Servion Mortgage Newsletter (MN &WI) – July 2021

JULY 2021

In This Issue Partner Updates Servion CEO Elected to the Board of Directors of the National Association of Credit Union Service Organizations Insurance Q&A with Servion’s Mortgage Loan Servicing Department Homeowners Rapidly Gaining Equity as Home Prices Surge Servion Named One of Minnesota’s Top 175 Workplaces The Buzz: Recent Feedback

PARTNER UPDATES

Please join us in welcoming the financial institutions who became Servion Mortgage partners in May and June!

New Retail Lending Partners Callaway Bank Fulton, MO

Miles City Federal Credit Union Miles City, MT

Pampa Teachers Federal Credit Union Pampa, TX

New Quality Control Partners Summit Credit Union Cottage Grove, WI

Relationship Expansions Energy One Federal Credit Union Tulsa, OK - Now using contract processing services

Fulda Area Credit Union

Fulda, MN - Added Retail channel services LEARN ABOUT OUR PRODUCTS & PARTNERSHIP OPPORTUNITIES

Insurance Q&A with Servion’s Mortgage Loan Servicing Department Our loan servicing department fields thousands of phone calls from partners and borrowers all over the country.

Recently the team has handled several questions about insurance-related issues, and we thought it might be helpful to share those with a broader audience.

Does flood insurance always have to be escrowed?

Yes. Flood insurance must always be escrowed. This requirement is contained in a 2015 rule issued jointly by the FDIC, OCC, NCUA and several other regulatory bodies. The rule requires credit unions, community banks, or servicers acting on their behalf to escrow flood insurance premiums and fees for mortgage loans made on or after January 1, 2016.

Because of this rule, an escrow for flood insurance must be established at closing. This is the case no matter the LTV. And, flood insurance must be escrowed even if property taxes and/or homeowners insurance are not.

A borrower receives an insurance check made out to both them and Servion. What should they do?

Insurance claim checks are often made out to both the borrower and the mortgage company/servicer. This is standard practice in the insurance industry.

Essentially, the insurance company is issuing payment to anyone who has a financial interest in the property. This practice is designed to ensure that the insurance funds are used to make the necessary repairs associated with the claim.

The check cannot be deposited into an account until all parties have signed it, including the mortgage company/servicer.

If your borrower has received an insurance claim check made out to both them and Servion, here is what they should do: • Checks of $40,000 or less: Send the check and adjuster’s summary to Servion. Servion will endorse the check and return it to the borrower.

• Checks of more than $40,000: Send the check, adjuster’s summary, and a contract for repair to Servion. Servion will retain the check and manage disbursements for repairs.

Checks and related material should be sent to: Servion Inc. Attn: Loan Servicing 500 Main Street New Brighton, MN 55112

Get in Touch with Servion’s Servicing Department Our Servicing department is here to help! Our phone number is 1-800-766-5626, or you can visit our website to find the email address most relevant to your question.

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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

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Servion CEO Elected to the Board of Directors of the National Credit Union Service Organizations The Servion Group is pleased to announce that president and CEO Brad Crandall has been elected to serve on the board of directors for the National Association of Credit Union Service Organizations (NACUSO).

“We are thrilled to welcome Brad Crandall, CEO of The Servion Group, to our board,” Jack Antonini, president and CEO of NACUSO said in a press release.

In the announcement, Antonini noted that during Brad’s tenure, Servion has expanded from its origins as a mortgage support organization for a handful of credit unions into a diversified company

providing a variety of solutions for hundreds of community financial institutions.

“I am honored to join NACUSO’s board and look forward to working alongside a group of people who are dedicated to innovating and collaborating,” said Crandall. “At Servion, we’ve always taken pride in helping our financial institution partners deliver valuable products and services to their members and customers. We’ve strategically grown and positioned ourselves to be a resource for credit unions and community banks, and now I’m excited to share my experience and perspective as part of NACUSO.”

Crandall joined The Servion Group in 1995, serving as president and CEO since 2005.

Founded in 1987 to support the mortgage needs of three Twin Cities credit unions, Servion has since grown to partner with approximately 500 credit unions and community banks and has more than 270 employees.

The Servion Group received NACUSO’s 2018 CUSO of the Year award in recognition of excellence in innovation and collaboration. _____

HOMEOWNERS RAPIDLY GAINING EQUITY AS HOME PRICES SURGE Feverish homebuyer competition during the pandemic era has resulted in skyrocketing home values and the highest levels of owner equity in at least 10 years.

The average homeowner with a mortgage gained $33,403 of equity in the first quarter of 2021, according to financial data analytics company CoreLogic. This incredible increase is even more notable considering that equity had already risen by an average of $26,512 per homeowner in the previous quarter.

Rising home prices have also reduced the share of people who are underwater on their mortgages. The share of underwater borrowers dropped from 3.4 percent in Q1 2020 to 2.6 percent in Q1 2021.

The equity increases should help to alleviate some COVID-related stress, since borrowers with equity can tap into the value in their home rather than fall into foreclosure.

“Homeowner equity has more than doubled over the past decade and has become a crucial buffer for many weathering the challenges of the pandemic,” said CoreLogic CEO Frank Martell. “These gains have become an important financial tool and boosted consumer confidence.”

HOW MUCH LONGER CAN HOME VALUES CONTINUE TO INCREASE? There are signs that the housing market is finally starting to cool off. Redfin said pending sales and asking prices began to flatten at the end of May and into June. “The housing market was going 100 miles per hour and now it’s down to 80,” said Daryl Fairweather, Redfin’s chief economist.

Fairweather added that the slowdown is not necessarily a sign of a bursting bubble. Instead, he argues that as pandemic restrictions ease, people are starting to spend their money on things other than housing, such as travel, dining and entertainment. He expects price growth to taper off in 2022.

Source: https://www.nationalmortgagenews.com/news/u-s-homeowners-gain-1-9-trillion-in-equity-in-1q-2021

Servion Named One of Minnesota’s Top 175 Workplaces We are excited to share that Minnesota’s largest newspaper, the Star Tribune, has named The Servion Group one of the state’s top 175 workplaces!

Top Workplaces recognizes exceptional companies in Minnesota based on measurements of employees’ opinions regarding engagement, organizational health and satisfaction. The analysis included responses from over 76,000 employees at nearly 3,000 Minnesota public, private and nonprofit organizations. Rankings were calculated purely based on responses collected by Energage, an independent employee engagement and retention specialist.

Our employees love working here in part because they love working with partners like you. Helping you and your members/

customers accomplish goals is meaningful and rewarding, which keeps our employees engaged and even excited about getting to work every day. It’s the relationship-building that makes a difference – we hope you feel it on your end, and we certainly feel it on our end.

Looking to the future, we think being recognized as a Top Workplace will help us continue to attract and retain talent as we grow. People are the key to everything we do; great employees help us provide great service.

Thank you for being so responsive to our requests. Your expertise and willingness to work through this project in invaluable.

I can’t tell you how thankful I am to be working with you all!

Thank you for your constantly efficient processes and for always looking out for our members!

THE

BUZZ

Hear what our partners are saying about us!

I want to thank you for the outstanding job you did today. You assisted me with great patience and were very thorough in your explanations.

I wish I could clone you!

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