Real estate brokerage Radius unveils mortgage-lending arm

Real estate brokerage Radius unveils mortgage-lending arm
Tech-focused real estate brokerage Radius, flush with $14 million in venture capital raised this past April, has launched a mortgage lending arm in California that it plans to roll out to additional markets sometime next year.

The new venture, a mortgage brokerage operation, is focused on the California market to start, where Radius already has a strong presence. The firm, based in San Francisco, plans to refine and demonstrate “proof of concept” for the new mortgage brokerage through the first quarter of 2023, according to Sam Kasle, Radius’ chief revenue officer, before expanding to additional states. 

Kasle also confirmed that Radius has its eyes on eventually launching a mortgage banking unit, which would allow the firm to underwrite and offer its own loan products as well as keep more of the profits in-house. Mortgage brokerages, by contrast, serve as intermediaries between lenders and borrowers and work with multiple lenders, or mortgage banks, and are typically paid by the lenders after loans close.

“We work with eight or nine different lenders to make sure that we have a full product suite to provide to the end buyer [homebuyer via the new mortgage brokerage], whether they’re looking for jumbo loans or VA [Veterans Affairs] loans or bridge loans,” Kasle said. “We work with a number of different lenders, including the top ones like UWM [United Wholesale Mortgage] and loanDepot, but we also work with some boutique lenders to make sure that we have a full suite [of loan products] to meet our buyers’ [agents’ and their customers’] needs across the board.”

Radius is setting up the infrastructure and testing the viability of its new mortgage brokerage arm in California first, including the workflows, product flows, marketing and the general playbook. Kasle said “when the sun comes back out” on the now-dour economy, hopefully sometime in 2023, then Radius “will be prepped to take advantage of that.” 

Kasle added that “it’s a pretty good bet” that the next states that will be the focus of the mortgage brokerage’s future expansion are Florida, Texas and Washington, “which are very attractive markets.”

The new mortgage brokerage is set up as a separate operation from Radius’ real estate brokerage, Kasle stressed, “so with the corporate structure, there is a clear delineation.” The mortgage brokerage services also will be presented to agents — both part of Radius’ network and beyond — as just one option among others, Kasle explained. He added that Radius will remain in compliance with the Real Estate Settlement Procedures Act (RESPA), which governs mortgage settlement procedures and costs as well as referral fees and prohibits kickbacks.

“If we [Radius’ mortgage brokerage] are presented through one of our brokerage agents to the end user [the homebuyer], we are presented along with a number of other options to make sure that the end user is making a fully informed decision about all their opportunities,” Kasle added.

Radius is a full service, fee-based brokerage that enables real estate professionals to keep 100% of their commissions while providing agents and their teams with the services and resources needed to grow their business. The brokerage focuses on serving real estate professionals by offering them access to integrated technology, including a web-based dashboard and services that include mentorship; legal and compliance support; recruiting help; financial services; vetted business leads; customer-relationship management; and marketing resources. The goal is to build and amplify the affiliated agents’ own brands, Kasle explained.

Fee-based membership and access to Radius services is open to both agents and brokerage teams. In addition, Radius also operates an 85,000-member social network, with features that are like those of other social media platforms — including, in Radius’ case, offering real estate agents access to a robust referral-exchange network. 

Radius currently has some 300 fee-paying member agents, according to Kasle, including 34 teams, across the seven states where it is currently licensed to operate — California, Colorado, Georgia, Oregon, Texas, Florida and Washington.

Radius, along with announcing the new mortgage brokerage, also said it plans to expand its real estate brokerage operations to more states by year’s end — although it did not reveal which states are on the firm’s planning whiteboard. Kasle said Radius helped real estate professionals and their teams close some $400 million in sales in the first quarter of 2022. In addition, the company claims its social network has helped participating agents generate $25 billion in referral commissions over the last three years. 

Kasle said Radius brought in $2.2 million in 2021. Expansion will come in iterations, he said.

“First we want to prove that we can pull this off [the mortgage brokerage] in California and that it makes sense from an operational regulatory and financial basis, and also that were providing the right products and services to our clients and our clients’ clients [homebuyers],” Kasle said. “If all things go well, then we would start looking into how to keep more of the of the revenue and moving from being just a [mortgage] broker to being correspondent lender or even an originator.”

