MCS CEO Caroline Reaves announces her retirement

MCS CEO Caroline Reaves announces her retirement
Caroline Reaves, CEO of property services provider Mortgage Contracting Services, announced her retirement on Tuesday after leading the company for 14 years. While Reaves will be departing from one position at the company’s helm, the mortgage veteran is set to transition to MCS’ board of directors as its chairwoman.

According to MCS, this new role will allow Reaves to step away from her current day-to-day duties, while maintaining the continuity of the leadership team.

“While I will certainly miss the daily involvement with the business, I am so looking forward to this next chapter in my life with family, faith and friends,” Reaves said. “Having the ability to focus on those things while continuing to be involved in the business provides me with the best of both worlds, both personally and professionally.”

Reaves began her mortgage journey in 1991, where she served as the vice president of default servicing for nearly 13 years at MidFirst Bank. Afterwards, she would move on as president of default outsourcing at First American Title for several years and also served as the chairperson of the Mortgage Bankers Association’s Property Preservation Work Group and has been doing so for over 15 years.

By 2007, Reaves joined MCS as its president and was promoted to CEO two years after where she went on to help lead the company’s explosive growth from a one-office, 40-employee operation to a national presence with over 800 employees. Because of her contributions to the market, Reaves was also named a HousingWire Women of Influence in 2018.

Her successor has yet to be named, though she did reveal they are beginning an internal and external search for a new CEO. While that search continues, chief relationship officer Chad Mosley has been promoted to President of MCS.

Mosley served at the property services provider for 13 years and was previously the chief operating officer and senior vice president of business development before his promotion as CRO in 2019.

“This new structure will allow a specialized team to focus on more targeted development in this area, while ensuring that the field services business that has defined MCS for so many years remains successful,” Reaves said.

According to Reaves, she and Mosley have been working on this transition for some time. Mosley will effectively taking responsibility for the company on June 1, while Reaves will shift to her position on the board July 1.

“This is an exciting time for Caroline, and I want to thank her for all she has done for MCS, our clients and our team members,” said Mosley. “Her leadership has set a high standard, one we’re ready to follow.”
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Mortgage complaints hit three-year-high, CFPB says

Mortgage complaints hit three-year-high, CFPB says
In April, the Consumer Financial Protection Bureau warned the industry of its plans to keep a much closer eye on servicers as they transition borrowers out of forbearance. On Tuesday, a report from the government watchdog may have just kicked up the incentive.

According to the report, in March 2021, consumers submitted more mortgage complaints to the CFPB than in any month since April 2018. Within those complaints, mentions of forbearance and related terms reached their highest monthly average since March and April of 2020, while the number of borrowers who reported struggling to make payments also rose.

Complaints ranged from not being able to reach their servicers, to misinformation or lack of information, to confusing and incomplete post-forbearance options.

Consumers also reported long delays in having their loan modified so that they could resume payments on the mortgage. According to the report, in some cases these delays were due to demands for additional documents by servicers. In other cases, consumers said servicers provided conflicting information about what options were available and the consumer’s eligibility for loan modification.

“More borrowers are behind on their mortgage than at any time since the height of the Great Recession,” said CFPB Acting Director Dave Uejio. “Communities of color have been hit hard by the pandemic, and the latest data show that many borrowers are still hurting. The CFPB will continue to seek and actively respond to developments in the market, doing everything in our power to help families stay in their homes.  As we warned mortgage servicers last month, unprepared is unacceptable.”

The greater number of borrowers exiting forbearance right now also requires more labor from the servicers’ side given the Mortgage Bankers Association estimates 27% of exits since June of 2020 resulted in loan deferrals and partial claims.

The CFPB pointed out FHA loans in particular as having complications when borrowers attempted making a partial claim or modifying their loan to address forborne payments. FHA loans have had the largest forbearance portfolio share for the better part of the pandemic, although portfolio and private-label securities recently took that title.

The sudden spike in complaints to the CFPB signaled a significant shift in the 2.23 million borrowers who are still postponing their mortgage payments in 2021.

In 2020, the CFPB’s Home Mortgage Disclosure Act data painted a profoundly different picture after the Bureau reported complaints against mortgage servicers were down by 3.5% year over year.

March marked a substantial milestone for forbearance as the one-year mark since the inception of the COVID-related program. It also marked the expiration of that forbearance for some homeowners, while those with government-backed mortgages had the option to extend their plans out to 18 months.

