Mortgage Rate Outlook May Be Improving

 

iLeads Mortgage Market Minute

Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Will Trillions in Stimulus Push Mortgage Rates Over 5%? This week we’re bringing you:

 

Housing inventory is down 40%. Buyers are paying the price*

Annual home prices grew 11.6% in January

Prices are up sharply as housing inventory continues to plateau, leaving 40% fewer homes on the market compared to last year, according to a report prepared by Black Knight.

Instead of making up for the shortfall, new listings have slumped further in 2021. Year-over-year, new listing volumes were down 16% in January and 21% in February — amounting to a 125,000 deficit in inventory compared to the same time in 2020.

“Any hopes of 2021 bringing an influx of homes to the market and lessening pressure on prices appear to be dashed for now,” said Ben Graboske, Black Knight’s data and analytics president.

Buyers who were fortunate enough to snag an available single-family home – new listings are down 46% from a year ago – paid a premium. In February, the median single-family sales price rose nearly 16% from last year.

Home prices in most big cities also increased due to low inventory. In nearly three quarters of the 100 largest U.S. markets, annual home prices grew more than 10%. Overall, home prices grew 11.6% year-over-year in January, the most growth in a single year since 2005.

Boise, Idaho, and Spokane, Washington saw the greatest home-price appreciation, growing 26% and 20% year-over-year, respectively. In Chicago, meanwhile, home prices grew just 7%.

“Of course, upward pressure on home prices has also served to tighten affordability, and with rates on the rise, affordability concerns are coming into sharper relief,” said Graboske.

Read more in-depth here.

 

Despite Pandemic, Homeowners View Housing as a Good Investment*

Fannie Mae says results from its fourth quarter 2020 National Housing Survey show that consumers continue to view homeownership as a good investment. Respondents were asked about various investment types, including stocks, bonds, homes, and savings accounts. Seventy-five percent of respondents indicated that homes are a “safe” investment, ranking just slightly below a savings/money market account. Additionally, 73 percent of consumers felt that investing in a home has “a lot of potential.” Only 63 percent felt that way about owning stocks.

The report, written for the company’s Perspectives blog by Mark Palim, Vice President and Deputy Chief Economist and Rachel Zimmerman, Market Research Advisor and National Housing Survey Lead, says the recent single family housing market has been especially strong. As of Q4 2020, home prices were up by double digits and existing home sales were 20 percent higher year-over-year.

The authors attribute much of housing’s strength to the response of policymakers and consumers to the unique circumstances of the COVID-19 pandemic. “Thus far, the pandemic has contributed to historically low mortgage rates, higher savings for many households, and even stronger demand for homes relative to supply, as many households searched for homes with additional features, including more space, home offices, and the ability to safely ‘nest’ with their families. Even in the years prior to the pandemic, consumers reported that they believed housing, as an asset class, was a safe investment with high potential, a perception which, if it persists, will likely further support demand even as pandemic-related factors recede.”

Read more in-depth here.

 

Here’s how to fix the housing market inventory crisis*

Incentivizing current owners to sell is key

The U.S. housing market is in the midst of an inventory crisis. The number of homes for sale in the U.S. is hovering near record lows, caused by a pandemic-induced housing inventory death-spiral.

At the same time, home sales have soared close to record highs, suggesting the housing market suffers exclusively from a supply (and not demand) problem. Thus, federal policies must focus as much on increasing housing supply as boosting demand.

Rolled out in isolation, first-time homebuyer tax incentives (FTHB) – such as the Biden Administration’s proposed $15,000 advanceable FTHB credit – are only likely to make housing inventory scarcer and prices higher. Instead of just bolstering demand, policies that focusing on increasing supply – such as tax incentives that encourage owners to sell and builders to build – is what the U.S. housing market desperately needs.

The federal government could quickly incentivize owners of existing homes to sell using one or a combination of carrot-based or stick-based approaches. Using a carrot-based approach, opening a temporary window of capital gains exemptions would incentivize owners of investment homes with capital gains, as well as owner-occupiers with over $250k-$500k in gains, to sell.

Alternatively, a stick-based approach might raise taxes on single-family rental income, implement nation-wide rent control, and/or reduce bulk ownership of single-family homes. In our current political environment, though, it seems carrot-based approaches would be much more likely to garner bipartisan support than stick-based approaches, especially given the hardship that both renters and landlords have experienced during the pandemic.

Read more in-depth here.

 

What Biden’s infrastructure plan does for housing*

Proposed $213 billion could help low- and middle-income homeowners

President Joseph Biden’s $2 trillion infrastructure plan represents the most sweeping national investment in decades. The “American Rescue Plan,” unveiled Wednesday, includes $213 billion allocated for housing, with a focus on low- and middle-income homeowners and prospective homebuyers.

Specifically, the plan calls for the construction and rehabilitation of over 500,000 homes in low- and middle-income areas. According to Biden, two million affordable homes and commercial buildings would be built and renovated over the next decade as part of the initiative.

Biden is also calling on Congress to eliminate exclusionary zoning laws, which he says inflates housing and construction costs – an issue that has crippled homebuilders across the country for more than a year.

Biden wants homes upgraded through “block grants” – annual sums awarded by the federal government to a state or local body to help fund a specific problem – and through extending and expanding home and commercial efficiency tax credits.

Officials said extending and expanding the efficiency tax credits would be done through the Weatherization Assistance Program, the nation’s largest residential whole-house energy efficiency program.

Listen to the full podcast episode here.

 

Mortgage Rate Outlook May Be Improving*

Things have been bad for mortgage rates in 2021. That assertion has nothing to do with the outright level of mortgage rates–indeed, that’s still very low historically–and everything to do with the pace and duration of the rate spike. Like many things, there comes a certain point at which things have been bad enough for long enough that they can’t help but improve. Have we reached that point with the rate spike of 2021 and is today the proof?

Let’s not tempt fate, and let’s be realistic. As far as rate spikes go, there have been worse examples. In fact, even as recently as 2016, one could argue some of that movement was worse than what we’ve seen in 2021. And if we go back another few years, there’s no question that 2013 was much tougher than the current environment. Things can definitely be worse, and they could still get worse from here.

With all of the disclaimers out of the way, on to the good stuff. Both yesterday and today have been reasonably strong and resilient for the bond market. That’s a good thing because mortgage rates are primarily driven by day-to-day bond market movement. Perhaps more important than the friendly movement is the fact that bond yields (another word for “rates”) have remained under important ceilings since March 18th despite numerous attempts at a breakout. Specifically, we’re watching 10yr Treasury yields in the mid 1.7% range. To be fair, Treasuries and mortgage rates have diverged GREATLY in the past year, but Treasuries nonetheless tell us the most when it comes to identifying shifts in broad bond market momentum.

All that to say, the evidence for a supportive shift in the rate environment is beginning to mount. The shift could be underwhelming or short-lived, true. But almost anything is better than the first quarter of 2021. Simply drifting sideways at current levels would be a big victory.

Read more in-depth here.

 

Finding highly affordable leads to keep sales coming in

At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

You can also schedule a call here.