Kasle said any move toward establishing a mortgage banking operation, however, is likely two or three years down the road at this point. He added that by launching a mortgage banking operation and underwriting its own loans, Radius would be able to offer “even better, more innovative financing solutions and also keep more of the profits.”

Radius’ new mortgage brokerage arm will be headed by Michael Bardales, director of mortgage and a 20-year veteran of California lending. Silvia Grace Davis, a 17-year real estate veteran and top lending officer in the state, will serve as senior lending manager. 

Radius, funded in 2015, is backed by an impressive group of investors and is fresh off raising $14 million in Series A venture capital funding that will help propel the firm’s expansion plans. Among its investors are Trulia founder and former CEO Peter Flint; Roofstock founder and CEO Gary Beasley; former Zillow CEO and co-founder Spencer Rascoff; Crosscut Ventures, led by co-founder and Managing Director Bret Brewe; and Sierra Ventures, led by Managing Director Tim Guleri.

“We’re following the tried-and-true VC [venture capital] path,” Kasle said. That path – if successful – normally results in an eventual sale of a company or a public offering of stock.

“Our internal goals are looking to what is needed to raise a Round B [venture capital investment],” Kasle said. “But because of the current [economic] macro-environment, we have looked at everything top to bottom at the company with a fine-tooth comb and are now only leaning into what’s essential. 

“We have battened down the hatches to a certain extent, while continuing to grow, and are really setting our sights on a Round B [fundraising effort] next year.”

Kasle recognizes that Radius is going against the grain to an extent in planning a mortgage-brokerage expansion during a down-cycle in the housing market — marked by rising rates and declining mortgage originations, especially refinancing. He stressed, however, that “you don’t get to choose the weather,” referring to business operations and the current economic climate.

Radius does have a full tank of gas due to its venture capital backing and says it is positioning itself to take advantage of the market conditions — as opposed to being confined by them.

“We’re continuing to hire full-time staff, in both the [real estate] brokerage and the mortgage [arm],” Kasle said, adding that Radius currently employs about 80 people. “We’re pursuing more thoughtful growth, rather than all guns blazing at once.

“For Radius, the markets we’re focused on [for future product expansions] are in Washington, California, Florida, and in Texas. If there is a pullback [of the economy, a recession], that pullback is going to hit those areas less than then it could potentially hit others, which will give us a clear path to growing through a downturn.”

The real estate industry is “highly fractionalized,” Kasle added, so if a Radius were to achieve “10% penetration into 20 major metros,” it would easily become “a multi-billion company.”

“And the way we have set up our strategy, it can facilitate that level of growth,” he concluded.
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New American Funding eliminates hundreds of jobs

New American Funding eliminates hundreds of jobs
New American Funding has laid off hundreds of employees across multiple rounds of workforce reductions this year, multiple former employees told HousingWire.

The most recent layoff came on Tuesday when the California-based lender eliminated several hundred positions, including loan officers, mortgage underwriters, processors and training specialists, multiple former employees said. The firm had 4,800 employees as of July 2021, and hired more than 1,190 workers in the first seven months of last year, New American said in a release at the time.

No Worker Adjustment and Retraining Notification (WARN) notices were submitted to California’s Employment Development Department (EDD) and New American Funding did not respond to requests for comment.

Founded in 2003 by Rick Arvielo and his wife Patty Arvielo, New American Funding offers a variety of conventional, government, adjustable-rate and non-qualified mortgages. Licensed in 49 states across the nation, the lender has 159 active branches nationwide and originated $31.8 billion in mortgages in 2021.

In June of last year, New American Funding announced plans to expand its footprint across much of the country by hiring LOs and other sales staff. But, as is the case for virtually all mortgage lenders, origination volume began to drop as mortgage rates climbed.

According to data from Inside Mortgage Finance, New American Funding originated $9.1 billion in the first six months of 2022, down 42.7% from the first six months of 2021.

“In 2021 I was reviewing about 50 to 100 loans a day,” said a former disclosure specialist who was laid off in 2022. “Early this year I began to review around 30 to 50 and that continued to decline.” 

Multiple rounds of layoffs happened in the early part of 2022, former employees said. A mass layoff of around 500 employees came in February, ahead of the Fed’s first rate hike in March, according to two ex-employees who spoke to HousingWire on the condition of anonymity.

