Fannie announces sale of $3.4B in re-performing loans

Fannie Mae continues to reduce the size of its retained mortgage portfolio. The agency announced the start of its sixteenth marketing effort to do just that. This time the sale consists of approximately 18,300 re-performing loans with an unpaid principal balance of approximately $3.4 billion.

Loans are available for purchase only to qualified bidders, according to a statement, so interested bidders need to register on Fannie’s Whole Loans Sales page by August 18, 2020.

Fannie is marketing the sale in collaboration with Citigroup Global Markets, Inc.

Fannie’s terms on a re-performing loan sale include several specific requirements. Re-performing loans are mortgages that previously were delinquent – with some of the loans up to 90 days delinquent – but have been performing well for a certain length of time. 

Furthermore, Fannie requires the buyer to offer loss mitigation options “designed to be sustainable to any borrower who may re-default within five years following the closing of the re-performing loan sale.”

In addition, buyers must periodically report to Fannie their loss mitigation outcome data. Such performance reporting requirements would “cease once a loan has been current for twelve consecutive months” after the closing of the re-performing loan sale, the agency said.

Interested bidders can choose to register for ongoing announcements, training, and other information Fannie provides on its website, including information about specific pools available for purchase. The Federal Housing Finance Agency (FHFA) announced guidelines for these sales “to encourage broad buyer participation” and safeguard borrowers in 2015.


Quontic increases access to Non-QM

Quontic is yet another lender re-entering the non-qualified mortgage (non-QM) space in the past couple of months. The adaptive digital bank Quontic said it is responding to the pandemic fiscal restraints with a countertrend measure, re-launching its non-QM products for owner-occupied one-to-four family homes and investors.

Designed to fuel community development, these non-traditional, debt-service coverage ratio (DSCR) loans are immediately available in all 50 states through Quontic’s wholesale lending division.

The New York based bank offers non-QM while in compliance with its Community Development Financial Institution (CDFI) mission. Since 2015, when the U.S. Treasury Department certified Quontic as a CDFI that serves low-income communities, the bank has originated over $3 billion in mortgage loans 70% of which to low income census tracts.

“The market for non-QM loans came to a screeching halt during the pandemic. There was still borrower demand, but most non-bank lenders lost their financing and thus their ability to make non-QM loans,” said Steve Schnall, founder and CEO at Quontic.

“Our non-QM products are designed to enable underbanked populations like gig economy workers, immigrants, and seniors to obtain mortgage financing for both owner occupied and investment properties,” those who do not meet the rigid income documentation guidelines mandated under Dodd-Frank and traditional ability-to-repay (ATR) requirements, he added. Instead, Quontic assesses “the borrower’s total picture including credit, equity contribution and source of earnings.”

As most non-QM lenders Quontic pulled out of the market due to liquidity constraints, capital losses or other financial events caused by the pandemic, Quontic said it paused to assess risk. Currently the bank has a strong balance sheet and “is now aggressively offering its unique non-QM product line” at rates and terms that are attractive to borrowers and investors.

The CDFI status exempts Quontic from ATR requirements. Therefore, its owner-occupied, non-QM home loans do not require tax returns, W2 forms or pay stubs, 12-24 months bank statements required by most non-QM lenders to document income, the company said. Quontic requires up to 75% loan-to-value (LTV) “and only a borrower prepared P&L to document income.”

Each borrower’s overall and unique circumstances matter in qualifying for competitive interest rates for owner occupied home mortgages.

“Quontic does not require a stack of bank statements as we can rely on other more objective factors such as credit score, self-employment and equity contribution,” said Lee Ann Casanova, Director Mortgage Wholesale Division at Quontic. “It’s an easier process, has a higher level of approvals and is priced great so that everyone has access to an affordable mortgage even during uncertain fiscal times.”

The process differs from a more traditional approach as most non-QM lenders require the borrower to submit 12-24 months bank statements “in order to attempt to extrapolate the borrower’s income from their deposit activity,” explained Casanova. “Oftentimes this results in a denial for nontraditional buyers.”

Insellerate reports record demand for borrower tech

Mortgage marketing and sales engagement platform Insellerate has been welcoming a growing number of lender clients in the past 12 months. An additional 52 lenders are now using its highly scalable software, technology integration, strategy, and content services, the Newport Beach, Cal., based fintech reported in a statement.

Since Insellerate launched its most recent CRM & Engagement Platform in June 2017, it has processed over 2.6 million applications for its lender clients and engaged with over 64 million prospective borrowers.

Among notable client examples, Northpointe Bank loan officers reported credited the Insellerate platform, the company said, for helping generate over $125 million in mortgage lending volume a month, even though staff consisted of only 11 loan officers.

“With loan officers often working remotely, it is critical to provide them with the complete tools they need to engage with borrowers, deliver critical communication and content instantly to close loans,” said Josh Friend, CEO of Insellerate. “Lenders are drawn to Insellerate because our platform delivers lead management & distribution, CRM, call routing, and robust marketing automation and engagement.”

The Insellerate Software-as-a-Service (SaaS) platform is SOC 2 (System and Organization Controls’) and SSAE 18 certified to comply with closely regulated lending requirements, including for banks with mortgage subsidiaries.

Insellerate said it has doubled the implementation and support team via new hires and internal promotions, as client growth organically led to staff growth.

In 2019, Insellerate enhanced its CRM & lead management solution by adding a marketing automation and engagement platform.  This multi-channel marketing portal delivers pre-created content through social media, email, direct mail, compliant text messaging, ringless voicemail, and phone calls “to enable better borrower engagement.”

In August, Insellerate plans to launch a mobile version of the multi-channel marketing portal automation loan officers can access from their phone.

The Insellerate sales and marketing engagement mobile app automates in-bound call routing, lead distribution, full lead management, remote call tracking, click to call, and pipeline management, according to a release.

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