How non-QM lenders can make the origination process easier for brokers

How non-QM lenders can make the origination process easier for brokers
There are a number of challenges affecting the non-QM market, but there are also opportunities. By partnering with a mortgage company that understands how to streamline non-Qm loans, brokers can close loans quickly and effectively. HousingWire recently sat down with John Jeanmonod, Regional Vice President of Sales at Angel Oak, about the company’s non-QM solutions which make the mortgage process easier for brokers.

HousingWire: Why is non-QM so important for originators to utilize in 2021?

John Jeanmonod: There are a number of factors making non-QM essential in today’s market. For one, refinance volume that has filled the pipeline for many originators over the past year is declining. It was projected in Q4 of 2020 that refinance volume would be cut in half in 2021 and we are definitely seeing the slowdown. In fact, the Mortgage Bankers Association (MBA) reports a decline in refinance applications almost weekly. Agency business alone will not bridge the gap to sustain volume growth. This is simply because more borrowers will not qualify for Agency loans. 

Fannie Mae and Freddie Mac have imposed tighter restrictions making the government box smaller and smaller. They have limited the percentage of loans they will do based on criteria they have set for what they consider to be high-risk loans. If borrowers meet two out of the three risks on the list, they won’t qualify. The three high-risk scenarios are: LTVs over 90%, DTI at 45% or above, or credit scores lower than 680. This two-out-of-three elimination rule creates a bigger demand for non-QM and results in a growing number of borrowers who do not fit in the GSE box. 

Originators without non-QM offerings risk losing deals and jeopardizing volume growth.

HW: Why is choosing the right non-QM lender so important?

JJ: It’s the difference between getting non-QM loans closed quickly and seamlessly versus working with a lender that doesn’t. Some non-QM lenders must get approval from outside investors that could result in delays. One of our biggest differentiators from other lenders is the fact that we are the end investor. We do not have to get approval or position anything with an outside party who could request changes and delay closings. The entire process from prequalification, underwriting to securitization occurs here at Angel Oak. We work very closely with our affiliate company Angel Oak Capital Advisors and when we say a loan is cleared to close – that’s it. We close the loan. 

In addition, we don’t sell our non-QM loans to Fannie Mae or Freddie Mac. This means that we are not held to the GSE’s 7% volume cap for investment properties or second home loans. Originators don’t have to worry about whether or not we can issue these loans – we are not held to a loan cap restriction.

Working with Angel Oak Mortgage Solutions means working with the leader in non-QM. It means originators are getting the top account executives in the country and an underwriting team incomparable to others. These unique individuals know every aspect of non-QM because our main focus is on non-QM lending. These are important factors to consider when choosing a non-QM lender. Your reputation and protecting your referral base depends on the right alignment.

HW: How does Angel Oak support the broker community at the local level?

JJ: We take great pride in our efforts focused on supporting brokers in local communities. We have 70 plus account executives across the country covering local markets. We belong to and sponsor every major trade organization coast to coast and many of our account executives serve on the board. For instance, I serve on the board of directors for the North Texas Association of Mortgage Professionals (NXTAMP) and Eric Morgenson, business development, sits on the board for the Orange County chapter of the California Association of Mortgage Professionals (CAMP). We are often the preferred non-QM partner for trade shows and events across the country. Our goal is to support originators the best we can and to continue to educate on non-QM with valuable information that moves the needle for our clients. The only way to do that is to be ingrained in local communities, knowing our clients and understanding their challenges. Each market is different.

Housing Wire: What is Angel Oak doing to make the process easier for brokers?

JJ: As much as we can. We try to do the heavy lifting so our clients can focus on prospecting and closing deals. One example is our marketing flyers available for approved brokers to use. Add your company logo, contact information and download to send out. We have presentations ready to go and we are happy to present with you as the expert on non-QM at any Realtor or referral partner meeting. An integral part of the business is to grow and solidify a referral base and we can help with that through in-person presentations or webinars. 

A significant time-saver for clients is our bank statement review team who will review, analyze and calculate income upfront for bank statement deals. As I mentioned before, our underwriting team is the most proficient in the business and our clients have access to them during the underwriting stage of the process. 

We continue to invest in technology ensuring quick responses, information and file updates. Examples include our non-QM pricing engine QuickQuote that provides an instant answer, Live Chat, a new broker helpline and we just launched loan status text notifications.