“Since the mortgage business has slowed down, we’re doing a reduction in force is what they [human resources] told me,” said an employee who was notified of her layoff on Tuesday morning. Employment termination was effective Aug. 2 and no severance payment was offered, according to a separation document reviewed by HousingWire.

With less origination volume, the lender put stricter payout standards for positions including senior processors in the beginning of the year, former employees said.  

“We were paid out on every file we did last year,” a former employee said. “Earlier this year, around March or April, they cut that back saying we couldn’t get paid out on anything unless we closed over 11 loans a month. Last year when it was busier we were able to close 20 to 30 no problem but with the economy as it is, it was a struggle to hit 10.” 

Privately held New American Funding is hardly the only mortgage lender to make sizable cuts to its workforce this year.

loanDepot, a top-10 lender, plans to eliminate 4,800 jobs, about 40% of its workforce, to return to profitability. Digital mortgage lender laid off more than 4,000 employees since December. Even Rocket Mortgage, easily the country’s largest lender, offered voluntary buyouts to 2,000 workers earlier this year.

With a plummet in mortgage origination volume, lenders including Pennymac, Mr. Cooper, Guaranteed Rate and Fairway Independent Mortgage conducted at least one round of reduction in force and First Guaranty Mortgage Corp (FGMC) filed for bankruptcy in June after laying off nearly 80% of its workforce in a virtual meeting.
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Don’t miss the Future of Title panel at HW Annual Oct. 4

Don’t miss the Future of Title panel at HW Annual Oct. 4
From tech adoption and innovation to M&A activity and partnerships, there have been a lot of shifts in the title sector, making “The Future of Title” session one of the can’t-miss panels this year at HW Annual on Oct. 4

Mortgage and real estate professionals will want to pay close attention to this panel as the speakers discuss what the next year has in store for all things title, including insights into the latest innovations and the potential of blockchain to transform the industry. 

The panel is made up of industry professionals like Pat Stone, chairman and CEO of Williston Financial Group, Heather Siegel, account manager at Qualia, Marcus Hunt, co-founder and attorney at South Oak Title and Title Success Solutions, and Rachel Luna, agency development manager at Patriot Title Co. The panel will be moderated by HW Media’s own Allison LaForgia. 

“Title is a corner of the housing industry that has an industry-wide interest, and has had a good amount of news coverage in the past year. News about M&A, consolidation and even blockchain has reached mainstream news cycles. I’m excited to explore the latest trends and what the future of title could look like with this panel of industry experts,” said Allison LaForgia, senior webinar and events manager at HW Media. 

Attendees will get an inside look at where the title business could be headed next year. The speakers will explore and analyze the all-important blockchain innovations that are revolutionizing the industry, as well as the consolidation and M&A trends that will be affecting title moving forward. This panel is a great opportunity to bring cutting-edge information back to your business and put the knowledge gained from HW Annual to practical use.

HW Annual will be held in Scottsdale, Arizona this year and feature housing leaders from all corners of the industry including real estate, mortgage and closings. Hear from today’s top leaders and experts and enjoy networking events with like-minded professionals. After this panel, stick around for “Reaching Homebuyers in a Purchase Market” panel. Join us at HW Annual for the content, connections and insights you need to win in this environment. Register here
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Expect a foreclosure spike in the coming months

Expect a foreclosure spike in the coming months
Distressed mortgages dating back to the height of the pandemic are expected to fuel a jump in foreclosure activity over the next 12 months, although the foreclosure rate is still expected to remain below the pre-pandemic historical average, a new report from contends.

The prediction by one of the nation’s leading marketplaces for distressed assets, is based on a survey of some 50 clients, including private-sector mortgage servicers and government-sponsored enterprises (GSEs). The survey, called the Seller Insights report, shows that nine in 10 mortgage servicers expect their foreclosure volume to increase over the next 12 months — with 74% anticipating a “slight increase,” and 15% projecting a “substantial increase.”

The survey queried clients about their expectations for outcomes of seriously delinquent (SDQ) mortgages — many of which have lost the protections of forbearance programs enacted early on during the COVID-19 pandemic. That loss of forbearance protection is expected to be the primary driver of future foreclosures — ahead of interest rate increases, regulatory factors, a recession or home-equity woes.

