Title firms swoop in to help victims of Cloudstar ransomware attack, Fannie Mae expects lower rates to boost mortgage originations in 2H & more of the week's top news
July 23, 2021 7:21 PM
Title firms swoop in to help victims of Cloudstar ransomware attack
Companies across the mortgage settlement services spectrum are pulling together to help Cloudstar clients get back up and running following aransomware attack that has shut down one of its largest providers.
Cloudstar, which acts as a container for the data generated by title production software,was shut down on July 16 by the attack. It is unknown how many closings could be affected, however, Cloudstar has six data centers in the U.S., with more than 42,000 users, according to information on the American Land Title Association website.
"We have retained third-party experts to assist us in our recovery efforts and have also informed law enforcement," a Cloudstar spokesperson said. "Due to the nature of this attack, at this time our systems are currently inaccessible, and although we are working around the clock, we do not have a definitive restoration timeline."
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Cloudstar, which acts as a container for the data generated by title production software,
"We have retained third-party experts to assist us in our recovery efforts and have also informed law enforcement," a Cloudstar spokesperson said. "Due to the nature of this attack, at this time our systems are currently inaccessible, and although we are working around the clock, we do not have a definitive restoration timeline."
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Fannie Mae expects lower rates to boost mortgage originations in 2H
Fannie Mae cut its interest rate forecast in its July economic outlook and now predicts slightly more purchase and refinance originations for this year thanit had expected in June.
The improved outlook does not take into account the Federal Housing Finance Agency's cancellation of its50 basis point adverse market fee at the government-sponsored enterprises for most refinancings, announced last Friday. When the FHFA announced the fee last August, the industry was concerned that the increased cost could reduce refinance activity, but volume numbers through the first half of this year indicate a limited impact.
Fannie Mae now expects over $4.2 trillion in production this year, versus its June prediction of $4.1 trillion. Its outlook is more bullish than Freddie Mac's, whosethird quarter forecast calls for $3.9 trillion. The Freddie Mac forecast was released on July 15, two days before the FHFA moved to cancel the adverse market fee.
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The improved outlook does not take into account the Federal Housing Finance Agency's cancellation of its
Fannie Mae now expects over $4.2 trillion in production this year, versus its June prediction of $4.1 trillion. Its outlook is more bullish than Freddie Mac's, whose
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5 things to know about cash offer financing products
“Cash is king” when it comes to home buying, Fannie Mae chief economist Doug Duncan , said in a recent interview with National Mortgage News, and in 2021, statistics show that to be the case.
The evidence shows up in the rising number ofall-cash offers on new purchases, according to Gay Cororaton, senior economist and director of housing and commercial research at the National Association of Realtors. While buyers paying for a new home with cash is nothing new, it has been on a noticeable upswing in the first half of 2021.
“Supply is very tight. Cash offers are what sellers prefer just because the deal will go through faster — you don't have to have an appraisal. And so that's what we've seen tracking at about 25%,” she said.
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The evidence shows up in the rising number of
“Supply is very tight. Cash offers are what sellers prefer just because the deal will go through faster — you don't have to have an appraisal. And so that's what we've seen tracking at about 25%,” she said.
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Predicted for H2: Signs of a housing bubble, non-agency lending growth
The biggest 2021 problems for mortgage originators carrying through to the second half of the year are thelack of inventory and the relatedrun-up in home values to record levels.
Both are big concerns for Bruno Pasceri, the president of Incenter, which provides lender services. "I hate to use that word because it's scary, but I think we'reapproaching bubble status on the appreciation of homes," he said.
The annual price gains alarm him because of their effect on house sales.
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Both are big concerns for Bruno Pasceri, the president of Incenter, which provides lender services. "I hate to use that word because it's scary, but I think we're
The annual price gains alarm him because of their effect on house sales.
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MeridianLink announces pricing of its IPO
MeridianLink is the latest mortgage technology company set to go public, announcing today the terms for its IPO launch expected next week.
The cloud-based loan origination and decision-making software provider will put out 12 million shares of common stock, with 10 million from the company itself and 2 million sold by existing stockholders. It’s also giving its underwriters a 30-day option to purchase an additional 1.8 million shares. The company first announced a proposed IPO on April 30.
The stock’s anticipated price range should fall between $24 and $26 per share when it starts trading at some point next week, according to the Securities and Exchange Commission S-1 document. It would raise between $331.2 million and $358.8 million if the share prices stay within that range.
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The cloud-based loan origination and decision-making software provider will put out 12 million shares of common stock, with 10 million from the company itself and 2 million sold by existing stockholders. It’s also giving its underwriters a 30-day option to purchase an additional 1.8 million shares. The company first announced a proposed IPO on April 30.
The stock’s anticipated price range should fall between $24 and $26 per share when it starts trading at some point next week, according to the Securities and Exchange Commission S-1 document. It would raise between $331.2 million and $358.8 million if the share prices stay within that range.
