NewDay USA CEO Predicts Over 150% Increase In Firm’s VA Volume

Rob Posner, founder and CEO of NewDay USA, a national VA mortgage lender, said the company’s Operation Home Purchase Division is expected to enable 2,000 veteran and military families to purchase a home this year. The company expects its monthly purchase mortgage production to increase from 100 loans in March to 250 a month by the end of the year, a more than 150% monthly volume increase. 

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That additional loan volume is projected to lead to a 10 percent increase in overall originations at NewDay USA this year, well ahead of the mortgage industry at large. The Mortgage Bankers Association is forecasting a nine percent drop in refinance volume this year, while purchase-money lending is expected to increase by just five percent.  

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NewDay’s fintech-based model, which relies on analytics powered by information-based decisioning capabilities, is helping to fuel the company’s purchase loan growth. While every loan at NewDay USA is manually underwritten, the company has been wildly successful at leveraging its technology to approve applicants who were denied by other lenders, thus enabling it to increase its VA refinancing volume. NewDay is now applying that same technology to help originate home purchase loans, stated Posner.

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 “The American Dream is to own a home,” Posner said. “If anyone is deserving of the American Dream, it’s these men and women and their families who have served and protected our country. I am proud that the NewDay team can help them.” 

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In addition, Posner said NewDay USA is planning a nationwide, $100,000-per-week media campaign promoting its VA purchase loan business. Ads focused on veterans and active military service members who are thinking about homeownership will begin airing on CNN next week. 

NewDay USA Awards Scholarships To Children Of Servicemembers

NewDay USA, a nationwide VA mortgage lender, has announced that it is extending its military prep school scholarship program criteria to include children of soldiers and National Guard members with a successful deployment record in the Global War on Terror (GWOT). NewDay USA scholarships were initially reserved for children of Gold Star families and the children of a 100 percent disabled combat Veteran.  

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“Overseas deployments put a huge strain on military families, both personally and financially. We want students to get a great military education and not have their families worry about the cost during such a time,” said Rear Admiral Thomas Lynch USN (Ret.), Executive Chairman of NewDay USA.  

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On December 3rd, NewDay USA awarded its 50th full military prep school scholarship to Kathryn Lilyanne Bailey to attend Georgia Military College Preparatory School (GMC Prep) in Milledgeville, Georgia. Kathryn, a sixth-grader at the school whose father is a 100 percent disabled combat Veteran, was awarded a scholarship that will pay her tuition until she graduates 12th grade. Her brother Jacob is also a recipient of this scholarship. 

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“We are just blown away by the generosity of NewDay USA and their support of our soldiers and their families,” said Brigadier General Randall Simmons, Commanding General of the Georgia National Guard. “Providing these scholarships does so much for our deployed soldiers, who now have increased confidence that their children are getting a quality education back home so they’re able to focus on the mission at hand. We couldn’t be more thankful for NewDay’s generosity and expanding their scholarship program to the children of GWOT Veterans.”

Kathryn Bailey was awarded the scholarship just as the Georgia National Guard 48th Infantry Brigade Combat Team (IBCT) was about to be deployed to Afghanistan. The scholarship is good for the entire time she attends GMC Prep. “As the beneficiary of a JROTC education, I know personally how important such an education is in building America’s leaders of tomorrow,” said NewDay USA CEO Rob Posner. “Expanding our scholarship program to the children of those who have served our country during the Global War on Terror (GWOT), is one of the most important things we are doing as a company.” 

The NewDay USA Foundation has now awarded 50 full scholarships to students at 13 military prep schools in 11 states, including 13 scholarships to GMC Prep School cadets since 2016. NewDay USA has also donated $1 million to the GWOT Memorial, currently under construction in Washington, D.C.

“It’s absolutely incredible what these scholarships do for these families,” added Lieutenant General William B. Caldwell, IV, President of Georgia Military College. “We are incredibly appreciative of NewDay USA. Their commitment to Veterans is so special.

Helping Our Vets

NewDay USA, a nationwide VA mortgage lender, has announced Operation Home, a new program designed to help hundreds of thousands of active Servicemembers and military Veterans purchase a home with no down payment and no money out of pocket for closing costs. The official launch of Operation Home coincides with NewDay’s sponsorship of this Saturday’s nationally televised Army-Navy football game.

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While traditional VA mortgages do not require a down payment for qualified borrowers to purchase their homes, Veterans still need to bring money to the settlement table to cover closing costs. Many Veterans, however, would rather have the security of a savings account in the bank, or be able to use savings for the cost of moving or furnishing their new home. NewDay USA’s Operation Home program works with realtors nationwide to understand how to maximize a Veteran’s VA benefits.

