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Gaining Traction With First-Time Homebuyers

First-time homebuyers are key players in today’s housing industry, where they comprise 46 percent of homebuyers. In Q4 2018, first-time buyers took out about 56 percent of purchase mortgages.  [Source: https://miblog.genworth.com/first-time-homebuyer-market-report-02-19/] Sixty six percent of first-time buyers are Gen Z and Millennials. According to Freddie Mac, by 2020 more than 50 percent of first-time homebuyers will be Hispanic.  [Sources: https://www.borrowerofthefuture.com/who


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To better serve first-time homebuyers, mortgage professionals need to consider new buyers’ challenges, preferences and specific needs and tailor their customer service accordingly. 

Challenges Facing First-time Buyers 

Today’s first-time buyers are in a market where starter and trade-up inventory grew between 2018 and 2019, but more inventory doesn’t necessarily mean better affordability. Starter home prices rose 12.4 percent over the past year. People who buy a starter home can expect to pay 37.7 percent of their income on a monthly mortgage payment—exceeding the recommended 30 percent maximum of household income for housing costs. New buyers need guidance regarding down payments, determining the best type of mortgage or lender, and even finding a home within their price range and time frame. [Sources: https://www.trulia.com/research/inventory-and-price-watch-q1-2019/and https://www.redfin.com/blog/april-2019-housing-market-tracker]


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Misconceptions about down payment requirements may prevent some potential homeowners from even considering buying a house. Sixty two percent of Americans mistakenly believe you must put down at least 20 percent to purchase a home. In reality, 32 percent of current U.S. homeowners put down five percent or less on their home, according to census data. [Source: https://www.nerdwallet.com/blog/2019-home-buyer-report/#first] Several national loan programs and special programs for first-time buyers have low (or even no) down payment requirements.  

Meeting First-Time Homebuyers’ Needs

Educate borrowers. With its plethora of loan products, unfamiliar jargon, and complicated forms, the mortgage application process can be intimidating, particularly for first-time buyers. Many consumers lack confidence in their personal knowledge of the mortgage process. Only 34 percent of survey respondents rated their knowledge about the mortgage process as above average or excellent. [Source: https://www.aba.com/Press/Pages/06212017MortgageBorrowers.aspx#


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Not surprisingly, first-time homebuyers are less knowledgeable about the mortgage process than repeat buyers. One Consumer Financial Protection Bureau (CFPB) survey assessed consumer knowledge about mortgage-related concepts such as discount points and mortgage insurance. Only 28 percent of respondents understood the difference between the interest rate on a mortgage loan and the loan’s annual percentage rate (APR). Repeat homebuyers had higher mortgage market knowledge than first-time homebuyers.  [Source: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_mortgages_shopping-study_brief-3-knowledge.pdf]

Consumers rely heavily on lenders for information about mortgages.  According to the National Survey of Mortgage Borrowers (NSMB), 70 percent of borrowers used their lender or broker “a lot” to get mortgage information. [Source: https://files.consumerfinance.gov/f/201501_cfpb_consumers-mortgage-shopping-experience.pdf] Lenders and mortgage brokers can play a significant role in helping determine the type of mortgage the consumer chooses. The NSMB found that up to 70 percent of borrowers choose their lender or broker beforedeciding on the type of loan. Lenders can clarify the process and assist in loan product selection by defining terms, explaining the pros and cons of various loan products and using mortgage calculators. Lenders should inform borrowers about special loan programs designed to make the home-buying process easier for qualified first-time buyers. The FHA, USDA, VA and other agencies offer loan features such as low or no down payments, low credit requirements, down payment assistance and/or closing cost assistance. [Source: https://www.nerdwallet.com/blog/mortgages/texas-first-time-home-buyer-programs/


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Provide a digital mortgage experience. In today’s digital, “I-want-it-now” age, borrowers want the mortgage process to be quick, easy, and transparent. Accordingly, mobile or online services are important to borrowers when obtaining a mortgage or making mortgage payments. Sixty-one percent of respondents to an American Bankers Association survey consider mobile and online services very important or somewhat important. [Source: https://www.aba.com/Press/Pages/06212017MortgageBorrowers.aspx#]. Fannie Mae’s National Housing Survey of 3000 people revealed that 72 percent of respondents prefer to complete their mortgage application online, while 66 percent want a fully digital mortgage process. [Source: http://www.fanniemae.com/portal/research-insights/perspectives/digital-mortgage-technology-cason-082818.html]. The percentage of homebuyers who apply online (versus merely expressing a preference to do so) is somewhat lower but still significant. According to a JD Power survey of homebuyers, 43 percent applied digitally in 2017, up from 28 percent in 2016. [Source: https://www.jdpower.com/business/press-releases/jd-power-2017-us-primary-mortgage-origination-satisfaction-study