“Now that most pandemic-era foreclosure protections have expired or are winding down, it’s clear that the pro-active response to the pandemic by policymakers and mortgage servicers helped to avoid a feared foreclosure wave triggered by the crisis,” said Jason Allnutt, CEO of “While most in the default servicing industry expect to see foreclosures gradually increase over the next year, they are expecting a higher percentage of delinquent mortgages to avoid foreclosure than the historical average prior to the pandemic.”

For clients, per the survey, some 23% expect their SDQ inventory as of June 2022 “to go to foreclosure auction in the following 12 months,” reports. Some 20% of clients, however, expect more than 30% of their SDQ inventory to wind up in foreclosure over the next 12 months.

“The expected SDQ-to-foreclosure roll rate [23%] is below the historical average of 27 percent, which may be thanks to the high levels of home equity for properties securing delinquent mortgages,” states in its announcement of the Seller Insights survey results. “ clients surveyed estimated, on average, that 72 percent of their SDQ inventory had at least 10 percent equity as of June 2022.”

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The most likely foreclosure increases will be among government-insured mortgages and on properties located in the Midwest, according to survey respondents. 
The post Expect a foreclosure spike in the coming months appeared first on HousingWire.

Can lower mortgage rates stop the housing recession?

Can lower mortgage rates stop the housing recession?
To say that mortgage rates have been on a wild Mr. Toad’s ride in 2022 is an understatement. In less than a year, we went from 2.78% on the 30-year fixed to as high as 6.28%, then recently got as low as 5% — only to have another move higher this week to 5.30%. People thought the mortgage rate drama in 2013-2014 was a lot when rates went from 3.5% to 4.5%. However, as we all know, after 2020, things are just more intense. 

The question is, can lower mortgage rates save the housing market from its recent downtrend? To understand this, we need to look back into the past to realize how different this period is from what we had to deal with in the previous expansion when rates rose and then fell.

Higher rates and sales data

We can see that when rates rise, sales trends are traditionally lower. We saw this in 2013-2014 and 2018-2019. We know the impact in 2022, working from the highest bar in recent history.The most significant difference now from what we saw in the previous expansion is that mortgage rates never got above 5% in the previous expansion. However, more importantly, we didn’t have the massive home-price growth in such a short time. It does make an enormous difference now that home prices grew above 40% in just 2.5 years. 

This is why I focused my readers on the years 2020-2024, because if home prices only grew by 23% over five years, we would be ok. However, that got smashed in just two years, and prices are still rising in 2022. It’s savage man, truly savage with the mortgage rate rise. Yes, rates bursting toward more than 6% is a big deal in such a short time, but the fact that we had massive home-price growth in such a short time (and in the same timeframe) is even more critical.While I truly believe that the growth rate of pricing is now cooling down, 2022 hasn’t had the luxury of falling prices to offset higher rates. So we can’t reference this period of time with rates falling as we did the previous expansion due to the massive increase in home prices and the bigger mortgage rate move. In 2018, sales trends fell from 5.72 million to the lows of January 2019 at 4.98 million. This year we have seen sales fall from 6.5 million to 5.12 million, and they are still falling.

Housing acts better when rates are below 4%

In the past, demand improved when mortgage rates were heading toward 4% and then below. Obviously, we are nowhere close to those levels today, barely touching 5% recently to only go higher in the last 24 hours.Again, I stress that the massive home-price growth is different this time. However, with that said, considering the sales decline trends and that we have seen better-than-average wage growth, housing demand should act much better if rates head toward 4% and below. 

I stress that higher and lower mortgage rates impact the market, but it needs time to filter their way into the economy. When I talk about the duration, this means rates have to be lower for a more extended period. People don’t throw their stuff down and buy a home in a second; purchasing a home is planned for a year. Rates would need to stay lower for longer into the next calender year to make a big difference. 

Millions and millions of people buy homes every year. They have to move as well, so a traditional seller is a buyer most of the time when it’s a primary resident owner. Sometimes when rates go higher too quickly, some sellers can’t move, this takes a sale off the data line, but if rates fall quickly, they might feel much better about the process.

The downside of rates moving up so quickly is that some sellers pull the plug until rates are better. We see some of this in the active listing data as new listings are declining. Lower rates may pull some of these listings forward as people feel more comfortable with rates down; time will tell.

