Category Archives: Servicing

Rent: San Franciscans’ burden to bear

Over the last 28 years, San Francisco’s population has become drastically more susceptible to rent burden.

A study by the San Francisco Planning Commission revealed that people making 80% to 120% of the area median income ($82,900 as of April) have become susceptible to rent burden. Nearly three decades ago, this would have been nearly unheard of.

According to the study, in 1990 just over 10% of renters in the 80% to 120% AMI category were rent burdened. From 2011 to 2015, the number of rent burdened renters in that category jumped to over 30% with a small portion (under 10%) of them exhibiting severe rent burden (paying more than 50% of their income for rent).

The picture gets much, much bleaker for those in who live in San Francisco and make less than 80% of AMI.

The study shows that just under 60% of San Francisco renters in the 50% to 80% AMI category are rent burdened, and roughly 15% of those renters are severely burdened.

Rent burden chart

(Courtesy of the San Francisco Planning Commission)

Going down the list, about 75% of renters making between 30% and 50% AMI are rent burdened, with over 40% under severe rent burden.

And finally, roughly 80% of renters making 0% to 30% of the AMI are rent burdened with over 60% of them under severe rent burden.

This is actually a slight improvement over 1990, when just under 85% of renters in this category were rent burdened and about 65% were severely rent burdened.

The total number of rent burdened households in San Francisco increased from about 38,000 to 49,000 from 1990 to 2015.

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What’s worse than assembling furniture? The current mortgage lending process

In the past, shoppers had to take separate trips to the butcher, baker, and market to find and gather the ingredients they would need to prepare a meal.

Then, supermarkets were born, and this fragmented shopping system was turned into a “one-stop shop” where consumers could get anything they needed for dinner in one place.

Now, technology has taken this concept a step further, with mega e-commerce vendors acting as online marketplaces where you can get everything from groceries to furniture, even cars and industrial machinery, with just a few clicks of a button.

While these sites allow a consumer to go to one place to research, compare and ultimately purchase almost anything, mortgage lenders need more than just a mega-vendor that can sell them individual point products. They need a provider who can package individual products into intelligent and integrated solutions or bundles that plug into existing workflows to help make their processes faster, less expensive, and more user-friendly.

Let’s take this analogy a step further, and think about what happens when your package, say a piece of furniture, arrives from a store. Unless you’ve paid for assembly, you’ll open the box to find pieces of wood, some different sized screws, a small Allen wrench, and a numbered instruction booklet; all of which should make the process pretty straightforward.

However, like evaluating and verifying a borrower’s loan file, the process of building a piece of furniture is laborious, time-consuming, and subject to human error. That’s why items that arrive “pre-assembled” are so appealing – there’s no fuss, no confusion and no waking up in the middle of the night to a large thud when your dresser drawer falls off.

Mortgage lenders need a solution that helps take the guesswork out of evaluating and verifying a borrower’s qualifications; one that helps streamline and standardize existing manual processes to yield more consistent results in a fraction of the time; an automated process that helps mortgage underwriters feel more confident when facing QC and audit reviews.

While many other industries have turned to technology to optimize manual processes, mortgage underwriting has continued to lag behind on digital transformation. But what if every origination wasn’t like putting together a piece of wobbly furniture?

We believe the mortgage origination process of the future will provide lenders with intelligent, integrated solutions from one vendor, delivered in a way that is flexible enough to use a variety of different workflows with varying data formats. It will minimize human touches and maximize process transparency for both underwriters and consumers to reduce redundant feedback loops and other workflow inefficiencies.

By increasing the reliability of the process and increasing underwriter productivity, this workflow will help reduce the time and costs required to close loans while improving the overall user experience. With millions of mortgages issued each year, we’re hoping the mortgage origination process of the future isn’t too far away. 

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Fannie Mae CEO to resign by end of year

Fannie Mae announced President and CEO Timothy Mayopoulos will resign from his position by the end of the year.

Fannie Mae explained to HousingWire that after being with the company since 2009, Mayopoulos now feels the “time is right” for him to resign from his position. Currently, the company has not named it’s next CEO, but did announce several promotions.

The company is promoting Chief Financial Officer David Benson to president. He will report directly to Mayopoulos, managing the day-to-day business and operations of the company. The company also promoted Celeste Brown to the role of executive vice president and chief financial officer.

Both appointments will go into effect on August 6, 2018, and Mayopoulos, although he doesn’t have a set date for his resignation, will step down by the end of the year. 

“Today’s announcement reflects the Board’s interest in ensuring continuity and in continuing to pursue Fannie Mae’s ongoing transformation,” said Egbert Perry, chairman of Fannie Mae’s board of directors. “I am grateful that we have an incredibly talented and experienced leadership team that is laying the foundation for a better, more innovative, safer, and more sustainable housing system for future generations.”

Mayopoulos was first promoted to CEO back in June of 2012, moving up from his position as chief administrative officer and general counsel.

During his tenure as CEO, Mayopoulos returned about $167 billion in dividends to the U.S. Treasury, and oversaw the company as it turned from a legacy company to a startup, evolving into a smart, agile company.

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