Category Archives: Servicing

Credit Plus hires new VP of Data Solutions

Credit Plus has hired Jane House as vice president of Data Solutions.

As such, the mortgage industry veteran will support the 2017 Tech100 winner’s mission to broaden its application of risk management and portfolio retention tools for mortgage servicers. House will also assist the company with vendor management.

Jane HouseCredit Plus said House, who has more than 20 years of experience in the mortgage industry, is a mortgage data specialist whose expertise includes blending credit information and public record data “to create innovative client solutions.”

“Jane is a highly respected and connected industry leader. Her incredible depth and knowledge in prescreen marketing and expanded data solutions will assist in further strengthening our offerings,” said Credit Plus Managing Partner Greg Holmes.

“Bringing Jane aboard is an example of our commitment to helping lenders and mortgage servicers apply data effectively so they can monitor loans throughout the life of loan and retain their portfolios,” Holmes added.


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Wells Fargo to pay $13 million to settle claims of improperly modifying bankrupt borrowers’ mortgages

Wells Fargo will pay more than $13 million to settle a pending class-action lawsuit that accused the bank of “improperly” modifying the mortgages of borrowers who had declared bankruptcy.

According to the bank, it recently reached a settlement in the pending class-action suit, which accused the bank of “improperly filing mortgage payment change notices” on borrowers who were in the midst of Chapter 13 bankruptcy proceedings.

The complaint alleged that the bank engaged in “fraud, violations of bankruptcy rules and laws, and unfair and deceptive trade practices” by “improperly and unilaterally” modifying the mortgages of the bankrupt borrowers.

Wells Fargo revealed the settlement in its recent annual report from 2018. In the report, Wells Fargo said that it reached a preliminary settlement agreement last year that would see the bank pay $13.5 million to resolve the lawsuit’s claims.

And Law360 reported late last week that the settlement was approved by the United States Bankruptcy Court for the Western District of North Carolina, meaning the settlement will now move forward.

The settlement comes on the heels of Wells Fargo CEO Tim Sloan taking a beating on Capitol Hill over the bank’s run of scandals that stretches back to 2016.

Last year, the bank revealed that an error in its mortgage underwriting software led to hundreds of improperly denied mortgage modifications for borrowers facing foreclosure over a five-year period.

That came just two days after the bank agreed to pay more than $2 billion for allegedly lying about the quality of subprime and Alt-A mortgages that backed residential mortgage-backed securities in the run-up to the housing crisis.

Wells Fargo’s troubles began in 2016 when the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of Los Angeles fined the bank $150 million for more than 5,000 of the bank’s former employees opening as many as 2 million fake accounts in order to get sales bonuses.

That issue led the bank to agree to pay $480 million to shareholders to settle class-action suit over the bank’s fake accounts scandal.

The fake accounts issue also led to class-action lawsuit being brought on behalf of the bank’s customers who had fake accounts opened in their names, which the bank eventually settled for $142 million.

In April 2018, the CFPB and the OCC announced a $1 billion fine for the bank over auto insurance and mortgage abuses.

Before that, Wells Fargo revealed that it was preparing to hand out $80 million in remediation for potentially wrongfully force-placing auto insurance on as many as 570,000 customers.

The bank later disclosed that it agreed to pay $108 million to the federal government to settle allegations that the bank overcharged military veterans for refinances.

The bank later reached a $575 million settlement with all 50 state attorneys general and the attorney general for the District of Columbia regarding previously disclosed retail sales practices, auto collateral protection insurance and guaranteed asset/auto protection, and mortgage interest rate lock matters.

But none of those settlements prevented Wells Fargo from giving Sloan a $2 million bonus the day after he received his congressional thrashing. Must be nice.

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Supreme Court makes it harder for borrowers to fight foreclosures in non-judicial states

Law firms, mortgage lenders and servicers were just awarded more protection in serving non-judicial foreclosures, according to a recent Supreme Court ruling.

The ruling is a victory for the mortgage industry in its fight to retrieve property from delinquent homeowners. One attorney claims the ruling may eliminate thousands of similar homeowner lawsuits.

In the case of the Obduskey v. McCarthy Holthus decision from earlier today, the homeowner tried to fight his non-judicial foreclosure in Colorado.

