David Stevens and Kris Kully to speak at Spring Summit

David Stevens and Kris Kully to speak at Spring Summit
The regulatory landscape has shifted quickly under President Biden. To discuss just what that means for those in the housing economy, Kris Kully, a partner at Mayer Brown, and David Stevens, the former CEO of the Mortgage Bankers Association, will speak on a panel titled A New Regulatory Regime, at HousingWire’s virtual Spring Summit on March 4.

Stevens has served as senior vice president of single family at Freddie Mac, executive vice president at Wells Fargo Home Mortgage, president and COO of the Long and Foster Realty Companies, assistant secretary of Housing and FHA Commissioner, and CEO of the Mortgage Bankers Association.

Kully previously worked at the Department of Housing and Urban Development as a senior attorney, in the legal division at Fannie Mae and as a partner at K&L Gates. Now, at Mayer Brown, Kully advises clients in the consumer financial services and real estate settlement services industries in connection with federal and state consumer protection, licensing, and practice requirements.

The focus of the Spring Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, but as rates rise, real estate agents and lenders will have to adapt to accommodate the demographic tsunami of Millennial homebuyers looking to enter the market.

The summit will covers topics that are critical to success in another unprecedented year, including:

Servicing challenges in a pandemic periodOperational strategies in the current marketThe brave new world of valuationseClosing/RON updateEconomic forecast

The summit also features sessions on mortgage disruption, lessons from local markets and more.

As with all HousingWire events, we’re bringing together some of the brightest and most successful people in mortgage, real estate, compliance, technology and regulation to offer their insights on what’s happening right now and what’s coming next.

Speakers joining Kully and Stevens include UWM CEO Mat Ishbia,  Figure Technologies CEO and co-founder Mike Cagney, MBA’s Lisa Haynes, Blend CEO Nima Ghamsari, Mortgage Champions CEO Dale Vermillion and many more.

The 2021 Spring Summit is designed for our HW+ premium members, who get access to all HousingWire virtual events, long-form digital content published weekly, an exclusive Slack community and more. Sign up for HW+ membership and register for the summit here, or get event-only access for your company or team here.
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Chopra warns of post-COVID housing market fallout

Chopra warns of post-COVID housing market fallout
Rohit Chopra is laser-focused on helping homeowners who have been hit hard by the COVID-19 pandemic. Student loan debt is in his crosshairs, too. In his confirmation hearing Tuesday before the Senate Banking Committee, Chopra, President Joe Biden’s choice for director of the Consumer Financial Protection Bureau, emphasized that the CFPB has to be ready for housing market fallout due to the pandemic.

“My intuition is we have to be ready for potentially looming problems when it comes to forbearances that might flip to foreclosures,” Chopra said. “I don’t want to see another foreclosure crisis in this country. And we need to do everything we can to make sure the laws are being followed and homeowners can navigate their options.” 

According to the most recent numbers reported by the Mortgage Bankers Association, the U.S. housing market currently has about 2.6 million borrowers with mortgages in forbearance plans. In February, the Federal Housing Finance Agency extended forbearance protection for another six months, bringing the total to 18 months. It also extended moratoriums on single-family foreclosures and real estate owned evictions through June 30, 2021.

“In the mortgage market, fair and effective oversight can promote a resilient and competitive financial sector, and address the systemic inequities faced by families of color,” Chopra said in his opening statement. “Perhaps most importantly, administration of consumer protection laws can help families navigate their options to save their homes.”

In answering questions, Chopra said he had an open mind regarding how the CFPB’s Qualified Mortgage rules should be revised. He also said he plans to use consumer complaints and supervision to guide enforcement activity.

Christopher Willis, co-leader of Ballard Spahr‘s Consumer Financial Services Group, noted that “Mr. Chopra’s responses to several questions reinforce our expectation that the CFPB will significantly ramp up its enforcement activity under his leadership.”

Chopra is a CFPB veteran, having previously served as assistant director, where he was the bureau’s top student loan watchdog. The Federal Reserve estimates Americans now owe more than $1.7 trillion in student loans, and student loans have been an obstacle for first-time homebuyers in the housing market. 

“It’s one of the biggest consumer credit markets in our country after mortgages and we have to make sure that the law is being followed,” he said. 

In 2011, the Secretary of the Treasury appointed Chopra to serve as the CFPB’s student loan ombudsman, a new position established in the financial reform law. As one of Sen. Elizabeth Warren’s (D-Mass.) first hires as she constructed the CFPB, Chopra was on the ground floor as the bureau was built.

“Commissioner Chopra has long fought for financial markets that are fair for consumers, including student loan borrowers,” said Ashley Harrington, Center for Responsible Lending federal agency director and senior council.
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MAXEX unveils green energy home improvement loans

MAXEX unveils green energy home improvement loans
MAXEX, a digital exchange platform for buying and selling residential loans, announced on Wednesday the launch of two new lending programs in collaboration with JPMorgan Chase for green energy home improvements.

The programs include MAXEX Sustainable, which allows borrowers to finance green energy renovations into their 30-year fixed mortgage, and allows for residential solar panels and geothermal units to be amortized in the loan at the point of purchase or refinance.

