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Share of Mortgage Loans in Forbearance Decreases to 0.94% in April

WASHINGTON, D.C. (May 16, 2022) – The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 11 basis points from 1.05% of servicers’ portfolio volume in the prior month to 0.94% as of April 30, 2022. According to MBA’s estimate, 470,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 6 basis points to 0.43%. Ginnie Mae loans in forbearance decreased 9 basis points to 1.29%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 29 basis points to 2.15%.

“With the number of borrowers in forbearance decreasing to less than half a million, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Servicers are expected to continue making small incremental inroads to the remaining loans in forbearance.”

In addition to improvement in the overall forbearance rate, the percentage of borrowers who were current on their mortgage payments increased to the highest level of 2022, despite potential headwinds such as high inflation and stock market volatility.

Added Walsh, “The best indicator of loan performance is overall national employment. The U.S. unemployment rate is still below 4 percent, leaving borrowers in a good position to make their monthly mortgage payments.”

 

Key findings of MBA's Loan Monitoring Survey – April 1 to April 30, 2022:

  • Total loans in forbearance decreased by 11 basis points in April 2022 relative to March 2022: from 1.05% to 0.94%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior month: from 1.38% to 1.29%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior month: from 0.49% to 0.43%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior month: from 2.44% to 2.15%.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of April 30, 2022:
  • Total: 0.94% (previous month: 1.05%)
  • Independent Mortgage Banks (IMBs): 1.17% (previous month: 1.29%)
  • Depositories: 0.74% (previous month: 0.86%)
  • By stage, 28.9% of total loans in forbearance are in the initial forbearance plan stage, while 58.1% are in a forbearance extension. The remaining 13.0% are forbearance re-entries, including re-entries with extensions.
  • Of the cumulative forbearance exits for the period from June 1, 2020, through April 30, 2022, at the time of forbearance exit:
  • 29.3% resulted in a loan deferral/partial claim.
  • 18.8% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 17.0% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 15.6% resulted in a loan modification or trial loan modification.
  • 11.3% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 6.7% resulted in loans paid off through either a refinance or by selling the home.
  • The remaining 1.3% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
  • Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume (#) rose to 95.64% in April 2022 from 95.47% in March 2022 (on a non-seasonally adjusted basis).
  • The five states with the highest share of loans that were current as a percent of servicing portfolio: Idaho, Washington, Colorado, Utah, and Oregon.
  • The five states with the lowest share of loans that were current as a percent of servicing portfolio: Louisiana, Mississippi, West Virginia, New York, and Oklahoma.
  • Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current as a percent of total completed workouts declined to 82.99% last month from 83.67% in March.

MBA’s monthly Loan Monitoring Survey (replaced MBA’s Weekly Forbearance and Call Volume Survey in November 2021) covers the period from April 1 through April 30, 2022, and represents 72% of the first-mortgage servicing market (36.2 million loans). To subscribe to the full report, go to www.mba.org/loanmonitoring.

NOTES: The next publication of the Monthly Loan Monitoring Survey (LMS) will be released on Tuesday, June 21, 2022, at 4:00 p.m. ET. For more detailed information on performance metrics, including seasonally adjusted delinquency rates by stage (30 days, 60 days, 90+ days), please refer to MBA’s Quarterly National Delinquency Survey at www.mba.org/nds.

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FirstClose Plans to Accelerate Growth with $35 Million Investment from Lateral

AUSTIN, Texas (May 17, 2022) - FirstClose, Inc., a leading fintech provider of data and workflow solutions for mortgage and home equity lenders nationwide, has closed a $35 million investment from growth equity firm Lateral Investment Management to accelerate its product and growth strategies. 

FirstClose provides underwriting workflow automation technology, point-of-sale software, and data services for the U.S. home equity and mortgage markets.  FirstClose will use the funds to expand its ever-growing financial services footprint to leverage property data intelligence, industry-leading partners, and groundbreaking technology to enable lenders to compete for and close consumer loans unlike any other solution in the industry.

“FirstClose is excited to announce this next step in our company’s journey,” said Tedd Smith, Co-Founder and Chief Executive Officer of FirstClose.  “Our mission has always been to improve the way that banks and credit unions serve consumers by accelerating loan closing times, increasing loan volumes and reducing costs. This year, as interest rates continue to rise and home equity lending volumes skyrocket, this funding will allow us to continue innovating faster and provide a superior customer experience, while delivering end-to-end solutions that are in high demand in today's constantly changing lending environment.” 