Mobile access is particularly important for Hispanic borrowers. Because they use smart phones to shop, communicate and socialize more than any other U.S. demographic, Hispanic Americans are considered ‘super consumers’ of mobile.[Source : https://www.borrowerofthefuture.com/assets/pdfs/meet-the-borrowers.pdf]Indeed, 77 percent of Hispanic consumerscheck their bank account balances and pay bills on mobile devices. [Source:  https://www.borrowerofthefuture.com/insights/articles/connecting-with-hispanic-homebuyers-via-mobile]

Mortgage professionals should use loan origination software and mortgage servicing software with web applications and digital imaging to expedite the loan application process, provide online access to loan information, allow online payment, and go paperless.

Remember the human touch. Borrower-facing web applications allow borrowers to apply for a mortgage and manage their loan with limited human interaction, facilitating the mortgage process.  However, as the mortgage process becomes more automated and less personalized, borrowers may perceive that they’re receiving inferior customer service. Surveys show that, although borrowers want a digital mortgage experience, they also want to interact with real, live mortgage professionals. Even millennials, known to prefer technology, still want personal assistance when paperwork and terminology get complicated. [Source: https://thefinancialbrand.com/62142/millennial-digital-mortgage-lending/]. The next generation of borrowers—Gen Z—may prefer face-to-face communication instead of technology. In one worldwide study, 53 percent of Gen Z respondents indicated a preference for in-person communication over tools like instant messaging or video conferencing. [Source: http://millennialbranding.com/2014/geny-genz-global-workplace-expectations-study] Borrower-facing web applications should complement mortgage professionals—not replace them. 

To better serve first-time homebuyers, lenders need to provide an efficient digital mortgage experience, supported by interaction with mortgage professionals who can educate buyers about the mortgage process and help them choose the right loan products. Satisfied borrowers may be more likely to recommend the lender and/or servicer who helped them successfully navigate the complicated mortgage process. Millennials and Gen Z borrowers are early in their careers and likely to purchase several more houses in their lifetime. Don’t miss out on the opportunity to become a trusted lending source for future transactions. 

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Freedom Mortgage And RoundPoint To Merge

Freedom Mortgage Corporation, and RoundPoint Mortgage Servicing Corporation announced they have entered into a merger agreement in which RoundPoint will become a wholly-owned subsidiary of Freedom Mortgage. 


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Founded in 2007, RoundPoint currently services and subservices approximately $91 billion in unpaid mortgage assets comprised primarily of agency loans. RoundPoint also originates loans through its loan officers and its correspondent program. The transaction is subject to customary closing conditions and certain regulatory approvals and is expected to close in the third or fourth quarter of 2019.  


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Following the merger, Freedom Mortgage’s combined owned and subserviced mortgage servicing rights (MSR) portfolio is expected to be in excess of $300 billion. The merger also provides Freedom Mortgage with an active subservicing platform and broadens the scope of the company’s co-issue origination network. 


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“This merger will create a much larger and stronger organization with significant synergies,” said RoundPoint CEO Kevin Brungardt. “RoundPoint will benefit operationally in many ways, including having access to Freedom Mortgage’s substantial origination platform. With the combination of servicing portfolios, the merger makes the company the seventh largest U.S. mortgage servicer nationwide.” 


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“I am pleased to welcome RoundPoint’s highly successful and professional team to the Freedom family,” said Stan Middleman, CEO of Freedom Mortgage. “We very much appreciate the hard work by everyone involved in making this merger happen, and look forward to working together.” 

Goldman Sachs & Co. LLC served as financial advisor to RoundPoint and Sidley Austin LLP served as legal counsel. Classic Strategies Group served as financial advisor to Freedom Mortgage and Zuckerman Gore Brandeis & Crossman LLP served as legal counsel.