Each state differs in foreclosure requirements, but generally fit into two category: foreclosures that get to be decided by the courts or foreclosures that are not — a non-judicial foreclosure. Colorado is a non-judicial foreclosure state.

Homeowner Dennis Obduskey alleged that once he received a foreclosure notice from law firm McCarthy Holthus, he invoked protection under the federal Fair Debt Collection Practices Act.

This act protects consumers and maintains that: “a ‘debt collector’ must ‘cease collection’ until it ‘obtains verification of the debt’ and mails a copy to the debtor,” the Supreme Court ruling states.

However, McCarthy Holthus is not a debt collector by definition, as it only pursues non-judicial foreclosures, the Court ruled.

From the ruling:

Obduskey argues that McCarthy engaged in more than security-interest enforcement by sending notices that any ordinary homeowner would understand as an attempt to collect a debt. Here, however, the notices sent by McCarthy were antecedent steps required under state law to enforce a security interest, and the Act’s (partial) exclusion of “the enforcement of security interests” must also exclude the legal means required to do so.

“This decision essentially gives law firms and lenders more protection in non-judicial foreclosure states,” said David Scheffel, partner at law firm Dorsey Whitney.

“In these jurisdictions, homeowners and borrowers will no longer be able to file lawsuits under the Fair Debt Collection Practices Act (FDCPA) against law firms who are pursuing foreclosures,” he added.

“This essentially eliminates a heavily used practice by plaintiffs’ attorneys,” Scheffel added. “Ultimately, this should have the effect of reducing the cost that lenders/servicers bare in terms of getting to a final foreclosure in these states as the FDCPA lawsuits delay this process significantly. At the end of the day, this decision will eliminate thousands of these lawsuits in non-judicial foreclosure states like Massachusetts, California, Colorado, and Minnesota.”

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HousingWire announces agenda

When we started planning our second annual event, our goal was to design a very practical conference that would give marketers the information and insight they need to succeed in this purchase market so they can Play to Win.

To that end, we invited marketing leaders from 10 lenders to serve on our advisory board, and asked them:  

  • What is the single greatest challenge facing mortgage marketers this year?
  • What’s the most impactful solution you are working with right now, and why? Is there a problem you have that there doesn’t seem to be a solution for?
  • Which social channels are most important for reaching your customers? How has your strategy changed in the last year?
  • What topic do you wish we would have a session on?
  • What’s important for marketers to know when it comes to referral relationships?

We took their answers — some were pages long! — and developed our session topics around their insights, ensuring tangible benefits for our attendees.

So, what is the single greatest challenge facing mortgage marketers right now? The most common answer: How to do more with less. That answer didn’t end up as a session, but rather as marching orders informing how we approach every one of the sessions — how do marketers accomplish social selling, content marketing, branding, etc. when their budget might be smaller or they have less staff than last year?

And that mantra has spurred us to seek speakers from a range of companies — the solutions for a top 25 HMDA lender won’t likely be the same as the solution a stand-alone marketer needs and we want a range of perspectives and potential solutions.

Armed with those insights, we’ve packed a ton of content into the day-and-a-half summit covering topics that include referral marketing, personal branding, content marketing, how to build a marketing tech stack, how to use video, podcasts and voice effectively, and so much more. We’re very excited to host what is shaping up to be a meeting of some of the smartest, most successful mortgage marketers in the business. 

Check out the full agenda and don’t wait to reserve your seat — our early bird pricing expires after March 31. 

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Homeownership investment company Point raises $122 million

Homeownership investment company Point just landed a major cash infusion that will fund its plans to help more Americans access their home equity without incurring debt.

The Silicon Valley company raised $100 million in platform capital from Kingsbridge Wealth Management – bringing its total platform capital to $265 million.

It also secured $22 million in a Series B funding round led by Prudential Financial and DAG Ventures, with participation from existing investors that include Andreessen Horowitz, Ribbit Capital and Bloomberg Beta.

Point said its new investors, including Prudential, are interested in the company’s solution the lack of affordable housing, and that it plans to work with these investors to create innovative solutions for first-time homebuyers and those living in challenging markets.

“We know that many Americans are overburdened by debt,” said Prudential’s VP of Impact Investments Miljana Vujosevic. “Our investment in Point is one more way we’re committing to helping consumers meet their goals and achieve lasting financial security.”

