Low rates won’t last forever: Here’s how mortgage leaders should be preparing for what’s next

Low rates won’t last forever: Here’s how mortgage leaders should be preparing for what’s next
Along with the rest of the economy, the housing market has been dealing with the fallout of a global pandemic, leading to an uncertain “new norm.” In a HousingWire panel on Tuesday, Rohit Gupta, CEO and president of Genworth Mortgage Insurance, and Tom Wind, executive vice president of consumer lending at U.S. Bank, discussed adapting to sudden winds of change and how to focus on what’s next.

In a typical recession, Gupta noted, increased unemployment and lack of consumer confidence slow the market as delinquencies rise and origination volume begins to decline. But 2020’s pandemic threw that trend out the window. With record high unemployment in April and increased delinquencies that may last through 2022, low interest rates triggered solid originations for nearly six months – and companies pivoted quickly.

“We had to refocus our efforts, both from an energy perspective, and from our resources perspective. Our focus became both putting people in homes on the front end so our customers were well positioned to close loans and then also on the servicing side, to make sure that we were taking care of families that were encountering financial issues and were in forbearance or delinquency,” Gupta said.

In a boom cycle, however, Wind said it can become more tempting to fulfill every loan possible. According to Wind, staying ahead of the volume includes more than just completion – growing a powerful team, digital adoption, customer engagement and automation require management past a strong season.

“The day will come, and it’s not that far off, when things start to slow down and if you’re not thinking about the future, and investing in the future, when that next day comes, you’re going to be on the outside looking in in terms of competitive position,” Wind said. “I think as much as you want to take advantage of today, particularly for the leaders of the company, be thinking of tomorrow.”

In a period of crisis, both professionals were in agreement that a strong team will follow the data as far down the rabbit hole as possible. From rates, to applications, to secondary spread and forbearance – paying attention to trends gives companies ample time to prepare.

“So when we start taking actions on what we are thinking about risk in the market, everybody has the same view on what is the right thing to do, and what could be the risky thing to do,” Gupta said.

“We have established teams that actually go across our business using tools like machine learning, which actually look at our forbearance data and then parses that forbearance data down to attributes. What attributes are leading to higher forbearance? To lower? So then the underwriting organization is aware of it, the pricing organization is aware of it, risk organization is aware — all the way to the commercial organization from marketing and sales.”

Here’s what housing professionals can use as a roadmap amid economic uncertainty

Find out how mortgage data can both reveal and solve lender pain points during these uncertain times.

Presented by: First American

What can the industry expect in the remainder of the fourth quarter? To Gupta, that’s the “$1.8 trillion question” – an homage to the stimulus offer President Trump signed off on Oct. 9. The CEO said his team is “cautiously optimistic” and not yet ready to declare victory in terms of economic or COVID-19 trends, though a second stimulus may help buffer another downturn.

Gupta noted that if Biden wins the election, aside from the possible first-time homebuyer tax credit, the dialogue would shift from capital standards to affordable options alongside an expanded industry focus on increasing homeownership and greater options for lower FICO scores.

“I’d say a bright spot for lending and housing is regardless of who wins the election, from a rate-environment standpoint, the need to promote the economy and its growth will prevail. It’s hard to picture rates jumping up at this point dramatically,” Wind said.

Aside from whether the White House stays red or goes blue, Wind said since the 2008 financial crisis, the government has clearly seen how important housing is to recovery, and in turn, the industry has seen how important a government backstop is.

“I think it’ll be a lot of discussion on how big that backstop should be and how Fannie and Freddie are structured. But fundamentally making sure that there’s ongoing liquidity to housing finance, I think you’ll find broad agreement across both sides of the aisle,” Wind said.

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This techie mortgage broker has cleared $1 billion in originations this year. And now Thuan Nguyen is scaling up

This techie mortgage broker has cleared billion in originations this year. And now Thuan Nguyen is scaling up
In 2013, Thuan Nguyen was working out of his chaotic office in the heart of Silicon Valley. You’d find him there from 5 a.m. to 11 p.m. At that point, Loan Factory had about 200 loans and just 13 employees. They hustled, too.“The office was like a market,” Nguyen recalled. “It was so noisy, stuff was everywhere. We couldn’t keep track of things. It was crazy. And now we have 20 times the volume, and people have a peaceful life. And it’s because of the software, because of the technology. Quicken Loans, see how big they are? How much volume they can push through so quickly? I think it’s all because of the technology. They prepared for it.” 

Nguyen, who emigrated from Vietnam to the United States and fell into the mortgage business about 14 years ago after leaving an unsatisfying career in finance, has capitalized on the historic mortgage boom like few others. Though plenty of loan originators and brokerage executives are stuffing their pockets with cash, his approach is rare – he personally develops his own software and sells it to other brokerages. 