Black Knight: Servicers Retained Just 18% Of Customers Post-Refinance In Q1 2019, A 13-Year Low

Black Knight released its Mortgage Monitor Report. This month, by leveraging its McDash loan-level mortgage performance data in combination with public property records, Black Knight undertook an analysis of mortgage servicer retention rates by looking at consecutive mortgages on a single property before and after a refinance transaction. As Black Knight’s Data & Analytics Division President Ben Graboske explained, retention rates – the share of borrowers who remain with their prior servicer post-refinance – have reached record lows, creating serious challenges in an ever more competitive marketplace.


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“In Q1 2019, fewer than one in five homeowners remained with their prior mortgage servicer after refinancing their first lien,” said Graboske. “That is the lowest retention rate we’ve seen since Black Knight began tracking the metric in 2005. Anyone in this industry can tell you that customer retention is key – not only to success, but to survival. The challenge is that everyone is competing for a piece of a shrinking refinance market, the size of which is incredibly rate-sensitive, and therefore volatile in its make-up. Just a month ago, we were reporting that recent rate reductions had swelled the population of eligible refinance candidates by more than half in a single week after hitting a multi-year low just a few months before. Then, with just a slight increase in the 30-year fixed rate – less than one-eighth of a point – 1 million homeowners lost their rate incentive to refinance – almost 20% of the total eligible market.


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“This is critical, because refinances driven by a homeowner seeking to reduce their rate or term have always been servicers’ ‘bread and butter’ when it comes to customer retention. Offering lower rates to qualified existing customers is a good, and relatively simple, way to retain their business. Unfortunately, the market has shifted dramatically away from such rate/term refinances. In fact, nearly 80% of 2018 refinances involved the customer pulling equity out of their home – and more than two-thirds of those raised their interest rate to do so. Retention battles are no longer won – or lost – based on interest rates alone. A simple ‘in the money analysis’ doesn’t provide the insight necessary to retain customers and can’t take the place of accurately identifying borrowers who are likely to refinance and offering them the correct product. Rather, understanding equity position – and the willingness to utilize that equity – is key to accurately identifying attrition risk and reaching out to retain that business.” 


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Black Knight’s Mortgage Monitor report also looked at retention from the perspective of product offerings. For example, in 2018, 72% of FHA/VA borrowers in peak cash-out refi vintages (2012/2013) refinanced into a conventional loan product to pull equity from their home; just 28% ended up with an FHA/VA product. This suggests that borrowers may be looking to shed mortgage insurance while simultaneously taking advantage of equity. An astonishing 93% of those same borrowers raised their interest rate to do so. On the other hand, those with GSE loans tended to remain in GSE products post-refinance; 61% remained, while 32% shifted to loans held in bank portfolios. It could be that rising home prices are pushing that second segment into non-conforming, jumbo products. It’s also worth noting that fewer GSE borrowers, as compared to FHA/VA, are increasing their interest rate in order to tap equity.


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HGTV Driving Demand For REO Renovations

Traditionally, foreclosures have been marketed “as is” with the understanding that any renovations would be the buyer’s responsibility. These properties appealed in large part to the do-it-yourself community with at least some experience in home improvement and repair. However, with the growing popularity of HGTV shows such as Fixer Upper, Property Brothers, and Flip or Flop, this is rapidly changing. Investors are now finding that buyers are looking for properties that have been remodeled to include upgrades similar to those featured in their favorite “wow” reveal series.


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Driven by buyer demand, investors are increasingly requesting significant repairs and renovations be completed to increase the market value of REO assets. These types of improvements can be much more extensive than simple cosmetic repairs and routine home maintenance. This presents a new set of challenges to servicers not only in managing the overall process including budgeting, timelines, and third-party vendors but also conducting analysis to determine which repairs will result in the greatest return.

Managing Renovations Present New Challenges

As the market shifts so do investor strategies for managing REOs. Presently, the value and turn rates are showing a transition out of a rental strategy and towards repairs. Investors are demanding that servicers do more than just basic upkeep. Instead many are looking to analyze repair costs and timelines to drive higher return rates. 


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Meanwhile, servicers have been forced to learn as they go while executing repairs, communicating with contractors and staying within budget. The current tracking models have no tasking or workflow management capabilities; they offer only a basic “fill in the blank” option for fundamental tasks to establish document completion and ensure filing protocols. There is no option to pursue internal communication, much less communication with vendors. Without the ability to request and obtain necessary information, such as interior photos, servicers have been left unable to manage and execute projects effectively. Even with a general insight into price fluctuations, there remains a greater need for detailed analysis in identifying trends. Not being able to determine whether a change is due to sales price or limitation in the market renders this information not particularly beneficial. 