Point is one of a number of companies offering homeowners debt-free access to their equity by connecting them with investors who want to purchase a portion of their home’s equity.

Point’s offer is typically between 5% and 20% of the home’s appraised value, and homeowners can sell or pay back the investment at any time. If the home depreciates, Point shoulders the loss alongside the homeowner.

The company markets its product as an alternative to home equity loans and cash-out refinances.

Point Co-Founder and CEO Eddie Lim said the company is seeing real interest from consumers looking for an alternative way to get their hands on their equity.

“Point is seeing significant demand for its home equity investment solution,” said Lim. “We are witnessing the emergence of a whole new class of financial solution that is aligned with homeowners, and investors are taking notice.”

Point, which launched in 2015, secured a $150 million platform capital investment from Atalaya Capital Management in 2018, and since expanded its reach to 13 states and Washington, D.C.

The company said the new capital will be used to fund its expansion into more than 30 states by the end of 2020 and aid in its goal to fund more than 1,000 homeowners in the coming year.

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MBA: Economic worries slow growth of mortgage applications

Mortgage applications inched forward slightly for the week ending on March 15, 2019, according to the newest data from the Mortgage Bankers Association‘s weekly Mortgage Applications Survey.

On an unadjusted basis, the Market Composite Index moved forward 1.6% from the previous week.

MBA Vice President of Economic and Industry Forecasting Joel Kan said mortgage rates declined once again, as concerns about the slowing global economy and status of Brexit drove investors’ demand for U.S. Treasuries.

“Rates for most loan types were at their lowest levels in over a year, with the 30-year fixed mortgage rate falling to 4.55% – it’s lowest reading since last February,” Kan continued. “Although lower rates sparked a 3.5% increase in refinance applications, purchase activity was up only slightly last week and from a year ago.”

Furthermore, Kan noted entry-level housing supply remains weak and is likely hindering some would-be first-time buyers from finding a home.

All in all, this – along with faster growth in the higher-price tiers – is why the average loan application size has risen to a new high for three straight weeks, according to Kan.

The Refinance Index slightly grew 4% from the previous week and the unadjusted Purchase Index rose 1% from a week ago and is also 1% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index also increased 0.3% from the week before.

Here’s a more detailed breakdown of this week’s mortgage application data:

  • The refinance share of mortgage activity decreased to 39.2% of total applications, moderately increasing from 38.6% the previous week.
  • The adjustable-rate mortgage share of activity fell to 7.1% of total applications.
  • The Federal Housing Administration‘s share of mortgage apps held steady from last week’s 10.4%.
  • The Veterans Affairs‘ share of applications climbed from 10.2% the previous week to 10.6% this week.
  • The Department of Agriculture‘s share of total applications held its ground from last week’s 0.6%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances fell from 4.64% to 4.55%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances slightly decreased from last week’s 4.45% to 4.37%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA declined from last week’s 4.61% to 4.59% this week.
  • The average contract interest rate for 15-year fixed-rate mortgages moved backwards from 4.02% to 3.97%.
  • The average contract interest rate for 5/1 ARMs fell to  3.99% from 4.09%.

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These are the best housing markets for first-time buyers

Purchasing the perfect home can be difficult, especially for those navigating the housing market for the first time.

Luckily, a new report by Zillow reveals the country’s top housing markets for first-time buyers, measuring factors like home value, home appreciation, wealth and inventory.

“Becoming a homeowner for the first time is easier in some markets than others – and the difference is not strictly about home prices, although they have a big impact on how long it takes to save a down payment,” Zillow writes. “Strong inventory and lower competition for listings also make a difference – as does the market outlook.”

The video below highlights the top 5 most affordable rental markets, according to Zillow’s research: 

5. Orlando, Florida. In this metro, the median home value is $237,100 and 21.3% of home listings have experienced a price cut.

4. Atlanta, Georgia. In this metro, the median home value is $217,500 and 15.9% of home listings have experienced a price cut.

3. Phoenix, Arizona. In this metro, the median home value is $264,900 and 20.9% of home listings have experienced a price cut.

2. Las Vegas, Nevada. In this metro, the median home value is $277,900 and 23.9% of home listings have experienced a price cut.

