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Apache is functioning normally

The Government National Mortgage Association (Ginnie Mae) announced on Thursday an expansion of its Environmental, Social, and Governance (ESG) labeling to single-family mortgage-backed securities (MBS) pools, an expansion of a previous initiative that had only impacted multifamily pools, and which some analysts say an increasingly strong market for investors.

In an interview with HousingWire, Ginnie Mae President Alanna McCargo explained that this represents Ginnie’s first social bond label in the investment space.

“This is really about just furthering the specifics around Ginnie Mae’s social impact story,” McCargo said. “We’re a 55-year-old company and [during that time], we’ve been a social impact company. This team during my tenure has done the yeoman’s work of really amplifying, collecting and gathering all the loan-level data that is in our securities to be able to disclose that data to investors, so they really understand what’s in the pools that they’re buying and what they’re investing in.”

McCargo also stressed that determinations of social impact will be left to the investors, and will not be made by Ginnie Mae itself.

“Something that we’ve always been doing all along in terms of the borrowers that we support through the Ginnie Mae program are now much more clear and transparent so investors understand and know the social impact elements in their bonds,” she said. “And I think it’s important to say that we don’t determine if it’s social impact, investors do. But we’re making all the tools and all the data available to them to be able to do that.”

The expansion will come in the form of a new prospectus language that will identify the social impact elements of the bond, on top of the recent rollout of the company’s ESG composite social and sustainability data.

“It’s a disclosure we’re doing on a monthly basis,” McCargo said. “[It allows you to] see the data around what is in Ginnie Mae securities, how it is affecting or helping low-to-moderate income households, or seniors, all the different categories of social support that we provide through the Ginnie Mae program.”

That record provides pool-level aggregate information about the extent of loans and unpaid principal balance (UPB) dollars that are in low- and moderate-income areas, with a chart illustrating the percentage of loans, percentage of UPB of ESG-flagged pools and/or loans and totals of the total portfolio over the last 12 months.

McCargo said she sees the development as “a big deal,” saying it’s representative of the other ESG work being done more broadly at HUD and at other federal agencies.

“This is a first-of-its-kind social bond label,” she said. “It’s laying down a marker for impact investing. It really has been something that we have noted is driving demand for Ginnie Mae, especially from the international investor community, and we are being responsive to that now that we have the data, the capability and the tools to be able to make that much more clear in our disclosures going forward.”

Part of the reason McCargo sees the development as significant is because ESG is often interpreted very differently by various parties that may be involved in the investment space.

“Social is a new construct, especially in the fixed-income markets and in the mortgage-backed securities space,” she said. “We’re defining it in a way that gives the transparency to investors for them to decide if that’s how they want to think about social, again, serving low-to-moderate incomes, tribal communities, rural communities and serving senior citizens through our [reverse mortgage securities] program. So all the different elements of that, we are trying to really lead the way because we are naturally, and inherently a social impact company.”

Sam Valverde, principal EVP of Ginnie Mae, added that the new label is designed to increase transparency and communicate that Ginnie Mae can provide a social investment opportunity.

“We’re extremely proud of what we launched in February, which is on per-security level, we now can offer investors clear verifiable data on who is represented in the bonds that they’re buying,” Valverde said. “And that is privacy-protected. So, we’re offering it on a pool level, and you can tell now how much of any given bond is being made to a borrower who makes less than 80% of the area median income. We have the address and income information at origination, so we’re offering demonstrable data to investors in a privacy-sensitive way so they can really understand what impact and investment in Ginnie Mae securities has.”

Source: housingwire.com

Apache is functioning normally

Today is the 15th anniversary of the collapse of Lehman Brothers. The great financial crisis (GFC) revealed a defective supply chain, metrics unable to assess local risk and markets incapable of answering Ben Bernanke’s defining question – “what’s this stuff worth?”

