31Oct

How To Drive Even More Value into Agent-Originator Relationships

October 31, 2022 California MBA

For two tumultuous years, the housing market has twisted and turned through rate environments, sellers’ markets, and equity booms. Now, as it nears the end of 2022, headwinds face both the housing and mortgage sectors. Originators must work to find every loan available. Many have wisely turned to mortgage fundamentals like strong relationships with referral partners such as real estate agents.

Loan originators have been beholden to agents for referrals for a long time. And, aside from a free lunch and a rate sheet – as well as the promise to provide great service to an agent’s customers – originators have had less power in that relationship as a matter of practicality. Realtors usually find out first that a customer is in the market for a home. 

Now, though, advances in technology have begun to turn the tide. Originators can now help realtors by referring business to them, a shift that encourages realtors to work even more closely with originators. Loan officers’ technology has become a realtor’s opportunity to build customers for life.   

Origination Volume Dependency 

Why have lenders been so dependent on realtors for referrals and origination volume? Part of it is lenders’ abysmal retention rates. They need brand new customers each year because they are transactional and earn no repeat business from about 80% of past borrowers. 

Upon reading that, lenders might blame borrowers’ lack of loyalty on rate shopping, especially for refinances. But, before you decide that there is nothing a lender can do to improve retention, consider that loyalty also is low for purchase mortgages. Industry data from 2019, before the refinance boom, shows retention rates were dropping to below 20%, a low point not reached since before the 2008 mortgage bust. 

It is also not customer dissatisfaction with lenders’ service. Across the board, between 60% and 70% of borrowers polled say their lender provided “satisfactory” or “very satisfactory” service throughout the mortgage process. So, what keeps borrowers from returning to do more business with a lender? Consumers said their lender “never asked me to do more business with them.” And, when a lender did, the messaging was “irrelevant to their needs,” according to a recent study by Cornerstone Advisors.

The mortgage industry has not been idle about improving its ability to engage past borrowers in ways relevant to their situation. In fact, because of new technology developed for that purpose, some lenders have become so good at relevant engagement that they are not only addressing low retention, but they are also becoming a source of referrals back to realtors.  

Becoming a Referral Source  

Realtors have enjoyed an upper hand historically because who thinks of a lender first when they want to sell a home or search for a new one? Most people begin shopping for homes online and connect with a realtor that way, or they request a search from their realtor. The realtor then refers to lenders they prefer.

Fortunately for lenders, realtor home searches require price ranges. And buyers usually determine price range based on a mortgage payment, information best provided by a lender. What is more, borrowers also often apply for credit to learn their mortgage rate and payment, even before they list their old home. Since applying for credit is a trackable action – especially for lenders with established credit relationships with borrowers – loan officers can identify customers in the market, and they may even engage them before a realtor partner.

Lenders also now can catch new home listings from their borrowers on the multiple listing service (MLS) – another technological advancement that affects how loan originators relate with realtors. Before, with a referral from an agent, lenders may never learn their customers were in the market. Knowing that a customer listed their home offers a loan officer a chance to reach out, putting the lender back in the running to provide financing.  

Knowledge of customer activity is the real game changer. Before, realtors controlled the leads and even information about those leads. Data now allows lenders both to know and to engage, and it can make them into referral sources and increase their connection with past customers.  

 Doing the Math

Hundreds of mortgage originations await because technology allows originators to refer to realtors. 

For every 100,000 contacts monitored in a mortgage or banking database, lenders are discovering around 2,500 additional mortgages per year, according to a calculator published by Total Expert. At an average $250,000 loan amount, 2,500 additional mortgages translate to about $625 million in loan volume. 

Return business also costs much less. Mortgage leads can cost between $800 and $1,200 per loan. Consider how much it would cost to replace 2,500 loans not retained from a lender’s database. Lenders have a clear incentive to solve their retention challenges. It offers both cost savings and revenue growth. 

What if a portion of those 2,500 loan opportunities also became referrals to partner agents? Loan originators would become much more than co-marketing partners or great service providers to borrowers. They become indispensable to realtors who know that growing their franchise depends on developing customers for life. 