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An additional challenge is that investor and third-party rights are bound to the requirements within the servicing agreement. For example, an arrangement may state that a servicer will handle all property defaults, collection, loss mitigation and possibly foreclosure. In the case of foreclosure, the servicer would also recover losses and file claims. Now, the market is seeing more investors ask for repairs and renovations to decrease losses. The obstacle is that servicing rights remain the same and investors are not adjusting the servicing agreement to accommodate the repairs and renovation necessary. Most agreements only take into account general upkeep and maintenance. If any repairs are to be in the agreement, they tend to be minor issues that address curb appeal, which only require the contractor or third-party vendors and are not treated the same as large-scale projects. Advanced repairs and renovation are still new to the market, and servicers are being charged with implementing this strategy into their established processes. 

Overcoming the Obstacles

To successfully manage the renovations process, servicers need better insight into the condition of assets. More accurate estimates regarding costs and resources are required to complete renovation projects, as well as a workflow-based system to track and manage the actual construction and completion of each project. Mainly, this can be accomplished in three phases: 1) property/asset analysis, 2) cost analysis and 3) construction.


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Phase One: Asset Analysis 

To determine which repairs and renovations should be completed, analysis on both interior and exterior comparables in the same market must be completed. This provides insight into buyer demand, as well as an as-repaired value for comparison. Examining and comparing area comparables, especially viewing interior photographs, helps identify what types of renovations and home enhancements are in demand for the particular area. This avoids making unnecessary property repairs. Technology can provide this data so servicers can also see what related properties sold for and what their subject property may be lacking.

Phase Two: Cost Analysis

Once the desired repairs are identified, servicers must determine the estimated cost to complete the renovations, as well as analyze how these costs impact overhead and eventually the overall ROl. Tools are available to evaluate repairs and renovations by zip code providing servicers with an estimate on what the upgrades should cost. This is helpful with estimating cost analysis and cost controls. The analysis should ensure the identified repairs are justified and make sense, in other words that the resources invested will ultimately yield a return. It is critical during this phase that all of the data and information gathered be tracked and archived to ensure projects stay on budget and meet determined requirements and timelines.

Phase Three: Construction 

When the analysis is completed, servicers must put the plan into action. This often requires that servicers manage multiple third-party vendors such as contractors and agents who will be responsible for the work. Often servicers are managing these projects remotely and whether they are using a construction management company or in direct communication with contractors, viewing and tracking progress is critical. Keys to success include generating automated punch lists for contractors, proactively managing costs and changes that may impact overhead, gathering and saving photos of progress and ensuring costs stay within estimates.

Conclusion

The ability to accurately plan and oversee the entire process is extremely beneficial to servicers. The increased investment in repairs and renovations will add value to properties resulting in higher ROIs. This comes with a new requirement for tracking more frequently and intensively than before. However, working through this learning curve will assist the repair and renovation industry for years to come as buyers’ expectations will only continue to grow. 

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RoundPoint Is Selected As Subservicer By Reliant Bank

RoundPoint Mortgage Servicing Corporation (“RoundPoint”), one of the nation’s top 10 non-bank mortgage servicing companies, announced it has been selected as a subservicing partner for Reliant Bank. Its parent company is Reliant Bancorp, Inc.  (Nasdaq: RBNC).


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RoundPoint services loans for a variety of community banks, credit unions, private equity firms, and mortgage banks and is committed to providing a world-class customer experience to borrowers. Reliant Bank’s selection of RoundPoint as its subservicer is confirmation of this commitment.


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“Reliant Bank has experienced tremendous growth and success, and we are delighted to have been selected as its subservicing partner. This relationship helps Reliant excel at providing comprehensive mortgage solutions while RoundPoint focuses on what we do best – expertly performing our subservicing responsibilities,” said Allen Price, Senior Vice President of Business Development for RoundPoint.


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Kevin Brungardt, Chief Executive Officer for RoundPoint, added, “As we continue providing a world class subservicing execution to publicly-traded institutions, we seek partnerships with like-minded organizations that seek to promote and foster homeownership with innovative solutions. Our relationship with Reliant is a perfect example of this partnership objective.”