The requirements of a Digital Housing Platform were well understood long before the crisis.  The components needed to move housing past a costly, error prone, disconnected system include:

  • Authentication: Identity is the key control point in any digital interaction. The capability to “identity proof” the participants in a complex, multi-party transaction is fundamental to establishing trust, reducing fraud and removing friction between “relying parties.” The capability to authenticate, issue and revoke digital credentials is central to controlling access, verifying rights and accepting content from supply chain partners.
  • Authorization: A digital loan file of record accessed by a broad range of trusted identities from lenders to guarantors to investors requires a permission structure. What functions are individuals and organizations allowed to perform including viewing, editing, printing, exporting and approving? The capability to enforce these rights can eliminate errors and rework. The result should be collapsing costs and cycle times, improving quality, reducing repurchase risk and certifying that a loan, and its related assets are “Fit 4 Sale.”
  • Non-Repudiation: E-sign became federal law in 2000 but digital signatures are only a subset of the integrity component. Investors require assurance that a file, note or instrument reflects the verifiable intentions of the committed parties. Sensitive content must be protected in motion over networks and at rest within repositories. Technologies like encryption help deliver certainty that content has not been tampered with.
  • Validation: Mortgage is a manufacturing process with end products dependent on accurate information. Data is imported from multiple sources including credit agencies, public records aggregators, appraisers, inspectors, title and insurance firms and Realtors.  How do we know that the data is correct, can the source be verified, does it meet quality standards and can compliance with pricing guidelines be guaranteed?
  • Federation: Integrating the fragmented, localized and diverse housing ecosystem is the major challenge for any network delivering content from trusted sources. Standard agreements define shared responsibilities and what happens when mistakes happen.  These policy considerations, enforced by technology and legal conventions, are required for interoperability among supply chains and between competing “Super Apps.”  
  • Registration: A golden record of who owns the asset is a prerequisite for any commercial trading system. Improving the ability of MERS to verify and transfer ownership required capital, time and technology. Extending the registration component to county recording offices was another platform foundation.
  • Transactions: Platforms are “plug and play” once federated policies are widely implemented. Matching and clearing trades in open exchanges for multiple asset classes is a core ICE capability. The Ellie Mae component provided a critical mass of connections to begin the process of reinventing the property transaction. 
  • Compensation: Payments reveal the end points of the ad-hoc networks that characterize real estate. A servicing system that touches the consumer every month can be extended to all the participants in the original transaction. As every consumer facing commercial platform will attest — payments are the prize.
  • Information: Listings are on platform and new metrics will assess the risk, value and volatility of submarkets.
  • Integration: The sector reimagines portals, anchors federations, converges markets and makes money.

The DC3 platform launched in 1937 featured five components that had to be invented to make commercial air travel possible. Apple’s iPhone integrated 12 new components in 2007, and its reach has been extended to multiple vertical markets including banking. Housing finally has a Digital Platform that can attack several hard problems. What’s next?

Stuart McFarland is the former EVP Operations and CFO at Fannie Mae, EVP General Manager at GE Capital Mortgage Services, and CEO at GE Capital Asset Management.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Stuart McFarland at [email protected]

To contact the editor responsible for this story:
Tracey Velt at [email protected]

Source: housingwire.com

Apache is functioning normally

Mortgage rates have soared to historic highs in America, but one company’s CEO told Newsweek what they’re doing about it.

The popular 30-year term is now over 7 percent, a more than 20-year high. New homebuyers are discouraged from entering the market.

Applications for new mortgages have plummeted to their lowest level since 1996, according to the Mortgage Bankers Association (MBA). Homeowners who may want to sell and buy new properties are hitting pause and in turn stifling the supply of houses for sale, scared away by high rates.

Prospective buyers have been crowded out of the market.

House with sold sign in yard. One startup company is working to lower interest rates for some homebuyers.
Harold M. Lambert/GETTY IMAGES

One startup is hoping to change that. Roam, a new real-estate platform that launched on Wednesday, says it can help potential home buyers find mortgages for as low as 2 percent. The company is focusing on what’s called an “assumable mortgage” business where a homebuyer essentially takes over an existing mortgage from a seller.