Soaring home prices have made home equity lending products a clear option for lenders looking to diversify their lending portfolios while creating new revenue streams.  The increase in mortgage rates since the beginning of the year has caused the additional demand for home equity lines of credit (HELOCs) and other home equity lending products to increase significantly.  The new funding for FirstClose is the first institutional equity investment round in the company which has been self-funded since it was founded in 2000. 

“Lateral is excited to partner with the FirstClose team as they accelerate growth,” said Stuart Barden, Managing Director at Lateral Investment Management, a San Mateo, California-based growth equity investment firm. “We believe that FirstClose has a critical role to play in streamlining the origination, underwriting and closing processes in the $200 billion consumer home loan market.” 

Based in Austin, Texas, FirstClose provides solutions that dramatically reduce the time to close HELOCs and mortgages for more than 400 banks and credit union customers.  Lenders using the FirstClose EquityIQ solution have experienced a 35% increase in online applications, a 25% increase in pull through, and a 77% reduction in time to close from application to funding. The company has strategic partnerships with MeridianLink and other industry-leading LOS companies to embed its workflow automation and data solutions into their platforms.

“We want to keep providing more value for our customers.  The demand for a simple and easy way to get instant feedback on a home value, available home equity, and instant loan decision while applying for a HELOC has become a business imperative,” said Tim Smith, Co-Founder and Chief Revenue Officer of FirstClose.  “We are expanding our sales and customer success teams to serve more customers across the home loan market.  By partnering with Lateral, we have found a team that has the skills and experience to support our growth – both organically and through acquisition.”

FirstClose recently expanded the leadership team to add Pat Carney as Chief Technology Officer and Kathy Mantych as Senior Vice President of Sales.  Carney has more than 20 years of industry experience formulating strategies and developing innovative products for the real estate and title industries, including as Chief Innovation Officer and Senior Vice President, Strategic Partnerships at ClosingCorp.  Mantych has been a veteran sales leader in the mortgage banking and financial services industries.  

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Black Knight Empower LOS Now Integrated with DocMagic

Lights-out integration with Empower LOS streamlines loan document generation and compliance 

TORRANCE, Calif., May 17, 2022DocMagic, Inc., the premier provider of loan document generation, compliance support and comprehensive eMortgage services, announced an integration with Empower, Black Knight’s loan origination system (LOS), to help automate the DocMagic document generation process for lenders and provide access to additional DocMagic services.

Lenders now have access directly from Empower to DocMagic’s intelligent document generation solution, supporting compliance, data integrity and trackability. DocMagic’s data-driven technology leverages its sophisticated audit engine for automated data validation testing and regulatory compliance audits to analyze relevant compliance rules, regulations and applicable laws, assisting lenders with compliance on pertinent loan documents throughout the lending process.

“We are pleased to integrate with Black Knight to facilitate digital document generation and compliance support for the mortgage industry’s leading lenders,” stated Dominic Iannitti, president and CEO of DocMagic. “Black Knight has done an outstanding job aligning with key market providers to support their customer base, significantly growing its LOS business. We’re excited that this integration for document generation will also pave the way to provide lenders with the benefits of additional DocMagic solutions.” 

Black Knight’s end-to-end, feature rich LOS platform supports a growing digital lending ecosystem designed to support business expansion. The cloud-based system offers advanced capabilities that automate the lending process from start to finish. Empower is configured to support a lender-specific workflow and operates in tandem with DocMagic’s automated and continuous compliance checks on relevant documents at key points throughout the process. 

“Empower’s strategic integration with DocMagic offers tremendous benefits to Empower users by providing innovative, lights-out integration to support best-in-class document generation, while preserving the integrity of the data and tracking it throughout the loan process,” said Rich Gagliano, president, Black Knight Origination Technologies. “Together, Black Knight and DocMagic can help lenders support their compliance efforts and provide borrowers with a more satisfying loan experience.”

              Kansas City-based Nutter Home Loans, the first mutual Black Knight and DocMagic client to go-live with the Empower integration to DocMagic, is experiencing positive results. The national lender was founded in 1951 and originates Conventional, FHA, VA, Jumbo, and USDA loans. 

              "Nutter is committed to making the lending process as easy as possible for our customers," stated Tera Guy, EVP of operations at Nutter Home Loans. "DocMagic’s integration with Black Knight delivers multiple efficiencies for our borrowers and our support staff. Like Nutter, the team at DocMagic places paramount emphasis on delivering service excellence, and in part, this is one of the primary reasons we engaged with them. We look forward to continued optimization of our service through future capability expansions.”

 

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