Servion Mortgage Newsletter - January 2022

JANUARY 2022

In This Issue Partner Updates 2022 Conforming Loan Limits 2022 Housing Market Outlook Servion Partners with Leading FinTech Company to Evolve Loan Servicing Capabilities Our Lending Conference Will Return in 2022!

Servion Forms New Mortgage Training Department The Buzz: Recent Feedback

PARTNER UPDATES

Entering the holiday season, people around the country continued shopping for homes. That meant community financial institutions were looking for mortgage support, and we were ready to provide it. Please welcome Servion Mortgage’s newest partner and help us thank all the existing partners who expanded their Servion relationships in November and December!

New Retail Lending Partner Northeast Missouri State Bank - Kirksville, MO

Relationship Expansions Billings Federal Credit Union - Billings, MT • Expanded into FHA/VA wholesale channel Cloverbelt Credit Union - Wausau, WI • Now using delegated correspondent service MED5 Federal Credit Union - Rapid City, SD • Expanded into FHA/VA whole channel and signed up for USDA sponsored agent services On Tap Credit Union - Golden, CO • Expanded into FHA/VA wholesale channel Park View Federal Credit Union - Harrisonburg, VA • Expanded into the delegated correspondent channel United Credit Union - Tyler, TX • Expanded into FHA/VA wholesale channel)

LEARN ABOUT OUR PRODUCTS & PARTNERSHIP OPPORTUNITIES

2022 Conforming Loan Limits New Baseline In most zip codes throughout the country, the maximum conforming loan limit (CLL) for 2022 will be $647,200. This is the new baseline CLL. The new conforming loan limit is $98,950, or 18 percent, higher than 2021’s maximum of $548,250, making this the largest increase ever both in terms of dollars and percentage.

The Federal Housing Finance Agency announced record-high conforming loan limits for loans to be acquired by Fannie Mae and Freddie Mac in 2022.

High-Cost Area Limit is Now Nearly $1 Million In designated high-cost areas, the maximum limit will rise to $970,800, which is 150 percent of the baseline CLL. High-cost areas are those where 115 percent of the local median home value exceeds the baseline CLL.

Why Such a Big Increase?

Median home values exploded around the U.S. in 2021. The FHFA announced on November 30 that house prices rose 18.5 percent from Q3 2020 to Q3 2021. Some markets saw even bigger increases.

Under the Housing and Economic Recovery Act of 2008, the FHFA is required to keep the conforming loan limit in line with home values.

An Example of the Difference the Change Will Make When the conforming loan limit rises, it means more homebuyers can apply for conforming mortgages instead of jumbo loans. This is a good

thing for potential buyers because jumbo loans are usually harder to qualify for and carry higher interest rates because they’re not backed by Fannie and Freddie.

Under the Housing and Economic Recovery Act of 2008, the FHFA is required to keep the conforming loan limit in line with home values.

Find Conforming Loan Limits in Your Area To find the conforming loan limit for any county in the U.S., use FHFA’s interactive map.

2022

HOUSING MARKET OUTLOOK

2021 finished up as one of the most competitive years the housing market has ever seen. Home prices skyrocketed to levels that easily blew past the experts’ predictions. So, what about 2022? Will home shoppers see conditions start to tilt in their favor? Let’s walk through some of the possibilities for housing and home lending for the upcoming year.

HOME SALES EXPECTED TO INCREASE YET AGAIN

PURCHASE ORIGINATIONS VOLUME TO RISE

Despite affordability challenges and rising interest rates, Realtor.com Chief Economist Danielle Hale says 2022 will be a “whirlwind for the housing market.” Hale told Forbes that home sales are expected to increase another 6.6 percent while home prices will rise another 2.9 percent on top of 2021 highs. The National Association of Realtors thinks prices will climb even more: 5.7 percent higher than 2021.

Those continuing home price increases are expected to lead to even higher purchase mortgage originations in 2022.

Freddie Mac says purchase originations should rise from OVERALL ORIGINATION $1.9 trillion in 2021 to $2.1 trillion VOLUME WILL DECLINE in 2022.

Freddie Mac forecasts that total originations (purchases REFINANCE ACTIVITY plus refinances) will decline WILL SOFTEN – A LOT from $4.5 trillion in 2021 to With higher interest rates $3.1 trillion in 2022. That $3.1 forecast for 2022, Freddie trillion is still a massive amount

Mac anticipates a major drop in refinance activity. The GSE expects refinance volume to drop from $2.6 trillion in 2021 all the way to $995 billion in 2022. That would be a roughly 62 percent decline in volume.

