Two Southern banks complete mortgage eNote transfer

Two Southern banks complete mortgage eNote transfer
Truliant Federal Credit Union is the first Southeast financial institution to officially complete a transfer of an eNote – or an electronic promissory note – to Federal Home Loan Bank of Atlanta (FHLBank Atlanta), as part of FHLBank Atlanta’s eNote pilot program, the lender said Tuesday.

Going forward, FHLBank Atlanta will accept all eNotes, per bank officials.

An eNote is a digital version of the promissory note which must meet the requirements of electronic transaction laws. eNotes contain the same information as a traditional mortgage note – on paper – but they are created, signed and stored digitally.

FHLBank Atlanta used the eNote transfer to test the infrastructure necessary to allow a limited number of FHLBank members to report eNotes as collateral. Truliant, which serves more than 270,000 members and over 30 member financial centers in North Carolina, South Carolina, and Virginia, met a series of standards relating to eSignatures, eNote documentation, eClosings, eRegistry requirements, and eNote vault requirements, said Todd Hall, Truliant president and CEO.

“This final digital step makes the whole home-buying experience quicker, more accurate and secure,” Hall said. “Truliant completed its first end-to-end eClosing on March 27 last year. One year later we are the first member to deliver an eNote to FHLBank Atlanta.”

Navigating Closing Struggles in 2021’s Purchase Market

In this webinar, we’ll provide the most current information on hybrid and full eNote eClosings, discuss the increases happening in eNote adoption, define the progression happening in eNotarization including RON, and discuss key criteria to successfully implementing your eClosing strategy.

Presented by: First American Docutech

Elaine Marshall, North Carolina Secretary of State, described it as a “win-win-win for home buyers, the business sector and the government sector in making the mortgage closing process less time consuming, less stressful, and even more secure.”

When a closing is completed, the eNote is tamper-sealed and registered with the MERS eRegistry system. eNotes cannot be altered without the change being recorded an a digital audit trail, said Rob Kovach, FHLBank Atlanta’s chief credit officer.

“Interest in the ability to pledge eNotes as collateral continues to grow among our members, and this initial transfer demonstrates that we now have the ability to meet this growing demand,” Kovach said.

Officials said 11 federal home loan banks set servicing system requirements relating to eSignatures and eNote documentation in early 2020 – the culmination of three years of development.

Full e-Closings reduce the use of paper, legal fees, mailing and courier costs.

“eClosings are one part of an evolving program we’ve put in place to increase our competitiveness, put more members in homes, and allow them to complete purchases on their schedule,” said Beth Eller, Truliant mortgage lending vice president.

Truliant announced in 2019 it would be the first North Carolina Credit Union to offer complete eClosing services on mortgages, and the second North Carolina-based financial institution to use it. In May 2020, Truliant announced that Freddie Mac would be buying eNotes from Truliant as collateral for mortgage-backed securities.

Truliant gained approval in May to offer “set aside” funds assistance from Federal Home Loan Savings Bank of Atlanta. The funds allow distribution for first-time homebuyers of up to $5,000, up to $7,500 for first-time home buyers who are current or retired law enforcement officers, educators, firefighters, and health care workers, and up to $10,000 if available to first time or non-first-time veteran homebuyers that are currently serving or have served in an overseas military intervention – or their surviving spouses.
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Here’s how to fix the housing market inventory crisis

Here’s how to fix the housing market inventory crisis
The U.S. housing market is in the midst of an inventory crisis. The number of homes for sale in the U.S. is hovering near record lows, caused by a pandemic-induced housing inventory death-spiral.

At the same time, home sales have soared close to record highs, suggesting the housing market suffers exclusively from a supply (and not demand) problem. Thus, federal policies must focus as much on increasing housing supply as boosting demand.

Rolled out in isolation, first-time homebuyer tax incentives (FTHB) – such as the Biden Administration’s proposed $15,000 advanceable FTHB credit – are only likely to make housing inventory scarcer and prices higher. Instead of just bolstering demand, policies that focusing on increasing supply – such as tax incentives that encourage owners to sell and builders to build – is what the U.S. housing market desperately needs.

The federal government could quickly incentivize owners of existing homes to sell using one or a combination of carrot-based or stick-based approaches. Using a carrot-based approach, opening a temporary window of capital gains exemptions would incentivize owners of investment homes with capital gains, as well as owner-occupiers with over $250k-$500k in gains, to sell.

Alternatively, a stick-based approach might raise taxes on single-family rental income, implement nation-wide rent control, and/or reduce bulk ownership of single-family homes. In our current political environment, though, it seems carrot-based approaches would be much more likely to garner bipartisan support than stick-based approaches, especially given the hardship that both renters and landlords have experienced during the pandemic.