However, non–federally backed borrowers don’t all have the same policies. A number of these loans may be held in bank portfolios, where it is up to the bank’s discretion to offer the relief it feels is most appropriate. Others are owned by smaller investors or repackaged as a PLS, where these loans have differences in what kind of relief a borrower may receive.

Federally backed or not, the CFPB is already making good on its threats to police mortgage servicers. In late January, the agency released a series of authority actions warning servicers that they need to do right by consumers who need access to forbearance programs. On March 31, the CFPB rescinded seven of its temporary policies put in place due to COVID-19, and said it intends to exercise the full scope of its supervisory and enforcement authority provided under the Dodd-Frank Act.

In April, the CFPB began seeking comments on a proposal that if finalized would temporarily require servicers to enhance communications with borrowers who are delinquent or in forbearance, allow servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships, and require servicers to afford all borrowers a special pre-foreclosure review period.

By the end of the month, news that the Bureau was already actively investigating several servicers was released.
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ProperSign launches eSign tool for RON capabilities

ProperSign launches eSign tool for RON capabilities
Remote online notarization company ProperSign announced a new electronic signature tool called QuickSign, which offers both RON and eSign capabilities.

“Between the RON capability and QuickSign, professionals no longer have to shop for two different tools,” said Wyatt Long, ProperSign vice president. “And since there’s no limit to the number of documents you can execute through QuickSign, organizations can use it for sales contracts, legal or human resource documents as well.”

QuickSign users can add one or multiple signers, upload and tag documents, select the signing order, and send them off to be electronically signed, the company said in a release. Multipage documents can be prepared and tagged for signing in less than a minute, and tags can be added or edited after the document has been sent and before the first signature is applied.

Currently, 32 U.S. states allow full eClosings. RON bills have also been introduced in several other states, and at the federal level. In a RON eClosing, all documents are electronically signed and electronically notarized by a commissioned remote online notary via webcam.

Based in Florida, ProperSign is following the wave of notarization companies that are moving their entire process online. This trend became a necessity during COVID-19 when real estate and title professionals found many that of their clients wanted to do business remotely. A survey by the American Land Title Association in December found that RON adoption soared 547% in 2020.

In November, Zillow CEO Rich Barton said there is “no going back” from remote online notarization.

“Across every industry, there has been a COVID catalyzed and dramatic increase and reliance upon and adoption of technology,” Barton said. “The concrete is setting on new digital habits for life and work, and it is highly unlikely that we go back to the old analog ways.”

Other companies and platforms riding the digital signature wave include SimpleNexus, which announced a partnership last week with Notarize to support remote online notarization through its eClose technology, and real estate tech company Spruce, which recently partnered with insurtech platform Digital Partners and American Digital Title Insurance Company to offer a fully underwritten title commitment that can be completed in minutes.
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Jonathan Corr joins Reggora board of directors

Jonathan Corr joins Reggora board of directors
Former Ellie Mae CEO Jonathan Corr has joined the board of directors for appraisal technology company Reggora.

Corr spent 18 years at Ellie Mae before announcing his retirement in September after the company was acquired by Intercontinental Exchange. Joe Tyrrell, Ellie Mae’s chief operating officer, succeeded Corr as president of ICE. Corr helped launch Ellie Mae’s popular Encompass platform and saw revenue jump from $10 million to $1 billion during his tenure.

“Reggora is uniquely positioned to bring meaningful change to the appraisal industry,” said Corr. “The company is taking a unique approach to solving a historic challenge in the mortgage loan process, and I am proud to join in the mission to deliver consistent two-day appraisal turn times.”

Corr will work closely on the board with Regorra’s leadership team — including co-founders Brian Zitin and Will Denslow.

“We are honored to work with Jonathan and leverage his tremendous industry expertise at Reggora,” said Zitin. “After raising our Series B earlier this year, we were looking for an additional leader who could help Reggora continue to deliver a high-quality solution and be a leader in the appraisal space.”

In an interview with HousingWire, Zitin said Reggora is “hyper-focused” on streamlining the entire appraisal process, and Denslow said digital appraisals will be the norm sooner rather than later.

“We are excited to help lenders become more strategic about the way they manage their appraisal operations,” Denslow said. “The future of mortgage will be digital, unlocking new ways to leverage data and analytics to power things such as appraisal vendor selection, risk management and quality assurance.”