Get Started

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    What I’ve Learned From Working In Insurance

    ileads insurance market minute

     

    Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading SPAC Spree Presents Opportunities for Insurance Industry. This week we’re bringing you:

     

    Zillow recruits Christy Kaufman as risk manager*

    Christy Kaufman, former head of strategy, governance and compliance at the venture capital arm of American Family Insurance Co., has joined online real estate marketplace Zillow Group Inc. as vice president of risk management.

    Ms. Kaufman, who is also a board member of the New York-based Risk & Insurance Management Society Inc., joined American Family in 2017 after 10 years at Marsh & McLennan Cos. Inc. where she held various positions, including head of enterprise risk management.

    Find out more in-depth here.

     

    Being proactive in a volatile cyber insurance market*

    Cyber risk is everywhere. It’s an enterprise problem that can trigger a string of loss-driving events well beyond the technology or the systems that were initially compromised. Cyber events can result in business interruption (both primary and contingent), productivity loss, reputational damage, physical damage, and significant legal repercussions and recovery expenses. As the impacts of cyber exposure are realized, the scale and frequency of cyber insurance losses continue to soar.

    Ransomware is arguably the most pressing issue the cyber insurance community is dealing with today. This variation of malware allows hackers to lock people out of their business systems until they pay a ransom, usually in cryptocurrency and to an offshore bank account. In recent years, there has been a significant uptick in the frequency and severity of ransomware attacks impacting businesses of all sizes and in all sectors. Hackers have grown more sophisticated and targeted in their attacks, aiming for larger organizations that can afford bigger ransoms.

    In the past five years, the average ransom demand has shot up from $15,000 to $175,000 – an almost twelve-fold increase – according to the NetDiligence 2021 Ransomware Spotlight Report. Furthermore, ransom demands crossed the $1 million threshold in 2018, the $3 million threshold in 2019, and publicly available data indicates that they crossed the $30 million threshold in 2020 – although this was likely negotiated down.

    The ransomware headache doesn’t stop there. In 2020, a new wave of ransomware attacks hit the market. Known as ‘double extortion,’ threat actors are maximizing their chance of making profit by threatening the victim with an additional abuse of the information they encrypted, such as selling or auctioning it.

    Find out more in-depth here.

     

    What I’ve learned from working in insurance*

    The following is an editorial by Alicja Grzadkowska, former senior news editor at Insurance Business.

    Last week, I wrapped up my work at Insurance Business and bid farewell to my team and our parent company Key Media. Over the past three-plus years, I’ve learned a lot from writing about the insurance industry, and leaving it behind has given me a chance to think about what will stay with me as I move on to new endeavors.

    My main challenge when I started at Insurance Business was wrapping my head around the complexities of this sector. While I had a background in business journalism, I had never focused in on the insurance space so intently, and knew very little about it, besides what I gleaned from buying auto and renters’ insurance. Suddenly, I was writing articles on personal and commercial lines, as well as reinsurance and all of the other developments that touch this industry – my first two articles were about the aftermath of the 2017-18 US wildfire season, and a tribute to a Canadian insurance leader who had passed away. I had to learn very quickly what all of the terminology meant and how to explain it in an interesting and readable way to our audience, many of whom already had experience in insurance.

    I was pleasantly surprised to find out just how open insurance professionals were to helping me personally, as well as the broader public, understand what it is that they do. This proved to be helpful throughout my entire time at Insurance Business since, as some of you can relate, there are many pockets and niches of insurance that you might not stumble upon in the course of your everyday work, yet suddenly have to know a lot about for the benefit of the end reader or customer.

    I’m very thankful for all the experts who took time out of their busy days to talk to me about various insurance developments and walk me through their specific areas of focus without any ego or presumption that one should already know all of this. This patient approach is the same one that many professionals bring to their work with buyers of insurance, who, like me, are often not well-versed in insurance products before they suddenly have to buy coverage.

    Find out more in-depth here.

     

    Finding highly affordable leads to keep sales coming in

    At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

    We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

    You can also schedule a call here.

    Get Started

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      Will Trillions in Stimulus Push Mortgage Rates Over 5%?

       

      iLeads Mortgage Market Minute

      Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Lender Profits Are Crashing Back To Earth. This week we’re bringing you:

       

      Forbearance falls below 5% for the first time in a year*

      But servicers must keep a watchful eye on those who remain in forbearance the longest

      The U.S. forbearance rate is officially below 5% for the first time in a year. Servicers’ forbearance portfolio volume fell nine basis points last week to 4.96%, according to a survey from the Mortgage Bankers Association.

      Since October, the percentage of portfolio loans in forbearance hovered between 5% and 6%, the longest a percentage range had held since the survey’s beginning as continuous extensions gave homeowners more time to postpone payments.

      According to the MBA, new forbearance requests last week remained at their lowest level since last March, while the pace of exits increased and shrunk the share of loans in forbearance across all investor categories. Fannie Mae and Freddie Mac loans boasted the smallest percentage once again, dropping to 2.77% – a six-basis-point improvement.

      Ginnie Mae‘s forbearance share dropped 20 basis points last week to 6.83%, it’s third week of double-digit declines, while portfolio loans and private-label securities (PLS) managed a one basis point drop to 8.9%.

      Continued downward trends mark a positive sign for the larger economic picture, but the MBA still estimates 2.5 million homeowners are taking advantage of some form of forbearance, and now, more than 17% of borrowers in forbearance extensions have exceeded the original 12-month mark set by servicers and agencies.

      “Many homeowners need this support, even as there are increasing signs that the pace of economic activity is picking up as the vaccine rollout continues,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Those who have an ongoing hardship due to the pandemic and want to extend their forbearance beyond the 12-month point need to contact their servicer. Servicers cannot automatically extend forbearance terms without the borrower’s consent.”

      According to a recent report from Black Knight, at the current rate of improvement, an estimated 600,000 plans should have reached their original 12-month expiration at the end of this month (the peak month for expiration activity). Next week’s data should be informative, given both HUD and the FHFA pushed expirations to the end of September 2021 for the first round of forbearance seekers.

      Read more in-depth here.

       

      Even With Recent Declines, Purchase App Volume is Still Outpacing 2020*

      Mortgage Application volume continued to trend down during the week ended March 26. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, declined 2.2 percent on a seasonally adjusted basis from the previous week and was down 2 percent on an unadjusted basis. It was the tenth time the index has declined in the 13 weeks since 2021 began.

      The Refinance Index decreased 3 percent from the previous week and was 32 percent lower than the same week one year ago. Refinancing, however, still accounts for the lion’s share of applications, 60.6 percent during the week, down only slightly from the week ended March 19.

      The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. Unadjusted, the Index was down 1 percent and was 39 percent higher than the same week one year ago.

      “After seven consecutive weeks of increasing mortgage rates, the 30-year fixed rate declined 3 basis points to 3.33 percent, which is still almost half a percentage point higher than the start of this year. Mortgage applications for refinances and home purchases both declined, but purchase activity was still convincingly higher than the pandemic-induced drop seen a year ago, as well as up 6 percent from the same week in March 2019,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Many prospective homebuyers this spring are feeling the effects of higher rates and rapidly accelerating home prices. Record-low inventory is pushing home-price growth at double the rate from a year ago, and even above the 10 percent growth rates seen in 2005. The housing market is in desperate need of more inventory to cool price growth and preserve affordability.”

