Feb. 13: Vendor news from around the biz; letters on credit concerns; Saturday Spotlight: LHM Financial

Are people in their 30s taking time away from their jobs to look at alluring online photos? Kind of… It certainly is a type of charm. Yes, Valentine’s Day is tomorrow, reminding us that we’re almost halfway through February already and life continues to be good for lenders and MLOs who are helping millions of borrowers around the nation. Sure enough, January continued the strong 2020 trends, although things slowed a little from December. According to FBX, January 2021 mortgage rate-lock volume was up 64% YoY and 6% MoM across all channels, while funded volume increased 64% YoY but decreased 6% MoM. In the Retail channel, lock volume increased 63% YoY and 6% MoM, while funded volume was up 82% YoY but down 6% MoM.

Saturday Spotlight: LHM Financial Corporation, a full-service mortgage banker that takes great pride in the communities that it is a part of

In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth). 

LHM Financial has been a full-service mortgage banker with an experienced staff offering knowledge in mortgage lending for over 20 years. With access to a full range of mortgage sources, our licensed loan originators are dedicated to finding the right loan with the rates, terms, and costs to meet our borrower’s unique needs. We started with one branch and now we have 9 branches in 4 states with licenses in 6 additional states.

 

We now offer all our mortgage services online, making everything easier for our clients and partners. LHM Financial not only allows access loan options available in the marketplace online where you can also review loan alternatives and apply for your loan, at your convenience, online, 24 hours a day.

Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why. 

Our President, Chris Lagerblade, is constantly participating in local charities or events to help the community. During Hurricane Harvey, we held a donation drive and Chris loaded up her horse trailer with supplies and drove it to Texas herself. We had local media and radio involved so the donations kept coming weeks after she left. All the extra donations were given to one of the radio stations and were taken to Texas a couple weeks later.

We hold blanket drives for animal shelters, donate to the Joy Bus and every year we hold our annual “adopt a senior” for Filmore Gardens where the seniors fill out their Christmas wish lists and all our employees buy what is on their list for Christmas.

Tell us how your company maintains its culture in the office, or in a work-from-home environment if applicable. 

We have migrated to mostly work-from-home but what we have done to connect is increase our meetings and purchase cameras for those who need them. This past holiday season we could not have a traditional holiday party, so we sent all employees their own “Holiday Party in a Box.” Then we scheduled out by departments and branches to hop on the zoom call, catch up with each other, play some fun trivia and do some timed scavenger hunts.

Things you are most proud of that don’t have to do with sales. 

This company is predominantly run by women. In our operations staff, almost every department head is a woman. Among our Loan Originators, we have a high percentage of female top performers. If you know the mortgage industry, that is uncommon to find, and we are proud of it.

(For more information on having your firm, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Credit: A topic that is alive and well

The question occasionally comes up among originators, “When you pull a credit report, does the information you send for the report contain any info on race, gender, age, etc.? And is information from the Government Monitoring section of the URLA is passed to credit bureaus?”

I am not an expert in credit, or credit bureau policy, so I asked Tracey King-Danadio, the COO of Partners Credit & Verification Solutions. “Something to consider regarding the racial bias: obviously race and gender are not subject to review when submitting credit. Date of birth is one of the factors in inquiry identification, and while not required by the bureaus, is sometimes required by lenders; regardless of if it is input to obtain credit, it is returned as data from the bureaus. The credit information returned does not take into consideration the disparity in lending practices with minority communities, from predatory installment loan lenders, to obtaining a credit card based on lower incomes, etc. I know that some are making a case that these types of loans and issues should be considered and factored into determining scores or credit worthiness.

 

“Within each scoring model there are a number of scorecards, which might be best described as ‘mini scoring models.’ Consumers with similar credit histories are organized together in tiers, and there are a minimum and maximum scores available within each scorecard. ‘A segmented scorecard uses a set of predictive input variables to divide the population.’ Since these scoring models are proprietary, we are limited in knowing all the different impacts of differing credit can have on different ‘tiers’ of borrowers. Thank you, Tracey!

The lending industry is talking about an article titled, “Biden Wants to Shut Down Credit Bureaus – What Would That Mean for You?” I received a few letters opining that eliminating the credit bureaus would be a poor route to take as they are already regulated by the FTC and the CFPB. “Nationalizing a product or service is usually a poor decision, especially for the consumer. More expensive and less efficient than open, competitive markets. There are probably well-meaning individuals who feel they are protecting everyone from certain evils but the effect is usually the opposite.”

