Hardware Failure Causes Outage for ReverseVision

Category: National Mortgage News
Published: Sunday, 01 February 2015
Written by Admin

ReverseVision, which operates the largest technology platform used in the origination and servicing of reverse mortgages, suffered an outage with its RV Express system because of a hardware failure. Its the second technology disruption for the San Diego-based vendor.

The company sent an email to lenders apologizing for the performance issues with its system, which occurred during the overnight hours of Jan. 30, the last business day of the month. Like in the forward mortgage world, the end of the month is the busiest time for closing reverse mortgages.

We had very high demand on the system over the last couple of days, approximately the last 48 hours. That demand level was high enough that for some users their transactions were very, very slow, to the point of feeling like [the system] is down, like it is not responsive, John Button, ReverseVisions president and CEO, said in an interview with National Mortgage News.

He compared it to a bad news, good news situation. The bad news was that the volume was affecting ReverseVisions ability to deliver its services. The good news was the cause; there has been an increase in reverse mortgage production and in users in recent months and that increase stressed the capacity of the RV Exchange system.

The load on our system has grown substantially over the past few months. The industry is now adding loan records to our system at the rate of over one million per year — thats averaging 83,000 each month. Over 850 additional companies were added to the system in 2014 and the pace is higher this month, according to the email that was sent out under Buttons signature.

ReverseVision had a team working on the system the night of Jan. 29 looking to increase capacity going into the last day of the month, Button said in the interview. But as they were finishing up that work, a piece of hardware on its main database server failed and that took the system offline, which was still the case as of 4:45 eastern time on Jan. 30.

The failed hardware has been replaced and is being brought online and the system should be active later on Jan. 30 or early on Jan. 31, he said. ReverseVision plans to update clients by email hourly or when there is additional information to be shared.

The company has added additional application servers to increase capacity. Separately, ReverseVision is in the process of bringing on board a whole new data center, with a revised structure of hardware that has more capacity. That revised environment has been underway for the last few months and the intent is to migrate into that environment to give us considerably more capacity in the not too distant future, said Button.

Earlier in January, the company had an unrelated problem with RV Exchange, where there was an incorrect Internet address which redirected clients to the wrong server to get a software update from.

That problem did not affect the RV Express operating environment and is not related to the most recent issue, he said.

Zillow CEO Says Trulia Brand Will Continue After Acquisition

Category: National Mortgage News
Published: Saturday, 31 January 2015
Written by Admin

If Zillow receives regulatory approval for its planned $3.5 billion acquisition of real estate listing website Trulia, the property listing and mortgage lead marketplace plans to operate both brands websites as a combined company.

Theyll be different brands to the consumer but to the industry, itll be one company, Zillow CEO Spencer Rascoff said Wednesday during a real estate conference in New York.

Rascoff likened the arrangement to Viacoms ownership of both the MTV and VH1 cable networks, and added real estate professionals who advertise property listings on the two sites will benefit from integrated tools for updating information.

It will be simpler for them to manage listings; simpler for them to manage their own profile and reviews, he said.

Zillow and Trulia announced the acquisition plan in July, and the companies expect a Federal Trade Commission ruling on the proposed transaction during the first half of 2015, Rascoff said.

The Zillow/Trulia deal would follow News Corp.s $950 million acquisition of Realtor.com parent company Move Inc., which was announced in September 2014 and closed in November 2014.

Move Inc. has long benefited from its relationship with the National Association of Realtors. NAR once held an ownership stake in Move Inc. and licensed its branding for the Realtor.com website. The partnership also let Realtor.com automatically post property listings from multiple listing services controlled by local Realtor associations.

The arrangement promoted a sense of ownership of the Realtor.com website by many of NARs real estate agent members, Rascoff said. But now that NAR doesnt own a stake in Move, real estate agents should reexamine those loyalties, he said.

Realtor.com is News Corp. News Corp. owns Realtor.com, Rascoff said. Its not your website. Its Rupert Murdochs website.

People Outlook: Good Loan Officers Will Be in Demand

Category: National Mortgage News
Published: Thursday, 08 January 2015
Written by Admin

No one really knows what mortgage employment will be like next year. The best guess seems to be modestly upward, tracking the macro economys ongoing run-up in employment and a modest increase in hiring in the mortgage industry.

