Title insurance vs. alternatives: Considering the claims process

The possibility of lowering upfront costs for borrowers by using title insurance alternatives, which are now more widely accepted by major secondary market participants, has become more of an option for lenders and borrowers, but there's more to consider than the initial price tag. The point of traditional title insurance coverage or an attorney title opinion letter is to protect ownership of the property, so in evaluating the value proposition of each method, it's important to weigh what happens with each in the event that ownership is actually challenged. To get a sense of this, we turned to an insurance industry group, a provider of attorney-opinion letters, and an expert familiar with the history of the business.

READ MORE: Title insurance vs. alternatives: Considering the claims process

CrossCountry Mortgage executive discusses expansion

Brett Dillenberg, an executive vice president at CrossCountry Mortgage, runs six branches mostly situated across the West Coast and oversees 19 others spread out throughout the country. Last year, his team of about 150 employees, churned out $850 million worth of originations. And this year, despite the headwinds, Dillenberg hopes to be "north of a billion."? Dillenberg's branches were previously under the LendUS umbrella.? The company was acquired by Ohio-based CrossCountry Mortgage in April 2022. Dillenberg says that since the acquisition, he is turning his attention to bringing more branches onboard to join his division. National Mortgage News spoke with Dillenberg about what benefits he sees from integrating with CCM, his outlook for the spring homebuying season and the trends he's watching.

Class action suit lodged against Celebrity Home Loans

A class action complaint has been lodged against Oakbrook Terrace, Illinois-based Celebrity Home Loans for its "callous" decision to shutdown without giving employees a 60-days heads up, as required by the Worker Adjustment and Retraining Notification Act. The suit, filed by Michael Blake, a former loan officer at CHL, also accuses the lender of failing to "timely pay full wages, commissions and final compensation owed," in violation of the Illinois Wage Payment and Collection Act. The complaint alleges that executive officers "knew for weeks, if not months" that the company was going under and the breakdown of negotiations with Arizona-based On Q Financial Inc. — which was set to acquire parts of the company — "could lead to a mass layoff and closure of the company."

How private mortgage insurers plan to weather 2023 downturn

The active private mortgage insurers have sufficient capital on hand to meet the requirements to keep their counterparty status with Fannie Mae and Freddie Mac, a Fitch report said. The Primary Mortgage Insurer Eligibility Requirements created a mandate for a capital cushion in order to absorb losses from mortgage foreclosure claims in times of financial stress. The amount above the cushion level is called the excess and is considered a measure of financial strength. The five monoline mortgage insurance companies have an average PMIERs cushion of 70% at year-end 2022, according to Keefe, Bruyette & Woods' calculation. The MIs are not expected to have any problems meeting the capital rule in the face of a likely economic downturn this year.

What Fannie Mae's changes could mean for home valuations

In a selling guide published last week, Fannie Mae showed it is moving away from the position that a property appraisal is a requirement to prove value for a lender to sell a loan to the government-sponsored enterprise. Also, it is looking to substitute the term "value acceptance" in place of appraisal waiver, although at first both will co-exist in the Fannie Mae lexicon. While the valuation profession has used desktop and hybrid appraisals in certain instances for years, a leading group is uneasy about these revisions. "This announcement does raise concerns and questions about increasing collateral risk at a time of market volatility," Craig Steinley, president of the Appraisal Institute, said in a statement.

Prepayment drivers shift as rates, affordability quell activity

As prepayment rates on home mortgages have fallen to record lows, the mix of catalysts driving that has changed, Black Knight found in its latest Mortgage Monitor report. Perhaps most striking is how much the rise in rates in the past year or so reduced refinances. Speeds on refis fell to a more than 20-year low in January, according to the report, in which the company conducts further analysis of numbers in its earlier First Look report. No-cash-out refis contributed just 1.52 basis points to the single-month mortality rate for home mortgages. That compared to default, 1.73; cash-out refi, 4.99; curtailment, 7.41, and home sales 17.16.? And even home sales were muted during the typically slow month.

Mortgage disclosure proposal aims to boost home construction

A banking industry trade group is proposing adding new language to current mortgage disclosures, which they say will stimulate demand for construction-related home financing and open up purchase opportunities. The Consumer Financial Protection Bureau is currently requesting public input on an application from the Independent Community Bankers of America to modify loan estimate and closing disclosures. The proposed changes would spell out in detail differences in costs and interest rates between the construction and home finance portion of loans, information mortgage disclosures currently lack. Changes would apply to both construction-to-permanent single-close mortgages as well as loans requiring two closings.

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