The bottom line is this – non-QM is going to become more and more in demand. Angel Oak Mortgage Solutions is the premier non-QM lender in the space. There is no one out there like us and we have the best account executives in the industry. Don’t trust your business or your livelihood to anyone but the experts who have built a successful company exclusively around non-QM.

To prepare for this surge in non-QM, brokers need a partner that’ll support their business. Using automation and fast technology to give brokers real-time data, Angel Oak Mortgage Solutions makes the process easier.
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Selling your home? Make sure you’re aware of hidden costs

Selling your home? Make sure you’re aware of hidden costs
It’s no secret that buying a home takes time and money. Well, it turns out, so does selling a home. According to Zillow and Thumbtack’s Hidden Costs of Selling Analysis, the average homeowner spends over $15,000 in “hidden costs” to sell their home. 

While a real estate agent’s commission is one of the most expensive costs, it definitely isn’t the only one. From staging fees, home improvements, repairs and seller concessions, there are several hidden costs involved in the selling process. 

Are you thinking about selling your home? Make sure you’re aware of the fees you’ll have to pay, so you can budget accordingly. Here are four potentially unexpected costs you should be aware of:

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1. Staging Costs

To attract potential buyers, sellers have to make sure their home is aesthetically pleasing. Not only does the house need to be clean, but the furniture should match the decor and be arranged in an appealing way. 

According to HomeAdvisor, the average seller pays almost $1,500 in staging costs. And while there are ways to cut down on staging costs, staging a home is crucial to making sure it sells quickly, and for the price you want. 

You also want to make sure the outside of your house is in good shape. After all, curb appeal is just as attractive to potential buyers as the indoor layout. Besides cutting your grass and mowing your lawn, you might also decide to add certain foliage to increase your home’s price tag.

Home improvements and renovations are also important to buyers. For example, let’s say a buyer is deciding between two homes with a similar price tag. If one of those homes has new kitchen appliances, they’re probably going to go with that one. 

2. Real Estate Commission

Working with a real estate agent isn’t free, but it takes the work off your plate as a seller. A real estate agent finds potential buyers, arranges housing tours and handles all the paperwork and coordination between all the parties involved.

According to Redfin, the average real estate commission is 5%–6% of the home’s sale price. Of course, this percentage varies depending on the agent and the location of the house being sold.

3. Seller Concessions

A concession is when the seller agrees to pay part of a buyer’s closing costs. This is usually done in an effort to convince the buyer to take the deal. A seller concession could include putting money towards the inspection costs, appraisal fees, taxes or another expense. Naturally, the price a buyer will ask a seller to pay will vary.

Sellers also have to pay closing costs. And while a concession can be part of closing costs, sellers might also have to pay attorney fees, transfer taxes and costs related to paying off the mortgage. 

Bottom Line

While this is a great time to be a seller, it’s not without its challenges. Regardless of how high in demand your house is, you’ll end up spending money to sell your home. 
The post Selling your home? Make sure you’re aware of hidden costs appeared first on HousingWire.

Here are the cities that ranked among the best and worst places to raise a family

Here are the cities that ranked among the best and worst places to raise a family
Whether moving to be near family or relocating for a job, moving is common. Take the pandemic, for instance. The housing market saw a huge spike in the number of moves as people relocated from big cities to avoid COVID-19. According to data obtained by USPS, almost 16 million people moved during the pandemic.

And even though life is getting back to normal, people are still moving. The pandemic showed companies the possibilities of remote work. With some employees no longer having to live close to their office, their residential options are endless. That said, before you pack up your family and move to somewhere new, do your research.

To help families decide where to live, WalletHub compared over 180 cities to find the best and worst cities to raise a family. Here’s what they found: 

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Best Cities for Families

Overland Park, KansasFremont, CaliforniaIrvine, CaliforniaPlano, TexasColumbia, MarylandSouth Burlington, VermontSeattleScottsdale, ArizonaGilbert, ArizonaMadison, Wisconsin

Worst Cities for Families

Montgomery, AlabamaMiamiSan Bernardino, California Wilmington, DelewareBirmingham, AlabamaNewark, New JerseyHialeah, FloridaMemphis, TennesseeClevelandDetroit

To rank these cities, WalletHub focused on five dimensions: family fun, health and safety, education and child care and affordability. They even took it a step further and highlighted the cities that feature must-have family attractions and other important family-friendly considerations.

