Ellie Mae: Millennials to lead surge in purchase market
The next generation of first-time homebuyers is maturing and coming up in strides. As shown by Ellie Mae’s second quarter data, millennials were responsible for more closed purchase loans than any other generation, and will lead such demand during the next several years.
The share or percentage of purchase mortgage loans closed in June 2020 was 56%, up nine percentage points from May, and marking the highest purchase share since March 2020, according to the latest Ellie Mae Millennial Tracker.
“While we’re currently seeing an upturn in millennial purchase activity, the true boom is just starting,” said Ellie Mae’s COO, Joe Tyrrell. “We expect that their entry into the market, as they reach prime home buying age, will fuel purchase transactions in 2021, 2022 and 2023.”
The Ellie Mae Millennial Tracker divides this demographic into the older millennials born from 1980 to 1990 and younger millennials born from 1991 to 2001.
Millennials in their 20s were more likely to buy homes in June, the report found. They closed 78% of all purchase loans, compared to 47% for older millennials, “who are more likely” to already own a home and seek to refinance.
“Millennials represent the single biggest opportunity in the housing market today,” said Tyrrell. “Per U.S. Census data, there will be over 4 million millennials reaching the age of 29 to 30, each year for the next several years. That is important, because our data shows that is the average age when Millennials enter the homebuying market.”
The average interest rate for all loans closed in June by millennial buyers fell to a new low of 3.36% further increasing their purchasing power compared in May, when the average rate dropped to 3.42%.
Average interest rates were nearly identical for both millennial groups. On average, the interest rate of 3.35% for younger millennials, compared to 3.34% for older millennials. Younger millennials, who on average had lower average FICO scores, “gravitated toward FHA loans, which have less stringent credit requirements,” the report notes.
Average time to close on all loans has risen every month since March. It was 45 days in June, up from 43 days in May; and it took even longer to close a refinancing loan. In June the time needed to refinance reached 49 days, increasing five days from May.
“Millennials are emerging as a dominant force” driving the purchase market forward, said Tyrrell, but the report highlights, it is critical for lenders to offer millennial customers the services and “the seamless digital experiences they expect.”
Kind Lending selects Docutech’s ConformX & Solex
Kind Lending LLC, a newly created wholesale lender and mortgage banking company led by celebrity investor and entrepreneur Glenn Stearns, has selected two Docutech solutions to streamline the lending process.
The privately owned Santa Ana, Calif., lender will integrate its loan origination platform with Docutech’s document generation engine ConformX and its Solex platform, which includes eDelivery, eSignature, eClosing and eVault capabilities.
The Solex platform has so far enabled lenders to close more than 100,000 mortgages electronically, according to the vendor’s website. While ConformX, enables users to create document packages and currently supports more than 30% of the nation’s total mortgage volume, representing over $500 billion in loan value, (as measured by the Home Mortgage Disclosure Act).
In addition, the new lender will use the digital to print fulfillment solution offered by Docutech.
The fintech affiliate of the First American family of companies also offers a wide range of document technology solutions for mortgage and home equity lending, from document generation to fulfillment, in all 50 states.
Kind Lending said it selected Docutech for its “strong integration into their loan origination software,” and tools that help staff to digitally generate and sign all loan documents “from initial disclosures through closing.”
Brokers, credit unions and banks utilizing the Kind Lending platform will be able to streamline operations, improve processing speed, accuracy and operational costs. Borrowers will have access to a convenient and consistent digital experience from any device.
“We’re taking a modern approach to the lending experience,” said Glenn Stearns, founder and CEO of Kind Lending. “Docutech’s legacy in the industry, coupled with their spirit of innovation and collaboration, aligns perfectly with our mission to deliver a new and refreshing experience to the mortgage community and their customers.”
A legend in the mortgage industry, Glenn is an outstanding human being “with a unique perspective and ability for reinvention,” said Amy Brandt, president of Docutech. “We are thrilled that Glenn and his team have chosen Docutech’s people and our technologies to launch Kind Lending’s offerings and deliver a new wholesale lending experience.”
Glenn Stearns, the founder and CEO of Kind Lending, also is the founder of Anivive Life Science, Stearns Wholesale, Stearns Holdings, Stearns Ventures, Artemis Holdings, TriVerify, TriMavin, United Housing Services, Inc., and Mortgage Services Providers Holdings.
According to media reports, Sterns also is an investor in Indi.com and Lender Price; the largest shareholder of California-based Infinity bank; and owns Underdog BBQ in Erie, PA a company he built while filming Discovery Channel’s Undercover Billionaire TV series. He travels the country as a motivational speaker that educates and inspires entrepreneurs of all ages.
Wells Fargo grants $1.5M to Funders for Housing and Opportunity
The Wells Fargo Foundation (WFF) has granted $1.5 million to the Funders for Housing and Opportunity (FHO) collaborative whose goal is to develop affordable housing solutions and relief for renter households, homeless people and communities disproportionately affected by the economic impact of COVID-19.
As part of the collaborative, WFF will address housing affordability, small business growth, and financial health issues through assistance that includes a $1 billion philanthropic commitment “to address housing affordability solutions by 2025.”
“Funders for Housing and Opportunity welcomes the Wells Fargo Foundation as its first financial services-related member and applauds its generous philanthropic support,” said Jeanne Fekade-Sellassie, project director for FHO. “Housing is the foundation on which our lives are built” and a path to economic mobility.
WFF is one of 15 foundations joining FHO’s pledge to make investments “that will spark large-scale change” and improve the life outcomes of the 11.7 million renter households in the U.S. who spend more than half of their income on housing, or who are homeless. COVID-19 has worsened their situation.
“Having a safe and affordable place to call home is essential to help lay the foundation for wellness, dignity, and economic opportunity,” said Eileen Fitzgerald, head of housing affordability philanthropy with the Wells Fargo Foundation. “The economic fallout caused by COVID-19 has disproportionally affected Black, Hispanic, Asian, Native America and Alaska Native communities, adding to a long history of systemic inequality, loss of wealth, and housing instability particularly during times of economic distress. That’s a problem that must change.”
FHO and its member foundations work to fortify housing as an essential part of efforts to improve lives of the most vulnerable people.
Earlier this year, as part of its $175 million response to COVID-19 to assist the most affected by the COVID-19 economic downturn, WFF awarded grants to national housing intermediaries, that will keep more than 100,000 homeowners and renters housed; over 1,100 grants to local nonprofits; expanding the capacity of housing counselors to respond to renters and homeowners.
Customer assistance, WFF said, includes more than 2.5 million payments deferred, representing more than $5 billion in principal and interest, including $3.2 billion in mortgage loans serviced for others.