Banking crisis adds to funding challenges at mortgage fintechs

As the recent collapse of Silicon Valley Bank continues reverberating across the startup community and the industries it serves, the effect has been akin to pouring salt on a wound for beleaguered mortgage technology firms. The event exacerbated the difficult environment fintechs and other businesses in the home finance sector have been contending with for months as lending has fallen to lows not seen in decades, heightening funding and revenue worries in the industry. But even as troubles in the banking sector remain top of mind, selective appetite for innovation in mortgage technology persists, and recent developments may even open up opportunities down the road once the dust settles, industry leaders interviewed for this article say.

READ MORE: Banking crisis adds to funding challenges at mortgage fintechs

Mortgage volumes head up for fourth straight week

Easing interest rates brought borrowers back to the table, sending residential loan application volumes higher for a fourth consecutive week, according to the Mortgage Bankers Association. The MBA's Market Composite Index, a measure of application activity based on surveys of its members, increased a seasonally adjusted 2.9% compared to the previous week for the seven-day period ending March 24. Despite the recent upswing, volumes were still 46.5% lower on a year-over-year basis. Both refinance and purchase loans drove numbers higher. The Refinance Index rose 4.8% compared to a week earlier, but landed 61% lower from the same survey period in 2022.

Fidelity National fined $3.5M for no-poach deals

The New York Attorney General's office has entered into a settlement with a third national title insurance underwriter regarding "no-poach" agreements. Fidelity National Financial consented to pay a $3.5 million penalty, end any existing pacts and assist in the state's ongoing investigation of title insurance infractions. Fidelity is the largest underwriter of title insurance in the U.S. based on several metrics, including premiums written and order counts. Previously, Stewart Information Services settled for $2.5 million in December, while Old Republic International's title unit agreed to a $1 million penalty in September 2021.

FHFA broadening use of expanded payment deferrals

The Federal Housing Finance Agency is extending an option used by borrowers with pandemic hardships to other distressed homeowners who have loans backed by government-sponsored enterprises Fannie Mae and Freddie Mac. "The Enterprises completed more than 1 million COVID-19 payment deferrals during the pandemic, helping borrowers nationwide to stay in their homes," FHFA Director Sandra Thompson said in a press release. "Based on the success of the COVID-19 payment deferral, we are making this solution a key part of our standard loss mitigation toolkit that is available to all borrowers with eligible hardships."

Warehouse lender to get $31M from First Mortgage and former exec

First Mortgage Co., along with its convicted founder and former Mortgage Bankers Association chair Ron McCord, have both agreed to pay CapLoc $31 million to settle a New York federal court case. The agreement was reached just prior to the scheduled start of a trial on March 27, said Aaron Tobin, one of the attorneys for CapLoc. Partial summary judgment had already been granted for CapLoc. First Mortgage and McCord are jointly liable for the whole amount. As part of the settlement, a single remaining count from a counterclaim brought by First Mortgage against Eli Global, a potential purchaser of the Oklahoma-based lender, was dismissed with prejudice.?

Sign up here to receive the National Mortgage News complete newsletter — delivered to your inbox daily.