Nguyen, who claims to be on track to personally originate $1.5 billion in volume this year, is in full expansion mode. His West Coast-centric operation is moving through the Gulf into Texas, Florida and following the Stream into Edison, New Jersey, a community with a fast-growing South Asian population. It’s part of his business thesis – investing in upwardly mobile communities where homeownership is a cultural value. He now has 12 offices, and he plans to open 10 additional offices by the end of 2021.

HousingWire caught up with Nguyen to talk about the up-and-downs of brokerage, clearing $1 billion in originations this year, the IPO craze, how to transition from a refi market to purchase market, and developing bespoke technology for brokers. 

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Investors Title’s excellent rating affirmed

Investors Title’s excellent rating affirmed
AM Best has affirmed the financial strength rating of A (excellent) and the long-term issuer credit ratings of “a” of both subsidiaries of Investors Title Co. Read on for more details.
Source: thetitlereport.com

Small-business owners becoming more optimistic

Small-business owners becoming more optimistic
Small-business owners surveyed in September were more optimistic than they had been the prior month, reflecting improvements in both foot traffic and sales, according to the latest NFIB Optimism Index.
Source: thetitlereport.com

Third-quarter foreclosures plummet

Third-quarter foreclosures plummet
ATTOM Data Solutions said the foreclosure level in the third quarter was the lowest since it began tracking quarterly filings in 2008. Read on to learn more.
Source: thetitlereport.com

Adopting Technology to Improve Servicing Profitability During and After the COVID-19 Crisis – Sponsored by Capacity

Adopting Technology to Improve Servicing Profitability During and After the COVID-19 Crisis – Sponsored by Capacity
In this session on servicing technology, you will discover:

The benefits of adopting an AI-driven process to streamline and standardize data.The power of automating your help desk, processes,and decision-making.Why it’s critical to automate processes associated with forbearance, loss mitigation, default management, and bankruptcy/foreclosure optimization.How to elevate your customer experience with customer-facing automation.How to reduce reliance on labor-centric solutions and telephony protocols.How to realize significant productivity gains per SPOC (Single Point of Contact).

Watch the full session below. To go back to the full HousingWire Annual 2020 on demand summit, go here.

Panelist:

John Heck, Senior Advisor of Lending Solutions, CapacityJim Albertelli, CEO, Albertelli Law

The rest of this content is for HW+ members. Join today with an HW+ Membership! Already a member? log in

HW+ includes weekly long-form digital content, HousingWire Magazine, access to HousingStack, and free admission to all HousingWire virtual events.

Get $75 off your initial membership with coupon code “intro75”.

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Capital Market Appetite by Channel

Capital Market Appetite by Channel
A conversation on mortgage capital markets wouldn’t be complete without data. Richard Koss of Recursion will set the stage with data on how capital markets participants are driving channel growth with data specific to retail, correspondent and brokered loan volume.  FormFree CEO Brent Chandler will then lead a discussion with three capital markets desk leaders on how they have navigated the last six months and how they are gearing up to beat the curve in 2021 and support market share growth for their institutions. We’ll also get a glimpse into the rise of property inspection waivers and potential secondary market impact.

During this half-hour discussion, the panelists offer their takes on capital market appetite by channel, touching on the rise of the nonbank, regulatory challenges, IPOs, adaptation and technology, the upcoming adverse-market fee, MSR value and even the forbearance timelines.

“Changes in culture, society, how we all work and live – it all ends up in capital markets,” said Koss. “This is where the rubber hits the road between the lender, the investor and the policy maker.”

Watch the full session below. To go back to the full HousingWire Annual 2020 on demand summit, go here.

Panelist:

Brent Chandler, CEO, FormFreeLeora Ruzin, SVP Wholesale Operations, Equity Prime MortgageRichard Koss, Chief Research Officer, RecursionGary Malis, CFO, PRMG

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Get $75 off your initial membership with coupon code “intro75”.

Sponsored by:

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Streamlining Your Borrower Experience from Engagement to eClose – Sponsored by SimpleNexus

Streamlining Your Borrower Experience from Engagement to eClose – Sponsored by SimpleNexus
Creating a simple, secure, and transparent borrower journey from start to finish enables lenders to increase conversion and deliver higher customer satisfaction. Join SimpleNexus to see the key components of delivering a single login experience to refi and purchase customers from initial engagement to closing with ease. 

Watch the full session below. To go back to the full HousingWire Annual 2020 on demand summit, go here.

Panelist:

Paul Drobot, VP of Sales, SimpleNexus

The rest of this content is for HW+ members. Join today with an HW+ Membership! Already a member? log in

HW+ includes weekly long-form digital content, HousingWire Magazine, access to HousingStack, and free admission to all HousingWire virtual events.

Get $75 off your initial membership with coupon code “intro75”.

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