3 mortgage companies are in trouble for 3 different reasons
- Let’s start with First American.
The Securities and Exchange Commission (SEC) on Tuesday announced settled charges against First American Financial Corp., one of the largest mortgage title and settlement services companies in the U.S., alleging cybersecurity breaches when the company exposed sensitive personal information of its customers and did not follow proper incident response when informing customers about the leak.
The SEC's order on the matter noted that a cybersecurity journalist notified First American of a data protection vulnerability on the morning of May 24, 2019, in which it exposed more than 800 million images dating back nearly two decades. The images in the data breach contained sensitive personal data like social security numbers.
First American currently controls 21.07% of the market share for mortgage title companies, second only to Fidelity National Financial, which holds a 32.24% market share. It is one of four mortgage title companies that control nearly all mortgage transactions.
2. And this weird complaint against United Wholesale.
The Coches Family said they applied for a loan from United Wholesale Mortgage. The couple had timed their application so that the loan would close just as wife Shayna gave birth, so they wouldn’t have to deal with the paperwork during her five months of paid maternity leave.
However, after the paperwork was finished and notarized—just days before the loan was expected to be finalized in mid-April—United Wholesale Mortgage declined to go through with the refinance. The lender had called to verify the couple’s employment just before the loan closed, a standard procedure.
During that call, the loan officer learned Shayna had just gone out on maternity leave. Shortly after, the couple received an email from their mortgage broker informing them that their loan had been denied.
The stated reason was simple: Shayna was on maternity leave. UWM declined to comment as it’s a legal matter now.
3. Nutter Home Loans Can't Dodge Fraud Suit.
In a complaint filed last year, Nutter Home Loans allegedly forged certifications and used unqualified underwriters to approve FHA HECM loans originated between 2008 and 2010 in an effort to bolster its production of reverse mortgage loans.
Yesterday a Federal Judge ruled the trial must go forward, despite Nutter’s bid to quash the complaint (Law360 paywall).
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Real estate investment lending is absolutely soaring
CIVIC announced that it has surpassed $5 billion in loan originations and 12,000 funded loans since the company was founded six years ago!
CIVIC funds exclusively business purpose loans for real estate investors, making this milestone the first for any company in the private lending industry.
CIVIC topped the $4 billion milestone on Sept 30, 2020. “We could never have imagined what the road from $4 billion to $5 billion would be amidst the pandemic, yet we reached it at record pace.” CIVIC President William Tessar said. “Reaching $5 billion was six years in the making, and now – with virtually unlimited access to capital – our current pace and trajectory will lead us to $10 billion in just two years.”
CIVIC was acquired by Pacific West Bancorp in February 2021. This move has given the company the ability to lend at a lower cost, enabling CIVIC's customers to benefit from considerably improved terms and lower interest rates. The company has also expanded its footprint, now lending in 25 states plus the District of Columbia.
“We're so proud to emerge from a tumultuous year in the strongest position possible to deliver the best loan products, support and service available in the institutional private lending industry and help our customers capitalize on today's real estate opportunities,” Tessar continued. “While low inventory has plagued the housing market, the brevity in which CIVIC achieved this milestone is just one indicator that real estate investors are finding properties and scaling at a rapid pace.”
🔥 Content ideas for mortgage Pros 🔥
With Josh Pitts & Joe Wilson
We averted a housing crisis in a way that caused another housing crisis
The United States averted the direst predictions about what the pandemic would do to the housing market. An eviction wave never materialized. After falling steadily for months, the share of people behind on mortgages recently hit its prepandemic level.
But a comprehensive report on housing conditions over the past year makes clear that while one crisis is passing, another is growing much worse. (NY Times paywall.)
Like the broader economy, the housing market is split on divergent tracks, according to the annual State of the Nation’s Housing Report released on Wednesday by Harvard’s Joint Center for Housing Studies.
While one group of households is rushing to buy homes with savings built during the pandemic, another is being locked out of ownership as prices march upward — and those who bore the brunt of pandemic job losses remain saddled with debt and in danger of losing their homes.
“Millions of households were financially unscathed coming out of the pandemic,” said Alexander Hermann, senior research analyst at the Joint Center for Housing Studies. “But the pandemic has left millions of others struggling to make their housing payments, especially lower-income households and people of color.”
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