      The FHA share of total applications decreased to 11.3 percent from 11.7 percent while the VA share grew to 10.3 percent from 9.8 percent. The USDA share was unchanged at 0.4 percent. The average loan balance decreased for all loans from $333,000 the previous week to $324,800. Purchase loan balances were also smaller than a week earlier, $401,400 compared to $409,300.

      Read more in-depth here.

       

      January’s Double-Digit Home Price Gains Continue to Break Records*

      The S&P CoreLogic Case-Shiller home price indices and the Federal Housing Finance Agency’s (FHFA’s) House Price Index (HPI) all show that the growth of home prices continued to accelerate through January, even as interest rates began to creep higher.

      Case-Shiller’s National Home Price Index, which covers all nine U.S. census divisions, rose 11.2 percent compared to its January 2020 level. The annual gain in December was 10.4 percent. The 10-City Composite Index posted an annual increase of 10.9 percent, a full percentage point above its 12-month gain the previous month. The 20-City Composite, with Detroit’s data now included in the calculations, was up 11.1 percent compared to January of last year. Annual appreciation was 10.2 percent in December.

      Phoenix, Seattle, and San Diego continued to report the highest year-over-year gains among the 20 cities, with Phoenix in the led for the 20th month. That city’s January increase was 15.8 percent. Seattle and San Diego followed with respective increases of 14.3 percent and 14.2 percent. All 20 cities reported higher price increases in the year ending January 2021 versus the year ending December 2020.

      On a month-over-month basis the National Index rose 0.8 percent on a non-seasonally adjusted basis and the 10-City and 20-City Composites posted increases of 0.8 percent and 0.9 percent. All three indices were up 1.2 percent after adjustment. Nineteen of 19 of 20 cities had gains from December before seasonal adjustment, and all 20 cities did so afterward. Sixteen of those cities had growth in double digits.

      Craig J. Lazzara, Managing Director and S&P Dow Jones Global Head of Index Investment Strategy, said, “The trend of accelerating prices that began in June 2020 has now reached its eighth month and is also reflected in the 10- and 20-City Composites. The market’s strength is broadly-based: all 20 cities rose, and all 20 cities gained more in the 12 months ended in January 2021 than they had gained in the 12 months ended in December 2020.

      Read more in-depth here.

       

      A closer look at the nation’s hottest housing markets*

      In today’s HousingWire Daily episode, HousingWire HW+ Managing Editor Brena Nath joins Editor in Chief Sarah Wheeler to discuss the hottest topics coming across HousingWire’s news desk.

      In this episode, Nath and Wheeler discuss the latest Real Trends 500 list, which ranks the largest real estate brokerage firms in the country by transaction sides and sales volume.

      The pair also review the recent median home sale price report from Redfin and examine what’s been happening in some of the hottest housing markets across the country.

      For some background on the interview, here’s a brief summary on the recent median home sale price report:

      Listen to the full podcast episode here.

       

      Will trillions in stimulus push mortgage rates over 5%?*

      Inflation and its impact on the housing market

      Whether we personally were infected by COVID-19 or not in the past year, we all suffered the pains of a sick economy as members of the American family. Now that the economy is on the verge of reopening, we can anticipate the release of pent-up demand for labor along with increased spending in specific sectors of our economy. Government disaster relief that kept the unemployed afloat last year will be with us for most of this year, too. However, Biden’s proposed fiscal stimulus package of around $3 trillion for infrastructure, education and workforce development should be replacing disaster relief.

      Part of Biden’s proposed stimulus is focused on getting everyone who lost jobs due to COVID back to work and the economy on better footing. By the end of September 2022, I anticipate seeing the total jobs data look a lot like February 2020 before COVID-19. Hopefully, we will see these near-total employment numbers even sooner, but we still have a few roadblocks that need to be conquered.

      Let’s say we do get back to February 2020’s employment levels: what will that do to inflation? It’s been a while since we had to think about inflation, and it’s a sign of the times that we are adding this back to our topics of conversation, along with higher mortgage rates. This means America is back, and the conversation is now shifting to growth rather than a deflationary crisis. So let’s take a peek at what the future holds.

      Read more in-depth here.

       

      Finding highly affordable leads to keep sales coming in

      At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

      We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

      You can also schedule a call here.

      Get Started

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        SPAC Spree Presents Opportunities for Insurance Industry

        ileads insurance market minute

         

        Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading ClarionDoor Selected To Optimize Insurer’s Cannabis Program. This week we’re bringing you:

         

        Comp claims increased in third quarter of 2020*

        Active workers compensation claims ticked up in the third quarter of 2020, compared with the second quarter, but remained below 2019 totals, according to data released Tuesday by the National Council on Compensation Insurance.

        Using aggregated multistate results, Boca Raton, Florida-based NCCI found that active workers compensation claims increased 10% in the third quarter from the second, but remained 14% below active claim numbers for the third quarter of 2019. This was likely attributable to pandemic-related drops in risk exposure from reduced payrolls, a decline or delay in the reporting of claims, or a decrease in medical treatments, NCCI said.

        New claims in the third quarter declined 22% from the same period in 2019, while existing claims decreased 8%, “despite partly revived economic activity,” NCCI said.

        About 5% of third-quarter claims included the use of at least one telemedicine service, a big drop from 14% in the second quarter. However, the use of telemedicine in the first three quarters far exceeded usage in 2019, when fewer than 0.5% of claims included its use.

        Find out more in-depth here.

         

        States introduce changes to promote legacy deals for insurance sector*

        Mergers and acquisitions among ongoing insurance sector companies are triggering more interest in runoff transactions to seal off old liabilities, and the trend has been boosted by legislation in various states seeking to simplify the process.

        Legislation passed in 2018 in Oklahoma led to the first transaction being approved in the state last year and several other states have either enacted or are considering enacting similar laws.

        Oklahoma’s Insurance Business Transfer Act provides a mechanism “for insurers to absolutely transfer blocks of insurance business to another insurance company,” according to the Oklahoma Insurance Department.

        The law allows for insurers to achieve contractual finality on the policies being sold or transferred as well as allowing for court, insurance department and independent review and approval of all transactions in the interest of policyholder protections.

        The first successful transaction under the Oklahoma law was completed in October 2020 when a court approved Providence Washington Insurance Co.’s plan to transfer substantially all the insurance and reinsurance business underwritten by PWIC to Yosemite Insurance Co. of Oklahoma.

        The deal included the liabilities associated with those policies as well as $38.5 million transferred from PWIC to Yosemite as consideration for assuming the liabilities. Both PWIC and Yosemite are wholly owned subsidiaries of Enstar Group Ltd.

        Find out more in-depth here.

         

        SPAC spree presents opportunities for insurance industry*

        Special purpose acquisition companies (SPACs), otherwise known as blank-check firms, have been making waves in the insurance industry lately. You may have seen several notable developments involving SPACs recently, like home insurance start-up Hippo agreeing to go public through a merger with Reinvent Technology Partners Z, online therapy app Talkspace planning to do the same with Hudson Executive Investment Corp., and ex-UniCredit SpA CEO Jean Pierre Mustier raising funds for his own SPAC.