Fannie Mae on how to make housing more affordable

In the last few years, the number of existing single-family homes for sale has decreased. But home prices have increased. To make homeownership a possibility for everyone, there needs to be a higher housing inventory of affordable homes.

Presented by: Fannie Mae

The efficacy of a carrot-based supply approach could also be heightened by combining it with the $15,000 FTHB credit in a targeted way. For example, capital-gain exclusion eligibility could be tied to the sale of a home to a first-time homebuyer. This would incentivize transfers of housing units from owners of homes with taxable gains to renters. In this way, policies would assist first-time homebuyers by helping them solve the search (supply) problem while also assisting them with the demand (affordability) problem.

This approach, however, doesn’t come without challenges. Incentivizing the conversion of rental stock to owner-occupier stock reduces the supply of rental housing. The beauty of a combined cap-gains and FTHB approach, however, is that in aggregate there would be no net loss of rental stock relative to rental demand. First-time hombeuyers who are, by definition, renting, would purchase previously rented homes or homes of long-time residents who moved elsewhere.

But the switch may not always be direct. In other words, owners of single-family rental units may not always – or even ever – sell directly to their tenants. This would create a temporary – but painful – problem for renters whose owners decided to sell since they would likely be forced to move. Assistance to state and local housing agencies could help displaced renters find new accommodation and moving-related tax breaks could help alleviate some of the financial pain of a relocation.

The federal government could also implement similar incentives for homebuilders by offering tax breaks to sellers of new homes who either sell to existing homeowners who sold to first-time homebuyers or to first-time homebuyers themselves. This would help break up congestion in the housing market by not only incentivizing home builders to cater to FTHBs, but in the case of markets where this isn’t feasible (because of high construction costs), it would also incentivize current owner-occupiers to trade up and sell their existing home to a first-time homebuyer, thus freeing up the housing inventory ladder.

In sum, providing an advanceable $15,000 FTHB credit alone is a well-intentioned policy that would likely have severe, un-intended consequences in today’s housing inventory-strangled market. However, when implemented in parallel with supply-oriented tax breaks for owners and builders, the Biden administration could help promote the largest wave of homeownership not seen in a quarter-century.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:Ralph McLaughlin at ralph@haus.com

To contact the editor responsible for this story:Sarah Wheeler at swheeler@housingwire.com
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The future of mortgage closings

The future of mortgage closings

A painstaking, uncoordinated movement to fully adopt remote online notarizations nationwide and complete end-to-end digital escrow mortgage closings is gaining even more traction as the real estate industry launches into a new decade in 2021.

But depending on where you work in housing, it can feel like a bumbling snafu, a noble attempt that’s stuck in slow motion, or maybe even a lifelong crusade where patience and persistence will eventually win the day. Where does the industry go from here?

Combined with real estate’s technological adaptation that’s kept transactions healthily moving during the coronavirus pandemic, recent events are signaling that complete electronic mortgage closings on a much larger scale could be the next big shift in property transactions.

The pandemic is injecting even greater urgency in endorsements of eClosings at the county and state levels from several private sector leaders in residential real estate — and perhaps a few public policymakers who might not be holding out too much longer.

“It’s not insurmountable to get permanent RON laws passed over the next few years by states that haven’t done so,” said Bill Anderson, vice president of government affairs for the National Notary Association in Chatsworth, Calif. “But there’s got to be a will to make it all happen.”

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Refi closing costs nearly half of purchase costs in 2020

Refi closing costs nearly half of purchase costs in 2020
ClosingCorp.’s first national refinance closing cost report shows that closing costs for residential refinances last year were nearly half as much as those for home purchases. Read on for more details, including the states with the highest average closing costs.
Source: thetitlereport.com

WFG National Title to offer foreclosure information reports

WFG National Title to offer foreclosure information reports
WFG National Title Insurance Co. has expanded its Default Title Services division’s offerings to include national loan modification and foreclosure information reports. Read on for more about WFG National Title’s new service.
Source: thetitlereport.com

RedfinNow to expand into District of Columbia

RedfinNow to expand into District of Columbia
RedfinNow is expanding from Maryland and northern Virginia into the Baltimore and Washington, D.C., region. Redfin also plans to expand its concierge service to northern Virginia and Maryland. Read on for more about the company’s expansion plans.
Source: thetitlereport.com

NATIC adds underwriting counsel

NATIC adds underwriting counsel
North American Title Insurance Co. has added a northwest regional underwriting counsel to work with title agents and affiliates in Washington, Oregon, Idaho and Montana. Read on for more about the new hire.
Source: thetitlereport.com

SYNRGO names director of national operations

SYNRGO names director of national operations
SYNRGO’s new director of national operations has more than 25 years of title, mortgage, and post-closing experience. Read on for more about the new director.
Source: thetitlereport.com