 3.29 in 2017, Velocity suffered, increasing by more than eight days in 2018, to 64.53 days. Pull-Through also suffered, dropping to 48.21% in 2018 from 50.08% in 2017. Both metrics contributed to the highest Cost-to-Close measure since the study’s inception: $5,643 (although still significantly less than the Mortgage Bankers Association (MBA) average of $8,975).

According to the study, the decrease in performance is partly the result of a housing supply problem: When the number of interested home buyers exceeds housing inventory, the pre-approval process is lengthened and Velocity increases. Pull-Through also suffers, as a lender can’t expect to close on an application if the borrower can’t find a home to purchase.

“The mortgage market’s volatility over the past 30 years has caused the Cost-to-Close to rise,” said Bryan Ireton, managing director for Mortgage Cadence, Accenture. “Even so, high-performing lenders have been able to consistently realize higher profits by fine-tuning their processes according to benchmarking results.”

MISMO Hires Jonathan Kearns As VP Of Technology

MISMO, the mortgage industry’s standards organization, has added Jonathan Kearns as Vice President of Technology. Under MISMO’s management by the Mortgage Bankers Association (MBA), Kearns will also serve as MBA Associate Vice President, Product Development.

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The hiring of Kearns comes on the heels of MBA’s $2 million investment in MISMO – announced in March – to enable the organization to expand its resources in support of key initiatives. Kearns will help take the lead on MISMO’s top priorities of focus, including: a uniform dataset for private label mortgage-backed securities; a standardized closing instructions template; harmonized remote online notary (RON) standards; common standards to encourage business-to-consumer communications on smartphones and tablets; and appraisal and rent roll standards for commercial and multifamily lenders.

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“Jonathan is a thought leader in the mortgage technology space, with substantial experience developing technology and product strategy,” said Mike Fratantoni, President of MISMO and MBA’s Chief Economist and Senior Vice President of Research and Industry Technology. “Jonathan is going to energize MISMO’s ability to develop standards and new technology initiatives that will benefit small and large companies and the entire industry.”

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Kearns, who previously served on MISMO’s Residential Standards Governance Committee, comes to the organization most recently from DocMagic, Inc., which acquired eSignSystems, where he had been since 1999. He held various leadership titles through mergers and acquisitions over the past two decades, and was most recently Senior Vice President of Technology.

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“We are excited to have someone with Jonathan’s experience and acumen join MISMO,” said Rick Hill, Executive Vice President of MISMO and MBA Vice President of Technology. “His background with digital technologies and product development will enable MISMO to better serve the entire mortgage industry.”

Mortgage Cadence Adds Data Verification, Fraud Prevention And Compliance Assistance

Mortgage Cadence, an Accenture (NYSE: ACN) company, has added additional DataVerify capabilities to its Enterprise Lending Center (ELC) loan-origination platform, providing additional data verification, fraud prevention and compliance assistance.

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The enhanced functionality streamlines the application authentication process and improves the borrower experience by automating verification of borrower-provided information, including income and social security data.

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The DataVerify integration provides on-platform access to 4506-T IRS transcript ordering and verification. Without this functionality, lenders must navigate to the IRS website, rekey borrower data, and manually complete the 4506-T form, which taxpayers use to request copies of their tax return information. With the new functionality, Mortgage Cadence clients execute the process without leaving the ELC platform — requesting borrower authorization via eSign and then, once consent is given, ordering 4506-T verification directly from the IRS. Customers using this new integration report they are completing this process up to 95% faster.

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The potential benefits to the borrower are equally significant. Instead of borrowers being asked to provide detailed information, and in some cases, additional data to verify this information, such process is now automated on the back end, helping to reduce time to close.

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The newly released 4506-T DataVerify integration provides additional workflow automation to ELC customers who currently use DataVerify’s DRIVE® platform — a single-source application that automates the manual underwriting process and that features audit trail capabilities. When lenders receive 4506-T results, the data is automatically updated in real-time within the DRIVE® report, resulting in an enhanced process that helps to decrease cost to close by automating what had previously been done manually.

Another element of the enhanced DataVerify integration is Social Security Administration (SSA) verification. When the lender receives the SSA document, the integration automatically triggers a system check to confirm if the data is accurate, saving time by eliminating off-platform navigation.  

“At DataVerify, our mission is to deliver flexible solutions tailored to meet the ever-changing needs of our customers,” said Brad Bogel, DataVerify’s president. “Our integration with Mortgage Cadence furthers this mission by providing convenient access to secure verification processes that address industry compliance regulations all within the lender’s origination platform, Enterprise Lending Center.” 