From From Redfin:Of course, a 1% move lower in rates matters, but keep in context where we are coming from and how much home-price growth we have had in just 2.5 years. This isn’t like the previous expansion where home prices were working from the housing bubble crash and affordability was much better back then.

When to know when lower rates are working?

The best data line to see this take place is purchase application data, which is very forward-looking as the fastest data line we have in housing. Let’s take a look at the data today.Purchase application data was positive week to week by 1% and down 16% year over year. The 4-week moving average is down negative 17.75% on a year-over-year basis.

This is one data line that has surprised me to a degree. I had anticipated this data to be much weaker earlier in the year. However, I concluded that 4%-5% mortgage rates didn’t do the damage I thought they would do. But, 5%-6% did, as I was looking for 18%-22% year-over-year declines on a four-week moving average earlier in the year. So, this makes me believe that if rates can get into a range of 4.125%-4.50% with some duration; the housing data should improve on the trend it has been at when rates are headed toward 6%. Again, we aren’t there on rates yet. 

The builders would love rates to get back to these levels so they can be sure to sell some of the homes they’re finishing up on the construction side. Now assuming rates do get this low; what would the purchase application data look like? Keep it simple, the year-over-year declines will be less and less, and then when things are improving, we should see year-over-year growth in this index. 

A few things about purchase apps: the comps for this data line will be much more challenging starting in October of this year. Last year’s purchase application data made a solid run toward the end of the year, which led existing home sales to reach 6.5 million. Next year we will have much easier comps to work with, so we need to keep that in mind. However, to keep things simple, the rate of change in the purchase applications data should improve yearly.

To wrap this up, lower mortgage rates should be looked at as a stabilizer first, but for them to change the market, we will need much lower rates for a more extended period. Also, we have to consider that rates moving from 3% to 6% is historical, and if rates fall, we have to look at housing data working from an extreme rise in rates that happened quickly. However, sales levels should fall if purchase application data shows negative year-over-year prints on a double-digit basis. 

Since home prices haven’t lost this year, you can see why I used talked about this as a savagely unhealthy housing market. The total cost of housing had risen in a fashion that isn’t comparable to what we saw in the previous expansion when rates went up and down due to the massive increase in home prices. Also, we have to know that we aren’t working from a high level of inventory data as well. Traditionally, total inventory ranges between 2 to 2.5 million. We are currently at 1.26 million.NAR total inventory data

We shall see how the economic data looks for the rest of the year and if the traditional bond and mortgage rate market works as it has since 1982, then mortgage rates will head lower over time. However, as of now, it’s not low enough to change the dynamics of the U.S. housing market.
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Mortgage demand increases after a four-week decline

Mortgage demand increases after a four-week decline
Demand for mortgage loans increased last week as a troubling economic outlook led to a decline in rates, according to the Mortgage Bankers Association (MBA).

The market composite index, a measure of mortgage loan application volume, increased 1.15% for the week ending July 29, after falling for four consecutive weeks to the lowest level in more than two decades. 

The refinance index rose 1.45% last week compared to the previous week. Meanwhile, the purchase index grew 0.97% in the same period. 

However, compared to one year ago, borrower demand is weak. The MBA data indicates that, in comparison to the same week in 2021, the market index fell 62%. The refi index was down 82.6% in the same period, and the purchase index was 15.8% than this time last year.

“Mortgage rates declined last week following another announcement of tighter monetary policy from the Federal Reserve, with the likelihood of more rate hikes to come,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “Treasury yields dropped as a result, as investors continue to expect a weaker macroeconomic environment in the coming months.”

The Fed raised the federal funds rate by another 75 basis points, to 2.25%-2.50%, on July 27, bringing more concerns about a recession in the U.S. economy. 

Consequently, purchase mortgage rates dropped to 5.30% last week, from 5.54% in the previous week, according to the PMMS survey from Freddie Mac. 

The MBA’s estimate also shows that rates are falling. The average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) decreased to 5.43%, from the previous week’s 5.74%, the largest weekly decline since 2020. Jumbo mortgage loans (greater than $647,200) went from 5.32% to 5.06% in the same period. 

“Lower mortgage rates, combined with signs of more inventory coming to the market, could lead to a rebound in purchase activity,” Kan said. 

