Fed says expect low rates through 2023

Fed says expect low rates through 2023
The Federal Reserve left its overnight lending rate unchanged on Wednesday at the end of its last meeting before the Nov. 3 presidential election and said it expects to keep it near zero for more than a year.

In a statement released Wednesday, all 17 members of the Federal Open Market Committee said they expect to keep the central bank’s benchmark rate near zero at least through next year, and 13 estimated it would stay there through 2023.

That will be a boost for homebuilders taking out business loans, and will keep rates low for home equity loans tied to prime rates, which are benchmarked to the Fed rate.

The committee also reiterated its commitment to purchase mortgage-backed securities and Treasuries to support the flow of credit. Fed purchases have helped to drive mortgage rates to the lowest level on record by boosting competition for the bonds, which compresses yields.

“Over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the FOMC said in its statement.

In the first meeting since last month’s overhaul to its inflation policy that will allow it to average its target 2% inflation rate rather than target it, the committee provided more specifics.

“The committee will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well-anchored at 2%,” the statement said. “The committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved.”

In a press conference following the release of the FOMC statement, Fed Chairman Jerome Powell said more stimulus is needed from Congress to help an economy struggling with the COVID-19 pandemic.

“My sense is that more fiscal support is likely to be needed,” Powell said. “Of course, the details of that are for Congress, not for the Fed. But I would just say there are roughly 11 million people still out of work due to the pandemic and good part of those people were working in industries that are likely to struggle. Those people may need additional support as they try to find their way through what will be a difficult time for them.”
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More young adults live at home now than during the Great Depression

More young adults live at home now than during the Great Depression
While at the beginning of the year it seemed like Millennials and Generation Z were going to take hold of the housing market in 2020, the pandemic drastically changed that prediction.

For the first time since the Great Depression, the majority of young adults are living with their parents, according to a new Pew Research Center analysis of monthly Census Bureau data.

The analysis found that the share of 18- to 29-year-olds living at home with their parents has become a majority since COVID-19 cases began spreading.

According to the analysis, 52% of young adults resided with one or both of their parents in July, rising from 47% in February.

The number of young adults living with parents grew to 26.6 million, an increase of 2.6 million from February. This surpassed the last record, which was set in 1940 when 48% of young adults lived with their parents. This year marks the first year the percentage exceeded 50%.

The analysis stated that young adults have been particularly hit hard by the pandemic and economic downturn, as about 9% of young adults said they relocated temporarily or permanently and 10% had someone else move in with them.

The biggest reason young adults moved was due to college campuses being closed (23%), followed by job loss or other financial reasons (18%).

The analysis stated this pattern is consistent with unemployment rates. The share of 16- to 24-year-olds who are neither enrolled in school nor employed surged from 11% in February to 28% in June.

The analysis added that there is a higher share of young adults in metro areas living with their parents compared to rural areas. Regardless, both numbers dramatically grew from February to July.

Regionally, the biggest increase in young adults moving in with their parents was in the South, increasing from 46% in February to 52% in July. The Northeast had the largest share of young adults living at home overall, coming in at 57%.

The share of racial and ethnic differences have also narrowed, according to the analysis. As of July, when looking at the percentage of young adults who live with their parents, 58% were Hispanic, 55% were Black, 51% were Asian and 49% were white.
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Help your broker partners with client retention by retaining servicing

Help your broker partners with client retention by retaining servicing
HousingWire spoke to Home Point Financial’s new President of Servicing Perry Hilzendeger about the company’s “We Care” philosophy and how Home Point supports its broker partners.

HW: What was it that initially drew you to Home Point, coming from such a long and rewarding career at such a large, well-known consumer-facing brand?

Perry Hilzendeger: The opportunity to join a company of Home Point’s size was incredibly attractive to me because it’s very much in growth mode. It’s exciting to be part of a company that has experienced such rapid growth over the last few years.

Home Point has only been around for five years and it’s already the fastest-growing top-five wholesale lender in the country. And it’s already on the fringe of being a top-10 correspondent lender. That trajectory is now being put in place for the servicing operation because we’ve seen such great success on the origination side of our business.

Additionally, Home Point aligns with my desire to work for a company that prioritizes customer satisfaction. Home Point’s people and its culture are incredibly strong.

There is a concerted effort to treat our people well throughout the company – whether it’s our associates, brokers or correspondent partners. Home Point has woven its “We Care” mentality into the fabric of how it conducts business daily, and it’s an excellent fit for me.

HW: How is the “We Care” philosophy reflected in Home Point’s approach to servicing?

PH: It’s simple. We make a concerted effort to ensure Home Point creates the best possible loan experience for customers, from start to finish – and that really benefits our mortgage broker and correspondent partners.