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28Sep

You Can Have Success With Non-QM In Five Easy Steps

September 28, 2022 California MBA

Learning and utilizing non-QM is not difficult, especially when you partner with the leader in non-QM, Angel Oak Mortgage Solutions. Angel Oak goes out of their way to make closing loans with non-QM as easy as possible. In fact, they created a PDF for originators listing 5 easy steps to follow for success with non-QM.

Angel Oak Mortgage Solutions is an exclusive non-QM lender and has built a very successful company around non-QM. This is because the demand for the products is so strong in the market. They have helped a significant number of originators grow their business over the years. In today’s volatile market, they are helping many originators protect their volume and referrals. When the Agency market is down and refinance business slow, non-QM is where to look for additional business. Non-QM helps you close loans that you otherwise would not have closed. A great example is closing a loan for a self-employed borrower who can’t qualify using their tax returns due to tax deductions. That borrower can get a loan submitting bank statements instead of tax returns. Angel Oak has a Bank Statement and 1099 Income program that are their most utilized loan products. Many originators prospect just for self-employed borrowers due to the success they have had closing Bank Statement loans.

Originators that utilize non-QM have something else of value to bring to their referral partners. There is always a scenario to share when you close a non-QM loan – because you did something for a borrower that was not going to happen without your help and a non-QM loan. It is a great example to share with your clients on how you are an expert on challenging loan scenarios.

You can download a PDF that details five steps to follow for success using non-QM.

The steps include:

Staying top of mind in social media
The importance of consistent networking
Finding your niche within non-QM programs
Choosing the right non-QM lender
Establishing a personal brand

Get them now!

Download Full Report

18Sep

Top 10 Servicing QC Findings for 2021

September 18, 2022 MetaSource

Document challenges continued to be a leading cause of QC trouble for mortgage servicers in 2021, a year in which record high mortgage levels exacerbated the effects of process shortcomings.

It was a problem that left servicers unable to substantiate a wide array of process requirements, from documenting timely follow-ups to customer inquiries to missing disclosures on service transfer letters. In fact, documentation lapses made up 9 of the top 10 findings identified in MetaSource’s annual analysis of servicing QC findings.

This findings report discusses what the top 10 findings were, why documentation remains a main source of difficulty, and how to overcome document challenges and ensure compliance.

Document Management: A “Daunting Task” for Mortgage Servicers
Our 2021 analysis shows that missing documents left servicers unable to provide proof that they met requirements. In many cases, servicers’ underlying processes were fully compliant, but the supporting records were insufficient or inaccessible at the time of the audit.

Why was this the case? MetaSource’s QC Manager John Morales said it best. “Establishing and maintaining adequate document management processes can be a daunting task,” he said.

In some cases, Morales said, the documents required to substantiate compliance were notated in the servicer’s records, but the original document image, which can be difficult to retrieve, was not available at the loan level.

According to Morales, many servicers relied on notations and codes as proof that requirements were met. Unfortunately, this led to negative outcomes.

“Reliance on codes and notations alone to substantiate work completed can open the door to findings where a conservative interpretation of a guideline requires physical proof of the underlying document,” Morales said.

For example, customer inquiry receipt dates are considered questionable when sent without a date stamp. The same is true for electronically provided payment receipt dates and notations of sent breaches when copies aren’t available.

In other cases, mandatory documents were retrieved and stored but were purged after a liquidation or service transfer before audits were submitted for review. This, too, resulted in a lack of required documentation and, therefore, findings.

Top Servicing QC Findings for 2021

Here is the list of our top mortgage servicing QC findings for 2021:

Incorrect set-up and timely premium payment of taxes, insurance, and mortgage
insurance
Failure to provide proof of payment within 24 hours of receipt due to
inability to prove receipt date via various methods of payment acceptance (e.g.,
online, phone, and lockbox)
Missing accounting histories where initial loan set-ups are completed after the first
payment was submitted and now second payment is due.Download the full report to see the complete list of top servicing QC findings, learn why overcoming document shortcomings is more important than ever, and discover how to ensure compliance in 2022.