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Jacqueline Weed, VP Operations and Correspondent Lending, with Reliant Bank stated, “We chose RoundPoint Mortgage Servicing because of its best-in-class systems, customer-centric operating model, and robust reporting tools. We look forward to deepening our relationship with RoundPoint as we continue to expand our mortgage product offerings.”

Founded in 2007, RoundPoint Mortgage Servicing Corporation is a national co-issue servicer, loan subservicer, and residential mortgage lender. As one of the nation’s largest non-bank mortgage servicers, it currently services nearly $90 billion worth of mortgage assets and is authorized to service loans in all 50 states, the District of Columbia and the U.S. Virgin Islands. The company is headquartered in Charlotte with an office in Dallas.

STRATMOR Adds A New Principal

Seth Sprague, CMB, has joined STRATMOR Group as a principal. An executive with more than 20 years of mortgage experience, Sprague brings to STRATMOR significant subject matter expertise in mortgage servicing rights (MSRs), servicing, cash flows, liquidity and mortgage profitability strategies.


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“We are delighted to have someone of Seth’s caliber and reputation join our team,” said Lisa Springer, senior partner and CEO of STRATMOR Group. “In today’s challenging times, understanding the value of servicing and how it integrates into an organization’s long-term business strategy is of paramount importance. We believe our clients will greatly benefit from Seth’s servicing know-how and unique industry knowledge. By being able to advise lenders on liquidity and servicing strategies, he adds very important expertise to STRATMOR which will bring tremendous value to our clients.”


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Sprague’s career has focused on the MSR asset management with an emphasis on valuation, cash flows and profitability of servicing at a variety of firms, including Bank of America and KPMG. Most recently, he served as executive vice president of Trading and Analytics at PHOENIX, a provider of mortgage servicing rights analytics, transactions and advisory services to over 250 clients, where he was responsible for client development and a variety of industry outreach efforts. Prior to joining PHOENIX in 2013, Sprague served as senior vice president and servicing asset manager at SunTrust Mortgage, where he managed the mortgage servicing rights (MSR) portfolio valuation process as well as periodic MSR transactions for over 10 years.  


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“Today’s environment requires data driven solutions and optimized performance,” said Sprague. “STRATMOR’s suite of proprietary data and industry subject matter experts provides clients optimal opportunity to prosper and grow. I am thrilled to help leverage these resources into practical solutions for our clients, so they may survive and thrive in the ever-changing mortgage environment.” 


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In 2018, Sprague was appointed as secretary of the Mortgage Bankers Association’s (MBA) Certified Mortgage Banker (CMB) Society. He also serves on several other MBA committees, including the Financial Management Steering Committee, the Council on Residential Mortgage Servicing for the 21st Century, the BASEL Committee and the Servicing Compensation Working Group. Since 2007, Sprague has been an instructor with the MBA School of Mortgage Banking program, where he teaches “Servicing/MSR Day.” He is also as an instructor at the MBA School of Mortgage Servicing. More recently, Sprague has taught a course on the Secondary Market for The National Association of Minority Mortgage Bankers of America.

Sprague is a frequent speaker at various MBA and other industry conferences, often speaking on liquidity and the overall challenges present in the mortgage industry. He holds an MBA from the University of Colorado-Denver and has an undergraduate degree from the University of Richmond with a concentration in Accounting.

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Lenders Could Be At Financial Risk Despite Protection With Home Flood Insurance

As flooding across the U.S. continues to be a serious issue, the effect of loss or damage to homes has dramatically increased. And because most properties are financed, that home serves as collateral to lenders. This in turn means that lenders have a greater financial stake when properties are damaged by flood waters. What makes this situation worse is when the homeowner abandons the home and/or stops making mortgage payments.


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Homes and businesses in high-risk floodareas with mortgages from federallyregulated or insuredlenders are required to have flood insurance. While flood insuranceis not federally requiredfor homes in a moderate- to low-risk floodarea, lenders may still requireflood insurance. Flood insurance is the only way lenders can protect an investment in case of a loss. Lenders need to be aware that properties in their portfolios can move into a covered flood area, which means it would need flood insurance to cover potential loss.  