“Roam is trying to help buyers wind back the clock on rates and purchase a home with a low rate mortgage included,” Raunaq Singh, founder and CEO of Roam, told Newsweek.

Singh, who worked as a Loan Officer at real estate business Opendoor, came to the idea after he struggled to find an affordable mortgage himself.

“The rates just kept going higher and higher, and the monthly payments kept going higher and higher, which meant that the number of homes I could afford kept getting smaller, and smaller and smaller,” he said in an interview.

Singh stumbled on the idea of assumable mortgages and was shocked to discover that there existed government-backed loans where the buyer could take over an existing mortgage from a seller at much lower rates than currently available in the market.

From there the concept of Roam emerged.

Singh found that few people knew about these mortgages and how to access them. The other thing he discovered was the process to acquire the homes was antiquated with the process still being done on pen and paper in some cases.

Even when a potential buyer has managed to discover these mortgages, they still have to deal with the process of eventually securing the property, which can be cumbersome and complicated. They have to deal with the seller, the seller’s agent, lenders and other parties before the transaction can be concluded.

Roam decided to digitize the process so that buyers could quickly get updates about available homes and make the exercise more efficient.

“We realized, if we quarterback this transaction on behalf of the buyer, everybody else would become more amenable. And we would take the stress out of the transaction,” Singh said.

The company is targeting 4.4 million homes whose mortgages are government-backed, such as those guaranteed by the Federal Housing Administration and the Department of Veterans Affairs.

The attraction of the homes for prospective buyers is that they come with low interest rates. Singh told Newsweek that his company is focused on homes that, if the interest rate is less than or equal to 4 percent, they have to have a loan-to-value of the home ratio of greater than or equal to 50 percent. And if the interest rate on the home is between four and 5.5 percent, they have to have a loan-to-value ratio of 75 percent. The focus for Roam is to make sure that the monthly payment is low for buyers, ideally less than half of what current rates would offer.

Roam, which launched today with an initial seed funding of $1.25 million, is available in Georgia, Arizona, Colorado, Texas and Florida. It has 10 employees.

The funding was led by Founders Fund’s Keith Rabois. Eric Wu, founder of Opendoor, is also an investor. They will both become board members. Other investors include Ryan Johnson, Culdesac CEO, and #ANGELS Founding Partner Jana Messerschmidt. Tim Mayopoulos, former CEO of mortgage company Fannie Mae, is joining the company as a senior advisor. Earlier this year, The Federal Deposit Insurance Corporation appointed him to briefly helm Silicon Valley Bank after its collapse.

The company is registered as a real estate brokerage in the states where it operates and will charge a 1 percent fee on the purchase price of the homes it helps sell.

One challenge the company will face is what happens when buyers take over a mortgage that still has outstanding loans to pay off and may need to borrow at current, high, interest rates to cover the balance.

Singh told Newsweek that the company will assist the buyer in securing financing for that loan. He added that whatever blended arrangement they will recommend, the goal is to help their customers save money.

“We would never recommend that a customer takes on a second lien if the monthly payments will be higher,” he said.

Roam is available as an online platform with a team that’s also available offline, Singh said. The company doesn’t yet have a mobile app.

“It’s something that people have asked us for, it’s something that’s on our roadmap,” he said.

Source: newsweek.com

Apache is functioning normally

The Federal Deposit Insurance Corporation is suing over a dozen mortgage firms in federal courts to recoup funds over loans they brokered over 14 years ago for Washington Mutual. 

The agency in its complaints points to a combined 373 home loans it claims were defective for a variety of reasons, according to a National Mortgage News review of federal court records. While dollar amounts sought aren’t disclosed, some alleged bad underwriting for the loans in question includes five-figure kickbacks and six-figure borrower debts.

The FDIC’s pursuit stems from the fallout of its takeover of WaMu in 2008 during the Great Financial Crisis. Deutsche Bank, a trustee for mortgage-backed securities including the defective WaMu loans, sued the agency in 2009 for indemnification for its securities. 