Download Full Report

29Jul

Constellation Mortgage Solutions Appoints Technology Innovator Kendrew Peacey as CTO

July 29, 2022 California MBA

Constellation Mortgage Solutions (CMS), provider of enterprise mortgage loan origination and servicing technology, recently appointed Tech Industry Veteran Kendrew Peacey as CTO. As a member of the executive team, Peacey will lead CMS in evolving and innovating lending technology to grow the product line and increase sales. Peacey and team will deliver the next generation of LOS in late 2022, equipping CMS clients with enhanced functionality and a single application suite that will elevate job performance and user experience.

“Kendrew was originally engaged as a consultant and proved himself an invaluable member of the team, with his global experience in implementing, and evolving enterprise technology, he is a great fit for CMS,” said Stephen Ryczek, CMS President and General Manager. “We’re excited to have him lead the team as we deliver the next generation of lending technology to the mortgage industry.”

Peacey brings with him over 30 years of experience developing, integrating, and implementing technology tools and software for various enterprise level companies. He has a proven record orchestrating IT and software engineering operations while managing global teams across multi-million-dollar projects. Peacey founded Ascension Technologies, a global software development company and leader of digital transformation, and previously served as CTO of U2 Logic, The Media Services Group, and in consultant roles at various companies including IBM.

“I’m excited to join Constellation Mortgage Solutions as CTO and help fill technology gaps the mortgage industry experiences today,” said Peacey. “Bringing a product to market that has not yet been seen, and doing it successfully, is fulfilling. New technology not only adds to the growth of CMS but also the lenders we support by providing a single point of entry and complete functionality for them to efficiently perform their job.”

Peacey’s contributions to CMS will continue to drive the unprecedented growth the company has experienced in the last two years.

About Constellation Mortgage Solutions
Constellation Mortgage Solutions provides industry-leading lending technology solutions through its products: Mortgage Builder LOS, Mortgage Builder LSS, and ReverseVision LOS. As the Gold Standard for mortgage solutions, CMS offers Lenders of all sizes enterprise technology empowering Lenders on the front lines with innovative solutions designed to deliver exceptional loan quality, regulatory compliance, and drive profitability. CMS has been working for more than two decades to help mortgage professionals streamline operations and close more loans faster to increase ROI. https://constellationmortgagesolutions.com/

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29Jun

Where is eClosing with Remote Online Notarization Available?

June 29, 2022 California MBA

Blog originally posted on Spruce’s Blog

A classic real estate closing can have upwards of 100 pages of documents to sign, and the ability to do this both remotely and electronically is alluring to everyone involved in the transaction––particularly busy homeowners. But, RON (remote online notarization) isn’t available everywhere, so understanding when and where you can utilize it is incredibly important. Check out our 3 steps to determine when and where you can use RON.

First, let’s start with the basics: what is RON (Remote Online Notarization?)

RON is a form of eClosing, which is the act of closing a mortgage or real estate transaction electronically. All or some of the closing documents are viewed and/or signed online through a secure digital environment. Depending on the state you live in, you can take advantage of three main types of eClosing options: RON, hybrid eClosing, or in-person eClosing. ‍A RON closing is a digital online closing that occurs where the signers and the notary meet via an audio and video application. The documents will contain an electronic signature and electronic notarization. ‍

3 Steps to Determine When and Where You Can Use RON

There are three methods that most title companies use to figure out where they can offer remote online notary services to clients: state legislation, underwriter requirements, and eVault capabilities.

Step 1. Check Which States Have Passed RON Laws

The first step to determining if RON can be offered on a transaction is to see if the state has passed legislation. To date, 38 states have passed laws allowing remote online notarization. The states that have enacted RON laws are: Virginia, Montana, Texas, Nevada, Indiana, Tennessee, Minnesota, Vermont, Michigan, Ohio, North Dakota, Idaho, Utah, Kentucky, Arizona, Washington, Iowa, Oklahoma, Maryland, Nebraska, Florida, Wisconsin, Pennsylvania, Alaska, Louisiana, Colorado, Oregon, Missouri, Hawaii, Wyoming, West Virginia, Kansas, New Hampshire, Arkansas, New Jersey, New Mexico, Illinois, and New York.