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“Veterans and their families have made great sacrifices to protect our freedom, and we want to help them achieve their own share of the American Dream,” said Rear Admiral Thomas Lynch USN (Ret.), Executive Chairman of NewDay USA. “With Operation Home, our Veterans will be able to purchase the home of their dreams without taking one dollar out of their pockets for a down payment or closing costs.”

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NewDay employees come to work each day with the noble purpose of helping a Veteran buy a new home. Located at NewDay USA headquarters, NewDay University develops mortgage bankers to counsel Veterans to understand their valuable VA benefits, and guide them throughout the mortgage process.

“With Operation Home, Veterans and active Servicemembers don’t have to save up to move up,” said Rob Posner, CEO of NewDay USA. “We have 500 employees who come to work every day with the sole mission of serving Veterans.”

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VA Lender Teams Up With Special Olympics

NewDay USA, a nationwide VA mortgage lender, today announced it has teamed up with Special Olympics Maryland as a major sponsor of the 21st Annual MSP Polar Bear Plunge, January 26 – 28, 2017, held at Sandy Point State Park on the Chesapeake Bay. The three-day fundraising event supports more than 7,300 athletes throughout Maryland, and is estimated to be the world’s largest polar bear plunge.

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As part of the company’s commitment:

>>NewDay USA Presents the Military, Fire, Police and EMS Plunge, registration beginning at 10:30 a.m. with the plunge scheduled for 12:00 p.m. on Friday, January 27, 2017

>>NewDay USA Presents the Corporate Plunge, registration beginning at2:00 p.m. with the plunge scheduled for at 3:30 p.m. on Friday, January 27, 2017

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“Through our corporate giving efforts, NewDay USA has been a supporter of Special Olympics Maryland for many years,” said Rear Admiral Tom Lynch (USN, Ret.), executive chairman of NewDay USA. “We are thrilled to have the opportunity to serve as a Presenting Sponsor of two of the event’s plunges and to demonstrate the importance that NewDay USA places on one of its core values, ‘Giving Back.’ We have quite a few team members fired up to take the plunge themselves.”

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The company’s sponsorship includes registration for more than 100 NewDay USA employees and college students participating in the company’s internship program who will be taking the plunge in a show of support for Special Olympic athletes, as well as members of Maryland’s military and first responder communities.

“NewDay USA has been a supporter of the Special Olympics and its mission of providing Olympic sports competition for the disabled since our company was founded in 1999,” said NewDay USA CEO Rob Posner. “We are honored to be a Presenting Sponsor for this year’s MSP Polar Bear Plunge.”

Overall, approximately 10,000 plunge participants are expected to take part in the event this year. All participants pledge $75 or more for the privilege to take to the waters of the Chesapeake Bay. The goal for this year’s plunge is to raise $2,500,000 for Special Olympics Maryland.

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VA Lender Gives Two Children Scholarships

NewDay USA, a nationwide VA mortgage lender, announced that for the sixth consecutive year the company is serving as a five-star sponsor of the Military Bowl presented by Northrop Grumman. The 2016 Military Bowl, which features the No. 23 Temple Owls against the Wake Forest Demon Deacons, is being held today at the Navy-Marine Corps Memorial Stadium in Annapolis, Maryland.

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This year’s Military Bowl halftime celebration features children of fallen veterans, Liam Griffin and Sophia Moore, who will be presented with NewDay USA Foundation academic scholarships to two of the most distinguished private military high schools: St. John’s Northwestern Military Academy of Wisconsin and Culver Academies. Rear Admiral Tom Lynch, (USN Ret.), executive chairman of NewDay USA, and Rob Posner, chief executive officer of NewDay USA will conduct the ceremonies.

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The NewDay USA Foundation provides scholarships to children of fallen or severely wounded veterans, and those whose families have endured multiple, extended deployments. Since the inception of these scholarships in 2013, the Foundation has committed approximately $1.2 million in scholarship funds to children attending select military high schools.

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According to Dr. Jack H. Albert, president of St John’s Northwestern Military Academy of Wisconsin, “St. John’s Northwestern Military Academy is honored to partner with NewDay USA in its scholarship program recognizing the families of those who have served our country and who have sacrificed so much. For more than 133 years, St. John’s Northwestern Military Academy, a premier military high school, has stood at the forefront of sound education and character building leadership. It is in this spirit we are humbled by the scholarship provided to our cadet Liam Griffin, whose family stood the supreme sacrifice for our nation, and who himself is a model of courage and character; a gift well deserved and thankfully received.”

