Calque, a company that partners with lenders to offer non-contingent mortgages to homebuyers, has appointed Dan Mugge as its chief operating officer.

Mugge, a mortgage industry veteran with more than two decades in technology and business management, will lead the company’s push to secure high-profile mortgage lending partners to offer Calque’s products.

“What I love about Calque is it addresses the challenges for consumers in a way that doesn’t disintermediate lenders and real estate agents and they pay much less than alternative offerings for the convenience,” Mugge said.

Launched in 2021, Calque offers a number of products geared toward borrowers who want to buy a new home and move before they sell.

The product options include Calque’s trade-in mortgage solution, which allows homeowners to use the equity in their current homes to buy their next homes by increasing their down payment and reducing their monthly payments. The homeowner then preps their original home for sale after they’ve moved out.

Unlike many other buy-first mortgage solutions companies, Calque also allows borrowers to work with the agent of their choice and any lender in the Calque mortgage provider network.

Prior to his role at Calque, Mugge worked in a number of roles, including vice president of default technology at CoreLogic; senior vice president of lending solutions at Black Knight; chief technology officer at ClosingCorp, which was sold to CoreLogic in October 2021; and co-owner of Clear Creek Provisions.

Calque currently operates in 17 states, with plans of expanding this year.

“As we expand our footprint from 17 states to the entire U.S., we know we have the best person to help us grow while maintaining our focus on providing an excellent experience for consumers, real estate agents, and lenders,” said Jeremy Foster, chairman at Calque.
Source: https://www.housingwire.com/rss

How Andrew Marquis plans to close more loans in a low-inventory market
Lack of inventory is an issue builders and mortgage loan originators alike are dealing with across the nation. It’s also what keeps Andrew Marquis, regional vice president at CrossCountry Mortgage and Scotsman Guide’s seventh top LO, up at night, especially as he sees more buyers entering the market.

A recent combination of lower property value appreciation in Boston, which is Marquis’ main market, and declining mortgage rates have resulted in bidding wars — but there aren’t as many deals to be done due to low inventory levels, Marquis said in an interview with HousingWire.

“Even if I write seven pre-approvals a day, when there is one house and there’s 20 people that want to buy the same house, we still can’t do a lot of deals,” Marquis said. “Rates are clearly not at a level where refinance businesses started up again. That’s our biggest issue in Boston.”

The inventory put a cap on how much business Marquis’ team can do, which is one of the reasons why Marquis is now licensed in 22 states. Mainly a reciprocal business of vacation homes or referrals in states outside of Massachusetts, the LO plans to increase marketing efforts beyond his main Boston market.

Marquis, whose production volume dropped by nearly one-third to $351 million in 2022 from the previous year’s $951 million, is cautiously optimistic about the mortgage industry. His goal is to bring his sales numbers up to $450 to $500 million, with origination coming from different states, and potentially capitalizing on a little refinance boom in the latter part of 2023.

Read on for more about Marquis’s perspective on the housing market, business strategies for 2023, and his take on the loan level pricing adjustment (LLPA) fees.

This interview has been condensed and lightly edited for clarity.

Connie Kim: We’ve seen a lot of optimism for the mortgage industry, mainly due to rates on a declining trend. How has business been in the Boston market?

Andrew Marquis: Markets are very different from city to city and state to state. In our market here in Boston, we have incredibly low inventory. I know that that’s sort of a cry nationwide, but I think it’s arguably the worst here.

We also have high wages, [and] our [prices of] properties didn’t go up as much as some other areas during COVID. So what we’re seeing now is, we’re kind of back to bidding wars again. I know that sounds crazy, but we have a lot of clients reaching out for pre-approvals. They’re looking for fully underwritten approvals so that they can potentially waive contingencies again.

We did have a short stint in the fall where people were doing temporary buydowns, 2-1 buydowns, [and] they were getting properties under the asking price. There was a little hint of a buyers’ market, but I would say, with the rates going from 6% to 7% down to four, five and 6% depending on the product, and with our low inventory, we’re starting to see bidding wars again here in the Boston area.

Kim: How does this compare to last year?

Marquis: Activity this month is up about 100% versus November and December. We are locking a lot more loans and we’re doing basically twice as many pre-approvals that we were doing in the fall. So from that perspective, it does look favorable. The issue is that there’s no inventory.

Even if I write seven pre-approvals a day, when there is one house and there’s 20 people that want to buy the same house, we still can’t do a lot of deals. Rates are clearly not at a level where refinance businesses started up again. That’s our biggest issue in Boston.

We are working very hard in terms of doing events, meeting with realtors, reinventing ourselves, [and] talking about programs so that when the inventory does improve, we’ll be able to really excel. But that’s really what the market is here, at least at this moment.

