Wells Fargo loosens jumbo lending requirements for current customers

Wells Fargo loosens jumbo lending requirements for current customers
Wells Fargo announced updates to its non-conforming refinance products at the beginning of July. While the updates loosen the jumbo requirements for current customers, the new standard for customers without a Wells Fargo relationship increased four times the amount it originally announced back in April. 

According to a spokesperson for Wells Fargo, as of July 1, any existing Wells Fargo customer can now get a non-conforming refinance with the mega bank. Or, if they have an existing loan that they need to refinance and no other deposit accounts, they can now get a non-conforming refinance with Wells Fargo. 

This means as long as they have a home mortgage, home equity line, deposit account, brokerage account, investment account or even if they have as little as $100 in their account, they can get a jumbo refinance. 

However, those who don’t have an existing relationship with the bank will need to transfer $1 million or more in assets to a qualifying deposit, brokerage or investment account in order to apply, according to Wells Fargo.

In a call with HousingWire, Wells Fargo did add that in some circumstances there may be other mortgage loan products available to customers without an existing Wells Fargo relationship depending on a variety of factors, and even if they do not transfer funds into a qualifying deposit, brokerage or investment account.

These new jumbo requirements serve as an update to news in April that Wells Fargo would only refinance jumbo mortgages for customers with at least $250,000 or more in assets under management with the bank for 30 or more days prior to the application. This was applicable to both new and existing customers. 
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Wells Fargo names Kristy Fercho as head of Home Lending

Wells Fargo names Kristy Fercho as head of Home Lending
Wells Fargo has announced Kristy Fercho will join the company as the new head of Wells Fargo Home Lending, beginning in August.

Kristy Fercho

Fercho will replace Michael DeVito, who said he plans to retire this summer after spending 23 years with the bank.

Fercho has 18 years of experience in the mortgage industry, most recently serving as the president of the mortgage division at Flagstar Bank since 2017.

“Kristy is a customer-first business leader with deep home lending experience. She has been an inspiring and vocal leader across the mortgage industry while driving transformational growth at Flagstar,” said Mike Weinbach, CEO of Consumer Lending at Wells Fargo, in a written statement. “Buying a home remains one of the most important financial decisions our customers will make in their lifetime, and Kristy is the right person to help us ensure that no one can do it better for them than Wells Fargo.”

Before Flagstar, Fercho led the strategy and business performance of single-family customers at Fannie Mae for 15 years. Fercho has also held sales, operations, and human resources roles at Baxter International before moving to Pepsico, where she was director of worldwide corporate human resources.

Currently, Fercho is the vice-chair of the board of the Mortgage Bankers Association, vice-chair of the MBA’s Diversity and Inclusion Advisory Committee, a co-chair of the Affordable Housing Council, and a member of its Residential Board of Governors, as well as on the board of City Year and the Detroit Zoological Society.

DeVito has been in the financial services industry for over 30 years, having served as the head of Wells Fargo Home Lending in January 2018 . Prior to that, he was the head of mortgage production and running mortgage servicing operations.
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California, Oregon and South Carolina continue to require in-person notarizations

California, Oregon and South Carolina continue to require in-person notarizations
In an effort to combat the economic toll of COVID-19, a wave of varying permanent and temporary legislation for remote online notarizations continues to sweep across the country.

While the SECURE Notarization Act currently sits in the introductory phase at the senate, states have taken it upon themselves to enact their own regulations and legislation of RON.

According to a recent report by Qualia, nearly half of the United States has not enacted RON legislation despite a survey by the company that remote notarizations surged 40% from April to May. Three states in particular, California, Oregon and South Carolina maintain a requirement for in-person notarizations and have yet to adopt RON regulations of any form.

While several states including Minnesota, Nevada and Ohio enacted RON legislation prior to the pandemic, states like Louisiana quickly pushed new RON orders in a reactionary method to COVID-19. In March, Louisiana’s governor amended his emergency executive order to allow the use of RON – by June he called for implementation of it no later than August 1, 2020.

