Refis stubbornly make a bit of a comeback

Refis stubbornly make a bit of a comeback
The week following Labor Day saw a flurry of mortgage loan application activity, with volume jumping by 4.9% for the seven days ending Sept. 17, according to the Mortgage Bankers Association. Refis were on the front foot again.

The increase in application activity is quite different from the MBA’s survey published in early September, which saw application volume decline by 1.9%, dragged down in part by low refi activity and unexpectedly low purchase volume.

Joel Kan, associate vice president of economic and industry forecasting at MBA, at the time noted that the “economic data has sent mixed signals.” But it seems that this week’s data is more straightforward.

Both the refi index and the purchase index came in strong. According to the MBA, the refi index increased by 7% from the previous week but hovered 5% lower than the same week on year ago today.

Moreover, the purchase index increased by 2% from one week earlier, while the unadjusted purchase index grew by 12% compared with the previous week.

Kan said in a statement that the surge in both refis and purchases was mainly driven by rates that remained low at 3.03%.

“There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021,” said Kan.

He added, “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale.”

However, Kan did note that despite the uptick in activity, purchase applications “were still 13% lower than the same week a year ago.”

Overall, the refi share of mortgage activity once again increased, inching up to 66.2% of total applications from 64.9% last week.

The MBA said that the refi activity was pushed by an increase in FHA and VA applications, with the share of total FHA applications increasing to 11.5% from 9.9% the week prior.

The VA share of total applications jumped to 10.4% from 10.2% the previous week, while the USDA share increased to 0.5% from 0.4%, the trade group said.
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Housing permits hold the key for economic expansion

Housing permits hold the key for economic expansion

On Tuesday, the U.S. Census Bureau reported that housing starts hit 1,615,000 for August and housing permits came in nicely at 1,728,000. These data lines beat expectations, and we had slight positive revisions to the previous months — overall, a good report on all fronts.

I have always been mindful that the month-to-month housing starts data can be wild, both positive and negative, so the trend is what matters the most. The movement says slow and steady is bringing sexy back to the housing data, and the wild action we saw due to COVID-19 is moderating.Single-family starts have been slowing recently to move along with the moderation in new home sales and the rise in monthly supply.

However, a lot of housing data was going to moderate from the massive distortion COVID-19 created in the data lines. The key is always knowing the difference from fundamental weakness in the data and what is returning to a normal base from an extreme move. This is why I believed it was vital for me to discuss the fact that housing data was going to moderate and be careful not to read too much in that moderation.

Unfortunately, our housing crash bros sounded the alarm too early again when they saw the decline in many housing data lines from their recent COVID-19 peaks. This is very common as this sensitive lot tends to believe they’re Wile Coyote, and every weakness is sending our friend to hold up the sign that says That’s All Folks before falling down a cliff.

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Lennar builds big profits, but still has complaints

Lennar builds big profits, but still has complaints

National homebuilding titan Lennar is comfortably profitable, but company executives lament that a struggle to procure construction materials keeps them from doing more.

“The supply chain for construction is significantly stressed and that will continue for the 4th quarter and beyond,” said Stuart Miller, chairman of Lennar during a company earning’s call Tuesday.

The call reported on Lennar’s earnings for the months of June, July, and August. The Miami-based company tallied $6.9 billion in total revenue with 94% of that total coming from its home-building arm.

Lennar delivered 15,200 homes onto market in those three months, with the average sale priced at $428,000.

The company reported $1.4 billion in net earnings for the quarter, a figure that compares favorably to $666 million the company made in the same quarter last year.

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Senate to advance Biden’s pick for CFPB

Senate to advance Biden’s pick for CFPB
Eight months after President Joe Biden tapped Rohit Chopra to lead the Consumer Financial Protection Bureau (CFPB), Sen. Majority Leader Chuck Schumer said he is ready to bring the nomination to the Senate floor for a vote.

The Senate Cloakroom said the Senate would proceed to a vote late Tuesday afternoon on the motion to discharge Chopra’s nomination from the Senate Banking Committee.

“This is the right man to lead this agency after it languished under the presidency of Donald Trump,” Schumer told his colleagues Tuesday. “Chopra has a long history of defending student loan borrowers from unscrupulous for-profit colleges and already served in the CFPB under President Obama where he was defending the rights of middle-class people who might be taken advantage of by rapacious financial institutions.”