According to the Black Knight’s monthly mortgage monitor report, June had the record-low home price appreciation and the largest single-month increase of for-sale inventory in 12 years, showing a cool down in the housing market. 

The MBA data shows the refinance share of all mortgage activity remained almost the same, from 30.7% the previous week to 30.8% of total applications this week. 

The Federal Housing Administration’s (FHA) share of total applications fell 11.9% from the previous week’s 12.1%. The Veterans Affairs’s (V.A.) share of applications increased to 10.8%, from 10.6% and the United States Department of Agriculture’s (USDA) share held steady at 0.6%. 

The share of adjustable-rate mortgages (ARM) applications declined from 9.1% to 8.4%. According to the MBA, the average interest rate for a 5/1 ARM decreased to 4.55% from 4.67% a week prior. 

The survey, conducted weekly since 1990, covers 75% of all U.S. retail, residential mortgage applications.
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Don’t miss the Vanguard Forum at HW Annual Oct. 4

Don’t miss the Vanguard Forum at HW Annual Oct. 4
Since we first started recognizing our HousingWire Vanguard award winners years ago, one key theme has been very clear — Vanguard honorees all share an unmistakable impact on the industry at-large. This immense impact on the industry is why we’re thrilled to bring some of the greatest housing leaders of all time together for our inaugural Vanguard Forum at HousingWire Annual.

The Vanguard Forum is invitation-only and will be hosted as a sub-segment of HousingWire Annual on Oct. 4. In this off-the-record forum, we’re including two rounds of CEO Playbooks, which are 15-minute, lightning round speeches from some of the greatest housing leaders of all time. These power-packed talks will dive into each leader’s perspective on cycle highs, cycle lows and everything in between. We’re also hosting two fireside chats with our Vanguards, along with a special recognition of our 2022 honorees during the cocktail hour.

“The Vanguard Forum convenes at one of the most consequential moments in the history of the modern housing market,” said Clayton Collins, CEO of HW Media. 

“As our market rapidly moves from a state of frenzy to a more normalized state, mortgage and real estate executives are tasked with developing the strategies, financial resources and partnerships that position their businesses for market share growth. This forum brings together the most impactful leaders in housing, all committed to moving the housing market forward,” said Collins. 

Vanguard honorees are c-suite leaders who have made a clear difference in their respective fields. They come from all corners of the industry, including mortgage, appraisal, real estate, finance and more. These leaders inspire the next generation of housing professionals as well as their peers to bring their best every day. All invited guests are Vanguard Award winners, along with other high-growth c-suite professionals.

During the Vanguard Forum, these same honorees will share their tips, tricks and secrets from decades in the industry. The forum features leaders like Laura O’Connor, president and COO at JPAR Franchising, Rick Haase, president at United Real Estate, Katie Sweeney, CEO at AIME, and Tammy Richards, CEO at LendArch. No one is holding back, and this is bound to be the most powerful room in housing. 

HW Annual will be held in Scottsdale, Arizona this year and feature housing leaders from all corners of the industry. Join us at HW Annual for the content, connections and insights you need to win in this environment. To register, go here, and if you have questions about this forum or how to get invited to the Vanguard Forum, reach out to
The post Don’t miss the Vanguard Forum at HW Annual Oct. 4 appeared first on HousingWire.

VA now accepting desktop and exterior-only appraisals

VA now accepting desktop and exterior-only appraisals
The Department of Veterans’ Affairs announced last week that it would allow desktop and exterior-only appraisals for some transactions.

The changes took effect July 27. In a department memo, the VA explained that the move was a response to “high demand for appraisal services and limited availability of appraisers in certain local market areas.”

But the VA said that its “willingness to accept” alternative appraisals was not a substitute for an appraisers’ assessment of the appropriate scope of work, and whether a desktop or exterior-only appraisal could result in a “credible report.”

Lenders had better be sure that an alternative appraisal is appropriate when requesting one for a property.

If an appraiser accepts an assignment, but later decides that a desktop or exterior-only appraisal is not appropriate, they can kick it back to the VA within two business days. The VA would then notify the lender, and restart the process to find an appraiser.

The VA explained that allowing desktop and exterior-only appraisals would help to reduce delays and address a longstanding shortage of VA appraisers.