For four years, the Land Title Association of Colorado pushed for RON legislation in Colorado, however, it would take less than four months from March, 2020 to June for the state to pass a bill allowing the use of temporary RON. In June, Colorado Governor Jared Polis declared the bill will effectively turn into law December 31, 2020.

Alaska also expedited RON legislation after an April bill backed the validity of electronic documents and signatures for notarizations, however, it will not be effective until January 2021.

Other states like Indiana, Iowa and Maryland were in the process of enacting RON when COVID-19 hit, advancing the process along in a bid to protect employees and homebuyers. One state in particular, Washington, passed RON legislation in April last year and was slated to go into effect Oct. 1, 2020. With stay-at-home orders being implemented across the country the governor issued a proclamation for immediate use of RON.

Whereas many states already adopted RON, others are making use of its close cousin remote ink-signed notarizations (RIN). In a RIN transaction, notarizations take place via a video platform and do not include e-Sign technology. Instead homebuyers receive closing packages via mail or email, and wet-ink sign the physical documents while a notary witnesses the events.

States like Connecticut, Hawaii, Maine, New Mexico and North Carolina opted for RIN transactions instead amid their emergency orders with several under certain restrictions.
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[PULSE] Irrefutable principles of high-performance mortgage and real estate practices

[PULSE] Irrefutable principles of high-performance mortgage and real estate practices
Note: This is part one of a five-part series. Over the next five weeks, Todd Duncan, sales entrepreneur and New York Times best-selling author, will showcase five principles for mortgage and real estate professionals to embrace for success.

What if success, massive success, all came down to one simple concept? What if I told you there is only one word you need to understand, and apply, to have all the success you’ve ever dreamed of?

Would you want to know the word? Sure, you would. Who wouldn’t? 

I’m guessing the reason you chose this business was because you saw an opportunity, felt excited and energized, and knew you could “make it,” and “make it big.” 

You might have had some ups and downs along the way. It’s a dynamic industry with ever changing markets, prices, demands, rules, ethics, compliance and challenges. And, that is a given. But high-performers know that, and they have arrived at a mindset that follows this thinking – it’s never the market that determines my success, it is how I am in that market!

Todd DuncanGuest Author

When I was 23, newly minted with a college degree, my childhood baseball coach – who happened also to own the largest independent real estate company on the West Coast along with a mortgage company – talked me into my first career at a July 4th BBQ. No visions as a kid for this career path! Fireman, policeman, doctor, yes. But I never dreamed about selling, listing or financing property for people. I got my brokers license and started down the path.

My first mentor sat down with me shortly thereafter and he asked me, “If I could tell one word that you need to embrace that will guarantee your success, would you want to know what that word was?” I said, “Yes,” just like you did. And that one word changed everything. Principles! 

That’s it: Principles! 

He went on, “That is the only word you ever need to know to succeed.” I grabbed it and never looked back.

Early on this became the guiding force in my life and it was the difference maker that allowed me to be involved in nearly 6,000 transactions in 10 years. I ate this word up and, in that pursuit, I stumbled across the work of Harrington Emerson. He is the author of The Twelve Principles of Efficiency which he wrote in 1913.

According to him, this is how you change your game…

“As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.” — Harrington Emerson

Over the next five weeks, I will showcase the five principles I have embraced, taught and coached thousands of mortgage and real estate professionals to embrace in order to crush it in business and life.

Principle No. 1: Everything Can Be Improved

As first glance, I can say you might be taking too long to get your results. And, if you are not measuring the things that matter most, you can’t begin to improve those things. I learned that this principle will produce three specific business results; more money, in less time, with less stress. There is no “silver bullet” to success, but one truth is you can only improve what you measure.