WHAT’S DRIVING SUCH HIGH PURCHASE DEMAND EVEN THOUGH PRICES ARE SO HIGH?

expected to list their homes for sale in 2022, which could alleviate some of the supply shortage, but demand from ABOUT THOSE RATES millions of millennials will still The Federal Reserve announced There are 45 million millennials far outpace supply, leading to those home price increases. in December its plan to raise aged 26-35 – prime firstBuyers will therefore still need the Federal Funds rate three time buyer age. Hale says to act quickly when they see a times in 2022 as the Fed turns demand from these young its attention to controlling households will keep the market home they want. inflation. The Fed Funds rate competitive and high-priced, is NOT the same as mortgage even though housing inventory For lenders, expect far less refinance requests. Purchase rates, but the Fed’s plan to is expected to finally start to volume, however, is expected to raise that rate plus slow down increase. The small increase slightly grow. No matter what the bond-buying program are in available homes won’t be the market holds for 2022, you a recipe for higher mortgage enough to offset millennial can rely on Servion Mortgage to rates. demand. be here to meet your needs and exceed your expectations.

Economists at both Freddie Mac HOME EQUITY OFFERS and the National Association SHOULD TAKE OFF of Realtors expect the 30-year “2022 will be the biggest year fixed mortgage rate to rise to 3.5 percent by the end of 2022. for home equity accounts Realtor.com predicts an average opened in the history of the rate of 3.3 percent for the year, mortgage market,” says Jeff Taylor, managing partner at risk hitting 3.6 percent by the time compliance firm Digital Risk.

2022 is over.

“If a client already has 2.5% on their mortgage, and they need to borrow $100,000, do you THE BOTTOM LINE refinance the whole thing at 3.5%? Or do you just go get a home equity loan or HELOC and leave your 2.5% alone over?” he said in an interview Sources: with National Mortgage News. https://www.nationalmortgagenews.com/ of business, but a sizeable slowdown from the breakneck pace of 2021.

“

2022 will be the biggest year for home equity accounts opened in the history of the mortgage market.

- JEFF TAYLOR, DIGITAL RISK

list/2022-mortgage-industry-predictions

At Servion, we don’t offer home equity loans, but we wrote about this topic in December as part of our commitment to helping partners identify all kinds of opportunities.

THE BOTTOM LINE Mortgage rates and home prices will rise, albeit slowly.

More homeowners are

https://www.forbes.com/sites/brendarichardson/2021/12/13/experts-predict-whatthe-housing-market-will-look-like-in2022/?sh=30ca62a93942 https://www.rocketmortgage.com/ learn/2022-housing-market-predictions http://www.freddiemac.com/research/ forecast/20211015_quarterly_economic_forecast.page https://www.marketwatch.com/picks/ if-the-market-is-cooling-down-its-only-bya-few-degrees-leading-economists-andanalysts-on-what-to-look-for-in-the-housing-market-in-2022-01639758149

Tired of Real Estate Agents Sending Your Borrowers to Other Lenders?

We developed the Go2Source Realtor Referral Network to address this “steering” problem. The network includes hand-picked agents who are committed to keeping borrowers with you, not sending them elsewhere. Your borrowers should remain yours, and Go2Source helps make that happen.

Benefits for Both Retail and Correspondent Partners Go2Source agents help your borrowers search, buy, sell and save on their transactions.

Go2Source agents are local to your area and carefully vetted for professionalism and service attributes.

Go2Source agents never steer the borrower to any other financial institution.

For just $30/year, we can help you get the word out about Go2Source with customizable print and digital materials.

What To Do Next Want more information?

Contact your Servion Account Executive.

Ready to connect a lead with a Go2Source Realtor®?

Visit: myservion.com/Go2Source

The Go2Source Realtor® Referral Network is managed by The Servion Group, which locates, vets and recommends real estate agents in cities across the country who then become part of the Go2Source-branded network.

MILITARY DISCOUNT 2

Servion Title salutes our troops with an exclusive discount as a thank you for their service and dedication! We welcome all Active Duty members, Reserves, Veterans and Retirees including their immediate family members.

Servion Partners with Leading FinTech Company to Evolve Loan Servicing Capabilities

Servion Mortgage has grown quickly over the past two years, thanks to partners like you and your trust in us to help you deliver the mortgage experience your members and customers deserve. One result of this growth is that we are now servicing more loans than ever before. Tens of thousands of borrowers rely on us for accurate, easy-to-understand loan servicing. As a result, we are actively seeking to expand and improve our servicing experience.

We are excited to share that we have entered a multi-year agreement with Sagent, a fintech company whose goal is to modernize and digitize mortgage loan servicing for lenders. The Sagent partnership will enable us to scale our servicing operations using consumer-first, enterprisegrade servicing platforms.

Borrowers will be able to manage everything about their loan at anytime and on any device.

“At Servion, we want to deliver a digital future to the credit unions and community banks we support, and to do this, we sought a servicing fintech provider who could empower our partners with a modern servicing tech stack to exceed the expectations of today’s digital-first borrowers,” Brad Crandall President and CEO at Servion

“Credit unions and community banks understand the customer lifecycle better than anyone. They have perfected the art of highly personalized customer care, and now Sagent is honored to work with Servion to superpower their smart human advice,” Dan Sogorka CEO and President of Sagent Read Sagent’s press release about the partnership here.