        According to CNBC, SPACs are “one of the hottest trends on Wall Street,” with more than 200 SPACs going public in 2020 and raising approximately $84 billion in total funding. And this market is only getting hotter – as of March 2021, SPACs in the US had already topped 2020’s funding numbers, according to Forbes.

        For those new to this developing investment arena, an SPAC has no commercial operations and is formed solely to raise capital through an IPO for the purpose of acquiring an existing company, explains Investopedia. The benefits of SPACs include the fact that selling to one of these companies can up the sale price by 20%, versus a standard private equity deal. Moreover, business owners get to go through a faster IPO process, armed with the support of an experienced partner.

        There are several implications of SPACs for the insurance industry. First of all, insurance start-ups have shown that they’re prime targets for IPOs involving blank-check firms. In fact, investment in the insurance industry in general has been of keen interest for some time now, since, noted Pitchbook in a 2020 report: “Insurance companies have the potential to meaningfully add to a general partner’s permanent capital, drive AUM growth, and make solid investments if their float is invested well — just as Berkshire Hathaway has done with many of its insurance holdings.”

        Find out more in-depth here.

         

        Finding highly affordable leads to keep sales coming in

        At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

        We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

        You can also schedule a call here.

        Get Started

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          ClarionDoor Selected To Optimize Insurer’s Cannabis Program

          ileads insurance market minute

           

          Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Is The Insurance Industry Prepared For New Tech Risks?. This week we’re bringing you:

           

          New COVID-19 standards introduce workers’ compensation-related risks*

          In response to the COVID-19 pandemic, President Joe Biden issued an Executive Order for OSHA to consider an Emergency Temporary Standard (ETS), which would include rules on wearing masks in the workplace and other regulations that aim to protect employees, as well as providing consistency of protection across all 50 states, according to the National Safety Council.

          “OSHA’s anticipated Emergency Temporary Standard is likely to be very similar to the comprehensive COVID-19 standards that Virginia and California established in late 2020, but would apply to nearly all workers and worksites across the country,” explained Gary Pearce (pictured above), chief risk architect at Aclaimant. “It’s expected that this temporary OSHA standard will eventually be replaced by a new and permanent infectious disease standard, even if the frequency of COVID-19-related workplace infections has fallen sharply in the meantime.”

          While the ETS has some clear benefits for worker safety, it also brings new risks to the forefront for businesses. For one, the ETS is likely to expand the totality of employers’ legal obligation and does not obviate the need to keep up with future changes, noted Pearce, adding: “Despite the existence of a unifying national standard, organizations shouldn’t discount the likelihood of having ongoing additional regulations at the state, county, or even municipal level.”

          Already, many businesses have adopted some COVID-19-specific standards in their workplaces. It would have been hard not to, if companies wanted their employees to feel safe at work. A few of the more common changes have included employers requiring employees to self-report symptoms, keeping symptomatic employees out of work and managing their return, providing personal protective equipment (PPE), and requiring social distancing, among others.

          Find out more in-depth here.

           

          Tesla’s in-car cameras raise privacy concerns: Consumer Reports*

          (Reuters) — Tesla Inc.’s use of in-car cameras to record and transmit video footage of passengers to develop self-driving technology raises privacy concerns, influential U.S. magazine Consumer Reports said Tuesday.

          Consumer Reports said the usage potentially undermines the safety benefits of driver monitoring, which is to alert drivers when they are not paying attention to the road.

          “If Tesla has the ability to determine if the driver isn’t paying attention, it needs to warn the driver in the moment, like other automakers already do,” said Jake Fisher, senior director of Consumer Reports’ auto test center.

          Automakers such as Ford Motor Co. and General Motors Co., whose monitoring systems do not record or transmit data or video, use infrared technology to identify drivers’ eye movements or head position to warn them if they are exhibiting signs of impairment or distraction, the magazine said.

          Tesla did not immediately respond to a Reuters request for comment.

          The Palo Alto, California-based carmaker’s internal cameras are also a point of contention in China, where the military banned Tesla cars from entering its complexes, citing security concerns.

          Tesla CEO Elon Musk said last week his company would be shut down if its cars were used to spy.

          Find out more in-depth here.

           

          ClarionDoor selected to optimize insurer’s cannabis program*

          Insurtech provider ClarionDoor has been selected by a major Pennsylvania-based insurer to optimize its cannabis program.

          The cannabis market is expected to hit $130 billion by 2024, providing new opportunities for insurance coverage for cannabis cultivators, wholesalers, processors, and distributors. The Pennsylvania-based property and casualty insurer “needed a flexible, cost-effective solution in order to launch products to market fast and integrate seamlessly with the company’s core systems,” ClarionDoor said.

          ClarionDoor’s cloud-based software for rating and quoting allows specialty insurers to streamline their underwriting processes. “Many insurers offering coverage for emerging markets are still rating risks manually, and need solutions that fit seamlessly into newly implemented digital strategies,” ClarionDoor said.

          “With cannabis legislation pending or at least proposed across the country, this opportunity is one that only continues to grow,” said Pat McCall, chief sales officer at ClarionDoor. “Truly, it is one of those specialty lines that is on the verge of booming, and technology should not stand in the way, but rather it should enable insurers to take advantage of growth potential.

          Find out more in-depth here.

           

          Finding highly affordable leads to keep sales coming in

          At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

          We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

          You can also schedule a call here.

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            Lender Profits Are Crashing Back To Earth

             

            iLeads Mortgage Market Minute

            Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Are We Seeing A Cash-Out Refinance Crisis?. This week we’re bringing you:

             

            Powell says he expects a temporary rise in inflation this year*

            Federal Reserve chairman Jerome Powell and Treasury Secretary Janet Yellen answer questions from lawmakers about the monetary and fiscal response to the coronavirus pandemic.

            Read more in-depth here.

             

            Stepping up the fight against fraud in mortgage lending*

            As instances of attempted fraud proliferate, fintech can help in hiring processes and operations

            Wherever there is commerce, there will be fraud, and the mortgage industry is no exception. In recent years, we have seen a significant uptick in fraudulent activity ranging from the high tech — intercepted wire transfers and electronic title phishing scams — to low-tech, such as applicants submitting falsified or doctored bank statements. The transition to a largely remote workforce during the COVID-19 pandemic only gave criminals more of an incentive to attempt to deceive lenders or misrepresent qualifications.

            The full extent of fraud in the mortgage industry may be impossible to fully quantify, but the 2020 True Cost of Fraud study by LexisNexis Risk Solutions estimated that the cost of fraud has risen 7.3% across U.S. retailers and e-commerce merchants, and every $1 of fraud now costs $3.36, up from $3.13 in 2019. The COVID-19 pandemic, coupled with skyrocketing refinance applications due to a low interest rate environment, have created a perfect storm for fraud.

            With e-signatures enabled for virtual closings, it has become more difficult for lenders to authenticate income and asset information, while the incentive to cheat is boosted by desperation or perceived opportunity.

            Underwriters with hidden agendas

            One emerging form of fraud we have seen plaguing our industry has nothing to do with the loan manufacturing process, but rather with the labor used to generate the loans.