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Mortgage rates fall following COVID-19 worries, FHFA change
The 30-year fixed-rate mortgage average fell for a fourth consecutive week , as increasing concerns about a COVID-19 resurgence and a recent rule change from the Federal Housing Finance Agency pushed rates downward.
According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed-rate average dropped 10 basis points for the weekly period ending July 22 — the steepest single-week decline this year — falling to 2.78% from 2.88%. During the same period one year ago, the average came in at 3.01%.
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According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed-rate average dropped 10 basis points for the weekly period ending July 22 — the steepest single-week decline this year — falling to 2.78% from 2.88%. During the same period one year ago, the average came in at 3.01%.
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Investors bought more single-family homes than ever in 2Q
With extreme home price growth in the past year, investors couldn’t help but take advantage of the situation.
Investors — any institute or business that deals in real estate — bought 67,943 homes in the second quarter, a surge from 59,017 in the first quarter and 32,873 the year before, according to Redfin. Those purchases amounted to $48.5 billion, up from $38.9 billion quarterly and $20.9 billion annually, though many investors pulled back during the pandemic’s early stages.
Investor-owned units make up 15.9% of all U.S. properties, an increase from 14.8% in 1Q, 10.2% a year ago and just below the record of 16.1% in 2020’s first quarter. Therise of housing values basically guarantees strong returns, especially if the investor has access to cheap debt, Redfin Senior Economist Sheharyar Bokhari said in the report. A 74% share of these investments were cash purchases, driving the already intense competition higher.
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Investors — any institute or business that deals in real estate — bought 67,943 homes in the second quarter, a surge from 59,017 in the first quarter and 32,873 the year before, according to Redfin. Those purchases amounted to $48.5 billion, up from $38.9 billion quarterly and $20.9 billion annually, though many investors pulled back during the pandemic’s early stages.
Investor-owned units make up 15.9% of all U.S. properties, an increase from 14.8% in 1Q, 10.2% a year ago and just below the record of 16.1% in 2020’s first quarter. The
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Title company earnings rise in 2Q even as business slips
Second quarter earnings at three of the large title insurance underwriters are higher than the previous period even as open order counts — a measurement of current business — were lower.
During the first quarter, the title insurers had unusually high activity due to the refinance boom. However, most home purchases, whose title orders have higher margins, typically take place in the spring, which helps to explain the increased earnings in the second quarter.
The Mortgage Bankers Association's forecast issued on Wednesday estimated the second quarter's total volume at $1.05 trillion, slightly down from the first quarter's $1.09 trillion. But purchase originations rose on a quarter-to-quarter basis to $460 billion from $320 billion. During the second quarter of 2020, mortgage originators had purchase volume of $348 billion
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During the first quarter, the title insurers had unusually high activity due to the refinance boom. However, most home purchases, whose title orders have higher margins, typically take place in the spring, which helps to explain the increased earnings in the second quarter.
The Mortgage Bankers Association's forecast issued on Wednesday estimated the second quarter's total volume at $1.05 trillion, slightly down from the first quarter's $1.09 trillion. But purchase originations rose on a quarter-to-quarter basis to $460 billion from $320 billion. During the second quarter of 2020, mortgage originators had purchase volume of $348 billion
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Mortgage volume drops again after a one-week surge
Following a seasonally adjusted spike that lasted one week, mortgage application volume declined again, with purchases slowing, according to the Mortgage Bankers Association.
The MBA’s Market Composite Index, which tracks application volume through a survey of members, declined 4% on a seasonally adjusted basis for the week ending June 16, compared to the prior period that included the July 4th holiday. The unadjusted index came in 20% higher for the week. Volume showed a seasonally adjusted 17.7% decrease from the same week a year ago.
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The MBA’s Market Composite Index, which tracks application volume through a survey of members, declined 4% on a seasonally adjusted basis for the week ending June 16, compared to the prior period that included the July 4th holiday. The unadjusted index came in 20% higher for the week. Volume showed a seasonally adjusted 17.7% decrease from the same week a year ago.
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Waterstone Mortgage's mortgage volume declines in 2Q21
Even as its second quarter purchase mortgage share grew 20 percentage points over the previous year, Waterstone Mortgage reported lower segment net income.
The subsidiary of Wauwatosa, Wis.-based Waterstone Financial had a net income of $10.4 million in the second quarter, compared with $14 million in the first quarter and$16.8 million one year ago. Mortgage banking net income peaked at $21.1 million in the fourth quarter of 2020.
Mortgages account for the bulk of net income at the parent company. Waterstone Financial, which also operates a community bank, had total net income of $17.9 million for the second quarter, down from $21.3 million in the first quarter and $20.9 million in the second quarter of 2020.
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The subsidiary of Wauwatosa, Wis.-based Waterstone Financial had a net income of $10.4 million in the second quarter, compared with $14 million in the first quarter and
Mortgages account for the bulk of net income at the parent company. Waterstone Financial, which also operates a community bank, had total net income of $17.9 million for the second quarter, down from $21.3 million in the first quarter and $20.9 million in the second quarter of 2020.