Paul Wetzel, EVP and managing director of product management at Mortgage Cadence, said, “Optimized workflows and increased automation are essential to reducing time and cost to close. This latest integration between our Enterprise Lending Center and DataVerify is yet another example of how we help lenders improve operating performance.”   

Rates Are Falling, Will It Continue?

With the 10-year treasury yield at 2% again, and the Federal Funds Rate (FFR) at 2.5%, it is natural for the rational mind to assume that this cannot go on for much longer. During normal market conditions, the treasury curve slopes upward; typically, short-term treasuries yield less than the long-term treasuries yield. In our current environment, the FFR is higher than a two-year treasury.

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The Federal Reserve (Fed) will eventually need to bend to the market and cut their FFR in order to align their policy stance with the dual mandate and market conditions. In fact, the Fed pivoted for a second time this year during July’s FOMC meeting. They essentially removed the “patience” approach and are considering rate cuts if economic data weakens further. The market is expecting a 50bp cut to the FFR by September’s FOMC meeting… will they get it?

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We do know that this rally to 2% will likely be short lived in the grand scheme of things. There will be some ups and downs, but the long-term trend is still bullish.

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If a recession is defined as two straight quarters of negative GDP, it’s a matter of time before we see much lower GDP and hints of a recession. In the short term, typically interest rates fall before a recession because investors seek risk-free returns. A quick reversal (50BP FFR cut) could reverse the economic slowdown.

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The only soft landing we have seen in the past 30 years occurred when the Fed, with Greenspan at the helm, realized that they overtightened so they cut FFR several times shortly after their last increase. On the opposite side, if nothing is done, we will see slower GDP, lower rates, and a much worse ending to the current business cycle.

Covius Completes Chronos Solutions Acquisition And NRZ Strategic Investment

Covius Holdings, a provider of technology-enabled solutions to the financial services industry, announced today that it has completed its previously announced purchase of various businesses from Chronos Solutions (Chronos), including its credit, flood, income and tax verification services, REO management and disposition, online foreclosure auction and homeowners association (HOA) tracking units. Concurrently, Covius and New Residential Investment Corp. (”New Residential”) completed New Residential’s strategic investment in Covius that was announced on May 1, 2019.

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With its expanded solutions set, Covius also announced that it will now go to market through two new divisions: Covius Origination Solutions and Covius Servicing and Capital Markets Solutions.

Covius Origination Solutions will include:

>>FundingSuitecredit reporting and modeling

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>>TaxDoorand VODAchek borrower verification services

>>Flood and HOA determinations

>>Lien preparation and tracking 

>>Valuations and appraisal workflow

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>>Origination document, title and title curative services

Covius Servicing and Capital Markets Solutions will include: 

>>Document management

>>Loan modification and loss mitigation

>>REO management 

>>RealtyBid auction services 

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>>Asset management 

>>Loss mitigation title and curative services

>>Compliance management

>>Due diligence and business process automation services

Rob Clements, Chairman and Chief Executive Officer of Covius Holdings, said: “The Chronos acquisition significantly expandsthecriticalservicesthatCoviuscandigitallydeliveracrossthemortgageecosystemand deepens our product offerings. Like the reQuire acquisition last year, this acquisition reflects the strategic plan that we have been executing for the past 18 months. Other key elements in that plan include attracting new capital through our agreement with New Residential and the divestiture of our private-label fulfillment business.”

John Surface, President and Chief Operating Officer of Covius Holdings, added: “The combined company is designed to effectively serve our 5,500 clients and meet the changing needs of the origination, servicing, asset management and capital market sectors. We are organizing our management team to align with our new client-oriented, go-to-market positioning and accelerate our enterprise-wide digital investments and partnerships.”

Optimal Blue Launches New Competitive Analytics Solution

Optimal Blue has released their Competitive Analytics solution. With mortgage rates at all-time lows, lenders are experiencing a surge in production, requiring access to real-time business intelligence to understand how well they are performing. Updated with new data daily, this game changing innovation positions Optimal Blue clients ahead of their peers by enabling them to gauge performance through sophisticated visualizations that illustrate market position, compare margins and profitability, and assess the effectiveness of current pricing strategies.