The problem is as rates go lower, the bidding war just gets worse. When you look at it nationally, Boston is really in a challenging spot from that inventory standpoint.

Kim: A term we heard a lot when rates were high was a mortgage rate lockdown. Existing homeowners didn’t have an incentive to give up their low mortgage rates to buy a new home and lock in rates at a higher level. Is this still the case, and what is the demand like from first-time buyers?

Marquis: I would say half and half. The problem we have with the people that already own a home is you cannot buy with sales contingencies here. I can’t tell that seller, ‘I’ll buy your house contingent on me selling mine.’ They won’t accept that offer.

So that’s a real issue, because as a lender, we offer ways to finance a new home for selling — and it could be a bridge loan, it could be a home equity line of credit. We have loan programs where we only have to debt the buyer for one of the two mortgages, so they don’t have enough income to carry both. We can just hit their debt ratio for the new property. So we (Cross Country) have creative programs – ways to work around that.

But I think that there’s a lot of lenders that do not, and I think there’s a lot of people that are kind of stuck for that reason. We work around a lot of those.

Then there is still a decent amount of first-time homebuyers. I think a lot of them were freaked out because those buyers only saw 2%, 3% rates. They’ve only really been looking at the market for three, four years. They haven’t seen 5%, 6% mortgage rates before.

But I do think a decent amount of those buyers are now saying, You know what, I gotta buy something.’ The rates are better than they were at the end of last year, and they’re tired of paying $3,500 a month for rent.

Kim: There’s expectation that the Federal Reserve will raise interest rates by about 25 basis points in February. I’m curious how this will impact potential buyers.

Marquis: I think consumers generally feel like the federal funds rate controls interest rates, and rates are going to go up another quarter. You and I both know [that] there’s sort of an indirect correlation. But I haven’t heard a lot about that.

It’s a very tough market. There’s no question about it — for different reasons in every market. I think other markets probably have a glut of inventory, and prices are falling and sellers are trying to provide buyer incentives to purchase a home, and we’re just not in that kind of market.

I’m excited that rates are a little better, and we’re doing a ton of pre-approvals. But [production] levels are not pre-pandemic.

Let’s say our business doubled during COVID. I’d at least like to get back to where we were in 2018 [or] 2019. I almost feel like we’re paying the price because we had such a good two years during COVID as a mortgage lender.

Kim: When inventory is low, doesn’t that mean there’s a limited amount of production volume you can do?

Marquis: Correct. It’s a hard challenge because we don’t have a lot of land here. It’s not like people can build wherever. Half of our city is on the coast, so all you can really do is move further away from Boston.

The inventory puts a cap on how much business we can do. When loan officers don’t have refinance business, half of their businesses are gone.

Then you have the purchase market, which is probably down 25-30% because of the inventory and the interest rates. You now have as many loan officers as you had before fighting for 30% of the overall business. So there’s less volume, there’s more compression.

It’s a conundrum. It’s a challenging one, for sure.

Kim: Then are you potentially looking to expand further out from Boston to get more sales?

Marquis: My team and I are now licensed in 22 states, so we are doing a lot of that. We do need to market better in those states. Right now, a lot of it is reciprocal business of vacation homes or referrals. So we really could market better in those other states. That’s definitely one tactic for sure.

It’s scary to say this, but it’s hard to say when the inventory is really going to get better. It almost seems like every year it just gets worse.

Kim: I’m curious how your team works. Are you the sole person closing sales? What does your team look like?

Marquis: I’m sort of like the rainmaker. I bring in all the leads and the relationships, and then I have three sales assistants. I have two executive assistants and I have a team of about seven processors.

Kim: Where do you get your leads from?

Marquis: I’d say it’s half and half. It’s half referral partners and the other half would be past clients, repeat business, referrals of real estate agents, financial advisors, [and] accountants.

Kim: How do you keep up with these agents and financial advisors? Do you make cold calls? How do you manage your relationships?

Marquis: I haven’t done a cold call in probably 15 years. We work off the relationships we already have. We make sure to nurture those. Then, when we’re doing transactions with new agents, we really kind of shine on those transactions.

And we look to follow up with those agents, invite them to lunches or dinners, coffee, etc. It’s all about the referral partner positioning. How you can make them look good in their business? Because really, ultimately, they want to be able to close more business, and you have to be an ally in that process. That’s the tactic that we take.

Kim: You came close to closing $1 billion in sales in 2021. What was your production volume for 2022?

Marquis: $351 million with 85% of the volume coming from purchase mortgages.

Kim: Starting last year, LOs strategies have pivoted to targeting the purchase mortgages. How have your business tactics changed from the pandemic years?

Marquis: We’ve always been more of a purchase team. I pivoted to that strategy in like 2009. We’ve always chased the purchase [mortgages] and treated refis as bonus income. When it comes, it comes great, but we don’t rely on it.