One thing is for sure, though. Good originators will remain in high demand.

Loan officers will always move around, said Mike Hardwick, chief executive at Churchill Mortgage in Brentwood, Tenn., which hired more than 100 people in 2013 and continued to aggressively recruit this year.

Were always looking to employ experienced and aggressive originators, Hardwick said, though he is predicting that he will be more aggressive hiring on the operations side in 2015.

I think youll have a lot of demand for top production people, added Cy Brinn, chief operating officer of VirPack in McLean, Va.

One caveat from a recent Stratmor Group survey: Loan officers from the bottom two production quintiles turn over at a 40% rate annually, while better ones are harder to lure away.

Next years industry employment is hard to predict Hardwick said, but he was willing to give a vote for cautious optimism. Hardwick said he believes mortgage rates will be up in 2015 but not dramatically — perhaps 50 to 75 basis points — and not enough to dramatically crimp volumes, or the need for people.

Our volumes will increase next year by 8% to 10%, he said. Were looking to add staff, more on the operations side, such as processors and underwriters.

Hardwick said he expects 2014 hiring at the retail lender, licensed in more than 30 states, to wind up with 75 to 100 new hires, adding that 2015 will somewhat mirror that.

Churchill, which largely focuses on conforming lending — about 25% of its volume involves government mortgages — has roughly 400 people now, represent a big expansion from when it started in 1992 with just Hardwick.

Brinn, at electronic document management vendor VirPack, said he sees some hiring tightness in his sector of mortgage automation firms. Mortgage technology space will continue to be a tighter than average market, he said.

People have left and gone to other industries, Brinn added. It will take a little more time and a little more effort to hire people. There will continue to be a challenge to find good people on the ops and production sides.

That being said, Brinn said he believes employment in all sectors of the mortgage business will increase a little bit in step with gains in the macro economy.

Which sectors might be hot spots? Nothing really comes to mind, Brinn said. Regulatory compliance people might be needed. At VirPack, we expect to add a few positions at a minimum.

Jay Brinkmann, principal at BrinkEcon in New Orleans and a former chief economist at the Mortgage Bankers Association, said he is looking for 2015 to be a flat hiring year.

Were seeing a leveling off of regulatory hiring, Brinkmann said. Still, he said there may be an increase on the technology side and, while the market for originators should be flat with a churn more than net new hiring.

The most recent figures from the Bureau of Labor Statistics show that nonbank mortgage hiring has been sluggishly rising this year. Total employment in mortgage banks and brokerages edged up to 289,400 in October from 284,900 in January, or a 1.6% increase. Such tepid growth was still better than 2013, where jobs fell 7.8%. (Industry job totals have varied, boom to bust, from about 500,000 to about 250,000.)

Turnover will likely be greater among less-desirable recruiting prospects.

The best companies dont keep the lowest performing LOs around very long, Garth Graham, a partner at Stratmor Group in Peachtree City, Ga., wrote in a recent National Mortgage News blog. As you might imagine, Our data bore this out, with turnover of the lowest two quintiles (or bottom 40%) at over 40% per year and then falling by half or so for each quintile as you move up the ladder until the top 20% turn over less than 10% of the time.

As for next year?

Scooping up these lower-performing loan officers is pretty easy, Graham wrote. They move often and they dont command high incomes. Turning them into star performers is more difficult, but not impossible.

Still, mortgage hiring patterns lack uniformity, according to the results of a recent survey by Stratmor.

Some companies appear to hire a lot, cut or lose the bottom tier and have even higher productivity from the top tiers, Graham wrote. Others are much more balanced, with few top performers, but more in the middle tier.

Narrative of the 'Fog-a-Mirror Finance' Era May Need Reexamining

Category: National Mortgage News
Published: Wednesday, 07 January 2015
Written by Admin

The perceived wisdom that the pre-2008 mortgage market was an era of automatic pulse loans made to anyone with a heartbeat and fog-a-mirror finance may need some rethinking, analyses of Home Mortgage Disclosure Act data show.

In fact, in the biggest racial category, loans to whites, denials were an even larger percentage of the total a decade ago than they are now.