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Competitive Analytics provides three types of sophisticated industry benchmarking capabilities, including:


Advanced volume benchmarking allows the user to compare their loan production to the overall market and chart volume trends across specific time periods – by week, month, quarter, or year. In addition, volume benchmarking provides a production percentile market rank by business channel, institution type, state, MSA, loan type, and other parameters, as well as the ability to compare the percentage of their locks that observed change requests or lock extensions to the overall market.

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Lending profile benchmarkingenables clients to compare characteristics of their loan production by charting loan level parameters such as FICO, LTV, loan amount, property type, occupancy, loan type, and loan purpose against the overall market.

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Pricing strategies benchmarking provides a market comparison for a variety of secondary marketing metrics that impact profitability. Through this powerful capability, clients can compare margins, concessions, price, and note rate to the market, and filter by business channel, institution type, state, MSA, and more.

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Competitive Analytics joins Optimal Blue’s already established suite of business intelligence offerings including theOptimal Blue Mortgage Market Indices(OBMMI) published earlier this year, as well as the unrivaled Enterprise Analytics solution which provides Optimal Blue clients with compelling visualizations that illustrate highly granular data on their own operation. “The Optimal Blue Marketplace Platform has supported the daily activity of mortgage buyers and sellers for close to two decades,” explained Scott Happ, CEO of Optimal Blue. “This has generated an incredible amount of transactional data that uniquely positions Optimal 

Pavaso Facilitates Tennessee’s First RON eClosing Under State Law

Pavaso, a digital closing provider, facilitated the first remote online notarization (RON) eClosing in Tennessee to be completed by a Tennessee eNotary. The transaction follows the July 1, 2019 effective date of a state law that permits RON. Pavaso’s innovative eClosing platform was selected by the closing agent, Joseph Kirkland, senior underwriting counsel with Closetrak Title & Closing in Memphis and president-elect of the Tennessee Land Title Association, to deliver all the benefits of a digital closing and a superior user experience.

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The Online Notary Public Act makes Tennessee the sixth state to permit RON, the notarization of electronic documents from a remote location using online, two-way audio-video technology. RON sessions are recorded, and the identity of all signatories is verified through a photo ID and knowledge-based authentication technology.

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Existing Tennessee notaries must apply for and receive approval from the state before performing RON. Before applying, notaries are required to contract with a third-party vendor that will provide the technological support necessary to expand their services online.

While the state does not endorse vendors, Pavaso was the provider of choice for the first notaries to have their applications approved.

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Pavaso offers one of the most utilized eClosing platforms on the market. It brings everyone involved in real estate transactions together in a secure digital environment to streamline the closing process. It also gives closing agents the autonomy to utilize their own state-commissioned eNotaries or existing notary network, and the functionality to support fully digital, hybrid and traditional closings.

Kirkland, the state’s first commissioned eNotary, had the honor of performing the first remote digital closing under the law he helped pass as part of the Tennessee Secretary of State’s RON workgroup. For him, Pavaso made the process as seamless as it was memorable.

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“Pavaso is an outstanding product that made this closing much more convenient,” says Kirkland. “My clients are missionaries in Uruguay who were having trouble scheduling a consular officer to notarize documents at the embassy. Using this technology saved weeks of waiting. Thanks to the new RON law and Pavaso, I was able to close the transaction and notarize documents at my office here in Memphis, while the sellers participated from their home in Montevideo.”

Sellers Bob and Jennifer Frith were also happy with their Pavaso experience.

“Due to our present situation of living overseas and selling a property in Tennessee, Pavaso’s eClosing service was a tremendous tool in assisting us in this long-distance transaction,” says Bob. “[Kirkland] guided us through the easy to understand process. We would highly recommend this innovative technology to anyone in need of long-distance notarial services.”

“We are thrilled Tennessee notaries have been given the green light to perform remote online notarizations and they chose our eClosing platform to make history,” says Nancy Pratt, vice president of partner relations & government affairs for Pavaso. “Pavaso has facilitated electronic notarization of thousands of loans in states where it is allowed, and we look forward to helping notaries in states that permit RON extend this convenient new option. We are committed to giving our settlement providers all the tools and support they need to accommodate any type of closing their customers prefer.”

MISMO Approves New Remote Online Notarization Standards

MISMO, the mortgage industry’s standards organization, today announced the release of its Remote Online Notarization (RON) standards, which include an update to the draft standards issued earlier this year. The RON standards allow the use of audio-visual communication devices to notarize documents in a virtual online environment. MISMO’s RON standards were updated to include language to preclude the storage of personally identifiable information.

