Mortgage facing a communication crisis
In this week’s Rise&Shred podcast, we kicked off talking about the importance of appropriate communications; who is doing it wrong and how to do it right. Since then, it’s come to our attention that the problem is much worse than we actually thought, and while there’s still time to right the ship, it’s not looking good.
The big starting point is that banks are struggling to understand how their residential mortgage portfolios will perform this year because borrower-assistance programs during the pandemic have clouded who will be able to pay when forbearance periods and enhanced jobless benefits expire.
Many seem to think that they won’t really have a complete understanding of the true picture, until these forbearance programs come to an end, later this year.
Of course, if lenders and servicers were proactively reaching out and COMMUNICATING to affected borrowers we wouldn’t have this problem. But they aren’t.
In a recent Fannie Mae survey, when asked about the biggest challenges of interacting with homeowners, servicers most frequently cited: 1) explaining clearly to homeowners post-forbearance payment plans; 2) explaining clearly to homeowners the potential implications of taking a forbearance plan; and 3) periodically checking in with homeowners to see if they are ready to exit forbearance. (slide 11, here.)
We’ve made the point once, and we’ll make it again: lack of appropriate communication is killing this industry.
However, we want to be positive and end on a high note by saying this time around is not nearly as bad as the last time around — so we are getting better.
“We also asked those survey respondents who worked in mortgage servicing during the 2008 housing crisis to compare their thoughts on the industry’s response then to its response to COVID-19-related challenges,” said Caroline Patane VP, Single-Family Counterparty Risk Oversight for Fannie Mae, in an email. “A plurality of respondents found most aspects of servicing to have been less challenging this time – to include data and technology standards, the process by which homeowners request assistance, and more generally “helping homeowners overcome hardship and stay in their homes.”
🤣 MEME of the day by Jason Turner 🤣
Have a funny meme? Email your favorite meme here for a chance to be featured in our next Rise&Shred.
“Honey, I’m headed to Walmart to speak to my financial advisor!”
While this is the first time that sentence has been mentioned, it may not be the last. Retailers get into financial offerings all the time and they rarely pay off big. Amazon Mortgage is on hold (nothing there), Costco’s mortgage simply funnels leads to a lender/partner.
And now Walmart is looking to get further into financial services.
The big-box retailer did not share the name of the new company or say when its services will be available. It said it will develop unique and affordable financial products for Walmart employees and customers.
What we do know is that Walmart said Monday that it’s creating a fintech start-up with Ribbit Capital, one of the venture capital firms behind Robinhood.
Hopefully, the startup will provide a way to help its underbanked customers — a digital Walmart Wallet, if you will, because that’s what makes the most Cents (get it?). With more than 4,700 stores across the country, Walmart interacts with millions of customers each year – including some who don’t have a relationship with a bank or a financial advisor.
🔥 Brand & Content 🔥
With Josh Pitts & Alec Hanson
Blend just raised, like, all the money
Here’s a crazy factoid about how crazy money is right now. Zoom went public at $36 a share in 2019. The video conference service now plans on selling some of its own shares at $337 or more, per share.
There’s also been a lot of fundraising in the mortgage space with projects of solid lending in the year to come. But Blend just took home the ribbon.
The digital lending solution announced it closed $300 million in Series G funding led by Coatue and Tiger Global, nearly doubling its valuation to $3.3B in just five months.
“No consumer dreams about applying for a home equity line of credit or a mortgage – they're looking to create a dream kitchen or purchase their first home,” said Nima Ghamsari, founder and CEO of Blend, in a statement. “We are helping our lenders be there as trusted advisors for their customers at every one of life's milestones.”
According to a statement, the capital will be used to fuel Blend's next phase of growth and support investment in the products and services that matter most to financial institutions as the company aims to power the future of consumer banking.
This news comes on the heels of a record year as Blend's technology facilitated $1.4 trillion in mortgages and consumer loans in 2020 and the company added more than 200 new employees, increasing its headcount by over 60%.
Spread the Rise&Shred ❤️ and share with a friend