Corr, along with Ellie Mae founder Sig Anderman, was an early proponent for automating the mortgage process. In an interview with HousingWire last year, Corr described the excitement he and Anderman felt as they looked to disrupt a traditional process.

“We saw the internet and the technology around it as a vehicle to help drive a better experience all the way around — for consumers, brokers and investors. We saw a tremendous opportunity to take friction out of the process and move from a disconnected, paper-laden way to a more consumer-friendly way,” Corr said.

Corr joins Reggora at an interesting inflection point for property valuations. In December, after a year of granting appraisal flexibilities due to the pandemic, the FHFA announced a Request for Input on GSE appraisal modernization efforts.
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Capitol Title Group acquires Homeland Title and Escrow

Capitol Title Group acquires Homeland Title and Escrow
Maryland-based Capitol Title Group announced the acquisition of Homeland Title and Escrow, ranked the seventh-largest title company in Maryland by the Baltimore Business Journal. Read on for more about the acquisition.



Avanta secures seed funding to digitize HOA data

Avanta secures seed funding to digitize HOA data
Avanta Risk Management announced new funding from Naples Technology Ventures and Green Park & Golf Ventures in a Series Seed round for its mission to digitize homeowners association data. Read on for more.

First American awarded patent for OCR enhancement

First American awarded patent for OCR enhancement
First American Financial Corp. was issued a U.S. patent for an optical character recognition (OCR) technology improvement that leverages artificial intelligence to accurately validate and correct text obtained from a document image. Read on for more about the latest patent.



Lawsuit claims Compass defrauds agents

Lawsuit claims Compass defrauds agents
Compass defrauded its real estate agents out of millions of dollars in sales commissions and broke pledges to give agents shares of stock, according to a new lawsuit that seeks class-action status.

Filed last week in California state courts, the lawsuit is the latest legal drama involving Compass, the New York City-headquartered residential brokerage. The litigation arrives one month after Compass became a publicly traded company, putting it in the position to make good on agent’s stock programs.

“Employers like Compass violate California employment and labor law every day to make it appear to investors and the general public alike that the company is doing well financially and increasing market share,” reads the complaint.

Messages left with Compass were not returned.

The complaint – which proposes a class of every single real estate agent who signed a contract with Compass in the last four years – is brought by Lisa Sheppard and Todd Sheppard, a sales team that operated a boutique brokerage in Sonoma County and has since moved onto Sotheby’s International Realty.

The couple allege that the brokerage lured them in 2018 with the promise of a signing bonus, marketing budget, and office space. Additionally, the sales team would keep 90% of each sales commission, with 10% routed to Compass.

However, once they arrived at Compass, the brokerage allegedly deducted expenses, including marketing, from the Sheppards’ 90% commission on each sale.

When the Sheppards complained about these deductions, Compass responded it has discretion to deduct expenses under its “term of engagement” with agents. The couple contend that they never saw these terms of engagement upon joining Compass, and instead were presented with a 1 ½ page contract that they electronically signed.

Also, the lawsuit claims, the brokerage deducted from the Sheppards’ commission if the sales team got less than the standard 5% commission rate of each home sale, a rate usually divided 50/50 by buyer and sales-side agent.

“Compass’s refusal to shoulder the cost of the discounted commission is unique and unprecedented in the real estate profession,” the lawsuit reads.

The Sheppards additionally contend that Compass deceived them in terms of stock shares once the company became public.

“Compass failed to disclose to plaintiffs and class members that they would receive an inferior level of stock, not the company’s shares of common stock,” the lawsuit reads.

A lawsuit filed in January by Greg Maffei, a former Los Angeles-area Compass agent, makes a similar claim about agent’s shares of stock.

Compass has a few agent-equity plans, which are premised around agents snaring shares now in exchange for past commission income deferral. One program has agents buying stock at the “preferred” price of $154 a share. The firm’s stock as of Monday was trading at $18 a share.

Compass has faced multiple lawsuits in its eight-year-old history. Besides the Maffei litigation – also in California court – other pending litigation includes brokerages Realogy and Howard Hanna suing over unfair business practices, and theft of trade secrets.

The second-largest brokerage in the U.S. by sales volume after Realogy, per RealTrends, Compass is particularly prolific in California, following the 2019 acquisition of Pacific Union.
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