The sides reached a $3 billion settlement agreement in 2017, in which the FDIC issued a receivership certificate, which grants payments to Deutsche Bank as the FDIC recoups WaMu funds. The federal agency began requesting indemnification from mortgage companies in 2021 and none, according to court records, have acquiesced. 

“I’m really quite concerned about them taking this stance when they stand in the shoes of those banks who were really at fault, lenders at fault, not the brokers who are just giving them information they asked for,” said Mukesh Advani, a Bay Area attorney representing defendant Cal Coast Financial.

The FDIC sued East Bay-based Cal Coast in August over 21 mortgages the company brokered for WaMu and its subsidiary, Long Beach Mortgage Co. 

The FDIC declined to comment last week, while its counsel and other companies either declined to comment or didn’t respond to questions. Two lenders facing such lawsuits, Guild Mortgage and Supreme Lending, have responded to the FDIC’s complaints in brewing court battles. 

The 14 firms named in lawsuits in the past 12 months range from small operations to major players, such as Freedom Mortgage. Mortgage companies are being sued for indemnification for as few as 14 loans, in Guild’s case, to as many as 72 loans from Benchmark Mortgage. The Plano, Texas-based Benchmark is scheduled to take the FDIC to trial next June, court records show.

Other businesses the FDIC is suing include American Nationwide Mortgage Co.; Lennar Mortgage; The Mortgage Link; Mortgage Management Consultants; New Jersey Lenders; PNC Bank as successor to smaller firms; Primary Residential Mortgage Inc.; Pulte Mortgage and RealFi Home Funding Corp. 

The lawsuits are nearly uniform in length and language, describing the FDIC-WaMu receivership’s losses as arising from inaccurate and/or incomplete loan applications and documentation produced by the brokers. 

Each company signed broker agreements with WaMu and its subsidiaries, such as Long Beach Mortgage, in 2004 and 2005, according to exhibits attached to each claim. The FDIC in each case includes an exhibit describing in brief the defects of each loan, the majority appearing to be misrepresented credit or income and debt. 

In the FDIC’s lawsuit against Lennar, it alleges one borrower suggested a $60,000 monthly income, six times their actual earnings, while another homebuyer failed to disclose over $660,000 in mortgage debt from a previous property. Lennar last week declined to comment on pending litigation. 

Each lawsuit also cites a six-year limitation to file claims following the 2017 Deutsche Bank agreement, and attorneys for lenders said they anticipate more FDIC complaints against lenders. 

James Brody, an attorney with Irvine-based Garris Horn LLP, represents Guild and was recently retained by The Mortgage Link in its own FDIC litigation. In regards to the Guild lawsuit, Brody shared a statement this week calling the FDIC’s case “extremely weak” and noted the complaint’s lack of specifics around losses attributable to Guild’s brokered loans. 

“We certainly anticipate that there will be a number of motions for summary judgment that will be filed with the Court by most if not all parties that don’t decide to settle out because of their own cost/benefit considerations,” he wrote. 

Guild anticipates filing a motion for summary judgment to dismiss the lawsuit, Brody said.

Source: nationalmortgagenews.com

Apache is functioning normally

Hawaii, with its lush landscapes, volcanic terrains, and mesmerizing beaches, offers a unique backdrop for the real estate market. The home inspection process here isn’t just routine—it’s essential. For prospective buyers, a home inspection not only reveals a property’s interaction with the unique Hawaiian environment but also offers a comprehensive view of its overall condition and potential challenges. Sellers, on the other hand, find value in providing clarity about their property’s strengths and vulnerabilities.

So whether you’re buying a home in Honolulu or selling a home in Waipahu, this Redfin article has everything you need to know about getting a home inspection in Hawaii, along with insights from local home inspectors themselves. Let’s get started. 

ejs9 via Getty Tmages

Why should you get a home inspection in Hawaii?

“A Home Inspection initiated by the seller will increase the confidence of the buyer, reduce the time on the market, and lower the unknown risks faced by the buyer,” shares Inspect Hawaii.”A good analogy is the game of poker versus chess. In poker, cards are hidden from both parties to enable bluffing and guessing as part of the game. In chess, all the chess pieces of both parties are on the chess board and there is full transparency of information. A seller’s inspection is like playing chess instead of the current process which is akin to playing poker.”

