Nexa's 100% commission program spurs confusion, intrigues
National Mortgage News
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When Nexa Mortgage rolled out its Nexa100 program, a 100% commission product, in late May, social media exploded with emotions and confusion. "Can someone explain this program to me like I'm five?," quipped one broker in a Facebook group for mortgage originators. Other commenters thought the company's program was "too good to be true." Prior to introduction of the program, out of the 275 basis points received on a loan, 220 basis points would go to the LO and 55 basis points would go to Nexa. The Nexa100 program makes it so that 220 basis points goes to the LO, while 55 basis points goes to a separate account to cover their expenses, such as marketing costs and more, CEO Mike Kortas explains.Some brokers have called the program "gimmicky," because in reality 100% of the commission does not entirely land in an LOs pocket.
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With average mortgage rates above 6% since late 2022, the potential for refinancing activity is rising, a new report found. Approximately 24% of mortgage holders currently possess a rate above 5%, more than double the share since 2022, according to data from Intercontinental Exchange's mortgage technology unit. "As recently as two years ago, an astonishing nine of every 10 mortgage holders were below that threshold," said Andy Walden, vice president of research and analysis at ICE Mortgage Technology, in a press release.Lenders have originated 4 million mortgages with rates above 6.5% since mid 2022, with 1.9 million of those sitting above 7%, ICE's monthly Mortgage Monitor report said.?
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Though outlawed by the Fair Housing Act in 1968, the racist housing practice of redlining perpetuated a wealth gap for Black people and contributed to an intentional disinvestment in minority communities. The effects are still being felt today, says Nikitra Bailey, executive vice president at the National Fair Housing Alliance, as some of these communities become particularly vulnerable to climate-related risk."[Climate change] is falling on communities that were already historically burdened by negative environmental impacts because our nation's public policies relegated families of color to neighborhoods that were more toxic than the neighborhoods that white communities were allowed to live in," she said. "So we see that climate impacts are now developing, and they are having a disproportionate impact on communities of color."
The Consumer Financial Protection Bureau has released a review of pandemic servicing intervention that suggests despite steps taken to make it broadly accessible, distressed borrowers reported a degree of difficulty with the entry to and exits from it. Nearly 50% had questions about whether they were able to use forbearance intended to be broadly offered to borrowers with hardships related to COVID-19, largely upon request. Even with that streamlining, more than a third were unclear on how to settle up later, and over one-fourth found the overall process too daunting. The report also found that not only were one in 15 borrowers limited English proficient, more than 20% were multilingual.
The burden of debt has reached an all-time high for American households, according to a study by The Kaplan Group. The collection agency analyzed the evolution of mortgages as well as auto, credit card and student loans since 2003 and found total debt grew by 81.5% over the past 20 years. Although the total amount of debt decreased temporarily after the 2008 financial crisis, the study found the amount owed has been growing rapidly since, outpacing inflation. With over $100,000 in debt, residents of Washington, D.C., struggle with the highest amount, followed by households in Hawaii and Washington, the study said. Conversely, with around $35,000, residents of West Virginia, Mississippi and Arkansas live with the least amount of debt. Mortgage debt is 18% higher than at the peak of the subprime crisis.?
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