Those who opposed Chopra’s nomination, including the Senate Banking Committee’s ranking Republican member, Sen. Pat Toomey of Pennsylvania, have raised concerns that he is overzealous in his efforts to crack down on big business.

Ahead of the committee’s March vote, Toomey said Chopra would return the CFPB to the “hyperactive, sometimes law-breaking, anti-business, unaccountable agency it was under the Obama Administration.” The Senate Banking Committee’s vote on Chopra resulted in a 12-12 tie. 

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Chopra previously served as assistant director at the CFPB, where he was the agency’s top student loan watchdog. In 2011, the Secretary of the Treasury appointed him to serve as the CFPB’s student loan ombudsman, a new position established in the financial reform law. 

Chopra was one of Massachusetts Democratic Sen. Elizabeth Warren’s earliest hires as she constructed the CFPB. He has also served as special advisor at the U.S. Department of Education.

Chopra was confirmed unanimously by the Senate in 2018 for his current position at the Federal Trade Commission, where he pushed for aggressive action against companies including Facebook.

Despite enjoying unanimous approval for his nomination to the FTC, nomination to the CFPB is no easy feat. Bringing Chopra’s nomination to the floor now would also mean devoting precious Senate conference time for debate, just as Senate Democrats are marshaling votes to advance infrastructure legislation.

Nevertheless, Schumer said that over the next few weeks, Senate Democrats would move forward with several “noncontroversial” nominees. The Biden administration’s nominees for housing positions, however, have been anything but.

Last month, the Senate Banking Committee held a hearing for Julia Gordon, who Biden nominated as commissioner of the Federal Housing Administration, and CFPB Acting Director David Uejio, Biden’s pick for assistant secretary for the Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity.

The committee questioned Gordon’s tweets — which she had since deleted — in favor of defunding the police.

That day, the committee said it would reconvene in September to vote on Gordon and Uejio’s nominations. But last week, according to sources, the committee abruptly canceled its scheduled vote.
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Renter market picks up in suburbs

Renter market picks up in suburbs
American suburbs surrounding the nation’s 50 largest metropolitan areas gained a total of 4.7 million new residents since 2010, with 3.7 million of them renters, according to a report by nationwide apartment search website RENTCafé on U.S. Census Bureau data.

Today, an estimated 21 million people rent a suburban home in one of 50 largest metros. On average, renters made up 39% of the suburbs surrounding these metros.

Out of the 1,105 suburbs analyzed, a total of 242 are renter-dominated, 103 of which were owner-dominated 10 years ago. This represents a 69% increase in the number of suburban areas where renters are the majority, according to the report. 

During this same time period, only four suburbs transitioned to owner-dominated. Additionally, the number of suburban renters grew by 22% between 2010 and 2019, as compared to a 3% increase in the number of suburban homeowners during the same time period.

Of the 103 suburbs that made the switch, 39 are located around three metros: Washington D.C. (14), Miami (13) and Los Angeles (12). One of the most notable switches was that of famed Los Angeles’s suburb, Beverly Hills, which recorded a renter share of 50.7%, up from 49% in 2010.

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Washington, D.C. suburb, Merrifield, VA, was also owner-dominated 10 years ago, but as of 2019, it has the highest share of renters (64%) of the 103 suburbs. This was an 87% increase in renter population.

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Most of these new renters are millennials and Gen Z looking for more affordable housing options, as 55% of suburban renters are younger than 45 with median household earnings around $50,000.

Looking ahead, RENTCafé estimates that 57 additional suburbs will become renter-majority within the next five years. Associate professor of sociology at Millikin University Kenneth Laundra believes that the effects of the COVID-19 pandemic are partially to blame.

“With the increase in remote work, short-term projects and ‘side hustles,’ there’s every reason to believe that the future will be a more transitory, migratory existence,” Laundra said in a statement. “Most of this migration will be toward cities and urban landscapes, where even the suburbs will cluster most closely to urban areas.”