Mike wrote in to remind us that, “The credit bureaus do not calculate scores and credit ratings. They house information supplied by creditors each month. FICO and Vantage calculate scores based on information at the bureaus. In our industry when a lender pulls a credit report, the score is based on what is reported. Sometimes that information is incorrect and could affect the scores. Sometimes scores are not delivered due to a security freeze or lock placed by the consumer.

“Credit reporting is also voluntary. If mistakes are made, and we all make mistakes, they usually rest with the creditors (furnishers) who contribute account information to the bureaus. Reporting errors may play a part in credit decisions but so do many factors including the consumer’s ability to repay the credit. This is why it is so critical to provide extensive and frequent education on the subject early and often. I believe the majority of credit issues are due to a life event: job loss, divorce, medical emergencies, spousal death, etc. Are some groups in our country more susceptible to these misfortunes? Perhaps. Are there some consumers who just don’t manage their finances well or others that have no desire to do so? Certainly. But those occurrences know no lines between race, gender, income levels or any other external factor used to justify the author’s opinion.”

But from North Carolina Dan F. sent, “I have to take issue with the current set up of credit bureaus represents an open competitive market. I believe that is a bit of a stretch. I had to reach back 40 years to my freshman econ class to remember the term ‘oligopoly.’ Over the years I have become less and less comfortable with the idea that for-profit entities should be in charge of what has in essence become a public service role. Credit reporting and credit scores have just become too important to society to be left to private companies that have profit as their only motivation.”

And Sam L. relayed, “I think it is interesting that anyone makes a case for a lack of evidence for racial bias in credit scoring, and then says all nationalized programs hurt the market with no supporting evidence. Many cases are being made that nationalized programs can actually increase competition in sectors where prices are above equilibrium.”

Vendor news from around the biz

In LIBOR news, KBC Bank, a Belgium-based bank with operations across Europe, U.S., and Asia Pacific, has chosen Finastra’s Fusion Loan IQ Alternate Reference Rates (ARR) module to help manage its transition through the upcoming interbank references rates changes and to expand its lending business. The bank has also opted for the Fusion LIBOR Transition Calculator to help calculate rates ahead of the transition period.

SitusAMC has been busy with its rapidly growing technology offerings such as automated underwriting technologies for income and asset calculation, ComplianceEase and the Rate Lock System to name a few. Its recent acquisition of ReadyPrice adds loan pricing, underwriting, and delivery software to its growing residential technology offerings.

Mortgage document preparation vendor International Document Services, Inc. (IDS), has fully integrated with Promontory MortgagePath LLC, a leading provider of comprehensive digital mortgage and tech-driven fulfillment solutions. “The partnership includes the migration of Promontory MortgagePath’s client base to IDS’ flagship document preparation platform idsDoc, which is recognized for unequalled customization and superior customer service. Throughout the implementation process, Promontory MortgagePath and IDS worked to meticulously test and prepare for Promontory MortgagePath’s lender-client needs, including common loan and document types and likely use scenarios, thus enabling Promontory MortgagePath to further support its clients with customizable document preparation services.”

HomeLight announced a partnership with the National Association of Real Estate Brokers – NAREB, together, they are launching the Black Real Estate Program, which will provide financial, educational, and career support for aspiring Black real estate agents to help them achieve high-production success. According to the latest U.S. Census Bureau data, Black Americans represent less than 6 percent of all real estate professionals. The HomeLight-NAREB Black Real Estate Agent Program will seek to increase the number of top-producing Black agents in real estate, with the ultimate goal of helping improve the rate of homeownership for Black Americans across the country.

Built announced a significant update to its Construction platform. The launch of Billing Solution will provide construction professional greater visibility into every stage of the billing process from conception to completion. Presented in the form of a clean and intuitive dashboard from which all invoices and progress billing, compliance documents, lien waivers and payments can be monitored and tracked., Built offers finance tools purpose-built for construction to bring billing into focus. Further, because specialty contractors and vendors will continue to submit invoices via email, there is no learning curve or change management when implementing Built.