A real estate agent named Jim told me recently that when he finally understood this principle his business went from $8 million in sales to $40 million in sales in three years. A mortgage professional we coach went from 118 transactions to 184 transactions a year in less than 12-months and she shortened her workweek to 28-hours. 

There are two key points to this principle:

1.  If you want to make more money, you need to spend more time on what makes you money, the most money, per minute. 

According to Indeed.com, the average real estate agent in America is making $18.49 an hour and the average loan originator in America is making $37.52 an hour. 

So, the truth is, the hours you work are nowhere as important as the work you do during those hours. What makes you the most money is meeting with, connecting with, and converting prospects to customers to clients, and then keep them for life. The better you get at that, the easier, faster and more permanent those results are. That’s it. We measure hourly rate every two weeks with our coaching clients. It is not uncommon for them to go from $50 dollars an hour to over $500 an hour in under six months. They measure everything; how many hours with clients, showings and presentations. They look at how many hours they spend on interruptions, email and low-income tasks.

 It starts with the “x-ray” of where time is going and then, over time, how to reverse those trends by applying focus, skill mastery and delegation of the lowest income time robbers. 

There is a crazy mindset to this, bordering on obsession with all top performers, and it sounds like this, “Why take 40 years to do what I could do in 10 years? Why take a week to do what I could do in a day? Why take a day to do what I could do in an hour? Why take an hour with a client when I could do a better job and cut that in half and see twice as many people. Why talk to 10 prospects to get one deal when I could do a better job with one prospect and get 10 referrals/deals? Why show 10 properties, when I could show two to three? Why take three hours to do one open house when I can do three open houses, an hour each, and triple exposure and create a buying frenzy?” Are you getting this principle?

2. There is no limit to how much money you can make per hour, which is the most important metric you measure. (While producing extraordinary customer experiences.)

If everything can be improved – and it can – what is preventing you from earning in an hour what you usually make in a day? The answer is your head – and the belief that you can. Thomas Dreier said, “The life each of us lives is the life within the limits of our own thinking. To have life more abundant, we must think in limitless terms of abundance.”

Mindset is everything! Everyone has an income gap. The gap is large if the mind is small and if the skills are poor. Not so much, when belief is high. And once you move to increasing revenue “per minute”, you never want to go back. If you’re making a dollar an hour, and you embrace the first teaching point, once you are at ten dollars an hour, going back to a dollar an hour is not going to happen…unless you stop measuring and improving.

We teach that the better you get at business, the better business gets for you. What’s required? Spend the most time on the fewest things that produce the greatest revenue for your time. 

When I was 13, I went with my dad to one of his hospitals. He was a radiologist and when he showed me the x-ray room where a technician was taking x-rays, I asked him, “Dad, why don’t you take the x-rays?” He said, “Because I get paid to read them.” That impacted me and I never forgot that.

So, the prescriptive idea here is do what you get paid to do. Do as much of it as you can, efficiently and profitably. Don’t do things that fall outside of your core talent areas, or things that others can do better and less expensively than it will cost you to do it. And be vigilant and courageous because when you don’t follow this principle, you will work too hard, too long and when you are trading time for money, and you can’t get more time, the only thing that makes reasonable sense is make more money for the time you put in. 

One of our clients sent me this recently, “I have bought 101 rental properties in the last five years, live off 25% of my income, and have no debts other than my mortgages, plus I take 20 weeks of vacation per year, thanks to you.”

That’s what happens when you embrace Principle No.1: Everything can be improved.
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New York City apartment vacancy rates reach record highs

New York City apartment vacancy rates reach record highs
Apartment vacancies have reached record-high levels as more people want to migrate to rural areas and larger living spaces.

According to a new report from Douglas Elliman, Manhattan, New York, has now reached its highest vacancy rate in nearly 14 years of being tracked – 3.67%.

“The state mandate that prevented real estate brokers to physically show property was removed before the last week of the month, not enough time to have a material influence on market conditions for the month,” the report stated.