Most of the suburbs expected to flip are in California and Florida, with quite a few others in Georgia, Maryland, Missouri and Ohio. However, the Cleveland suburb of Maple Heights is the suburb with the highest likelihood of transitioning to renter-majority the soonest. The share of renters in Maple Heights nearly doubled (up 87%) in the past 10 years, reaching 47% in 2019.
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New RULONA Amendment Gives More Flexibility

New RULONA Amendment Gives More Flexibility
It’s not news to anyone in the title industry that there has been an explosion of interest in remote online notarization (RON) since the start of the COVID-19 pandemic. The past year also saw growing interest in paper alternatives to the RON experience.
Performing a RON requires using electronic documents signed with electronic signatures. That means all parties to the transaction, from the lender to the county recorder, must be willing and able to accept a “native digital” document—a document that has never existed in paper form. It’s clear that the long-term trend of our industry is toward paperless closings, even if there may always be a need for paper in some cases. RON is certainly the future. But, for many, the pandemic put a premium on doing remote closings now. Given the short-term hurdles to achieving digital alignment across the entire real estate industry, remote closings have by necessity included using traditional paper processes.
Since last year, we have seen two principal paper alternatives to RON. The first is commonly called PRON (paper remote online notarization) and the second is known as remote ink-signed notarization (RIN). Both involve the use of pen and paper instead of electronic documents. The main difference between the two is that PRON uses the same fraud-reducing consumer protections as RON, such as third-party multifactor authentication to identify the signer, while RIN lacks such consumer safeguards. Remarkably, in some states RIN does not even require the retention of an audio-video recording of the notarization. Finally, the way the paper documents are physically handled—including how they are transmitted to the notary and when the notary completes the notarial certificate—may vary between PRON and RIN. Performing a proper PRON will result in a single, notarized paper document that conforms to settled notarial law and practice, while RIN often does not.
Thus, PRON is safer and sounder than RIN both for consumers and for businesses (like the title industry) that rely on notarized documents. And by requiring third-party multifactor identity proofing, PRON also aligns with ALTA’s principles for remote notarization.
A New ‘Hip Pocket’ Amendment
The Revised Uniform Law on Notarial Acts (RULONA) was adopted by the Uniform Law Commission (ULC) in 2018 to enable both a fully digital RON as well as PRON. It is now enacted in 17 states and is under consideration in several others. To perform a PRON under RULONA, a notary must meet three requirements relating to how the paper document is handled. First, under §14A(c)(2) a notary must reasonably confirm that the document being notarized is the same document that the remotely located individual signed. Second, §15(a)(1) requires the notary to contemporaneously execute the notarial certificate with the performance of the notarization. Finally, §15(f) requires the notary to securely attach the notarial certificate to the notarized paper document.
Until this year, there were two basic ways to perform a PRON under RULONA to meet these requirements. However, both methods could be a slightly awkward fit for how some real estate settlements are conducted. In response to this concern, the ULC convened a working group in late 2020 to draft a “hip pocket” amendment to RULONA to give state legislatures a thoroughly vetted option to add new flexibility to PRON.
Three Ways to Do a PRON
If a state enacts RULONA along with the “hip pocket” amendment, its notaries will have three different ways to perform a PRON. In each case, the paper document is sent to or printed out by the remotely located individual in advance of the signing session. But from that point forward, how the paper document is handled differs between each method.