1. Tampa, Florida. In this metro, the median home value is $213,600 and 24.8% of home listings have experienced a price cut.

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Two New Jersey men arraigned in $1.6 million reverse mortgage scam

Two New Jersey men were arraigned in federal court Monday for a reverse mortgage scheme that used inflated property appraisals to obtain $1.6 million in proceeds that were then taken from unsuspecting homeowners.

Rafael Peralta of Clifton, New Jersey, and Philip Puccio Jr. of Mahwah, New Jersey, were indicted by a federal grand jury on one count of conspiracy to commit fraud and six counts of bank fraud.

According to the Department of Justice, Puccio is a mortgage broker who also had a stake in a home remodeling company alongside Peralta. The two allegedly solicited older homeowners for home repairs and renovations, encouraging them to apply for a reverse mortgage to finance the work.

They then conspired with an appraiser to submit inflated property valuations in order to secure larger proceeds on the reverse mortgages, and also submitted false loan documents that actively concealed the fact that the loan proceeds were being dispersed to entities they owned, the indictment stated.

The indictment lists six New Jersey properties for which the two men submitted inflated appraisals to obtain a collective $1.6 million in loans.

“The diverted loan proceeds were deposited into bank accounts controlled by Peralta and Puccio and used for their personal benefit and to further the conspiracy,” the DOJ stated.

The two face up to 30 years in prison, a $1 million fine, or twice the gross monetary gain by the defendants or twice the gross monetary loss to others, whichever is greater.

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Facebook making massive changes to ad platform after being accused of enabling housing discrimination

Facebook is making significant changes to its advertising platform after the social media monolith was accused of enabling discrimination in housing, employment, and lending.

The changes come after years of scrutiny into Facebook’s ad practices, which appeared to allow advertisers to purposefully exclude certain people from seeing housing, employment, or lending ads.

Last year, the Department of Housing and Urban Development filed a complaint against Facebook, claiming that the social media giant’s advertising platform enabled property owners to discriminate against prospective renters and buyers based on their race, color, religion, sex, familial status, national origin, disability, or other factors.

HUD’s investigation began in response to a ProPublica article in October 2016, which said Facebook gave advertisers the ability to exclude certain ethnic groups from seeing the ads.

Fair housing groups later filed a lawsuit against Facebook in March 2018, saying its ads still discriminate against protected groups under the Fair Housing Act, including women, veterans with disabilities and single mothers.

After HUD filed its complaint against Facebook, the site announced that it was removing more than 5,000 ad target options to “help prevent misuse.” The site claimed that the removed options include “limiting the ability for advertisers to exclude audiences that relate to attributes such as ethnicity or religion.”

But Facebook announced Tuesday that it is undertaking a massive overhaul of its advertising platform that goes well beyond any of the previously announced changes.

According to Facebook, it will no longer allow anyone or any company to target housing, employment, or credit ads by age, gender or zip code.

Additionally, advertisers offering housing, employment and credit opportunities will have a “much smaller set of targeting categories to use in their campaigns overall,” Facebook said.

The site also said that any detailed targeting option “describing or appearing to relate to protected classes” will also be unavailable for advertisers.

Beyond that, the site said that it is building a tool that will allow users to search for and view all current housing ads in the U.S., regardless of where the ads are targeted.

“One of our top priorities is protecting people from discrimination on Facebook,” Facebook Chief Operating Officer Sheryl Sandberg said in the announcement.

“We’re proud that our services help businesses reach people all over the world who are interested in their products and services. Small businesses now have access to marketing tools that previously only big companies could afford. This levels the playing field so that they can reach audiences they care about,” Sandberg continued.

“Our job is to make sure these benefits continue while also making sure that our ads tools aren’t misused. There is a long history of discrimination in the areas of housing, employment and credit, and this harmful behavior should not happen through Facebook ads,” Sandberg added.

“Housing, employment and credit ads are crucial to helping people buy new homes, start great careers, and gain access to credit,” Sandberg said. “They should never be used to exclude or harm people. Getting this right is deeply important to me and all of us at Facebook because inclusivity is a core value for our company.”

The announcement is the result of a settlement with the fair housing groups that sued the site, which include the National Fair Housing Alliance and the American Civil Liberties Union.