We care about our partners’ ability to build long-term sustainable value – and one of the ways we excel is by helping them hold onto their customers. We retain servicing for 99% of the loans we originate, and that’s intentional.

By keeping our partners at the forefront of every discussion with the customer, they have the opportunity to benefit from future transactions that the customer may look to do, whether it’s a refinance or another purchase.

Last quarter, wholesale lenders were only retaining around 20% of their loans. That number is so low because so many lenders get more entities involved in the transaction by selling off servicing. Then you have the customer, whose only real relationship is with the initial loan originator, ultimately being serviced by another company that they don’t know.

We believe in connecting the value chain for the customer. Our responsibility isn’t just to source customers to our partners, but to develop a relationship with the customer inclusive of the independent originator.

We care about the customer having a positive servicing experience for the entire life of the loan just as much as we care about them having a seamless origination experience. In turn, this helps our partners look great.

HW: Home Point retains the majority of its originated loans for servicing – how does this benefit mortgage brokers?

PH: It creates a tremendous value proposition for mortgage brokers because it facilitates customer retention. This is the part of the wholesale mortgage industry that presents great opportunity.

It’s hard to think of another industry where people, like mortgage brokers, work so hard and pay so much money to acquire new customers, but are then ineffective at retaining those customers.

Our mortgage broker partners work very hard and have significant expense associated with acquiring new customers. By retaining the servicing and developing a long-term relationship with the customer, the broker has the opportunity to earn their next loan.

The most significant opportunity, collectively, for the wholesale industry – mortgage brokers, in particular – is to make the servicing experience better for the customer. At Home Point, our goal is to make it a simplified and streamlined experience based on the customer’s preference.

We’re keeping the broker top of mind with the customer every time they log in to make a payment. Each conversation we have with the customer reminds them about their mortgage broker and reinforces the relationship in a meaningful way, instead of brokers having to arbitrarily make cold calls or send emails.

This long-term connectivity with the customer helps brokers retain their customers over the life of the loan, maximizing their earning potential over several years.

HW: That notion of “We Care” applies to your associates as well. How has the pandemic impacted the way business is done at Home Point?

PH: Thankfully, the mortgage industry has been among the few that have generally thrived during the pandemic because of historically low interest rates. Prior to the COVID-19 environment, we had approximately 37% of our associates working remotely. Once we began to experience the impacts of the pandemic, we pivoted quickly to expand the number of associates working remotely.

We have more than 96% of our team working from home, making our accelerated growth even more impressive. For us to grow our broker-oriented wholesale business faster than any other Top 5 wholesale lender with a remote workforce speaks volumes about the technology and processes we have in place, and how dedicated our associates are to helping our broker partners succeed.

We’re finding that our associates are embracing the opportunity to work from home and, in many ways, have been even more productive. It’s changing how we, as a leadership team, will manage work-life balance for our associates even after the pandemic has ended.

We’ve asked our associates for their feedback through surveys and weekly all-associate meetings and found that they appreciate the flexibility and ability to plan their work schedules around their personal lives, instead of the other way around.

Feedback has shown that 80% of our associates like the idea of a hybrid work arrangement, where they can work from home and choose which days they get to work in the office. We’re looking into doing more to accommodate our associates’ appreciation for flexibility because keeping them happy leads to tremendous success for Home Point, our broker partners and everyone.
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Stewart acquires Alaskan title agency

Stewart acquires Alaskan title agency
Stewart Title has acquired an Alaskan title agency with offices in Fairbanks, Anchorage and Wasilla, the company announced. Exact financial terms of the deal were not immediately disclosed.
Source: thetitlereport.com

CoreLogic rejects revised acquisition bid

CoreLogic rejects revised acquisition bid
CoreLogic reportedly has rejected a revised unsolicited acquisition bid from Senator Investment Group LP and Cannae Holdings Inc. to acquire all its outstanding common shares for $66 each. Read on for more details.
Source: thetitlereport.com

Housing markets poised for growth

Housing markets poised for growth
Mid-sized cities such as Boise, Idaho, and Syracuse, N.Y., are among the top housing markets poised for growth. Read on for more details.
Source: thetitlereport.com

Lawmakers ask Calabria to rethink adverse-market fee

Lawmakers ask Calabria to rethink adverse-market fee
Federal Housing Finance Agency Director Mark Calabria took fire during Congressional testimony on Wednesday about the implementation of an adverse-market fee that’s expected to add about $1,400 to the cost of refinanced mortgages delivered to Fannie Mae or Freddie Mac after Dec. 1.