Step 2. Check Underwriter Requirements

Even if a state has passed RON legislation, title insurance underwriters often have their own requirements for where remote online notarization is available. For example, underwriters have different requirements based on whether the transaction is a refinance or a purchase.

There are also counties in states that have passed legislation who won’t accept RON documents––making underwriters wary of insuring RON transactions.

Step 3. Check on eNote and eVault Capabilities

Lenders who want to offer RON closings to their borrowers will need to facilitate an eNote, which is the digital equivalent of a promissory note. It’s not as simple as just merely scanning a document into a computer and having it signed. To ensure the security of the electronic note, eNotes are created in a special file format and must be stored in an eVault.

An eVault is a repository for managing and transferring electronic documents. If a lender doesn’t have a relationship with an approved vendor, such as Notarize, the closing cannot be done via remote online notarization.

eClosing via RON is the Future of Real Estate Transactions

Despite some of the logistical hurdles, eClosing via RON is a winner for everyone involved in the real estate transaction process. We’ve heard from real estate agents and homebuyer’s alike that the use of RON is moving beyond a benefit to an expectation.

For lenders and large-scale investors, it creates a higher level of operational efficiency. For homeowners, it provides much needed flexibility in what can be an extremely stressful process. Rather than having to show up at a specific location at a certain time, consumers can sign documents at a place and time that’s convenient for them. Offering RON closings can be a key differentiator for lenders and can sharpen their competitive edge in an evolving market.

Interested in learning more about how Spruce’s RON closing process? Get in touch with our team here.

29Jun

2021 MERS QA Findings Report

June 29, 2022 MetaSource

Staff shortages, office closings, and high volumes created ongoing disruption for the mortgage industry in 2021.

And, based on MetaSource’s annual analysis of third-party QA reviews, some MERS processes suffered as a result.

Overall, our analysis showed that the top three areas of MERS compliance challenges fell along familiar themes. We also discovered that while the overall exception rate increased from 11% in 2020 to 19% in 2021, some notable improvements were made.

This report discusses why these improvements occurred, details surrounding what MERS Members struggled with the most, and best practices for overcoming these struggles in the future.

Top MERS QA Audit Findings for 2021

Here are the MERS QA challenges that Members struggled with most in 2021:

Rank

Finding

1. Written internal policies and procedures were missing or did not contain enough detail to ensure compliance with the most recent MERS requirements

2. Failure to conduct monthly or quarterly data reconciliation based on requirements and volume

3. Failure to properly manage/monitor internal audits, subservicer, or third-party vendor through reporting of QC reviews to confirm MERS standards are met

The Challenges of Maintaining Detailed, Up-to-Date Policies & Procedures

Ensuring that internal policies are thorough and up-to-date is a perennial struggle for many MERS Members. But it was heightened in 2021 when additional difficulties, including staffing shortages, left some servicers without the MERS support they needed. Many servicers were left to rely on staff members who were unfamiliar with MERS requirements and the level of detail necessary to meet current policy and procedure expectations.

Other servicers fell short of MERS requirements for written policies and procedures as their monthly volumes swelled and, for the first time ever, pushed them over the 1,000-mortgage identification number (MIN) mark. MERS Members over this MIN mark as of March 31 are required to obtain a third-party review, which includes a thorough review of MERS Members’ operational policies and procedures in preparation for the MERS eAnnual report due each year by December 31. Those new to this MIN volume level last year were left subject to monthly reconciliation requirements and third-party reviews for the first time. Similar to those experiencing staffing shortages, these servicers were unfamiliar with the requirements and failed to provide adequate written internal policies and procedures.

This unfamiliarity undoubtedly led to an increase in policy and procedure-related challenges and a rise in the overall exception rate. “About 90% of the Members I reviewed last year did not have detailed procedures,” said Rachel Pylant, MetaSource Director of MERS Services.

The Areas that Showed Improvement

While more Members struggled to meet written internal policy and procedure requirements last year, there were signs of improvement in other areas.