When it turns into a refi market, my ranking on Scotsman Guide is usually not as good because we’re not really geared to chase refis. But when we move into more of a sideways or a down market where refis are less prevalent, we seem to do better in the rankings, because that’s more of the type of market that we excel in.

Kim: I want to switch gears to the LLPA changes made by the Federal Housing Finance Agency. There have been concerns that the tweaks will hurt qualified borrowers amid an existing affordability crisis — or make it harder to get accurate quotes unless borrowers completed a full application. Are you concerned about the changes?

Marquis: Yeah, that makes sense in terms of the debt ratio and some of the other factors they’re taking into consideration. I think it will be a little bit more difficult to provide accurate quotes, but we can have people pre-approved with a soft credit check. So that’s one way we could work through that.

Kim: Which borrower types do you think will be affected the most?

Marquis: It looks like the high credit borrowers are going to get more pricing hits, but it also looks like the low credit borrowers are going to get less pricing hits. So it’s more going to even the playing field.

My theory on it is[that] it’s trying to point more people away from FHA. So the way I look at it, they’re trying to make conventional financing more affordable to those folks with lower credit scores.

Kim: What are your sales goals for 2023?

Marquis: This market is so unpredictable right now. I would like to see us at $450 to $500 million. I’d like to see us up by 25-30% versus where we were last year.

Kim: Your main concern for 2023 is the lack of inventory in the Boston market. Are there any silver linings that you look forward to?

Marquis: We’re off to a really encouraging start, so I would say I’m cautiously optimistic. We’re pulling a lot of credit reports, we’re taking a lot of applications. So things are looking up.

I think we’re going to get a little refi run this year, too. I do think if rates go down another half point, it opens up some refi opportunities, which we can add on to the purchase business.
Source: https://www.housingwire.com/rss

FHA announces new changes to loss mitigation waterfall
The Federal Housing Administration (FHA) announced on Monday changes to its loss mitigation options for borrowers struggling to pay their mortgages.

The announcement follows the Biden administration’s decision to set an end date for the COVID-19 pandemic national emergency declaration.

Meanwhile, the FHA-Home Affordable Modification (FHA-HAMP) options were temporarily suspended to simplify loss mitigation options, according to the FHA.

The main change is that servicers will have to offer Covid-19 loss mitigation options to all FHA’s eligible borrowers who fall behind on their mortgage payments, regardless of their hardship reason.

The toolkit will be available 18 months past the mandatory effective date of April 30, but “servicers may begin offering these options to borrowers immediately,” according to the FHA.

“FHA’s COVID-19 forbearances and streamlined COVID-19 loss mitigation options have successfully helped millions of struggling borrowers in the last two fiscal years alone,” Julia Gordon, assistant secretary of Housing and Federal Housing Commissioner, said in a statement. “Our action today lets us capitalize on what we have learned through the pandemic to continue helping borrowers avoid foreclosure, regardless of the nature of their hardship.”

The latest data shows that the FHA’s serious delinquency rate was 4.79% in November 2022, compared to 7.83% in November 2021.

The national forbearance plan and temporary Covid-19 recovery options deadline were slated to expire when the COVID-19 pandemic national emergency declaration ends.

On Monday, the Biden administration revealed its plan to end the COVID-19 national emergency and public health emergency on May 11. (They were set to expire on March 1 and April 11, respectively.)

“An abrupt end to the emergency declarations would create wide-ranging chaos and uncertainty throughout the health care system — for states, for hospitals and doctors’ offices, and, most importantly, for tens of millions of Americans,” the White House said in a statement.

Changes to the waterfall

The FHA also made changes to the loss mitigation toolkit. It’s raising the maximum partial claim amount from 25% of the mortgage‘s unpaid principal balance to the maximum 30% allowed by statute.

A partial claim works like an interest-free loan that borrowers can take to make their mortgage current. The money is repaid after the last mortgage payment, when the loan is refinanced or the property is sold.

If available, the partial claim is also used in Covid-19 recovery modifications to resolve outstanding arrearages. The partial claim cap for this option will also be 30% starting on April 30.

“This increase will help more borrowers who cannot return to making their current mortgage payments to reduce their mortgage balance to a level that permits them to achieve a target payment reduction of at least 25% despite today’s higher interest rates,” the FHA said in a statement.

The FHA also announced it is adding borrowers who qualified or used Homeowners Assistance Funds (HAF) to the definition of imminent default. It will allow them to have access to the loss mitigation options to avoid redefault when needed.

Servicers will also have access to incentive payments for successfully completing Covid-19 recovery options, which were previously only available for the standard loss mitigation options.
Source: https://www.housingwire.com/rss