The company is also offering a “quicker” version of its base program. “MAXEX Sustainable Express” includes the same benefits of the original model, but also has access to Fannie Mae’s Desktop Underwriter and Freddie Mac’s Loan Prospector Advisor, which the company says will speed up the underwriting process.

Both programs are offered for loan values from $400,000 to $3 million. As part of these programs, JPMorgan will purchase qualifying loans.

“The U.S. lacks sufficient low-cost options to help borrowers finance green energy home improvements such as solar panels and geothermal units, despite increasing consumer demand,” MAXEX said in a statement. “As a result, borrowers are often forced to pursue high interest rate loans with short maturities, utilize costly leasing options, or forego such improvements altogether.”

The company’s latest programs will expand on MAXEX’s Environmental, Social and Corporate (ESG) business line, which launched in December. At the time of launch, the company unveiled products that offered preferred pricing for minority, women and veteran-owned lenders under the same business model, and again with JPMorgan.

“MAXEX is passionate about leveling the playing field for Main Street banks by using our rapidly-growing digital exchange to deliver low-cost capital that drives social impact,” said Tom Pearce, Chairman and CEO of MAXEX. “These ESG programs fill a significant void in the mortgage market by increasing incentives for green energy improvements.” 

Much like the rest of the industry, MAXEX experienced a record year in 2020 despite the severe shortfall in liquidity in the non-agency market. According to the company, it achieved more lock volume in the first 11 months of 2020 than it did in the prior three years.

The fintech company shared with HousingWire that “MAXEX has now reached $13 billion in non-agency lock volume and its marketplace has grown to 19 institutional investors and more than 150 bank and non-bank lenders.” 
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Appraisal Foundation: Appraisers must take course on bias

Appraisal Foundation: Appraisers must take course on bias
Reacting to headlines pointing to racial bias in some home appraisals, the Appraisal Foundation this week said that it would require all appraisers to take a seven-hour course focused on fair housing laws and bias.

The move is in response to a series of well-publicized instances over the past year in which white appraisers were accused of valuing homes for minorities at lower values than whites in the same neighborhood.

The seven-hour course will be released later this year and will focus on “timely appraisal topics,” as well as giving test takers resource materials to better answer questions that may come up during an appointment, the industry group, which sets uniform standards for appraisers.

“Specifically, the first half of the course will focus on guidance and discussion on how USPAP addresses issues related to fair housing laws and bias,” said Lisa Desmarais, vice president of appraisal issues at the Appraisal Foundation. “This part of the course will concentrate on how to avoid both bias and the perception of bias in appraisals.”

The second half of the course will include test exercises consisting of “case studies” with several questions each. The answers to these questions will be supplied to the test taker, but they will have to figure out where those answers can be found within the book on standards, called the Uniform Standards of Professional Appraisal Practice (USPAP). 

The case studies were developed using data collected by the Appraisal Foundation of all the USPAP-related questions received. The most common questions and issues were then chosen as topics for the test.

“In this way, we are directly reacting to appraisers needs to maintain and enhance public trust, as well as be a valuable and useful resource for appraisers with relevant and timely course materials,” Desmarais said. “Essentially, we are concentrating on helping appraisers master USPAP, so they can more easily apply these tools in their day-to-day appraisal practice.”

In concert with the required seven-hour course, the Appraisal Standards Board announced that it will extend the current edition of the USPAP through Dec. 31, 2022.

In a statement, the Appraisal Foundation’s Appraisal Standards Board Chair Wayne Miller said “pressing issues” have arisen in appraisals over the past year, ranging from concerns about fair housing matters to how to conduct a socially distanced property inspection in the midst of COVID-19.

“USPAP is a maturing document, and it can take longer to study the complex issues facing our profession and how they will impact our standards,” Miller said. “We believe all of these are all critical issues and deserve thoughtful consideration before we issue guidance.”

Added Desmarais: “The current environment demonstrated the need to re-focus on this very relevant and important topic.”

Appraisals were already a hot-button topic in the housing industry with the onset of COVID-19, as many prospective homebuyers and sellers transitioned to online portals and companies that offered virtual appointments. This led to an uptick in hybrid appraisals, and with it, some concern from the appraisal industry on the future of their jobs.

Considered the quality control standards for property appraisers, USPAP was adopted in 1987 by a joint group of U.S. and Canadian appraisal organizations – the same groups that eventually created the Appraisal Foundation. Soon after, the Appraisal Foundation took control of USPAP.

All U.S. states and territories require appraisal licensure for valuation work on federally regulated institutions, and 35 of those states and territories require appraisal licensure for all valuation work performed.
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Compass rivals question path to profitability

Compass rivals question path to profitability
Compass’s S-1, a disclosure the company filed Monday as a shareholder pitch, runs over 250 pages long.

But nowhere in the voluminous filing, observers say, is a lucid argument as how Compass might become profitable.

“They showed a $270 million loss in an insanely booming housing market,” noted Jonathan Miller, a real estate appraiser at Miller Samuel.

