Servion Mortgage Newsletter - September 2022

SEPTEMBER 2022

In This Issue Partner Updates Servion’s Technology Capabilities Featured on creditunions.com Ensuring Success When Printing and Scanning CDs Mortgage Market Statistics Best Practices in Gaining E-Sign Consent ARM Basics Spare Key: A Non-Profit Resource Throughout the Nation Sagent Announcement The Buzz: Recent Feedback

PARTNERfiUPDATES

Amid rising interest rates and continued home price increases, Servion Mortgage is always here to assist our partners, including the newest ones who joined us in July and August!

New Retail Lending Partners Kraftcor Federal Credit Union Hawesville, KY Labor Management Federal Credit Union Lewisport, KY Lexington Postal Community Credit Union Lexington, KY United Arkansas Federal Credit Union Little Rock, AR

New Correspondent Partners Americana Community Bank (also using Retail) Arsenal Credit Union (also using Retail) Hercules First Federal Credit Union

LEARN ABOUT OUR PRODUCTS & PARTNERSHIP OPPORTUNITIES

COMMERCIAL LENDING. Simplified.

2

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.

SERVION’S TECHNOLOGY CAPABILITIES FEATURED ON CREDITUNIONS.COM Servion Mortgage was recently featured on CreditUnions.com in an article highlighting our exciting investment in a technology called AIQ, which stands for automation intelligence and quality.

Greg Schatzke, Vice President of Servion Mortgage, shared how this new technology can help streamline the processing and underwiring processes so financial institution partners can concentrate on new opportunities in their market. This new AIQ technology relies heavily on artificial intelligence to automate certain workflows, increase efficiency and productivity and reduce business risk.

Servion is currently using three pieces of AIQ now: document recognition, an income analyzer and a credit analyzer. These tools help uncover potential red flags early in the process to minimize any delays, particularly if partners are using a more manual process.

Watch for technology use for e-closings by the end of the year.

ENSURING SUCCESS WHEN

PRINTING AND SCANNING CD’S TO SERVION MORTGAGE

Page 5 of the Closing Disclosure contains this graphic: Incorrect Graphic

One of the key parts of the closing process is printing and scanning a Closing Disclosure document to Servion Mortgage. Recently, Servion has been getting closing packages in the Post-closing where the “print” or “scan” settings are causing the “?” and the grey box of the graphic not to appear. This is viewed as altering a closing document and is a quality control and compliance defect and can cause delays.

Correct Graphic

To help solve this challenge, please increase the intensity setting on your printer or scanner to ensure that the question mark or grey box appears on Page 5 of your Closing Disclosure.

QUESTIONS?

You can always reach out to your Servion account executive or email Greg Schatzke at gschatzke@myservion.com. Thank you for your attention to this matter!

MORTGAGE Market Statistics

Here is some recent data on the national housing market to give you an idea of what’s happening around the country.

These are not Servion-statistic numbers, but rather national housing marketing numbers.

At the end of August, mortgage rates climbed back above 5.5 percent, following the trend of the 10-year Treasury yield.

During the same period, home prices continued to show double-digit, year-over-year gains. The median-priced home is worth about $40,000 more than a year earlier.

Within the last 12 months, monthly mortgage payments rose by $510 due to the increase in mortgage rates. However, higher home prices pushed up the mortgage payment by $150.

The pace of pending home sales weakened 1 percent last month and fell 19.9 percent from a year ago.

Home sales across the country showed double-digit declines from a year ago.

SOURCES: https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-august-25-2022?g=173096 https://www.nar.realtor/blogs/economists-outlook/july-2022-pending-home-sales-falls-to-the-lowest-pace-since-april-2020

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.

BEST PRACTICES IN GAINING E-SIGN CONSENT

As the mortgage process becomes increasingly digitized, Servion Mortgage is moving towards having borrowers electronically receive and sign disclosure documents. This makes the overall mortgage process quicker and easier for all involved. But obtaining the borrower’s consent to electronically receive disclosure documents must be done in a certain way or else the e-consent is not valid.

ISSUE We’ve noticed that an increasing number of partners are asking borrowers for consent to e-sign, but they are not using the correct process. Specifically, partners are asking borrowers to physically sign a piece of paper stating that the borrower consents to receive and sign documents electronically. But that isn’t an approved process.

CORRECT PRODECURE Regulations require that you must obtain the e-sign consent request electronically.

This is required because it proves that the borrower has the ability to receive and

act on electronic documents. Once you receive this electronic consent, you will then be able to send the disclosures to them electronically.

KEY TAKEAWAYS • Do not send disclosures electronically and later ask for e-sign consent.

• Do not orally ask the borrower for e-sign consent.

• Do not have the borrower physically sign any printed documents purporting to grant e-sign consent.

• DO send your e-sign consent request electronically.

• DO send your disclosures after the borrower receives and acts on your electronically sent e-sign request.