There is no doubt that pre-2008, the number and the dollar volume of mortgages were much higher than they are now. But a look at a 10-year study of originations, denials and fallout by Maurice Jourdain-Earl, managing director of Arlington, Va.-based ComplianceTech shows that whites, for instance, were denied at an 18.7% rate in 2004 — higher than the 17.3% rate shown in 2013s supposedly tighter underwriting era.

Jourdain-Earl, who was studying these numbers to compare them by race/ethnic groups (he found origination percentages to whites have increased steadily in the decade, especially loans bought by Fannie Mae and Freddie Mac), counted only mortgages and applications where the race of the applicant was clear. So he factored out the multi-race, unknown and N/A categories.

And a National Mortgage News analysis found quite comparable findings to ComplianceTechs when all mortgages were tallied from one pre-crash year, 2006.

Black denials were the highest for all racial groups, but were constant at 31.9% in both 2004 and 2013, according to ComplianceTech. Denials were lower 10 years ago for Hispanics and Asians — but not by very much, less than 100 basis points for Asians and less than 200 basis points for Hispanics.

Jourdain-Earl also compared fallout rates, where an application was started but never completed, due to several reasons (such as incomplete or withdrawn), with very similar results. However, the fallout category may contain multiple applications made by the same person, who didnt complete the others after another lender decided to lend to him or her.

Denials actually were the highest in the tumultuous years of 2007 and 2008, when first the mortgage market and then the general economy went sour. Denials for the four largest racial categories (Native Americans and Native Hawaiians arent broken out) have all declined significantly since then.

When considering the share of overall origination volume in each racial group, conventional purchase loans (meaning government-sponsored enterprises and jumbos) to whites increased from 74% in 2004 to 82.5% in 2013, the ComplianceTech analysis showed. Asians were the only minority group that increased its share of overall conventional purchase originations (the government considers Hispanic an ethnicity rather than a race, but they are usually considered minorities). The story was much the same for conventional refinancings.

Minorities got a higher percentage of government purchase mortgages (Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service) than conventional loans during the decade. The white share of these loans also increased during this period, to 72% from 69%. The Asian share in this category was also up, while Hispanics stayed flat. Government refinance loans approvals to whites increased to 74%, from 64%.

Jourdain-Earl doesnt have a clear answer as to why the white share moved up so dramatically in GSE lending. I have been scratching my head for some time now trying to understand the practical dynamic, he said, adding he is doing a study on the data now, which he hopes to finish early in 2015. The reality is the data clearly show a skewing of the distribution (of loans).

How to explain the skewing? Jourdain-Earl has more questions than answers. Is it the route of least resistance? Is it the Realtor? I really dont know. Are borrowers self-selecting government loans? Is it a function of net worth? Of income? I have not come to a conclusion. I put it out there as a question.

He does have an opinion, however, on the heated current debate on the role of the GSEs in minority lending. He doesnt blame the racial disparity on the secondary agencies, but rather their lender customers.

Fannie and Freddie are not the problem. Its the lending industry thats the problem, he said.

Lenders dont originate the type of loans that Fannie and Freddie buy to people of color and instead, choose to originate more government loans than conventional loans to blacks and Hispanics, leaving fewer loans in the pool for the GSEs, Jourdain-Earl maintains.

The real question is, are Fannie and Freddie doing enough to ensure that their loan programs are being evenly distributed? Jourdain-Earl asked. Are they doing enough to monitor the lenders as to whether steering occurs?

The proportion of government loans to minorities may have increased because subprime loans fell out of favor, he added. Prior to 2008, practically half of all loans to minorities were subprime, he said. Since then, government lending has picked up the slack for minority borrowers.

Could the borrower who received a subprime loan have qualified for a prime loan? Or could those who got government loans have qualified for conventional? he asked.

One effect of the loan skewing has been to limit minority participation in the special mortgage programs the federal government created to shore up mortgage markets after the downturn.

The HARP program was limited to Fannie and Freddie loans, so if Fannie and Freddie have bought fewer loans from blacks and Hispanics, [then] blacks and Hispanics had fewer opportunities to participate.

Mark Fogarty, Editor at Large of National Mortgage News, brings more than 30 years of experience to his analyses of the mortgage market.