Most Playgrounds Per Capita

New York CityChicagoMadison, Wisconsin PhiladelphiaJacksonville, Florida

Highest Median Family Salary

Overland Park, KansasPlano, TexasScottsdale, ArizonaGibert, ArizonaColumbia, Maryland

Most Affordable Housing

Cedar Rapids, IowaAkron, OhioPittsburghOverland Park, KansasDes Monies, Iowa

Lowest Violent-Crime Rate per Capita

Irvine, CaliforniaWarwick, Rhode IslandGilbert, ArizonaSouth Burlington, VermontGlendale, California
The post Here are the cities that ranked among the best and worst places to raise a family appeared first on HousingWire.

Mortgage lenders loosened credit standards in May

Mortgage lenders loosened credit standards in May
Mortgage credit availability increased by 1.4% in May – a sign that volume-hungry lenders continued to loosen credit standards in a highly competitive market, according to Thursday data from the Mortgage Bankers Association.

MBA’s Mortgage Credit Availability Index (MCAI) which uses 100 as a benchmark — increased to 129.9 in May. A decline in the MCAI suggests that lending standards are tightening while a higher number suggests loosening credit standards.

Lenders concerned over borrowers’ ability to pay their bills at the beginning of the economic shutdown resulted in an exponential tightening of credit. However, May’s credit availability inched to its highest level since the early days of the pandemic, but remained at 2014 levels.

The MCAI on conventional loans increased 3.5%, while MCAI on government loans increased by 0.3%. Of the two component indices of the conventional MCAI, the jumbo MCAI increased by 5.1%, and the conforming MCAI rose by 1.6%, the MBA said.

“The overall increases were driven by a 3% gain in the conventional segment of the market, with a rise in the supply of ARMs and cash-out refinances,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

According to Kan, this is consistent with the uptick in mortgage rates and a slowing refinance market, as well as MBA’s Weekly Applications Survey data showing increased interest in ARMs. Monday data from the MBA revealed mortgage applications dropped for the third consecutive week.

Compared to last year, fewer people are applying for purchase mortgages – a likely result of home prices continuing to rise and prospective buyers avoiding astronomical bidding wars.

However, housing demand is still far outpacing supply, Kan said. The average loan size on a purchase application edged down to $407,000, below the record $418,000 set in February — but still far above 2020’s average of $353,900, the MBA reported.

“The jumbo index also jumped 5% last month, but even with increases over the past two months, the index is still around half of where it was in February 2020,” Kan said. “A rapidly improving economy and job market has freed up jumbo credit, as banks have deposits to utilize. However, there is still plenty of restraint, as many sectors have not fully returned to pre-pandemic capacity, and there are around 2 million borrowers still in forbearance.”

At this time last year, the Jumbo loan index was 54% lower than it had been in February 2020. Securing a jumbo loan was the most difficult it had been in four years, according to MBA data. But a flourishing housing market gave way to jumbos from a host of lenders, including Rocket Mortgage and United Wholesale Mortgage.
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Judge rules for Zillow in REX antitrust lawsuit

Judge rules for Zillow in REX antitrust lawsuit
REX grabbed national attention in March when the residential real estate brokerage filed a lawsuit alleging an antitrust conspiracy between listings giant Zillow and the powerful National Association of Realtors. But a judge’s ruling Wednesday forcefully concluded there’s little merit to REX’s allegations, and denied the brokerage’s motion to stop how Zillow is currently listing properties.

“Plaintiff has not supported its claim that there is any deception that is injuring a substantial portion of the purchasing public,” stated a Seattle federal court judge, Thomas Zilly.

The judge dinged REX for making a lawsuit out of, “An optional, internal NAR rule allegedly resulting in display bias.”

The case stems from Zillow changing how it collects the home listings information it publicly displays. The company moved late last year from syndication agreements with various parties to getting Internet data display, or IDX, feeds from Multiple Listings Services that are operated by the NAR.

In order to get these feeds, Zillow had to comply with the vast majority of MLS’s that adopt the NAR’s “no commingling” rule. Under the rule, Zillow was requested to separate out listings from MLS agents with those not part of the MLS, including many homes listed for sale by REX agents.

As a result, there is now an “agent listings” and “other listings” tab on Zillow’s website. Non-MLS listings, including by REX, are relegated to other listings.