Accepting desktop appraisals would allow an appraiser from “outside the market area, but with appropriate credentials for the jurisdiction of the property,” to do the appraisal, even when a local VA appraiser is not available. Exterior-only appraisals could help in cases where accessing the property could be difficult or “cause undue delay” in the appraisal process.

The department listed some additional caveats. In order to have the alternative appraisal options, lenders must be approved to participate in the VA’s Lender Appraisal Processing Program. The purchase price can’t exceed the Federal Housing Finance Agency’s conforming loan limits, which top out at $970,800 for 2022.  

This won’t apply for homes that are being renovated — the department was not immediately available to explain the logic of that choice — manufactured homes, or condominiums.

In order to have the alternate appraisal option, the veteran has to either make a down payment of at least 20%, or there must be a bottleneck with VA’s appraisal assignment system. If seven business days have elapsed since the lender requested an appraisal, and it remains unassigned, the lender can ask for a desktop appraisal.

It’s not clear how often there are delays of seven days or more between when a lender requests a VA appraisal and when it is assigned. The VA did not immediately respond to a request to comment.

The VA said it would conduct oversight of alternative appraisals through its current audit process and “address any willful or negligent practices.”

The VA’s lengthy appraisal process — or, at least, the perception that it is more difficult — is one reason sellers prefer borrowers with other kinds of financing over veterans.

The department is the latest federal mortgage player to back alternative appraisals. Freddie Mac and Fannie Mae started accepting desktop appraisals for some mortgages this year. Freddie Mac has also ventured into hybrid appraisals.

The move to accept alternative appraisals is the cabinet-level agency’s latest response to high demand for appraisals.

In rural areas, longer travel times between appraisals, coupled with exacting requirements of the VA process, deter available VA-certified appraisers. In November 2021, the agency raised appraisal fees and lengthened the allowable turnaround times in some high-demand markets.
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Rocket doubles down on solar

Rocket doubles down on solar
Rocket Loans will be offering loans to customers who are installing solar panels, the lender announced Tuesday. The news comes exactly one year after its parent Rocket Companies announced it would enter the green energy game in 2022. 

Rocket Loans will provide financing to Rocket Solar customers who choose to have a solar electricity system installed, the company said. When a customer applies to buy a solar panel through Rocket Solar, an automated and individualized solar loan will be sent from Rocket Loans in less than 30 seconds, according to the firm.

“It seems to be the right time to be in the business,” said Joel Gurman, president of Rocket Solar. “There was legislation announced the other day that would essentially extend a tax credit for renewable energy and solar investment tax credit.”

Last week, Senate Democrats unveiled a budget reconciliation bill that includes $369 billion in energy security and climate spending over the next 10 years. The bill contains tax credits to spur clean energy production, consumer incentives for energy efficiency and funding for transmission development. 

In announcing plans to enter the renewable energy market in August 2021, Rocket Mortgage rolled out a rate-and-term refinance product that allows borrowers to consolidate any solar panel with their mortgage for one interest rate. While the refinance was available to homeowners with Property Assessed Clean Energy (PACE) program loans and private loans, the loan issued by Rocket Loans is a solar loan for homeowners looking to finance the equipment itself, the company said. 

“It allows people to lock in a payment today versus a majority of what they’ll be paying in their utility bill,” Gurman said. “We know that will continue to increase because it follows the inflationary path.”

Prioritizing home equity solutions in a rising rate environment

HousingWire recently spoke with Barry Coffin, managing director of home equity title/close at ServiceLink, about the ways lenders can capitalize on current trends by revving up their home equity solutions.

Presented by: ServiceLink

Founded this year and operating in 16 states, Rocket Solar provides consulting, system design and offers solar panels to homeowners across the U.S. The company claims that Rocket Solar customers can save an average of $1,300 on their electric bill in the first year of their solar panel installment.

The move represents further diversification for Rocket Companies, which has branched out beyond mortgages into auto loans, home equity loans and personal loans over the last decade.

Inside Mortgage Finance reported that Rocket was the largest producing mortgage lender in the first half of this year. According to IMF, Rocket generated  $37.5 billion in originations in the second quarter of 2022, down 30.5% from the previous quarter. The Michigan lender is scheduled to issue second-quarter earnings on Aug. 4. The company reported a $1 billion profit in the first quarter.
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