Manhattan has also seen the lowest number of June new lease signings in 10 years, dropping by 35.6%, making listing inventory soar to a record 84.7%.

In Brooklyn, listing inventory has also surged by 57.3% as new leases declined for the ninth month in a row to 9.1%, the report said.

“While the decline in new leasing activity remained well below last year, the removal of ‘shelter-in-place’ restrictions in the final week of June that prevented in-person showings, is expected to expand activity,” the report said.

In Queens, New York, new leases declined annually for the eleventh month in a row, sinking by 34.7%, as listing inventory skyrocketed by 40.9%. Here, median rent declined year over year across all bedroom categories, the report said.

To fill these empty apartments, landlords are lowering the cost of rent, with the median cost of rent including concessions falling 6.6% in Manhattan and 5.7% in Queens. Rent actually rose 1% in Brooklyn.

“With the lifting of the lockdown that prevented real estate brokers from doing in-person showings in the last week of the month, there will be greater transparency in the market,” the report continued.
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From Caribbean Roots and a Random Convo With Warren Buffet to a Career in the Title Industry

From Caribbean Roots and a Random Convo With Warren Buffet to a Career in the Title Industry
Member Profile: Deborah S. BaileyAttorney – Managing Member | Bailey Helms Legal LLC
How long have you been in the title industry and how did you get started in this profession?

I entered the title industry in the fall of 1998 as part of a project to assist the Clerk of Superior Court of Fulton County—the most populous county in Georgia—clear a recording backlog that had grown so large, it was adversely affecting the economy. I had unique skills they needed, and the position was meant to be a temporary career detour, but I became fascinated by the title industry. After the backlog was cleared and I helped with the implementation of a new recording system, I accepted what I thought was another temporary position to learn title examination from some of the best examiners in the business at that time. The leadership team of the firm reassigned me to work on several projects in the firm’s transactional real estate practice and before long the years passed, and I faced the reality that this is my profession and my calling. 

What’s a day on the job like for you? 

I usually start when I arrive at the office or on most days before, depending on the needs of my clients.  During the day I am either in closings, drafting documents, reviewing titles and communicating with title underwriters about title to properties in our pipeline or I am performing tasks related to the business side of the practice. I also spend a significant amount of time on the phone or responding to emails or I am assisting answering with questions related to deal structures. 

What excites you about what you do or what is the most challenging aspect of your job? 

The most exciting and at the same time most challenging part of my job is the human interaction. It is such a joy to interact with people from every walk of life every day. There is also the reality that things are unpredictable, so no two transactions unfold alike, and it can be challenging to manage the range of emotions associated with the interactions. 

What’s your best industry “war” story?

I have volumes of “war” stories, most of which cannot be disclosed for a variety of reasons. One of my best industry stories is a happy one that came out of an encounter I had while shopping in my local community a few years ago. A couple was having a hard time getting their young boy to walk along. The boy refused to move, he refused to let them pick him up and he kept pointing in my direction. I thought he was pointing to someone else but there was no one else there so I became curious and decided to walk toward the family. With each step toward them, the child grew more excited and started jumping for joy, which made me conclude that he knew me. When I reached him, I knelt and told him hello. He could not contain his happiness and giggled loudly as I gave him a hug. His parents were perplexed by his behavior because they didn’t recognize me. After a few minutes, I realized that I was their closing attorney at their closing when they purchased their home. I always take time out for the children who attend my closing. This little boy remembered me even though he hadn’t yet learned to speak. His parents, who speak English as a second language, had a good laugh when they made the connection that I was their closing attorney. We chatted, then said goodbye as their son willingly walked away with them. The encounter reminded me of the significance of the Dr. Maya Angelou’s quote: “People may not remember exactly what you did, or what you say, but they will always remember how you made them feel.” 

Why is the title industry a great career opportunity for those entering the workforce? 

