EWSFLASH l MARCH 2014 l NMP NEWSFLASH l MARCH 2014 l NMP NEWSFLAS Historical First Paperless eClosing Announced by DocMagic
MARCH 2014 n Iowa Mortgage Professional Magazine n
NationalMortgageProfessional.com
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DocMagic Inc. has announced that its eSign compliant loan documents were chosen by Stewart Title and Mountain America Credit Union to complete the industry’s first ever eClosing of an FHA loan, in conjunction with Stewart’s eClosingRoom. DocMagic is the exclusive licensee of patent rights that enable its eSign technology. The FHA’s recent announcement supports the ability to eSign all documents with the exception of the note. The announcement states that the agency will begin accepting electronically signed notes by the end of the year. “eSign has never just been about the upfront disclosures,” said Tim Anderson, director of eServices for DocMagic. “That’s where we started and we’ve done that for a long time now. Our ability to use this technology to help lenders realize a fully paperless mortgage is the real story here. There really is no excuse now not to provide this service to borrowers, who have been demanding it for some time.” Anderson added that better compliance risk management is an additional benefit of paperless lending. “The ability to provide electronic proof as evidence of compliance will be critical for lenders in the future,” Anderson said. “When documents remain electronic, it’s easier to create and maintain an audit trail that can support the lender during a bank audit.” “Being the first lender in the country to conduct a live eClosing of an FHA loan and doing it with Stewart’s eClosingRoom platform powered by SureClose and DocMagic’s eSign enabled compliant loan documents is truly an exciting event for us,” said Amy Moser, vice president and mortgage services manager for Utah-based Mountain America Credit Union. “eClosing gives us a tremendous competitive advantage because it enables us to provide superior customer service to credit union members who demand an efficient loan experience.”
Nancy Pratt, director of eStrategy for PropertyInfo, the technology division for Stewart Title, said, “Our eClosingRoom platform enables lenders like Mountain America and title agencies not only to eSign, but also to eNotarize and eRecord the closing package in the title office, delivering a fully paperless eClosing experience for all participants. Stewart had its first electronic closing in May of 2005. Having the first FHA loan electronically closed in our system truly is a milestone for the mortgage industry.”
February Sees Spike in New Home Apps The Mortgage Bankers Association (MBA) estimates sales of new single-family homes were running at a seasonally adjusted annual rate of 533,000 units in February 2014, based on data from MBA’s Builder Applications Survey (BAS). The estimated sale pace for February is an increase of one percent from the revised January pace of 527,000 units. The sales pace for January was initially reported at 543,000 units. On an unadjusted basis, the MBA estimates that there were 43,000 new home sales in February 2014, an increase of 13 percent from 38,000 in January. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. Mortgage applications for new home purchases increased by 12 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns. By product type, conventional loans composed 65.1 percent of loan applications, FHA loans composed 16.5 percent, RHS/USDA loans composed 5.3 percent and VA loans composed 13 percent. The average loan size of new homes increased from $289,358 in January to $295,008 in February. MBA’s Builder Application Survey
tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
More Than Four Million U.S. Homes Return to Positive Equity in 2013 CoreLogic has released new analysis showing four million homes returned to positive equity in 2013, bringing the total number of mortgaged residential properties with equity to 42.7 million. The CoreLogic analysis indicates that nearly 6.5 million homes, or 13.3 percent of all residential properties with a mortgage, were still in negative equity at the end of 2013. Due to a small slowdown in the quarterly growth rate of the Home Price Index, the negative equity share was virtually unchanged from the end of the third quarter of 2013. Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both. For the homes in negative equity status, the national aggregate value of negative equity was $398.4 billion for fourth quarter 2013, compared to $401.3 billion for third quarter 2013, a decrease of $2.9 billion. Of the 42.7 million residential properties with positive equity, 10 million have less than 20-percent equity. Borrowers with less than 20-percent
equity, referred to as “under-equitied,” may have a more difficult time obtaining new financing for their homes due to underwriting constraints. Underequitied mortgages accounted for 21.1 percent of all residential properties with a mortgage nationwide in 2013, with more than 1.6 million residential properties at less than five percent equity, referred to as near-negative equity. Properties that are near-negative equity are considered at risk if home prices fall. “The plight of the underwater borrower has improved dramatically since negative equity peaked in December 2009 when more than 12 million mortgaged homeowners were underwater,” said Mark Fleming, chief economist for CoreLogic. “Over the past four years, more than 5.5 million homeowners have regained equity, reducing their risk of foreclosure and unlocking pentup supply in the housing market.” “Stability and growth in the housing market are essential for a durable recovery of the U.S. economy,” said Anand Nallathambi, president and CEO of CoreLogic. “The rebound in home prices in 2013 helped four million property owners regain at least some positive equity in their largest asset—their home. We still have a long way to go to eliminate the negative equity overhang but significant progress is being made every day across most of the country.” Nevada had the highest percentage of mortgaged properties in negative equity at 30.4 percent, followed by Florida (28.1 percent), Arizona (21.5 percent), Ohio (19.0 percent) and Illinois (18.7 percent). These top five states combined account for 36.9 percent of negative equity in the United States. Of the 25 largest Core Based Statistical Areas (CBSAs) based on population, Orlando-Kissimmee-Sanford, Fla., had the highest percentage of mortgaged properties in negative equity at 31.5 percent, followed by TampaSt. Petersburg-Clearwater, Fla. (30.4 percent), Phoenix-Mesa-Scottsdale, Ariz. (22.1 percent), Chicago-NapervilleArlington Heights, Ill. (21.4 percent) and Atlanta-Sandy Springs-Roswell, Ga. (19.9 percent).