            Given the historic volatility of 2020 (driving loan demand) and the search for elusive industry experience, underwriters have become a prized catch. Companies are offering exorbitant salaries, benefits, signing bonuses and hefty referral bonuses; it’s no wonder everyone suddenly decided they could become an underwriter! However, the real prize, for some, was not the cash made by originating loans but rather the value of the private, personal information stored in companies’ systems.

            Read more in-depth here.

             

            Payment Concerns Ebbing for Homeowners, Renters –Survey*

            A new Freddie Mac survey found that both homeowners and renters are still concerned about their ability to pay their mortgage or their monthly rent as the pandemic wears on. but those concerns have lessened since last fall. The COVID-19 Tracking Poll has contacted over 1,000 respondents on an irregular basis over the past year. Two thirds are homeowners, the remainder are renters.

            Over the nine months the survey was conducted in 2020, more than half of renters were concerned about making their monthly payments, fluctuating between 54 percent in April to 71 percent in November. Renter concern began to ebb in December to 67 percent and dropped further to 63 percent last month. Homeowners concerns over mortgage payments were at a low of 33 percent in June, rising to a high of 55 percent in October. By year end, 45 percent of respondents were expressing concern and in February it improved to 41 percent.

            As of December 2020, 27 percent of homeowners and 35 percent of renters had asked for a housing payment postponement, most commonly due to uncertainty over making payments beyond the next one. In the most recent survey, in February, those numbers had dropped to 19 percent of homeowners and 28 percent of renters.

            Confidence in the housing market has remained high over the course of the survey, averaging 60 percent over 2020 the surveys and improving to 66 percent in February. Renters were more likely that existing homeowners to buy a home last year, many doing so in late summer and early fall. The likelihood that homeowners would sell their homes (18 percent) and that renters planned to purchase one (34 percent) has held steady so far this year. Refinance activity also remains strong, with nearly a third of homeowners indicating they were likely to refinance their home within the first six months of 2021.

            Read more in-depth here.

             

            February New Home Sales Decline Sharply*

            The two-month rally in new home sales ended abruptly and definitively in February. The U.S. Census Bureau and Department of Housing and Urban Development said sales of newly constructed single-family homes dropped by 18.2 percent to a seasonally adjusted annual rate of 775,000 units but remained 8.2 percent higher than sales in February 2020. The January estimate, originally reported at 923,000 annualized units, was revised to 948,000.

            February’s number was 100,000 below the consensus estimate of analysts polled by Econoday. Their projections ranged from 825,000 to 970,000.

            Sales, on a non-adjusted basis, totaled 64,000 homes, down from 73,000 the prior month. Thus far in 2021 there have been 137,000 new homes sold compared to 122,000 by the same point in 2020. The 2020 total was 820,000 homes.

            At the end of February there were 312,000 new homes available for purchase, a 4.8 month supply at the current rate of sales. This is a full month’s more inventory than in was available in January but is down from a 5.5 month supply in February 2020.

            The median price of a home sold during the month was $349,400 and the average was $416,000. In February 2020, the respective numbers were $331,800 and $386,200.

            Read more in-depth here.

             

            Lender profits are crashing back to earth*

            Profit margins for independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks shrank dramatically in the fourth quarter of 2020 as costs climbed.

            IMBs reported a net gain of $3,738 per each originated loan in the fourth quarter, down from $5,535 during the third quarter, according to the Mortgage Bankers Association‘s latest quarterly performance report.

            “Driven by strong borrower demand and a study-high in average loan balances, production volume for independent mortgage companies reached unprecedented heights, averaging close to $1.5 billion per company in the fourth quarter of 2020,” said Marina Walsh, the MBA’s vice president of industry analysis. “Net production profits were at their third-highest levels, surpassed only by last year’s second and third quarter. While production profits were still incredibly strong in the fourth quarter, secondary marketing gains declined, resulting in an overall drop in production revenue.”

            Walsh’s research found that production expenses increased for the second straight quarter, even though higher origination volume has historically reduced per-loan costs. Expenses rose by almost $500 per loan from the third quarter, as personnel costs increased across sales, fulfillment, production support, and corporate overhead, Walsh said.

            In fact, total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to $7,938 per loan in the fourth quarter, up from $7,452 per loan in the third quarter. From the third quarter of 2008 to last quarter, loan production expenses have averaged $6,594 per loan.

            The MBA found that personnel expenses in particular averaged $5,426 per loan in the fourth quarter, up from $5,124 per loan in the third quarter. Productivity decreased to 4.2 loans originated per production employee (sales, fulfillment and production support staffers) per month in the fourth quarter from 4.3 loans per production employee per month in the third quarter.

            Industry-wide, the average pre-tax production profit was 137 basis points in the fourth quarter, a drop of 66 bps from the prior quarter. Still, it was far better than 46 bps average from IMBs in the fourth quarter of 2019 and the historic average of 53 bps (from Q3 2008-Q3 2020).

            Combining both production and servicing operations, 95 percent of firms posted overall profitability for the fourth quarter of 2020.

            Average production volume was $1.47 billion per company in the fourth quarter, up from $1.34 billion per company in the prior quarter, the MBA found. The volume by count per company averaged 5,049 loans in the fourth quarter, up from 4,732 loans in the third quarter. The MBA also found that the average pull-through rate increased dramatically to 78% from 72% from the prior quarter.

            Read more in-depth here.

             

            Finding highly affordable leads to keep sales coming in

            At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

            We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

            You can also schedule a call here.

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              Are We Seeing A Cash-Out Refinance Crisis?

               

              iLeads Mortgage Market Minute

              Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Spring Housing Market Forecast: Record Purchase Volume. This week we’re bringing you:

               

              Successful mortgage lending starts with superior customer service*

              What happens when borrowers can’t or won’t walk into a lending branch? HousingWire recently sat down with Insellerate CEO Josh Friend to discuss that very question and what strategies retail lenders should look to adopt from direct-to-consumer lending.

              HW: What are some strategies that retail lenders should look at adopting from direct-to-consumer lending?

              Josh Friend: Amid this global pandemic, mortgage rates have been at historically low levels, borrower demand has increased, refi’s have broken records and lenders have had to shift in many instances to a remote workforce. In addition to moving to a remote workforce, most face-to-face interaction with borrowers has either not been allowed to occur or the borrower’s willingness to meet has declined dramatically. That has caused a significant shift to a digital lending model that has significantly impacted a lender’s ability to do business during these challenging times.

              Record low-interest rates have driven U.S. home sales to a 14-year high and spurred a 200% annual increase in refinancing. While this boom in volume has generally been positive for primary mortgage originators, it has also exposed underlying weaknesses in their digital strategies that could create challenges down the road. According to the J.D. Power 2020 U.S. Primary Mortgage Origination Satisfaction Study, mortgage originators’ shortcomings in self-service tools for application and approvals, frequent communication and extended loan processing times could negatively affect customer satisfaction over time.

              These elevated levels of origination during a global pandemic have forced lenders to embrace technologies that allow them to operate remotely while finding ways to engage borrowers. What has begun to emerge is a hybrid digital lending model that converges principles of consumer direct and retail lending. Let’s start with what these traditional models look like.

              Retail lenders originate loans through their in-person retail branches. Typically they rely on branch traffic, referral partners, and in-branch loan officers interacting with potential borrowers face-to-face to originate loans.