You are a part of one of the oldest professions that exists in every community. The various jobs in the title industry may require a unique set of skills, but most of which can be learned or taught on the job. There is room for advancement in the industry with or without a college degree.

What advice do you have for professionals starting their career in the industry? 

The same advice I received when I came in the industry. Focus on the human side of the practice and protect the consumer’s interest and you will be rewarded in the end. There is a business side to what we do, but resist the urge to reduce your practice to just running a business because it is a short-sighted path. There are no shortcuts to success in this industry, so stay on the good path and practice transparently because truth always comes out in the end. Whatever you do in darkness will be revealed in the light. I would also add, trust but verify, and above all, question those things you believe to be true because what will hurt you in this profession isn’t what you don’t know but what you know that simply isn’t true. 

How has the industry evolved since you began your career? 

The industry is moving away from a paper-based and manual-intensive industry to one that is rapidly embracing new processes, procedures and technology. We are increasingly welcoming the reality that our survival as an industry requires us to evolve to meet the ever-changing needs of our customers and clients. 

How has your company had to change in order to remain competitive?

We are always improving our listening skills and looking for new ways to adjust based on market trends and feedback we receive from our customers. 

What have you learned about yourself or your company since the start of the COVID-19 pandemic? 

We are adaptable and we are willing to break away from the herd and take a different path if we believe that it is in the best interest of the consumer and our firm.  We are also willing to reflect on past experiences and draw from those experiences which helps us manage fear in a time of crisis. 

Why are you a member of ALTA? 

It is hard to justify not being part of an organization that has among its active members some of the best minds in the industry. I enjoy growing and learning from others with a lot more experience. By being a member, I can give back to an organization that has given me so many valuable tools to survive and compete in my market. I am also proud to be associated with an organization that is singularly focused on issues related to land conveyancing on a national, state and local level, and truly committed to protecting and defending property rights. 

Which ALTA committees do you participate in? Why do you participate? 

Abstractors and Title Insurance Agents Section Executive Committee; Education Committee; Real Property Records Committee; and the State Legislative/Regulatory Action Committee.  I believe in good citizenship and service is my way of giving back to the industry. I also enjoy the relationships that I can build with others in the title industry throughout the country as I participate in these committees. 

Tell us something that others in the industry may not know about you. 

When I was in my last year of my undergraduate studies, I was assigned to be the chaperone for a gentleman who was giving a lecture on value investment at the State University of New York at Buffalo for a stock investment group I co-founded. At the end of the evening, the man complemented me on how I treated him and asked if I would sit and talk with him for a few minutes and talk about plans for the future. I told him I wanted to pursue a career on Wall Street. He thought it was a good idea, but encouraged me to learn a lot and not stay too long in that career and take my skills instead to “Main Street” where he believed my career would have a bigger impact on society. I listened to his advice. I left a bright future in banking on Wall Street and went to law school and then went on the path that lead me to the title industry.   

If you could have dinner with anyone, who would it be and why? 

Warren Buffett. For years, the conversation I had with a kind man I chaperoned one night in Buffalo, N.Y., remained in my mind, but I failed to connect the dots and recognize whom I was speaking with. Turns out it was Warren Buffet. He knew that I had no idea who he was, and that allowed for an honest unfiltered conversation. I would like to have dinner with Warren Buffet to thank him for the advice and share some of my experiences and more importantly to discuss the power of words.    

What’s your favorite book/movie/TV series? Why? 

The Bible because every time I read this book, I learn something new that causes my mind to change in a positive way. My favorite movie is The Color Purple because of the complexity of the story telling and the theme of redemption. My favorite TV series is Swamp People. I find the show entertaining and the fundamentals of the alligator hunting business are the same as the title business. 

What’s in your music playlist?