The S-1’s main sales points, especially an introductory section where Compass walks through its agent-friendly technology, “seems to show how little they understand the brokerage space or are just ignoring it,” Miller said.

Compass and its CEO Robert Reffkin have likely braced for such criticism.

Going public appeared a logical next move for the nine-year-old real estate brokerage. Compass is a venture capital fundraising force, raising $1.6 billion total (34% of the company’s common stock shares are earmarked for a Cayman Islands subsidiary of the Masayoshi Son-led SoftBank Vision Fund, the brokerage’s biggest VC backer). It has also gobbled up market share in its home turf of New York City and across California, among other locales.

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Mortgage applications recover as winter storms pass

Mortgage applications recover as winter storms pass
Mortgage applications recovered slightly from last week, increasing 0.5% for the week ending Feb. 26, 2021 according to the latest report from the Mortgage Bankers Association.

A giant dip in applications was reported following the devastating winter storms in Texas the week of Feb. 8, but a week of normalized weather brought numbers back up, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting.

That is despite the fact that the 30-year fixed rate experienced its largest single-week increase in almost a year, reaching 3.23%.

The refinance share of mortgage activity decreased to 67.5% of total applications from 68.5% the previous week.

“The overall share of refinances declined for the fourth consecutive week, and conventional refinance applications fell more than 2% to the lowest level in four months,” Kan said. “Government refinance applications historically lag the more rate-sensitive movements of conventional applications, and that was true last week, as both FHA and VA refinancing volumes increased.”

The refinance index increased 0.1% from the previous week and was 7% higher year-over-year. The seasonally adjusted purchase index increased 2% from one week earlier, and the unadjusted purchase index increased 5% compared with the previous week.

“The housing market is entering the busy spring buying season with strong demand,” Kan said. “Purchase applications increased, with a rise in government applications – likely first-time buyers – pulling down the average loan size for the first time in six weeks.”

The FHA share of total mortgage applications increased to 12.1% from 11.2% the week prior. The VA share of total mortgage applications decreased to 12.3% from 11.9% the week prior.

Here is a more detailed breakdown of this week’s mortgage application data:

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.23% from 3.08%The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.33% from 3.23%, breaking a five-week stretch of decreasesThe average contract interest rate for 30-year fixed-rate mortgages increased to 3.19% from 3%The average contract interest rate for 15-year fixed-rate mortgages increased to 2.64% from 2.56%The average contract interest rate for 5/1 ARMs increased to 2.84% from 2.83%
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Doma, formerly States Title, will go public via SPAC

Doma, formerly States Title, will go public via SPAC
Title insurance startup Doma – formerly known as States Title – announced today that it will go public through a merger with special purpose acquisition company Capitol Investment Corp. V.

The deal is valued at $3 billion, including debt. It’s the fifth SPAC carried out by Capitol.

The transaction is expected to provide up to $645 million in cash proceeds and a fully committed private investment in public equity (PIPE) of $300 million. Up to $345 million of cash will be held in Capitol’s trust account.

Officials said approximately $510 million of the cash proceeds are expected to be retained by Doma, and existing Doma shareholders will own no less than approximately 80% of the equity of the newly combined company.

The SPAC news comes just weeks after DOMA announced $150 million in debt financing, which founder and CEO Max Simkoff said would help Doma “wipe the system clean” and build an efficient, digital homebuying system from scratch.

Doma, founded in 2016, says its patented machine-learning technology reduces title processing time from five days to five minutes.

“The platform benefits lenders, real estate professionals, title agents, and homeowners, and has become even more crucial as the impacts of COVID-19 and record-low interest rates have created a huge tailwind behind home purchase and refinance,” Simkoff said.

Doma has a long ways to go before it can seriously put a dent in the “Big Four” title insurers – it currently has less than 1% share of the title market in the U.S. but projects to be at 5% by 2023. Doma is backed by Lennar, one of the nation’s largest homebuilders.

In a release, officials from Doma – which counts States Title, North American Title Company (NATC) and North American Title Insurance Company (NATIC) as part of its family of brands – said the surge in 2020 home buying and refinancing “unveiled the critical need for the tech-first approach to real estate transactions that Doma is architecting.”

Doma saw revenues of $179.8 million in 2019 and $189.7 million in 2020, according to filings made with the Securities and Exchanges Commission. Generally accepted accounting principal (GAAP) revenues are expected to be around $226.4 million in 2021.

Simkoff, who will retain his position, said adoption and usage of the company’s core products exceeded expectations in 2020, despite the COVID-19 pandemic wrecking havoc on the country’s economy.

“We pushed hard against our product and operational expansion road map, and this accelerated momentum is helping remove friction from the home buying and refinancing experience,” he said. “This partnership with Capitol demonstrates their confidence in our strong growth position as we continue our sprint to architect the future of real estate transactions.”

The company reported that Capitol CEO Mark Ein will join the merged company’s board of directors.

“Our mission at Capitol is to help build industry-leading public companies that deliver long-term value, and Doma is an industry disruptor that is well on the way to doing just that,” said Ein.

Other housing-related companies that have gone public via a SPAC in the last year include United Wholesale Mortgage, Matterport, Porch and OpenDoor.
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