              Consumer direct lending is a method for lenders to originate loans through an online experience for completing the entire loan process digitally. Typically these loan originators rely on lead sources, call centers, and other marketing activity to drive inbound leads to their consumer direct loan officers.

              Read more in-depth here.

               

              How Remote Workers Could Eventually Disrupt Housing Market*

              A study by ApartmentList has identified a new category of workers, arising, at least in part, out of the pandemic. Lynn Pollack, writing in GlobeSt, says this “untethered class” hold remote types of jobs and have little reason to stay put.

              They have a median age of 32 and are “on the precipice of settling down.” They are currently renting, living alone or with a similarly untethered partner, have no school-aged children and are likely to live in a state other than where they were born. ApartmentList suggests that there may be 8.7 million untethered workers, constituting 5.6 percent of the American workforce.

              The highest share, 13.5 percent, live in San Francisco, followed by San Jose and other high housing cost cities like Los Angeles, New York, Seattle, and Boston.

              Pollock quotes housing economist Chris Salviati who says in the report, “Given that so many untethered workers are living in the nation’s most expensive housing markets, many may choose to relocate to markets where they can afford to purchase homes and raise families more comfortably. While such a trend would be unlikely to lead to the demise of superstar cities, it has significant potential to reshape the markets that the untethered class moves to.”

              ApartmentList estimates that about one third of the country’s jobs can be performed remotely, but the number is much higher in areas like Silicon Valley, where percent 46 percent of jobs are “remote friendly.”

              “Many Americans who worked in offices before the pandemic are likely to continue working remotely even after it subsides,” Salviati writes. “By severing the link between job choice and housing choice, remote work could have a profound impact on where Americans choose to live.”

              It is unclear how employers will react once the pandemic wanes and physical presence in the workplace becomes more reasonable. Some occupations such as banking will encounter regulatory challenges to remote working while others, Pollock cites media, may already be near a saturation point.

              Read more in-depth here.

               

              Insane lumber prices mean new homes cost $24K more*

              Homebuilders’ problem isn’t demand – it’s finding materials at a reasonable price

              With lumber prices and other building material costs still at record-high levels, homebuilder confidence fell two points in March, per the latest report from the National Association of Home Builders.

              That drop in builder confidence is in spite of sky-high buyer demand, which hasn’t waned despite rising home prices and climbing mortgage rates – the latter up 30 basis points from February.

              The COVID-19 pandemic shut down a large swath of lumber mills in early 2020, handcuffing homebuilding crews all over the country and forcing home prices upward. NAHB Chairman Chuck Fowke noted that supply shortages and high demand have caused lumber prices to jump “about 200%” since April 2020.

              “The elevated price of lumber is adding approximately $24,000 to the price of a new home,” Fowke said. “Though builders continue to see strong buyer traffic, recent increases for material costs and delivery times, particularly for softwood lumber, have depressed builder sentiment this month. Policymakers must address building material supply chain issues to help the economy sustain solid growth in 2021.”

              A Homesnap report said total new listings increased only .22% in December, while total sales increased 19.29%. And Zillow’s Producer Price Index – a measure of the average sell prices that domestic producers of products receive – found February’s 2.8% annual increase was the strongest since October 2018, meaning that while homes are being snatched up, building material inventory, including lumber, will remain low and expensive.

              Read more in-depth here.

               

              Mortgage forbearance ticks down to 5.14%*

              Servicer call volume was close to record levels

              The industry is now less than two weeks away from the one-year anniversary of the CARES Act, which provided borrowers with federally backed mortgages the option to receive forbearance for up to 180 days.

              After many extensions and exits, the Mortgage Bankers Association estimates 2.6 million homeowners are still in some form of forbearance, though that number continues to slowly fall. As of March 7, servicers’ forbearance portfolio volume sits at 5.14% – down six basis points from the week prior.

              Overall, forbearance share managed to drop or go unchanged in every loan type for the first week of march, with Fannie Mae and Freddie Mac once again boasting the smallest share after servicers’ portfolios declined six basis points to 2.88%.

              Ginnie Mae loans in forbearance experienced the greatest drop, down 12 basis points to 7.16%, while the forbearance share for portfolio loans and private-label securities (PLS) remained unchanged relative to the prior week at 9.05%.

              One year after the onset of the pandemic, many homeowners are approaching 12 months in their forbearance plan. That’s likely why servicers’ call volumes hit its highest peak since April 2020, and forbearance exits increased to the highest level since January, said Mike Fratantoni, MBA’s senior vice president and chief economist.

              Read more in-depth here.

               

              Are we seeing a cash-out refinance crisis?*

              Underlying fundamentals are significantly different than what we saw in the early 2000s

              I hear a lot of chatter about a boom in cash-out refinances, and the presumption seems to be that this is destined to wreak havoc on the housing market and the economy at some point. Cash-out loans have been growing over the past few years and it is also true that we have a recent history of excessive equity extraction factoring in a bust in housing. But there are several critical reasons why the recent uptick in cash-out refinancing is nothing like the cash-out boom of the early to mid-2000s.

              First, the refinance boom’s main driver in the 2000s was unhealthy because of the marketplace’s speculative unhealthy lending standards. Home prices were growing at an unsustainable level from 2002-2005, leading to some excess risk-taking on inadequate loan debt structures.

              In the 2020 market, on the other hand, refinances were not driven just by an increase in equity but lower mortgage rates. Cash-out loan borrowers who increased their loan balances could get a more favorable rate than in previous years. Although mortgage refinance activity was the highest in 2020 than it has been since 2003, the reasons for refinancing and the quality of the equity loans are much different than they were in the 2000s.

              The graph below is from an article by Len Kiefer of Freddie Mac. This is an excellent article for those interested in diving into the minutiae of the 2020 refinance market.

               

              Len Cash out article

              Read more in-depth here.

               

              Finding highly affordable leads to keep sales coming in

              At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

              We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

              You can also schedule a call here.

              Get Started

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                Is The Insurance Industry Prepared For New Tech Risks?

                 

                ileads insurance market minute

                Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Insurers Win Restaurants’ COVID-19 Cases. This week we’re bringing you:

                 

                Insurers can’t go it alone in the new normal*

                The following is an editorial by Alicja Grzadkowska, senior news editor at Insurance Business. To reach out to Alicja, email her at alicja.grzadkowska@keymedia.com.

                There are many capabilities that insurers excel at, from conducting risk analysis to providing critical solutions that protect companies’ and individuals’ bottom lines. However, there are also many areas in which the insurance industry needs some help to meet insureds’ needs – and that’s not a bad thing, especially when there are plenty of partners in other industries, namely technology, who can put new capabilities into the hand of insurers without the cost and hassle of going it alone.

                Partnerships between insurers and firms operating in the tech sector have made headlines more frequently over the past few months. Recent ones have included Aon collaborating with Nayms on a cryptocurrency pilot, Sompo International working with Flock on commercial drone solutions, and Blink partnering with Allianz Partners to roll out a travel disruption insurance platform, to name a few.

                These types of collaborations are nothing new and have been around in the industry for many years now, as insurtechs have gained a foothold in insurance and have become seen as partners more than direct competitors to incumbents. However, experts predict that, in part thanks to the disruption brought on by the coronavirus pandemic, these partnerships will become much more popular, valuable, and necessary over the coming years.