ARM BASICS

In mid-2022, adjustable-rate mortgages made up nearly 10 percent of all new home loan applications, according to the Mortgage Bankers Association (MBA). As this type of mortgage becomes more popular, here is more detail.

Index: the benchmark interest rate that reflects general market conditions.

Margin: 2.75% Index + Margin = new rate at the time of adjustment.

Floor: = Margin. The interest rate can never be less than the floor.

The floor for the Servion ARM product is the margin. Interest rate can never be less than 2.75%.

Example: 5/1 ARM, 4.5% start rate (Index is 3.25)

ARM: Adjustable Rate Mortgage Types: 5/1, 7/1, 10/1, 15/1 Example: 5/1 is fixed for 5 years, then adjusts once each year after that.

Caps: 2/2/5 The first adjustment has a cap for 2% change in the interest rate.

At month 60 – current index will be reviewed and added to margin 2.75. 3.25+2.75=6 % Interest rate will adjust to 6%. The initial adjustment could be as high as 4.5+2=6.5% At month 72 – current index will be reviewed and added to margin 2.75. Rate cannot increase or decrease more than 2%.

The subsequent adjustments have a cap of 2% change in the interest rate.

The lifetime cap is 5%, meaning the interest rate cannot be higher than start rate + 5%.

QUESTIONS? You can always reach out to your Servion account executive!

A Non-Profit Resource Throughout the Nation Servion is proud of our continued partnership with Spare Key, a nationwide non-profit helping families facing a medical crisis secure the resources they need to pay their bills. This year, our partnership has resulted in record staff participation and donations, and we wanted to make our partners aware of the help that is available, if needed, in your area and by your communities.

Spare Key is here to help when the unimaginable happens. A devastating medical crisis can happen when we least expect it and even the most financially secure families can face loss of income and savings when confronted with mounting medical bills and ongoing monthly finances.

THAT’S WHERE SPARE KEY COMES IN. Spare Key is a 501(c)(3) nonprofit founded in Minnesota in 1997. They are also Servion’s 2022 “Charity of Choice” because of their strong commitment and impact on families no matter their income, injury, illness, or age. They are

truly a resource for anyone that finds themselves facing unimaginable medical crisis in need of a helping hand.

But how does one non-profit help families across the nation with a small team of 6 employees?

BY USING THE POWER OF TECHNOLOGY. In 2019, Spare Key launched Help Me Bounce: The nation’s first donor directed giving platform. It’s here where Spare Key helps families “Be Seen. Be Heard. Be Found.” by a network of donors that want to help.

The website, where families’ stories are shared and donations are raised, helps Spare Key helps families “Be Seen. Be Heard. Be Found.” by a network of donors that want to help.

While no one wants to have to plan for the day where a loved one is sick in the hospital, Spare Key is here as a resource IF you are facing the unimaginable.

The organization helps take some of the stress away from facing a medical crisis. So YOU can focus on what’s really important – staying by your loved one’s side focused on their recovery.

To learn more about Spare Key and how they can be a resource for you, your company, and your community, visit helpmebounce.org or reach out to Sarah Putnam, Spare Key’s Chief Marketing Officer at (651) 829-2549 or sarahp@sparekey. org

If you know someone currently facing a medical crisis, pass helpmebounce.org along!

Angela Frazier, our Help Me Bounce Program Coordinator is here to answer any questions you may have by phone: Donors that want to make (651) 829-2656 or email: a bigger impact with their donated dollars: 100 percent of support@helpmebounce. all donations raised for families org. For a limited time, all new families to Help Me Bounce on Help Me Bounce goes DIRECTLY to that family’s bills – get their first $500 donation courtesy of the Richard M Spare Key doesn’t take a cut!

Schulze Family Foundation.

SCAN TO DONATE

SAGENT GO LIVE DATE MOVED TO MAY 2023 We want to share a quick update that our Servicing team has moved the go live date for the new Sagent digital servicing platform to May 2023. We are excited to make this new offering available to you because it will provide efficiencies, allowing you to easily manage performing and non-performing loans.

The platform will also offer a new customer-facing online system so your borrowers can have more access to loan information and rely on self-service functionality for managing payments and escrows, go paperless, plus monitor home equity, new offers and tax matters – all from any device.

WOW!!! I can’t even begin to tell you how much we appreciate you!

The speed at which you complete our doc requests is amazing!!

My Servion Realtor was knowledgeable and patient with me during the home search process all the way to my closing date. The team at The Servion Group was ready to answer questions and offered support when needed.

THE

BUZZ

Hear what our partners are saying about us!

We appreciate the team being so flexible to accommodate the changes to get a timely closing. Thank you all for all you do. You are all AWESOME!

I just wanted to reach out and express my gratitude for your outstanding customer service. You answered so many questions, streamlined communication, and went out of your way to help get my paperwork processed. I am super appreciative!

u o y k Than g n i b i r c s b for su WATCH FOR HIGHLIGHTS FROM THE SERVION LENDING CONFERENCE IN OUR NEXT ISSUE!

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