Type 1. The first type of PRON works for any kind of notarial act. The notary will get on a webcam, perform multifactor authentication, watch the individual sign the document and perform the notarial act. The key to Type 1 is that the notary complies with §15(a)(1) by completing the notarial certificate on a separate sheet of paper at the time of the signing session. The individual sends the signed document to the notary after the signing session. Once the notary has reasonably confirmed that the received document is what was signed (§14A(c)(2)), the notary will securely attach the notarial certificate to the document (§15(f)). This type of PRON may be slightly awkward for real estate closings where the notarial block is pre-printed in the document and not on a separate page.
Type 2. The second type of PRON works for acknowledgments, which is the kind of notarial act required in most states for deeds, mortgages, powers of attorney, and similar documents. With an acknowledgment, the notary notarizes a document that was previously signed—but how long in the past does not technically matter. The remotely located individual will sign the document in advance and send it to the notary prior to the signing session and performance of the notarial act. All the required steps in the notarization—including multifactor authentication, reasonably confirming what document was signed (§14A(c)(2)), and completing and attaching the notarial certificate (§15(a)(1), (f))—take place at the same time during the signing session. Two basic problems make a Type 2 PRON an uneasy fit for many real estate settlements. First, some closing documents (like affidavits) will contain jurats requiring a verification instead of an acknowledgment. State notarial law may not permit a verification to be performed on a document that was previously signed. Second, if the notary needs to conduct the settlement by walking the remotely located individual through the documents as they are being signed, then two separate webcam sessions are necessary: one for the initial signing session and a second for the notarization after the notary receives the signed documents. This makes coordinating and scheduling a single closing date difficult.
Type 3. The new “hip-pocket” amendment enables Type 3, which is a variation of Type 1. In addition to signing the document, the remotely located individual will also sign a separate unsworn declaration, under penalties of perjury, stating that the document has been remotely notarized. When the notary later receives the signed document and declaration—which must be sent within a specified timeframe (the ULC recommends three days)—the notary can rely on the declaration to comply with §14A(c)(2). That is, the declaration is legally sufficient to confirm that the document received by the notary is the same one that was notarized.

The key to Type 3 is that using a signed declaration permits the notary to override §15(a)(1): The notary may complete the notarial certificate after the signed document is received and may “back-date” the certificate to the date the declaration was signed and the notarial act was performed. In this way, a Type 3 PRON is similar to how documents are handled in some states under RIN.
Other Notable Features
The new amendment to RULONA gives new flexibility to the signing process. It’s designed merely as a safe harbor. It does not create a single mandatory way to perform a PRON. The notary can still perform a PRON under Type 1 or Type 2 and use any other reasonable method to comply with §14A(c)(2) and ensure proper custodianship of the paper document as it’s sent from the signer to the notary. (Examples we’ve seen include having the signer scan and email or fax the signed documents on the day of signing to permit comparison with the wet-ink original, or the use of custom tamper-evident overnight envelopes.)
The amendment also contains one provision unrelated to PRON. Under new subsection (h), the amendment confirms that a notary may administer an oath or affirmation remotely, even if it does not involve a signed document. Prior to the amendment, there was a question about whether a notary could remotely administer an oath at a deposition or similar proceeding because RULONA’s personal appearance requirement (§6) applies only to notarial acts involving signed documents.
What’s Next?
Work on the “hip pocket” amendment is complete. It is now officially a part of RULONA. It is currently available for use in any state that has adopted RULONA or is thinking of doing so. The ULC is currently drafting official commentary to accompany the amendment. Formal publication will likely occur later this fall.
Michael O’Neal, vice president of corporate underwriting for First American Title Insurance Co., serves on ALTA’s Digital Closing Work Group. He can be reached at moneal@firstam.com.
Source: blog.alta.org

ALTA Welcomes New Members

ALTA Welcomes New Members

ALTA is pleased to announce new and associate members, as well as real estate attorneys, who have recently joined ALTA. Over the past month, ALTA gained 36 new members, including seven attorney members and four associate members.
So far in 2021, ALTA has 6,021 member companies.
Click here for a list of the latest members.
Not a member? Click here to join today. You can check out member benefits here.
Source: blog.alta.org

Fathom Holdings quarterly revenue more than doubles

Fathom Holdings quarterly revenue more than doubles
Fathom Holdings Inc. total revenue for the second quarter rose 118 percent year-over-year, from $38.7 million to $84.2 million. Read on for more from the company’s second-quarter earnings report.
Source: thetitlereport.com

CATIC partners with Stavvy on closing platform features

CATIC partners with Stavvy on closing platform features
CATIC launched new features in PrepExpress, the company’s closing software program, including eRemit and eSubmit. The features, offered in partnership with Stavvy, allow CATIC agents to electronically pay for and submit their policies and other documents. Read on for more.
Source: thetitlereport.com

Security 1st Title launches in Nevada

Security 1st Title launches in Nevada
Security 1st Title expanded into Nevada, opening three offices in Boulder City, Las Vegas, and Pahrump. The company has more than 500 employees and 76 locations across Kansas, Missouri, and Nevada. Read on for more.
Source: thetitlereport.com