A heavy rotation of calypso, the music of my Caribbean roots. My life anthem, Koffe – Toast, it is all about blessings, giving thanks and expressing gratitude. Sir David Rodigan selections of classic and new music reggae and dancehall music to expand my mind. Anything Abba and Queen to remind me of my youth. Chronixx – Here Comes Trouble, Elvis Presley – Suspicious Mind, and King Short Shirt – True Patriot to recalibrate my mind in a season of uprising. Danza Kuduro & Lucenzo – Don Omar, and Elvis Crespo – Suavemente, when I want to dance and remember my last cruise vacation. Finally, La India and Marc Anthony – Vivir Lo Nuestro (Letra), this song is a beautiful expression of love, the universal language.

ALTA Member Profiles
Know someone who ALTA should consider for a member profile? Send your suggestions to communications@alta.org.
Source: blog.alta.org

Gentrification comes from lack of housing supply, Urban Institute says

Gentrification comes from lack of housing supply, Urban Institute says
A recent study from the Urban Institute reveals that higher housing costs as a result of the shortage of housing inventory is leading affluent buyers to seek out low- or moderate-income neighborhoods.

This creates gentrified neighborhoods.

Due to historical housing inventory shortages, gentrification is happening quicker.

According to the 2018 Home Mortgage Disclosure Act and 2018 American Community Survey data, nationally, 14% of low-income buyers are taking out new mortgages to buy homes in low- or moderate-income neighborhoods. This is happening at much lower rates than low-income homeownership rates in these neighborhoods, which is 31%. While the Urban Institute report was written shortly before the latest HMDA data came out, the 2019 ACS data will not be available until this fall.

Steps made to decrease gentrification disparity include boosting housing supply by easing local land use as well as easing building and zoning restrictions to make homes affordable, the Urban Institute said.

This would also lift barriers as to who can buy a home, and thus slowing down the pace of gentrification.

The report also pointed out that there are considerably fewer borrowers with low incomes who have mortgages, which is largely due to the lack of supply of houses for sale and mortgages at the lower end of the housing price spectrum.

Of households with moderate incomes, earning 50% to 80% of area median incomes, the share of new mortgages is 31%, compared to the 21% of the share of current homeowners.

For middle-income households, earning 80% to 120% of area median incomes, the share of mortgages is 27%, while rates of those already owning homes in the neighborhood are 21%.

Across the U.S., high-income households represent 45% of homeowners, 48% of all borrowers and 28% of borrowers in low- to moderate-income areas in 2018.
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Forbearance rate declines after June’s economic improvements, but will it hold?

Forbearance rate declines after June’s economic improvements, but will it hold?
The U.S. mortgage forbearance rate fell to 8.39% in the last week of June, down from 8.47% a week earlier, as businesses reopened and the jobs market improved, according to a report on Tuesday from the Mortgage Bankers Association. But will it hold?

The drop in forbearances came as the nation’s unemployment rate fell to 11.1% in June from May’s 13.3%, based on job data collected mid-month when the nation was reopening businesses.

“We learned last week that the job market improved more than expected in June,” said Mike Fratantoni, MBA’s chief economist. “With that as background, it is not surprising that the forbearance numbers continue to improve as more people go back to their jobs.”

The share of Fannie Mae and Freddie Mac mortgages in forbearance dropped for the fourth week in a row to 6.17%, a 9-basis-point improvement, the MBA report said.

Ginnie Mae loans in forbearance decreased 11 basis points to 11.72%. The forbearance share for portfolio loans and private-label securities, including jumbo mortgages, increased by 1 basis point to 10.08%.

Since that mid-June labor-market measurement showing people going back to work, COVID-19 infections have set new daily records and surpassed 3 million in the U.S., in total.

In the past two weeks, states representing about 60% of the U.S. population have responded to the acceleration of the pandemic by pausing or reversing reopening plans, according to a report from Goldman Sachs.

The resurgence in the pandemic has “already been much worse than we anticipated, and further restrictions will likely be required in some states to bring the virus under control,” the economists led by Goldman Sachs Chief Economist Jan Hatzius said in the report issued on Saturday.