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With this revision, the RON standards are being released for a public comment period beginning today and ending on August 12th, 2019.  If no substantive comments are received during this comment period, the standards will be moved to Candidate Recommendation status. Candidate Recommendation status means the RON standards have been thoroughly reviewed by a wide range of organizations and industry participants, and are ready for broad use across the entire residential mortgage industry. 

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“With states across the country enacting remote online notarization laws, MISMO’s standards will support greater consistency as the volume of remote online notarial transactions increases,” said Eddie Oddo, Vice President of Corporate Business Solutions at First American Title Insurance Company, and co-chair of MISMO’s Remote Online Notarization Workgroup. “We’re excited about this next stage in the standards process and look forward to seeing lenders, title companies, software vendors, and notaries leverage RON standards to offer borrowers a more secure and efficient closing process.”

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MISMO’s RON standards were created to promote consistency across mortgage industry practices and state regulations.  In the interest of furthering adoption of RON and to encourage consistency in related state regulation, MISMO will make its standards available for free to the public and will not require a license fee to use them. The standards include credential analysis, borrower identification, capturing and maintaining a recording of the notary process electronically, audio and video requirements, record storage, and audit trails.

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MISMO’s RON standards support model legislation that was developed by the Mortgage Bankers Association (MBA) and the American Land Title Association (ALTA), which multiple U.S. states are now using to enact RON laws in their jurisdictions. Furthermore, some states that enacted RON legislation have already utilized draft versions of the MISMO RON standards to implement their state law.

NTC Expands Their Philanthropic Efforts Nationwide In 2019

Nationwide Title Clearing, Inc. (NTC), the leading post-closing services provider for the nation’s largest financial institutions, investors and servicers, committed to several local and national non-profit organizations throughout 2019. For several years, NTC has been heavily involved with non-profit organizations in the Tampa Bay area such as the Humane Society of Pinellas, Feeding Tampa Bay, and the Ronald McDonald House Charities. As of January 2019, NTC is proud to announce they have expanded their philanthropic efforts nationwide.

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Community involvement and support for worthy causes is core to the culture at NTC. NTC’s culture is to contribute by volunteering, donating, and helping in any way that is not expected. The company supports employees in their charitable efforts and participates in several events throughout the year.

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“When people ask us why we do it, the answer is simple. It is because we care and NTC, as any established business, has a responsibility to ensure that non-profit organizations are supported and their cause disseminated,” said Danny Byrnes, Vice President of Sales and Marketing at NTC.

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NTC sponsors and supports their furry friends at the Humane Society of Pinellas in several events and donations throughout the year. The company sponsored the Humane Society of Pinellas’ annual Bark at the Ball Park event, where fans bring their furry friends to watch the ballgame. NTC also hosted a food drive for the Humane Societies Senior Pet Connection.

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NTC entered its 4th year of supporting Feeding Tampa Bay and hosted its annual Cereal for Summer food drive. Team members collected and donated over 500 boxes of cereal for children this Summer. WTSP Channel 10 News collaborated with Feeding Tampa Bay and the rest of the community collecting breakfast for families in need.

Most recently, NTC sponsored and attended the St. Pete Pride celebrations during the month of June in support of the LGBTQ+ community. Team members attended the Stonewall Reception, marched in the parade and hosted a booth during the festival. This is NTC’s first time sponsoring St. Pete Pride.

“NTC has always been an advocate of inclusion and diversity, from our Veteran’s Day recognition to our Women of NTC outing. We are proud of who we are and I think it is wonderful that we are always exploring new avenues to support our team,” said Santa Sorrentino, Marketing Director at NTC.

Expanding their outreach efforts nationwide, NTC attended and sponsored the Ruth Cheatham Foundation in Dallas, Texas, an organization that raises funds and helps those fighting cancer, especially children and teenagers. In addition, for the fourth consecutive year, NTC will be attending and sponsoring the Carrington Charitable Annual Golf Classic at Pelican Hill Resort in Newport Beach, California this coming October. The Carrington Charitable Foundation has many programs that support veterans who have sacrificed so much to ensure the safety of our nation.

In August, NTC team members will volunteer at the Ronald McDonald House and prepare meals for patients. This will be the companies seventh year volunteering for this organization. NTC is sponsoring the Boys and Girls Club gala in September and will sponsor the Gramatica Kickball Foundation’s annual Kick Ball tournament in October.

“For as long as I have worked at NTC, it has been a pleasure being as involved in our community as we have been. Each year we explore different charities and avenues of philanthropy, and I am grateful to be part of such an amazing company that is focused on giving back to our community,” said Sorrentino.