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Delinquency rate falls to pre-Great Recession average: Black Knight
The share of mortgage borrowers with late payments hasn’t yet fallen back to pre-pandemic levels, but it is now at a point where it’s not that unusual from a historical perspective.
June’s 4.4% delinquency rate, which includes borrowers with payments forborne due to coronavirus-related hardships, is well within the range that passed for normal in the period leading up to the mid-aughts housing crash, according to Black Knight’s latest First Look report. That rate, which excludes foreclosures, was down from 4.7% the previous month and 7.6% a year ago. Prior to the coronavirus’ arrival in the United States, the delinquency rate was 3.4%.
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June’s 4.4% delinquency rate, which includes borrowers with payments forborne due to coronavirus-related hardships, is well within the range that passed for normal in the period leading up to the mid-aughts housing crash, according to Black Knight’s latest First Look report. That rate, which excludes foreclosures, was down from 4.7% the previous month and 7.6% a year ago. Prior to the coronavirus’ arrival in the United States, the delinquency rate was 3.4%.
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New-home loan volume drops to 13-month low in June
New-home purchase application volume dropped every month in the second quarter, while building costs and low inventory drove loan amounts to an all-time high.
June applicationsfell 3% from May and 23.8% year-over-year, according to the Mortgage Bankers Association’s Builder Application Survey.
June’s seasonally adjusted annual estimate of 704,000 sales declined 5% from May’s 741,000 units. It represented the lowest amount since May 2020. The annual rate of sales over the past three months sits about 7% lower than 2020’s average, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting.
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June applications
June’s seasonally adjusted annual estimate of 704,000 sales declined 5% from May’s 741,000 units. It represented the lowest amount since May 2020. The annual rate of sales over the past three months sits about 7% lower than 2020’s average, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting.
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Home buyers drive condo sales prices to 9-year high
This enhanced demand pushed the average condo to multiple all-time highs in June, according to Redfin. The median sales price jumped 20.3% year-over-year to $304,000, 42% sold above asking, and the average sold for 0.7% above the listing price — for only the second time since 2012. Meanwhile, single-family property prices surged 26.8% from the year prior to a record $405,000 in June.
Condos also sold at the fastest pace ever, 22 days compared to 43 days in June 2020 and 36 days in June 2019. With more consumers returning to cities, June condo sales spiked 59.7% annually and pending sales rose 38.2%. Thisreversal from the early COVID-19 era dropped the total for-sale units by 18% while new listings grew 7.6%.
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Condos also sold at the fastest pace ever, 22 days compared to 43 days in June 2020 and 36 days in June 2019. With more consumers returning to cities, June condo sales spiked 59.7% annually and pending sales rose 38.2%. This
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Black borrowers more likely to make financial sacrifices to buy homes
Black Americans face greater financial barriers in the homebuying process than their white counterparts, a recent Redfin report showed.
White homeowners were 23% more likely to make no financial sacrifices to buy their first home, while only 14% of Black homeowners could say the same, according to the Redfin survey, which was based on more than 1500 responses from homeowners.
“African Americans are much less likely to come from families, communities that have strong homeownership,” said Dedrick Asante-Muhammad, chief of membership, policy and equity at the National Community Reinvestment Coalition. “They're going to get a lot less assistance through generational wealth.”
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White homeowners were 23% more likely to make no financial sacrifices to buy their first home, while only 14% of Black homeowners could say the same, according to the Redfin survey, which was based on more than 1500 responses from homeowners.
“African Americans are much less likely to come from families, communities that have strong homeownership,” said Dedrick Asante-Muhammad, chief of membership, policy and equity at the National Community Reinvestment Coalition. “They're going to get a lot less assistance through generational wealth.”
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Biden nominates progressive for Treasury financial policy job
President Biden has nominated former Senate staffer Graham Steele to serve as assistant secretary for financial institutions at the Treasury Department, a win for progressive Democrats who support strengthening bank regulatory policy.
Steele is currently the director of the Corporations and Society Initiative at Stanford University’s Graduate School of Business, which looks to “promote more accountable capitalism and governance,” the White House said in a news release.
Steele also worked from 2010 to 2017 on the Senate Banking Committee, where he was a legislative assistant for the committee’s current chair, Sen. Sherrod Brown, D-Ohio, and the minority chief counsel. He also served for four years as the staff director for the subcommittee on financial institutions and consumer protection.
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Steele is currently the director of the Corporations and Society Initiative at Stanford University’s Graduate School of Business, which looks to “promote more accountable capitalism and governance,” the White House said in a news release.
Steele also worked from 2010 to 2017 on the Senate Banking Committee, where he was a legislative assistant for the committee’s current chair, Sen. Sherrod Brown, D-Ohio, and the minority chief counsel. He also served for four years as the staff director for the subcommittee on financial institutions and consumer protection.
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