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Federal Emergency Management Agency (FEMA) applies precise standards and the most accurate hazard information to develop Flood Insurance Rate Maps (FIRM) that show flood zones. However, limitations in the scale or topographic details of the source maps used to prepare a FIRM may result in small elevated areas to be included in a SFHA. Because of this, lenders could face a significant loss if the property is flooded and does not have flood insurance due to Letter of Map Conversion. 


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In order to change the flood hazard designation for properties in these areas, FEMA has set up a process called the Letter of Map Amendment (LOMA) for properties on naturally high ground, Letter of Map Revision (LOMR), a modification to FIRM or flood boundary and floodway map (FBFM) and the Letter of Map Revision Based on Fill (LOMR-F) for properties elevated by placement of fill. These determinations officially amend an effective FIRM. Lenders need to be aware of a property that no longer requires flood insurance as they need to provide a refund to owners if they continue to pay it. 

If LOMA, LOMR, or LOMR-F prove the property is correctly shown outside the SFHA, the mandatory federal flood insurance requirement is no longer applied. Again, lenders can require flood insurance as a condition of the loan, but premiums are lowered for structures outside the SFHA. And if lenders remove the flood insurance requirement altogether, a refund of the premium paid could be issued or the policy canceled.

FEMA does not charge a fee to review a LOMA request, but requesters are responsible for providing the required mapping and survey information specific to their property. For FEMA to remove a structure from the SFHA through the LOMA process, federal regulations require the lowest ground touching the structure, or Lowest Adjacent Grade (LAG) elevation, to be at or above the Base Flood Elevation (BFE).  Lenders can send homeowners who want to file a request for conditional and final map revisions to the FEMA LOMC Clearinghouse.FEMA does recommend flood insurance coverage even if it’s not required by law or a lender. Mortgaged homeowners are eligible to pay much less for the flood insurance if their property is removed from the SFHA through this LOMA, LOMR or LOMR-F. Lenders need to be aware of the flood zone status of the properties in their portfolios and know where to send borrowers who want to challenge those designations. 

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Servicers Expect To See Growth And Increased Delinquencies In Their FHA Portfolios

Altisource has released its 2018 report, “The State of the Servicer Industry.” The report highlights results from the third annual Default Servicing Survey, a survey of over 200 mortgage default servicing professionals.  With the general decline in inventory over the past five years, servicers are expressing interest in working with larger service providers who offer end-to-end capabilities.


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According to the study, when evaluating a vendor to manage their default portfolio, a majority of servicing professionals surveyed consider end-to-end default disposition (93 percent) and REO asset management (93 percent) capabilities important.  Of the servicing professionals surveyed, 86 percent cited that their organization currently services FHA loans. Nearly three-quarters (72 percent) expect their FHA loan portfolio to increase over the next 12 to 24 months and 77 percent expect the increase to be more than 25 percent.


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While FHA loan delinquency rates remain low, servicers need to be prepared to handle these delinquencies. Servicing professionals (73 percent) cited using a third-party vendor as part of their CWCOT program management. When asked what factors are important when choosing a CWCOT vendor, 91 percent of those surveyed said end-to-end capabilities/outside services (i.e. closing, valuation, title curative).  


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“Based on the survey results, recent economic indicators suggest that the housing market is approaching an inflection point,” said Patrick G. McClain, Senior Vice President of Hubzu Auction Services and Equator for Altisource.”While delinquency and foreclosure rates remain low, home price appreciation is slowing and interest rates are rising. With lower origination volumes and an expanding credit box, servicers expect to see growth and increased delinquencies in their FHA portfolios.

“Now is the time for servicers to review their internal capabilities and ensure they are partnered with the best vendors to effectively manage their FHA delinquent loans to avoid unnecessary cost, increased risk and to maximize returns.”

The report can be accessed online at http://go.altisource.com/State-of-Servicing.html

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Servicing Platform Reaches A Significant Milestone

Sagent Lending Technologies has reached its latest achievement, supporting 1 million consumer loans on LoanServ, the loan servicing system powering the servicing operations of many leading financial businesses in the U.S. and Canada.


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LoanServ allows servicers to consolidate their use of outdated, heavily-siloed servicing applications into a single unique platform that provides a single-borrower view and scales to accommodate growth. The platform supports consumer loans and mortgages using a singular, unique design and data structure, unlike other servicing platforms that use wrap-around modules. In addition to making the loan process simpler for users, this helps servicers reduce costs.