“Buying a home in Hawaii, which is one of the most expensive and competitive places to live, can be a very emotional and difficult process,” shares Building Specs Hawaii. “Hiring qualified professionals, like an experienced home inspector, can help to alleviate some of the stresses and uncertainties that often arise.  A professional home inspection provides valuable insight into a home and its components allowing buyers to better understand their potential new home and to best determine if it is the right one for them.” 

Are there any specialized inspections that Hawaii buyers should consider?

In Hawaii, the tropical paradise known for its diverse landscapes and unique ecosystems, home buyers should be aware of specialized inspections that cater to the islands’ distinct conditions. Given Hawaii’s proximity to the ocean, a salt mist assessment can be valuable, as salt-laden air can accelerate corrosion on properties, especially metal components. Homes located in areas prone to volcanic activity might benefit from a geothermal risk evaluation. Additionally, given the high humidity levels, checking for mold or moisture damage is vital, particularly in enclosed spaces like basements. 

“A home inspection in Hawaii is of paramount importance due to the unique environmental factors that affect properties in this tropical paradise,”says Square One Home Inspections.  “The state’s high humidity levels can lead to hidden issues like mold and mildew, which may go unnoticed by the untrained eye. It is highly recommended that a home buyer to also complete a proper mold inspection.”

The state’s tropical climate can lead to pests like termites, making a comprehensive pest inspection critical. 

“Termites are insidious. They can infest a house for months without being detected. In Hawaii there are two types of termites, similar in appearance but completely different in how they become established, the type of damage they do, the extent of the damage and how quickly the damage occurs,” shares Entomologist, Jamie Neely.

“Indications of infestations that are in their infancy are subtle and it takes an experienced eye to notice. Some types of construction are much more prone to infestation. Some areas of the islands have greater levels of infestation. Some high-rise buildings are more susceptible to infestation based on the design.”

“Termites are insidious. They can infest a house for months without being detected. In Hawaii there are two types of termites, similar in appearance but completely different in how they become established, the type of damage they do, the extent of the damage and how quickly the damage occurs,” shares Entomologist, Jamie Neely.

“Indications of infestations that are in their infancy are subtle and it takes an experienced eye to notice. Some types of construction are much more prone to infestation. Some areas of the islands have greater levels of infestation. Some high-rise buildings are more susceptible to infestation based on the design.”

Are home inspections required in Hawaii?

“I have been Inspecting properties on Oahu for over 20 years and you wouldn’t believe the flaws I have come across. I highly recommend home buyers hire a Home Inspector before their purchase although Hawaii does not require it,” recommends Akamai Home Inspection.

How much does a home inspection cost in Hawaii?

The cost of a home inspection in Hawaii can vary depending on several factors, including the location, size, and age of the property, as well as the specific services included in the inspection. On average, home inspections in Hawaii typically range from $400 to $800 or more. It’s essential to obtain quotes from qualified home inspectors in your area to get a precise estimate tailored to your property’s unique characteristics and the level of inspection detail you require. Keep in mind that while the upfront cost may vary, a thorough home inspection is a valuable investment in ensuring the condition and safety of your prospective home.

Can you sell a house in Hawaii without an inspection?

“You can sell your home in Hawaii without having a home inspection, but should you? It depends on many factors but we would recommend having a pre listing inspection to reduce the anxiety that comes with not knowing the outcome during the contingency period,” shares Architect Inspection Systems, Inc.. “It also gives you the opportunity to stand out as a seller by handing the buyers a detailed report on the condition of the home upfront, showing the confidence you have in your offer for sale.”

Hawaii home inspection: the bottom line

In the unique environment of Hawaii, home inspections take on special significance. At the heart of it, a thorough home inspection in Hawaii is not just about ensuring a sound investment; it’s about understanding and respecting the delicate balance of nature and construction in this tropical haven.

Source: redfin.com