In a post on its site, the ACLU goes into more detail about how Facebook’s newly announced ad changes will be implemented, including the creation of a new and separate advertising portal for housing, employment, and credit ads.

From the ACLU:

In the first-of-its kind settlement announced today, Facebook has agreed to create a separate place on its platform for advertisers to create ads for jobs, housing, and credit. Within the separate space, Facebook will eliminate age- and gender-based targeting, as well as options for targeting that are associated with protected characteristics or groups. Targeting based on zip code or a geographic area that is less than a 15-mile radius will not be allowed. And Facebook will stop considering users’ age, gender, zip code, or membership in Facebook “groups” when creating “Lookalike” Audiences for advertisers. Facebook will also require advertisers for employment, housing, and credit to certify compliance with anti-discrimination laws, and it will institute a system of automated and human review to ensure that such ads are properly identified and channeled into the separate flow. Additionally, due to a three-year monitoring period in the agreement, we’ll be watching Facebook’s progress closely to ensure that it implements these changes fully.

Today’s changes mark an important step in our broader effort to prevent discrimination and promote fairness and inclusion on Facebook,” Sandberg said. “But our work is far from over. We’re committed to doing more, and we look forward to engaging in serious consultation and work with key civil rights groups, experts and policymakers to help us find the right path forward.”

In its statement, the NFHA said that it will work with Facebook to develop an in-house fair housing training program for Facebook leadership and staff. Additionally, the fair housing groups will monitor Facebook’s advertising platform on a continuing basis to ensure that future advertisers do not engage in discrimination.

“This settlement positively impacts all of Facebook’s 210 million users in the U.S. since everyone is protected by our nation’s fair housing laws,” said Lisa Rice, president and CEO of NFHA. “As the largest digitally-based advertising platform and a leader in tech, Facebook has an obligation to ensure that the data it collects on millions of people is not used against those same users in a harmful manner.”

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JLL buying HFF in $2 billion deal that will create multifamily real estate giant

In a deal that will combine two of the biggest names in multifamily and commercial real estate, Jones Lang LaSalle announced Tuesday that it is buying HFF for approximately $2 billion.

Under the terms of the agreement, JLL will acquire all the outstanding shares of HFF in a cash and stock transaction that carries an equity value of approximately $2 billion.

Both JLL and HFF are consistently among the top lenders in the multifamily real estate space, with both companies placing in Freddie Mac’s top 10 lenders of 2018.

JLL touted HFF’s capital markets experience as a significant draw to the deal. JLL claims that the deal will allow the company to “rapidly scale” its presence in the U.S. capital markets, and accelerate the growth of its debt advisory business in Europe and Asia, along with driving increased operating efficiency.

“Increasing the scale of our capital markets business is one of the key priorities in our Beyond strategic vision to drive long-term sustainable and profitable growth. The combination with HFF provides a unique opportunity to accelerate growth and establish JLL as a leading capital markets intermediary, with outstanding capabilities,” said Christian Ulbrich, global CEO of JLL.

“We have long admired HFF for its expertise and leading reputation in the industry, as well as its client-first culture of teamwork, ethics and excellence, which aligns with our own,” Ulbrich added. “I believe that combining our organizations will deliver a range of compelling benefits for our clients, employees and shareholders.”

Upon closing of the deal, JLL shareholders are expected to own approximately 87% of the combined company, while HFF shareholders are expected to own approximately 13%.

The companies also expect the deal to provide “significant run-rate synergies,” estimated to be approximately $60 million over two to three years.

As part of the deal, HFF CEO Mark Gibson will become JLL’s CEO, Capital Markets, Americas and Co-Chair of its Global Capital Markets Board.

“This is a terrific transaction for our shareholders, providing them with an immediate cash payment and the opportunity to participate in the long-term value of the combined company,” Gibson said.

“In addition, we believe the combination with JLL will create a superior platform for our shareholders, clients and employees than either company would have independent of the other and will significantly accelerate our firm’s strategic plan,” Gibson added. “JLL’s team-oriented culture with the additional standards of high character and integrity are an excellent match with the HFF culture, which has been HFF’s fundamental differentiator since its inception.”

The companies expect the deal to close in the third quarter of 2019.

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