Download the full report to learn what these areas of improvement were, the main reasons for the improvements, and the best practices for ensuring MERS compliance in 2022.

Download Full Report

20May

3 Ways for Lenders to Boost Efficiency in Appraisal Operations

May 20, 2022 California MBA

As the mortgage industry shifts more of its traditional workflows to digital operations – such as with eSigning, eNotes, eVaults, and more – the appraisal process cannot be an afterthought. There are numerous inefficiencies associated with the “old world” of appraisals that are slowing mortgage lenders’ turn times, keeping production costs high, and negatively impacting the borrower’s experience – all of which ultimately affect the bottom line.

This guide highlights three key areas where efficiency gains have been proven to generate measurable ROI: appraisal ordering and vendor allocation, appraisal payments, and communication and visibility. These lender-appraiser touchpoints are riddled with manual, error-prone tasks that are better executed by technology. Automation will not only expand employee bandwidth, but it will also do the work faster, more effectively and with greater accuracy.

Click above to open and download the guide ^^ (there’s no form!)

By focusing on modernizing operations in the three aforementioned areas, lenders have reported increasing efficiency by 213% and reducing their appraisal desk staff by 75%, among other quantifiable benefits.

Want to achieve similar results? Download this free guide to better understand where inefficiencies exist in your appraisal operations and the steps your organization can take to improve its appraisal-related processes and maximize impact.

If you would like to learn more about how Reggora can help, reach out to schedule a conversation with our team.

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20May

5 Things to Know About Desktop Appraisals

May 20, 2022 California MBA

Beginning in March 2022, Fannie Mae and Freddie Mac will begin to accept desktop appraisals. This means that a licensed appraiser will be allowed to complete the home appraisal without physically visiting the property. Instead, they will leverage data that can be made available to via third parties (homeowner, realtor, builder, etc.) and through public sources.

While desktop appraisals should enable faster (and potentially cheaper) approaches compared to the traditional appraisal, there are many caveats that lenders and appraisers should be aware of.

This guide from Fannie Mae provides initial details and guidelines for how desktop appraisals will work. There’s quite a bit to unpack here, as well as a few things that we’re awaiting clarity on, but we’ve summarized the key takeaways below, and in this LinkedIn video from our CEO. To dive even further into the topic, be sure to register for our upcoming webinar with Fannie Mae and Freddie Mac on desktop appraisals.

Here are 5 things lenders and appraisers should know:

1. Eligibility

Not all loans are eligible for desktop appraisals. The loan must be for a purchase transaction, one-unit principal residence, where the loan-to-value (LTV) ratio is less than or equal to 90%. On top of this, the loan file must also be approved by Fannie Mae’s Desktop Underwriter (DU).

2. Floor plans

A floor plan with interior walls is required. These floorplans typically don’t exist out in the wild, so an onsite inspection will often still need to occur. This inspection might be able to be done by someone other than an appraiser, such as the homeowner, realtor, builder, etc.,

NOTE: These floor plans and measurements may need to abide by ANSI standards starting April 1, 2022. This is something that we are awaiting further clarification on.

3. Appraiser discretion

The appraiser must have sufficient information to develop a credible report. The appraiser has the discretion to reject the order if they don’t feel comfortable with the data available to them. This means that getting high quality data to the appraiser for the floor plan and other property characteristics will be very important.

4. Verification

Any data (including potentially the floor plans mentioned above) that is provided by third parties with a financial interest in the sale or financing of the property (homeowner, realtor, builder, etc.) MUST be verified by a disinterested source. This could include maps, assessor data, or virtual inspection technologies. It will be important to accomodate any validation and verification processes that will be required by the appraiser, the lender, or both,

5. It’s optional

When permissible, ordering a desktop appraisal is optional for the lender. The lender or borrower always has the option to request that a traditional appraisal is obtained, regardless if a desktop or some other form of appraisal relief is offered.

As this initiative moves forward, it will be of interest to see the frequency of eligibility for desktop appraisals, and, when eligibility is offered, how often requests for desktop appraisal are actually fulfilled. Either way, this is important progress in the industry that will pave the way for further modernization and alternative products. For more insight on desktop appraisals, view our March 2022 webinar with Fannie Mae and Freddie Mac on the subject.