“Culver Academies is very thankful and honored for NewDay USA providing this special scholarship for veterans and their families who have sacrificed so much,” said Jim Power, head of schools at Culver Academies. “The NewDay scholarship has transformed a veteran family’s hardship and sacrifice into a unique leadership and education opportunity for Sophia Moore to attend Culver Academies. Since 1894, Culver has been a top-tier college preparatory school with a focus on educating its students for leadership and responsible citizenship in society by nurturing the whole individual – mind, spirit, and body.  The NewDay USA Foundation scholarship program embodies the ideals of character and leadership represented in our nation’s best, ensuring those values are nurtured in future generations.”

“With these scholarships we wish to honor the service members and their families’ sacrifices by easing the burden of tuition. We also wish to salute Sophia’s and Liam’s strength and character during their lives as military children,” said Rear Admiral Lynch. “The NewDay USA Foundation scholarship program provides an amazing opportunity for children whose parents or guardians have made great sacrifices for our country. These scholarships provide an education that may not have otherwise been available to the students.”

On game day, NewDay USA also serves as the sponsor of the Medal of Honor Reception held prior to kickoff. The NewDay USA Foundation supports Congressional Medal of Honor Foundation programs for character and leadership development and responsible citizenship in middle and high school curriculums throughout the country.

Automated Underwriting Is Holding Us Back

Five million. That’s the number of worthy individuals who were denied a mortgage between 2009 and 2014, yet would have received one in 2001, according to the Urban Institute.

Indeed, underwriting standards are much, much tighter than they were compared to 2001, well before the mortgage crisis took place. Laurie Goodman, the director of the Urban Institute’s Housing Finance Policy Center, said lenders have “plenty of room to safely ease credit,” adding that their unwillingness to do so is deterring a recovery in mortgages and the broader economy.

While I can’t verify the Urban Institute’s methodology and conclusions, I would agree that many lenders are being too conservative for their own good – and the good of the nation as a whole – now more than five years after the worst of the crisis.

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There are several reasons why many lenders are now reluctant to lend to people they gladly would have accepted as borrowers before. Some are valid, but some are not.

What I have found is that many lenders are taking the easy way out, preferring to turn away business rather than doing a little extra due diligence to help more prospective borrowers.

Since the advent of automated loan underwriting systems, many companies have been lulled into a false sense of security by relying on these engines. They have lost the art of truly understanding credit risk. And that means not just making sure you don’t make loans to those who are deemed to be poor credit risks; it also means making an extra effort to make loans to people who are good risks but may not appear to be at first blush.

Underwriting systems certainly have a role to play and are responsible for some of the recent improvement in mortgage credit quality. But by relying too heavily – in some cases, exclusively – on automated underwriting, many lenders have denied loans to creditworthy borrowers in the name of tighter underwriting standards. In the process, they’ve not only reduced their own new business, but failed to help people who can really use it, which is, after all, why this business exists.

We see that first-hand in the market for Veterans Administration-guaranteed mortgage loans.

According to Ellie Mae’s December 2015 Origination Insight Report, the closing rate on VA refinance loans was less than 44% in December, which was by far the lowest of any loan type Ellie Mae tracks (and trending downward). By contrast, the closing rate on purchase VA loans was almost 74%, the highest of any loan type.

Yet, other things being equal, it should be the other way around. While the average FICO score on closed loans on both types was almost identical, the LTV on refis was quite a bit lower, implying that refis should be less risky, not more. Indeed, most VA purchase loans are made to active-duty military personnel, who unfortunately, tend to have lower FICO scores due to their young age and multiple deployments. Try maintaining a good credit rating when you’re in the field. By contrast, the typical VA refi customer, in our experience, is older, retired and has more home equity but also more debt.

Most lenders shy away from these loans because they don’t understand how to underwrite credit for potential risk. Many of them believe that lending to veterans is too risky because they’ve bought into negative stereotypes about this group, or their underwriting systems deny loans willy-nilly without digging deeper to find out whether or not these people are genuinely credit-worthy. Many lenders, sad to say, just don’t want to be bothered.

But according to recent studies by the U.S. Census Bureau and others, veterans are better educated, make more money, and have better benefits than non-veterans, yet many of them find themselves at the mercy of a computer software program.

Lenders can’t rely solely on these systems to make yes or no decisions – not unless they’re satisfied in denying credit to people who can really use it and use it responsibly. Plus, it’s the right thing to do.

And after all, isn’t that why we’re in this business?

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