                And there’s a good reason for these predictions. For one, COVID-19 has demonstrated that insurers still have a way to go when it comes to meeting customers’ expectations about their insurance needs, from being able to access their policies anywhere and at any time, to creating solutions that address the fast-evolving risks facing commercial and personal insureds today. In some cases, insurance professionals within organizations are still siloed from their data analysis and IT departments, leaving two groups who should be united working on opposite sides of the building, metaphorically speaking.

                While there has been quite a bit of innovation in certain lines of insurance, other areas have fallen short in technology adoption, such as the specialty lines space. According to Insurwave CEO David Power, there’s a real opportunity in this space for technology to partner with brokers and insurers.

                Find out more in-depth here.

                 

                Ryan Specialty files IPO documents with SEC*

                Ryan Specialty Group LLC Tuesday said it plans to become a publicly held company.

                The wholesaler said in a statement it has confidentially submitted a draft registration form, Form S-1, with the U.S. Securities and Exchange Commission relating to a proposed initial public offering of its Class A common stock.

                The statement said the number of shares to be offered and the price range for the proposed offering have not yet been determined.

                Ryan Specialty said it expects to begin the IPO following completion of the SEC review process, subject to market and other conditions.

                Ryan Specialty was established in 2010 by former Aon PLC CEO Patrick G. Ryan as a holding company for various specialty intermediaries, including a wholesale brokerage, managing general agencies and managing general underwriters.

                Find out more in-depth here.

                 

                Is the insurance industry prepared for new tech risks?*

                Technology is creating new risks that the insurance industry is currently unprepared for, according to an expert at INSTANDA, a business platform for the insurance industry.

                “Risk, the bedrock of the insurance industry, is undergoing a silent revolution,” said Gari Gono, INSTANDA’s head of solutions. “While digital transformation has been the bastion of change for insurers over the last year, there has been far less said about how technology is changing insurance from the outside in.”

                Gono said that over the next five to 10 years, “insurers will have to create entirely new product lines” as technological advances create new risks.

                “Difficult conversations will need to be had over liability – if a driverless car is to blame for a road incident, who is responsible?” Gono said. “Only those insurers that adapt to these risks will survive and thrive. At the same time, with the developments of data and AI, incumbents will soon know more about risk than ever before. This is creating an opportunity for insurers to embed themselves deeper into consumers’ daily lives, in the same way we have seen with online banking apps.”

                Gono said that if technological advancement continues at its current pace, insurers will be able to use their knowledge of risk to offer better recommendations on how customers can protect themselves.

                “Last month’s annual CES technology event provides a good starting point for exploring these issues,” Gono said. “The event saw bigger, better, and thinner TVs and laptops. It also presented groundbreaking solutions designed to improve life and reduce the risk of accidents or death. But we should question if it is really that straightforward when it comes to insurance.”

                Find out more in-depth here.

                 

                Finding highly affordable leads to keep sales coming in

                At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

                We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

                You can also schedule a call here.

                Get Started

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                  Spring Housing Market Forecast: Record Purchase Volume

                   

                  iLeads Mortgage Market Minute

                  Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Mortgage Rates Finally Catching a Break. This week we’re bringing you:

                   

                  Will higher mortgage rates cool the housing market?*

                  High home prices are causing an unhealthy housing market where sellers are afraid they won’t be able to find a new house

                  Can you smell it in the air? America is back! The last plank required to complete the foundation of my “America is Back Economic Recovery” model was for the 10-year yield to start trading in the range of 1.33% to 1.60%, and as of Feb. 16, this has happened. Higher treasury yields have pushed mortgage rates higher, but will higher rates cool the housing market?

                  Article-10-year-yield

                   

                  We are currently administering three different effective and safe vaccines and are on the brink of reopening our economy. Added to this, the now high savings rate will likely go higher when the next stimulus checks are delivered.

                  Over the weekend, the Senate passed the 1.9 trillion disaster relief package, which will go back to the House of Representatives for a vote on Tuesday. We are looking at $1,400 checks being sent, six months of pandemic unemployment insurance, rental assistance, and many more disaster relief items.

                  Read more in-depth here.

                   

                  February Homebuying Sentiment Declines, Despite Stronger Job Market*

                  Fannie Mae’s Home Purchase Sentiment Index (HPSI) declined slightly in February as did four of its six components. The Index, based on a sample of answers to the company’s monthly National Housing Survey, dipped 1.2 points to 76.5. It is down 16 points from its level in February 2020.

                   

                   

                  Consumer sentiment soured significantly on the question of whether it is a good time to buy a house. Forty-eight percent of respondents called it a good time and 43 percent a bad time for a net positive of 5 percent. This is down 10 points compared to January and 23 points lower year-over-year.

                  Attitudes toward selling a home fared a little better. Those who say it is a good time to sell decreased from 57 percent in January to 55 percent, while the percentage who say it’s a bad time to sell increased from 33 percent to 35 percent. This left a net 20 percent who said it was a good time, a 4 percent downturn for the month, and 25 percent lower than a year earlier.

                  2021-03-09HPSI

                  Few respondents see interest rates declining further, the net who expect lower rates was a negative 39 percent, down 3 points from the prior month. The net of those reporting a higher income over the previous 12 months also turned negative, with 17 percent reporting an increase and 19 percent lower income. The remainder reported no or little change.

                  The two questions that netted gains, however, did so decisively with a 5 percent net positive increase in those who expect home prices to go up (47 percent) against those who expected a decline (18 percent). This net, however, was 10 percent lower than in February 2019.

                  Eighty-two percent of respondents said they were not concerned about losing their jobs while 17 percent said they were. The net of 65 percent who were unconcerned was a 14 point monthly increase although it was down 7 points from the net positive number before the pandemic emerged.

                  Read more in-depth here.

                   

                  Fannie Mae: housing market confidence should rise soon*

                  Vaccine rollout, warmer months should buoy housing numbers

                  Fannie Mae‘s Home Purchase Sentiment Index (HPSI), a composite index designed to track the housing market and consumer confidence to sell or buy a home, fell 1.2 points in February.

                  Fear not, experts say – better days are ahead.

                  Overall, the HPSI hit 76.5 last month, down from 77.7 in January. A small drop was expected, according to Fannie Mae Senior Vice President and Chief Economist Dave Duncan, but housing market confidence should be reflected in the coming months.

                  “The HPSI remained relatively flat in February, but underlying data indicate growing job-related optimism among consumers, especially among lower-income and renter groups,” Duncan said.

                  Duncan said the likelihood of COVID-19 lockdown restrictions easing as vaccination efforts ramp up, combined with the forthcoming warmer weather and another round of fiscal stimulus checks, will give consumers good reason to feel more confident about the labor and housing markets.

                  “However, other components of the index remain well below pre-pandemic levels, so we believe there may still be room for improvement in housing and economic attitudes in the coming months, depending in part on the future path of mortgage rates,” Duncan said.

                  Borrowers remain relatively pessimistic on the state of home prices, as the HPSI reported 47% of respondents expect home prices will go up in the next 12 months – up from 41% last month. Those who believe prices will go down increased for the second straight month, this time from 17% to 18%.