U.S. Bank Housing Capital Company (NYSE: USB), a division of U.S. Bank that specializes in offering full-service banking solutions to private and public homebuilders, announced its partnership with Built to digitize construction lending by offering an online solution for managing home builder construction loans. The new platform is part of U.S. Bank’s strategic plan to invest in new solutions that save its customers both time and money.

Real Estate Connection announced the launch of Knowledge Process Outsource Worldwide LLC. (KPOW), a Real Estate industry focused Knowledge Process Outsource (KPO) service provider. “KPOW works with clients to find ways to improve operational efficiency, lower costs, reach more of their customers and scale their back office operations. KPOW provides its clients cost effective and efficient ways to scale and profitability grow their business.”

Covius extensive compliance document library is now available within the Black Knight Loss Mitigation platform. Servicers using the Black Knight Loss Mitigation solution will be able to access Covius’ 50-state, warranted template document library covering GSE, Ginnie Mae and proprietary loss mitigation programs. Covius’ on-staff regulatory and compliance team continually monitors all federal, state and local legislation, as well as regulatory and judicial decisions, to ensure that the templates remain compliant. The Black Knight Loss Mitigation solution is integrated into Black Knight’s MSP loan servicing system and helps servicers manage the influx of repayment plans, FHA Partial Claims, GSE Payment Deferrals and other types of loan modifications.

Sales Boomerang announced the beta release of Prescriptive Scenarios, a product line of ‘smart’ loan scenarios designed to identify the ideal loan for each borrower. The beta release includes three categories of Prescriptive Scenarios: Rate-and-Term, Cash-Out and FHA Mortgage Insurance (MI) Removal. Leveraging real-time pricing data from Optimal Blue, Prescriptive Scenarios always reflect a lender’s current loan rates. Additionally, lenders can personalize Prescriptive Scenarios by layering on additional intelligence (for example, a borrower’s credit card debt load) or setting custom thresholds for criteria like home equity or loan-to-value (LTV) ratio.

Ease, cost, and practicality are three components lenders and consumers consider in enlisting a vendor’s help with a task. Greg Chaffin with FirstFunding sent along, “Rob, FirstFunding, Inc. rolled out the FlexClose Funding program about two years ago. The most dramatic/immediate results that we have seen involve mortgage lenders and settlement agents working together to capture business and improve the customer experience. The certainty of immediately available funds and the ability to move funds without dependence on the Fed’s wire platform presents opportunities in the refinance market with increased efficiencies and reduction of wire fraud, but the purchase market is where FlexClose really shines. The ability to expand the loan closing/funding window allows lenders and/or escrow agents to schedule closings for the customer convenience including after hours or weekends. Homebuilders and mortgage lenders see the marketing and customer satisfaction value in handing the keys to the buyer/borrower and the real estate agents receiving commission payments even from evening or weekend closings. We have also had settlement escrow agents adopt the model to better manage closing appointments (and the customer experience) during events such as the current crush of refinance, purchase closings, or in the face of managing health safety concerns during the pandemic.

“As we move into a purchase money market, real estate agents and others compete for buyers, lenders compete for referrals and everyone wants the homebuilder business. All parties should ask themselves, ‘What tools do I have to set me apart? Are there any strategic relationships that can be leveraged?’ As we move forward, it’s easy to envision mortgage lenders, settlement agents, and homebuilders working together, leveraging FlexClose to offer a closing and funding driven primarily for the convenience of the consumer and not dictated by office hours or wire cut-off deadlines. Couple electronic closings, eNotes, remote notaries, and FlexClose Funding, and it all works for the betterment of the consumer’s experience.” Thank you, Greg.

After 35 years of marriage, a husband and wife went to a therapist for counseling.

When asked what the problem was, the wife went into a tirade listing every problem they had ever had in the years they had been married, on and on and on: neglect, lack of intimacy, emptiness, loneliness, feeling unloved and unlovable, an entire laundry list of unmet needs she had endured.

Finally, after allowing this for a sufficient length of time, the therapist got up, walked around the desk and after asking the wife to stand, he embraced and kissed her long and passionately as her husband watched – with a raised eyebrow. The woman shut up and quietly sat down as though in a daze.

The therapist turned to the husband and said, “This is what your wife needs at least 3 times a week. Can you do this?”

“Well, I can drop her off here on Mondays and Wednesdays, but on Fridays, I golf.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Servicing: A Valuable Asset”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2021 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

 

Rob Chrisman