The need for the fee is based on recapitalizing the two mortgage financiers so they can be released from government conservatorship, Rep. Brad Sherman (D-CA) said during his questioning of Calabria. That’s a scenario that is unlikely to happen if former Vice President Joe Biden usurps President Donald Trump in the Nov. 3 election, as numerous national polls show him poised to do.

“Don’t institute the fee – wait until next year when a new Congress can look anew at whether we are going to recreate these agencies in a form that didn’t work last time, and if not, we don’t need the fees,” Sherman said, expressing a view echoed by several lawmakers during the session.

Sherman said he believed Fannie and Freddie should be government agencies, not private companies that have to raise fees to boost profits for shareholders. If the new adverse-market fee – an upfront cost passed on to consumers who are refinancing mortgages – is necessary, then it should be lower so it doesn’t create such a big hit to the finances of families struggling with the COVID-19 pandemic, Sherman said.

Calabria said the adverse-market fee was required “to avoid a much bigger disruption, and that is the insolvency of Fannie and Freddie” if the pandemic further destabilizes the economy and foreclosures rise.

Fannie Mae and Freddie Mac were seized by the government in 2008 during the subprime mortgage crisis. The companies have never backed risky loans – their standards are much higher – but in the run-up to the financial crisis they invested in bonds backed by mortgages to people with poor credit as a way to meet their Congressional mandate to support affordable housing.

Calabria made the point several times during the hearing, as he often does when testifying to Congress, that he has a duty to work toward the release of the two mortgage companies from government conservatorship.

“The statutory framework is that you either fix them and they exit or they go into receivership,” Calabria said. “I know it’s often characterized as being somehow my objective to get them out of conservatorship, but that’s just not accurate. I’m just carrying out the law.”

When one lawmaker during Wednesday’s hearing referred to Calabria efforts to privatize the companies, Calabria responded: “Lyndon Johnson privatized Fannie and Freddie.”

Calabria was referring to President Lyndon Johnson who signed a law in 1968 establishing Fannie Mae, founded in 1938 during the Great Depression as part of the New Deal, as a publicly-traded, shareholder-owned company, in part to pay off some of the costs of the Vietnam War.

Freddie Mac was created by Congress in 1970 with a similar structure: Congressionally-chartered, but owned by private shareholders.

Rep. Steve Stivers (R-OH) raised the possibility of Congress authorizing funds to remove the need of charging consumers to raise capital for Fannie and Freddie.

Stivers asked Calabria how much would be needed.

“In the neighborhood of about $10 billion to make sure we would not have to asses fee,” Calabria said. “That’s heavily caveated on the economy not getting worse.”
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Here are 2020’s top companies in title so far

Here are 2020’s top companies in title so far
The title industry experienced quite a rush in the second quarter of 2020 with $4.18 billion in title insurance premiums generated. According to a report from the American Land Title Association, family markets made up nearly 81% of those gains while independent companies shared what remained.

Below are the top 4 companies in title by market share for the second quarter. The family market of companies made up 80.5% in total volume:

Fidelity: 32.7%First American: 23.0%Old Republic: 14.8%Stewart: 10.1%

Independent companies made up the remaining 19.5% in volume. Here are the top 5:

Westcor Land Title Insurance: 5.9%WFG National Title Insurance: 3%Title Resources Guaranty: 2%North American Title Insurance: 2%First National Title Insurance: 1%

The top performing companies in family markets remained the same since the previous quarter, however in terms of independent companies, Alliance National Title Insurance and Connecticut Attorneys Title fell off ALTA’s top list in the second quarter.

ALTA reported the title insurance industry generated $3.92 billion in title insurance premiums in the first quarter, however family markets made up a slightly larger share in June’s report at 82.2%.

According to ALTA CEO Diane Tomb, although the industry isn’t experiencing the near-historic origination volume that graced the first quarter, the majority of the country is still trending upwards. Second quarter premiums written increased 8% compared with the second quarter of 2019 in 45 states.

Some states, on the other hand, outperformed millions of dollars ahead of others for premium gains. Texas took the No. 1 spot with an estimated $562 million in the second quarter – though no surprise as Realogy Title Group and Notarize reported a 200% spike in remote online notarizations in the first half of 2020 with demand particularly strong in Florida and Texas.

The sunshine state placed third in title insurance premium volume with nearly $430 million – fifty million less than the second-place seed, California, that originated a whopping $480 million in premiums.

Despite evidence of an urban exodus, the state of New York attained fourth place though was less than half of its third place predecessor with $197 million. That number is nearly 30% less than what it was first quarter. Texas also saw a decrease from the previous quarter, however 3.1%, while the other states experienced gains.

Pennsylvania took fifth place with $166 million in title insurance premium volume.
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