REX calls such separation “the segregation rule,” alleging it “falsely indicates that REX’s listings are not represented by licensed agents” and suggests to the consumer that REX’s listings are somehow inferior.

But the Seattle judge sided with Zillow that the listings website “have attempted to explain, in a consumer-friendly manner, the differences between the two tabs by developing pop-up and FAQ pages.”

The judge also noted that REX is not always on the other side of the MLS. The brokerage has “Co-listed properties with MLS agents to increase the online presence of client’s listings.”

Zillow provided a statement on Wednesday that it is pleased with the judge’s decision, “And it’s acknowledgement to our commitment in empowering consumers.”

The ruling suggested that REX, a six-year-old brokerage based in Austin, Texas, is balancing telling the court that Zillow’s business practices are seriously hurting the brokerage, while still operating said business. For example, the judge cited a REX internal communication that, “We still have good views” on a particular Zillow listing as evidence against the company.

In a statement Thursday, REX CEO Jack Ryan pointed out that the case is not over. REX still has, for example, monetary claims against Zillow and the NAR.

“We are disappointed that consumers will continue to face the NAR segregation rule every time they visit Zillow,” Ryan said. “The segregation rule banishes homes that would save consumers thousands–if not tens of thousands of dollars–in fees. REX won’t stop until consumers are freed from this indefensible rule.”   

Though it chafes at the term, REX is a “discount brokerage” meaning that they give their real estate agents a smaller commission, passing along the savings to consumers. Like Redfin, REX’s real estate agents are salaried employees.

The REX lawsuit against Zillow should not be confused with several lawsuits filed against the NAR regarding the commissions that consumers pay real estate agents.

Those lawsuits, which some legal observers say could upend the residential real estate industry, charge the NAR and the biggest brokerages with a “horizontal conspiracy” to fix prices, with home sellers paying agents about 5% of the sales price.

Rulings in these cases have not been made, excepting a Chicago federal judge denying NAR’s motion to dismiss one such lawsuit.
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Good Deeds: ‘Casual for a Cause’

Good Deeds: ‘Casual for a Cause’
Dominion Title & Exchange Services in Green Bay, Wis., recently launched a “casual for a cause” campaign to raise money for local charities. Employees can donate $5 to wear jeans one day of the week.
The company also started a campaign called #DominionCares where a portion of each closing fee will be donated toward one of three local organizations. Buyers can select the Golden House, Wisconsin Humane Society (WHS) – Green Bay Campus or NEW Community Shelter. The Golden House provides help to domestic abuse victims. The Wisconsin Humane Society (WHS) focuses on building a community where people value animals and treat them with respect and kindness. The NEW Community Shelter works with others in the community to address homelessness.
NYSLTA Donates to Feeding America
Members of the New York State Land Title Association (NYSLTA) recently contributed nearly $18,000 to four Feeding America foodbanks located across New York. This money will provide over 53,000 meals to those in need. In September 2013, the NYSLTA formed a Charitable Works Committee with the purpose of giving members to join together in participating in charitable causes.
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What does the housing market look like for rest of 2021?

What does the housing market look like for rest of 2021?
ATTOM Chief Product and Technology Officer Todd Teta and Altos Research founder and CEO Michael Simonsen recently took a comprehensive look at the mid-year housing market, analyzing current market conditions and sharing their forecasts for the rest of the year. Read on for details.

Doma revenues rise 80 percent year-over-year

Doma revenues rise 80 percent year-over-year
Doma Holdings, Inc., reported first quarter total revenues of $128 million, up 80 percent from a year ago. That “far exceeded our budgeted expectations,” Doma CEO Max Simkoff said. Read on for more from the company’s first-quarter earnings report.

iBuyer Offerpad partners with First American

iBuyer Offerpad partners with First American
iBuyer Offerpad partnered with First American Title Insurance Co. to help a Nevada homeseller close escrow on a sale in one day, according to the companies. Currently available as a pilot program, Offerpad Greenhouse is a 24-hour close option. Read on for more about the partnership.

Proper Title expands staff

Proper Title expands staff
Chicago-based Proper Title, LLC, recently boosted its staff with the hiring of an assistant vice president of commercial business development, a senior commercial underwriting consultant and counsel, a senior underwriting counsel, a director of title operations, a director of post-closing and settlement services, and a senior escrow officer. Read on for more about the new hires.