Origination

Household formations, looser credit and an improved economy will overcome higher rates — and even the inventory shortage.

There are more than 60 banks and other firms financing flippers today, according to AlphaFlow, an investment firm that buys real estate loans from lenders. That’s an increase of almost 50% in a little more than two months.

Proptech CEOs and investors fully expect a huge year for the sector due to the pandemic’s “watershed” effect on digitization, according to Keefe, Bruyette & Woods.

The government-sponsored enterprise greenlit the use of CoreLogic and LoanCraft’s tools that validate self-employed borrowers’ incomes, and it certified Finicity, a firm that facilitates the equivalent for W-2 employees’ payroll data.

Like the fintechs SoFi and LendingClub, DLP Real Estate Capital is acquiring a community bank largely to lower the cost of funding loans.

However, the increase has been more gradual than that seen in Treasury yields, and loan activity has only subsided slightly to date.

New assistance for renters may help but past efforts, while necessary, failed to get relief to renters in an expedient way, said David Brickman, who is now the head of a new agency lending platform backed by Barings and Meridian Capital.

The acquired platform, while remaining stand-alone, will have integrations with Black Knight's Empower loan origination system for mortgage lenders.

But building permits near an almost 15-year high point to further gains in home construction in the months ahead. The data coincide with still-elevated homebuilder sentiment as the industry works to replenish lean inventory and meet housing demand.

While the economic recovery and stimulus checks drove upward movement in purchases, it wasn’t enough to offset tumbling refinance activity.