LENDING CONFERENCE

OUR

WILL RETURN IN 2022!

As mentioned in our November newsletter, our lending conference is set to return in the fall of 2022!

We hosted a lending conference each year beginning in 2017, and it had grown into a multi-day event covering mortgage and business lending. Leaders and staff from our partner credit unions and community banks would come together to learn and explore ideas for growth. Of course, the pandemic forced us to cancel in 2020 and, with uncertainty over the delta variant, we called it off again in 2021.

Now, we’re getting the event back underway! We’ll have more details in the coming months, but here’s what you should know for now.

SEPTEMBER 26 AND 27

Mortgage Sessions

SEPTEMBER 28

Business/Commercial Lending Sessions

THE ST. PAUL HOTEL

350 Market Street • St. Paul, Minnesota *The location is very likely (but not 100% certain yet) to be The St. Paul Hotel, which is the same venue as our 2019 conference.

So, whether you’ve attended the conference before or this would be your first time, we are very excited to see all of you next September!

Servion Forms New Mortgage Training Department The last two years have been a time of incredible growth, both in the mortgage industry as a whole and here at Servion Mortgage specifically. The sheer volume of home purchases and refinances in this low interest rate environment has helped us and our partners achieve great things. It has also required that we adapt and evolve to handle things more efficiently and effectively.

As part of that evolution, we are very excited to announce that Servion Mortgage has formed a Mortgage Training Department! This new department will have an impact both externally on our partners in all channels and internally on our employees.

the partner function

the employee function

The Mortgage Training Department will impact partners by helping them better understand the Servion Mortgage process, learn about marketing mortgages to members/customers, and develop or advance a revenue stream for their credit union or community bank. We’ll also provide ongoing product training for partners.

The new training team will get new Servion Mortgage employees up to speed on processing or underwriting files as quickly as possible while allowing department managers to focus on day-to-day responsibilities. It also serves as a critical component to helping Servion Mortgage employees develop a career path for advancement opportunities within the company.

meet the team

As training and product development manager, Rachel works with retail, correspondent, delegated and wholesale partners, keeping them up to date on program and product changes within the mortgage industry. Rachel has always been the underwriter that many employees and partners have relied upon for getting loans closed. In addition, Rachel handles bulletins to all partners regarding Servion Mortgage changes, process updates and industry regulations.

Rachel Mengelkoch Training & Product Development Manager After uncovering a need for continued process training of our new and existing retail partners, Servion Mortgage created the retail account manager position which was assumed by Ariel Jacobsen in October of 2018. While in the role, Ariel has dramatically increased retail applications from new partners by shortening the time between training and when they submit their first mortgage application. Ariel has also increased the usage of our Marketing Library further strengthening our bond with retail partners.

Ariel Jacobsen Retail Account Manager

Amber Breidel

Amber came to us in 2017 as a processor from one of our correspondent partners, Firefighters CU. After establishing herself as one of our highest volume processors, plus showing a desire to help others become better within their roles, Amber became our mortgage trainer in May of 2021. Not only is she providing grassroots training for new processors, but she also serves a dual function by underwriting the new processors’ files as well. We have already received multiple compliments from other departments and partners on our newest processors thanks to Amber’s efforts. For more about Amber and her position, check out our recent article.

Mortgage Trainer

looking forward

With the Mortgage Training Department in place, we are looking forward to making the Servion Mortgage experience even better for partners. Everything we do here at Servion is geared toward constant improvement, and we believe this new department fits that philosophy very well.

COMMERCIAL LENDING. Simplified.

Ready to grow your lending portfolio?

Few things help a financial institution grow better than commercial lending.

The Answer: The Question:

How do you overcome costs like infrastructure and talent and make your commercial lending program successful?

By taking advantage of Servion’s full suite of Commercial Loan Resources.

Full Portfolio Servicing ALLL Development Loan Policy Review and Development Risk Rating Assessment MBL Portfolio Auditing Tailored Portfolio Servicing Documentation Services A La Carte Services

Grow your credit union or community bank.

Serve your local business community. A true win-win. Visit myservion.com/CLR or contact our dedicated CLR account executive, Brian Mielke, at bmielke@myservion.com.

I love working with all of you at Servion! You make my life so easy!

It was such a pleasure working with the team, the whole process felt way too easy!

THE

BUZZ

Hear what our partners are saying about us!

I cannot sing praises enough for the outstanding work that you all provide to help make our mortgage department flourish.

You have been AMAZING on each and every loan I have ever done through you. Thanks again for everything!

SERVICE. SOLUTIONS. SUCCESS. 651-631-3111 • myservion.com Servion Mortgage is a DBA of Servion, Inc. NMLS #1037. Equal Housing Lender.