How can Reggora help? Our goal is to make it easy for lenders and appraisers to adopt desktop appraisals, and we’re currently working closely with Fannie Mae, Freddie Mac, and our appraiser and AMC partners to understand the nuances and provide guidance to the industry. If you have questions about leveraging desktop appraisals and what you should do to prepare, please contact your Reggora customer success team or reach out to our sales team here.

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19May

Constellation Mortgage Solutions and Entrinsik Announce Partnership to Drive Data Insights

May 19, 2022 California MBA

The partnership between Constellation Mortgage Solutions and Entrinsik enables CMS users to maximize the value of their data through visualizations and self-service analytics.

Constellation Mortgage Solutions (CMS), provider of enterprise mortgage loan origination and servicing software systems, today announced a new partnership with Entrinsik, a leader in embedded business intelligence. This partnership will utilize the Informer Embedded platform, enabling CMS users to maximize the value of their data through visualizations and self-service analytics.

From origination to post-closing to servicing, CMS provides all the tools and integrations lenders need to keep operations streamlined. Every step in the mortgage process generates data, which can be analyzed and interpreted to provide users with the insights necessary to make better business decisions.

“Constellation Mortgage Solutions strives to help our clients become more efficient, productive, and collaborative through our technology,” said Stephen Ryczek, President and General Manager at CMS. “Our partnership with Entrinsik provides our clients with metrics that far exceed the reporting available in a traditional LOS or Loan Servicing platform. By using the Informer solution, clients will leverage dynamic reporting insights from our solutions alongside data that can be aggregated from other technologies to provide real-time meaningful insights to their entire business operations.”

CMS customers will better manage and measure their performance in real-time using Entrinsik Informer through the CMS enterprise LOS platform. Easy adoption of the technology and user-friendly and visually pleasing reporting relevant to all levels of an organization further enhances productivity and communication throughout the loan origination process.

“We’re excited to partner with Constellation Mortgage to bring advanced analytics to their lender platform,” said Chris Reeves, Vice President of Partnerships at Entrinsik. “The collaboration unlocks the power of data to further extend Constellation Mortgage Solutions’ promise to help lenders drive efficiency, close more loans faster, and reduce costly errors that can lead to problems with compliance.”

About Constellation Mortgage Solutions Inc.
Constellation Mortgage Solutions provides industry-leading lending technology solutions through its products: Mortgage Builder LOS, Mortgage Builder LSS, and ReverseVision LOS. As the Gold Standard for mortgage solutions, CMS offers Lenders of all sizes enterprise technology empowering Lenders on the front lines with innovative solutions designed to deliver exceptional loan quality, regulatory compliance, and drive profitability. CMS has been working for more than two decades to help mortgage professionals streamline operations and close more loans faster to increase ROI. https://constellationmortgagesolutions.com/

About Entrinsik
Entrinsik develops, implements, and supports software solutions that enable organizations to maximize performance and improve bottom lines. For six consecutive years, Entrinsik has been selected as a member of the DBTA 100, highlighting the 100 Companies that Matter Most in Data. Entrinsik Informer is an innovative, award-winning agile reporting and business intelligence solution used by tens of thousands around the world. Over 3000 organizations around the world use Entrinsik’s software every day. For a demonstration or a free trial, call 888-703-0016 or email sales@entrinsik.com. Visit https://entrinsik.com/.

Learn More About The Partnership

23Mar

Mortgage Underwriting: What You Need to Know | Redfin

March 23, 2022 California MBA

Check out the recent Redfin article we were featured in: Mortgage Underwriting: What You Need to Know | Redfin

Mortgage underwriting is a necessary step in the mortgage origination process and begins when the seller accepts the offer you submitted to purchase a home. Either you or your real estate agent contacts your lender, who then collects the necessary paperwork and sends your loan package to the underwriter.

Whether you’re a first-time homebuyer or just want to be familiar with the process, so you’re better equipped when it’s time to apply for a mortgage, here’s what you need to know.

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