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Consumer lending is highly variable in product and support needs and LoanServ automates more than traditional consumer systems. With full support for direct and indirect channels, LoanServ has managed fixed and variable rate products, revolving and installment loans, credit insurance products, and all types of collateral by the millions.


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LoanServ is designed to support changing product types while helping servicers manage state compliance on rates, refunds, late changes, and more. The system also adds automation for collections, reserved balances, secondary marketing, and even hypothecation functions.

“Solutions need to be built for today’s marketplace to help servicers compete, deliver best-in-class borrower experiences, and reduce overall costs. One million consumer loans actively being serviced on LoanServ signals to the market that the solution is trusted by a variety of servicers and can handle the increased scale and flexibility that modern lending demands,” says Bret Leech, CEO, Sagent Lending Technologies. “This is quite the milestone for us.”

 

FirstBank Puerto Rico Streamlines Operations, Automates The REO Process

RES.NET, a technology platform allowing mortgage bankers, investors, vendors, consumers and other parties to communicate around a real estate transaction, has successfully developed and deployed a Buyer’s Marketplace for FirstBank Puerto Rico. The new marketplace showcases the bank’s diverse portfolio of available assets and engages a much broader audience of potential buyers and investors than traditional tools available in the market. It was created in Spanish to accommodate the widest range of buyers.

Shortly after FirstBank Puerto Rico selected RES.NET as the operating platform to assist with the disposition of its OREO (other real estate owned) properties, the devastation from Hurricane Maria presented a new set of unforeseeable challenges for the bank and the island as a whole. The bank and RES.NET issued a call to action, expediting the development and deployment timeline, quickly launching the marketplace in its native language to contribute to the rebuilding efforts of the community.


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“Following Hurricane Maria, it became urgently important to streamline the bank’s OREO process and workflow, while simultaneously enhancing the visibility of the bank’s available assets to a broader audience of potential buyers and investors,” said Bianca Torres Román, VP, FirstBank Puerto Rico. “Within just one month of launching the new Buyer’s Marketplace, the unique number of visitors seeking information on our available properties more than tripled. Today, we are now reaching prospective buyers not just in Puerto Rico and the immediate region, but across the United States as well.”

The custom buyer’s site features a diverse range of assets available including land, commercial, residential, multi-family, retail, apartment units and apartment complexes. The site translation into Spanish enables prospective buyers and investors to easily navigate and independently search properties by territory, municipality, ZIP code and price range. Features include multiple photos of properties including photos of the interior, highlighted features providing information on specific desirable amenities from pools, to views or topography, and the ability for buyers or investors to contact the bank directly and/or make an offer. Prospects can view the available properties, or by navigating through FirstBank’s site.


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“Prior to partnering with RES.NET on the development of the Buyer’s Marketplace, we were limited in terms of the information and features we could highlight, as well as our ability to showcase a property,” Torres continued. “The traditional methods of marketing property in Puerto Rico are primarily through social media outlets, agent to agent exchanges and select online resources. Those methods have limited functionality, restricting the ability to upload photos, and in some cases, simply highlight a property’s specific location.”

In addition to the Buyer’s Marketplace, the bank has implemented RES.NET’s REO, Agent, Vendor, and Property Preservation portals to automatically track and manage its whole portfolio. Bank employees can now manage the entire process from the time a foreclosure has been conducted through the sale and closing to a new buyer. What was previously managed through a manual process has been improved through the automation of workflows, work cues, offer management tools and agent interaction, and notification features.


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Torres added, “With RES.NET, the complete portfolio can be viewed via the dashboard, providing real-time data and a more holistic view of our assets. Having access to this data is invaluable and helps ensure we are positioned for success in the future. Launching the Buyer’s Marketplace in combination with deploying our operating platforms is a pivotal moment for the bank’s OREO success.”

“I am very pleased with the work we’ve accomplished together with the team at FirstBank Puerto Rico,” said Keith Guenther, CEO and founder of RES.NET, a wholly owned subsidiary of USRES. “It is the combined dedication of both our teams that allowed this large-scale development and implementation to occur in less than six months. We worked closely with the bank’s staff to scope and develop this customized marketplace to assist the bank in connecting with potential buyers within Puerto Rico, as well as outside of the territory. This visibility of its available assets to a broader audience is an important step in the rebuilding efforts. Any effort that reduces the probability these properties remain vacant ensures the future stability of the region.”