Another worry is: The beefed-up unemployment provision in the CARES Act, which adds $600 a week to state payouts in an effort to fully replace salaries, is set to expire on July 31.

“If you’re a middle-income household with a job loss, that $600 a week could mean the ability to pay your mortgage and if it goes away it could put pressure on the housing market in terms of either mortgages or rents,” said Joel Naroff, president of Naroff Economics.

In May, the House of Representatives passed the Heroes Act, which extends the enhanced jobless benefits through January and provides almost $1 trillion in relief to state and local governments overwhelmed with the costs of battling COVID-19. Last week, the Senate adjourned for two weeks without addressing the issue.
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5 things mortgage pros must know about Quicken Loans’ Rocket Companies IPO

5 things mortgage pros must know about Quicken Loans’ Rocket Companies IPO
This week a Quicken Loans SEC filing confirmed the company will IPO with Rocket branding, as I predicted in HousingWire last month. Below, I explain why this is important, what it means for consumers and key things all mortgage pros must know about this milestone event in our industry.

1. Rocket Brand Power Is Real For Consumers 

The Quicken Loans/Rocket Mortgage machine had 20.2 million interactions with prospective clients in 2019, which is 80% more than it had in 2014. You’ll recall Rocket Mortgage was launched as the company’s digital mortgage brand in October 2015, and that’s when it began an aggressive brand push. From 2015 to 2016 alone, that brand push increased prospective client interactions from 11.7 million to 16 million. 

Interacting with this many leads led to becoming America’s top retail mortgage lender two years ago – and the company held that slot – funding $145 billion in originations in 2019 and $51.7 billion Q1 2020. 

Julian HebronColumnist

The company has spent $5 billion since founding on marketing, including $900 million in 2019 alone, with a huge emphasis on Rocket. Now the “Rocket” brand is official with a ‘Rocket Companies’ branded IPO. 

Consumer adoption is plain in the lead and volume stats above as well as in branded property stats. They created RocketMortgage.com from nothing in 2016, and the site had 73.8 million visits in 2019. Rocket advertising ubiquity has not only made Rocket Mortgage synonymous with push-button digital mortgages, it fills the funnel – which isn’t just a funnel, it’s end-to-end digital lending infrastructure.   

2. Rocket Brand Might Also Fuel Fintech Valuation 

Now, the Rocket brand will go deeper into four additional areas: Rocket Homes for home sale and search, Rocket Auto for car buying, Rocket Loans for personal loans, Rock Connections for client service and engagement. 

From a revenue standpoint, Homes, Auto and Loans are small contributors, but these businesses have potential and Rocket Connections is the marketing glue that holds it all together and could give this IPO a fintech valuation.

The SEC filing placeholder said the company aims to raise $100 million, but it’ll likely be several multiples of that. I’ll expand on this and stats on other Rocket businesses after the IPO prices.

3. Quicken/Rocket Can Refi Billions Imminently. Can You?

Quicken/Rocket funded $51.7 billion in loans in Q1 2020 with an average loan amount of $277,000, average loan-to-value ratio of 73%, average credit score of 747, and a weighted average rate of 3.57%.  

These stats are staggering given that rates on such high quality profiles are almost a half a percent lower now. It tells us two things: 

The rest of 2020 for Quicken/Rocket and the industry is going to be one for the ages as we keep racing to get homeowners in line with record low rates. Just watch those EPOs! The value of loan servicing won’t be as high as some think until this plays out. Originators are partly right to think today’s fundings have rich servicing values, but buyers of mortgage servicing rights won’t pay premiums until some of this margin comes out of the system. 

4. Mortgage Company Founders Can Retain Control After Dealmaking

Dan Gilbert is a founder’s founder. In addition to the Quicken/Rocket brand family, he’s also got 110+ other companies in the Rock Holdings mothership, including sports and consumer mainstays like the Cleveland Cavaliers, Dictionary.com, and StockX. 