                  A larger percentage of HPSI respondents now believe mortgage rates will go up as well, from 45% to 47%. They were correct, as rates climbed above 3% for the first time since July.

                  Since reaching a low point in January, mortgage rates have risen by more than 30 basis points as the economy works to recover, and according to Sam Khater, Freddie Mac’s chief economist, the impact on purchase demand has been noticeable.

                  Read more in-depth here.

                   

                  Black Knight’s Deep Dive Into Equity, Forbearance, and the Future Rate Environment*

                  Last year was a record setting one when it comes to mortgage origination according to Black Knight’s January Mortgage Monitor. It puts the total volume of originations during 2020 at $4.3 trillion, the highest in the company’s records. Refinance originations, to no one’s surprise were also at an all-time high of $2.8 trillion and $1.5 trillion in purchase loans was originated, the largest annual volume since 2005. The fourth quarter also made history with all-time single quarter highs for purchase mortgages at $346 billion and refinancing at $869 billion. In total, $1.3 trillion worth of mortgages were originated during the quarter.

                  Even though the record low mortgage interest rates, which paved the way for such a spectacular year, have been rising in recent weeks, Black Knight says 2021 at least got off to a promising start. The company examined lock activity through the middle of February and says, assuming a 45-day lock to close timeline, first quarter refinance activity can be expected to remain at those late 2020 levels. Purchase locks in the first half of February were up 6 percent compared to January and 37 percent year-over-year while refinance locks in that early February period edged back by about five percent from January but were still more than double the volume of that same two-week span in 2020.

                  Black Knight says it expects impacts from the rising rates to begin late in this quarter or early in the next. The 30-year conforming rate has increased 35 basis points since the first of the year, 25 basis points in the last two weeks alone.

                  With those rising rates, there has also been a drop-off in high-quality refinance candidates. As of March 4, with Freddie Mac reporting a rate of 3.02, the refinance pool is at 12.9 million potential borrowers. This is down from 18.1 million on February 11, a 29 percent decline in just three week and the smallest that population has been since May 2020.

                  Read more in-depth here.

                   

                  Spring housing market forecast: record purchase volume*

                  MBA says a meaningful jump in the supply of newly built homes will be key

                  The sun is shining as I write this today and the forecast is for warmer weather. While others might think of restarting outdoor activities or working in the garden, our industry is gearing up for a strong spring housing market – and the first step in what MBA is forecasting will be a record-breaking year of purchase origination volume.

                  Demand for homes will be bolstered by an improving job market, favorable demographic trends, and mortgage rates that, while rising, are still low from a historical perspective. The unemployment rate, which was at 6.2% in February, is expected to drop to 4.7% by the end of the year, with hiring accelerated by a surge of consumer spending as pandemic restrictions are lifted.

                  Another positive sign impacting MBA’s housing market forecast: more than 15% of the U.S. population has received at least one vaccine dose at this point, and recent announcements from the Biden administration indicate that the pace will only increase from here.

                  The improving economic picture is putting upward pressure on mortgage rates, which have moved above 3% in recent weeks for 30-year fixed-rate loans. MBA is forecasting that the Freddie Mac survey rate will reach about 3.5% by the end of 2021. I am asked this a lot and it’s important to remember: Freddie Mac’s weekly rate only includes purchase loans – not refinances and the accompanying cost of the current adverse market fee.

                  So long as rates stay in this neighborhood and do not quickly climb above 4%, potential homebuyers will likely not be dissuaded by the modest increase. Meanwhile, refinance demand will certainly cool as the year progresses.

                  Read more in-depth here.

                   

                  Finding highly affordable leads to keep sales coming in

                  At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

                  We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

                  You can also schedule a call here.

                  Get Started

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                    Insurers Win Restaurants’ COVID-19 Cases

                     

                    ileads insurance market minute

                    Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Lemonade CEO On The Company’s Quarterly Earnings And New Offerings. This week we’re bringing you:

                     

                    LinkedIn’s Reid Hoffman on taking home insurer Hippo public via SPAC*

                    CNBC’s “Squawk Alley” team is joined by Reid Hoffman, LinkedIn founder and chairman, and Hippo CEO Assaf Wand to discuss how Hoffman is involved in taking Hippo public via a SPAC deal.

                    Find out more in-depth here.

                     

                    What is driving growth in the E&S insurance market?*

                    The excess and surplus (E&S) lines market in the United States is booming. Total surplus lines premium reported to the 15 stamping offices across the country was $41.7 billion for the calendar year 2020, representing a 14.9% increase over the $37.5 billion reported in 2019.

                    According to the 2020 Annual Report of the US Surplus Lines Service and Stamping Offices, each of the 15 stamping offices reported premium growth in 2020, with 11 states reporting double-digit percentage increases. Despite this premium growth, total filings (item counts) decreased by 63,299, or 1.3%, from the prior year – something that Dan Maher, executive director of the Excess Lines Association of New York, attributed to “headwinds due to economic conditions resulting from COVID-19”.

                    There was a confluence of factors driving growth in the E&S market prior to the COVID-19 pandemic, and many of these factors still exist today, according to Bryan Sanders (pictured above), president of Markel Specialty. Speaking on the executive panel at the Wholesale & Specialty Insurance Association (WSIA) Underwriting Summit 2021, Sanders identified several market drivers, including tightening market conditions (rate increases, stricter coverage terms and conditions, and reduced capacity); the low-interest-rate environment, which is challenging insurers’ underwriting profitability; social inflation and increased claims costs; more frequent severe weather events; and a big question mark over the country’s economy.

                    Find out more in-depth here.

                     

                    Insurers win restaurants’ COVID-19 cases*

                    Federal courts in Massachusetts and Arizona have ruled in favor of insurers in COVID-19 business interruption litigation filed by restaurants, holding in both cases the plaintiffs had not provided evidence of physical damage.

                    Legal Sea Foods LLC, a 34-restaurant Boston-based chain, filed suit against its insurer, New York-based Strathmore Insurance Co., a unit of the Greater New York Group, in May.

                    It said Strathmore had refused to pay business interruption expense in connection with the coronavirus pandemic even though its policy was issued in March, when the pandemic was already widely acknowledged, and that the coverage did not include a virus exclusion.

                    It filed an amended complaint in September, in which it alleged COVID-19’s actual presence, according to Friday’s ruling by the U.S. District Court in Boston in Legal Sea Foods, LLC v. Strathmore Insurance Co.

                    “Legal does not plausibly allege that its business interruption losses resulted from the presence of COVID-19 at the Designated Properties,” the ruling said. “Instead, it indicates in the (amended complaint) that ‘(t)he Orders caused and are continuing to cause’ the losses for which it claims entitlement to coverage.”

                    The ruling said also, that “even if Legal had properly alleged that COVID-19 caused business interruption losses due to its presence at the Designated Properties, it would not be entitled to coverage under the policy.

                    “Courts in Massachusetts have had occasion to interpret the phrase ‘direct physical loss’ and have done so narrowly, concluding that it requires some kind of tangible, material loss,” the ruling said.

                    Find out more in-depth here.

                     

                    Finding highly affordable leads to keep sales coming in

                    At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

                    We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

                    You can also schedule a call here.

                    Get Started

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