The Quicken/Rocket SEC filing shows synergistic relationships between Rocket Companies and Rock Holdings companies will continue as usual. 

Also, the IPO will use a share class structure that preserves 79% control of the company for Gilbert, which means he can control shareholder actions and who’s on the board. 

The IPO set off mortgage M&A talk this summer, and too often mortgage deals are viewed as capitulation by active and engaged founder-operators. 

Meanwhile, everywhere else in fintech, any and all deals are celebrated as victories. 

As mortgage dealmakers, we should take our cues from the fintech community and view dealmaking as a positive. Especially if, as Gilbert is demonstrating, you can maintain control if you want to. 

I hope this encourages more founders to explore smart deals. 

5. Well Paid Execs Play The Long Game 

Quicken Loans CEO Jay Farner made a $650,000 base salary and a $11,075,567 bonus last year. Decent for a 47-year-old financial exec, until you consider he helped build and now runs America’s top mortgage lender. 

The real money is in building enterprise value, and participating in that value via equity in the company. 

He’s been with the company for 24 years, and 24 years is the average tenure for the core executive team. Farner and team deserve their forthcoming equity compensation for playing the long game.
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Housing Tech Rundown: Notarize, Optimal Blue and TowerHouse

Housing Tech Rundown: Notarize, Optimal Blue and TowerHouse
Notarize on Wednesday announced its partnership with Title365, a division of Xome, that will allow the companies to offer hybrid and fully digital residential real estate closings. As part of the collaboration, Title365 will collect, organize and retain mortgage documents via the Notarize platform.

Title365 customers will now have the option to close online through a secure video meeting – a fully digital option that Notarize predicts will shave weeks off the mortgage fulfillment process.

“As the industry evolves and demand for more efficient and secure solutions remains a high priority, our partnership with Notarize is a natural fit to help us deliver a seamless experience for our customers,” said Mike Rawls, CEO of Xome.

On Tuesday, Notarize announced it had closed on a $35 million series C round of funding in March. Since then, Notarize founder and CEO Pat Kindel said the startup has seen business surge by more than 400%.

Kindel said this latest partnership is ideal as Title365 shares Notarizes’ “commitment to using secure technology solutions to provide a world-class experience for everyone involved in the closing.”

Meanwhile, also on Wednesday, Optimal Blue released its integration with Nasdaq’s Contributor API enabling the Optimal Blue Mortgage Market Indices on Nasdaq’s Global Index Data Service platform.

Known as “OBMMI,” the platform is a compilation of 16 mortgage rate indices developed around mortgage loan products and credit-related attributes that impact mortgage pricing.

“Individuals who closely monitor the U.S. economy understand the strong correlation between the performance of the housing industry and the overall economy,” Optimal Blue said in a release. “Our timely indices offer substantial visibility into some of the critical drivers of mortgage pricing and trends over time for all GIDS data recipients, at no additional cost.”

Oliver Albers, SVP and head of data for Nasdaq’s global information services, said that while Nasdaq is already dedicated to bringing transparency to the financial ecosystem, the expansion of mortgage rate indices will provide additional clarity to an important asset class under one roof.

Finally, TowerHouse on Wednesday announced the launch of its flagship home management platform HomeEgg.com. The free platform allows U.S. homeowners the ability to track their home equity, home value trends, mortgage payoff and refi options, ROI on home improvements and other key financial information.

Daniel O’Toole, CEO and founder of TowerHouse, said HomeEgg will give homeowners unbiased financial insights across the homeownership cycle and the ability to tap into America’s $6.5 trillion in unmanaged home equity.

“Technology is stimulating new ways for homeowners to engage the marketplace which creates a unique opportunity for real estate services companies to calibrate more innovative customer retention and expansion strategies,” said Drew Meyers, founder and CEO of Geek Estate, a U.S. real estate think-tank. “HomeEgg.com is making strides toward capitalizing on this emerging proptech agenda.”
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