Housing Affordability Best in Four Years, Purchase Rate Locks Surge

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 U.S. Homeownership Rate Soars To An Almost 12-Year High. This week we’re bringing you:

 

How a pragmatic approach to eClosings helps lenders succeed during COVID-19 and beyond*

A digital closing expert weighs in

Many lenders are thinking about digital closings in a way that’s preventing them from achieving the ROI they want. Many have been solely focused on Remote Online Notarization (RON), since RON is seen as the quickest solution to the immediate challenges that COVID-19 has created.

However, as lenders try to conduct business remotely and keep up with high loan volumes while switching from fully paper closings to completely digital RON closings, they experience firsthand how difficult this is. My goal here is to provide helpful guidance on how lenders can implement a successful digital closing strategy that goes beyond RON and addresses current pain points and long-term goals. You’ll be able to create a plan that works in any environment and scales digital closings quickly.

Lenders need to have a digital closing strategy that’s successful in any environment and in every state, regardless of the speed with which individual states and stakeholders adopt new technology or change their policies. After onboarding dozens of lenders, we’ve learned that there are two concepts that are fundamental to success. Read more in-depth here.

 

More Home Buyers are in the Market, but Shopping Takes Longer*

In the second quarter of 2020, 11 percent of American adults were planning on purchasing a home over the next 12 months, and of those, almost half were actively engaged in doing so. Rose Quint, writing in the National Association of Home Builders’ (NAHB’s) Eye on Housing blog says that the 49 percent who were actively shopping was significantly higher than a year ago when 41 percent were in the game but was identical to the share in Q1. Quint says this suggests that the COVID-19 crisis and its accompanying record-low mortgage rates have converted some prospective buyers into active buyers.

The share of buyers who were actively looking versus thinking about it differs significantly by age group. Of Millennials planning a home purchase in the next year, 57 percent are already actively looking but among Boomers, that share is only 37 percent. Among Gen Z and Gen X buyers the share who were active was 40 percent and 47 percent, respectively. Regionally those in the Northeast are the most likely to be actively engaged in the purchase process (57 percent), compared to 44 percent in the Midwest, 45 percent in the West, and 50 percent in the South. Read more in-depth here.

 

 

Jumbo Mortgage Rates Are No Longer the Cheapest Mortgages Around*

Record-low interest rates are helping home buyers lock in years of savings on future mortgage payments. But those searching for larger homes or in expensive markets aren’t reaping the same rewards.

The average rate on a 30-year jumbo mortgage was 3.77% in mid-July, more than 0.4 percentage point above the average rate on smaller, conforming loans, according to Bankrate.com, a personal-finance website. From mid-2015 until this spring, jumbo rates had been consistently lower than or equal to the rates on conforming loans.

The reversal is just one of the ways the coronavirus crisis has wreaked havoc on the mortgage market. The same force pushing most mortgage rates to record lows—investors piling into safe-haven assets like government bonds—has pushed jumbo loans out of favor. Read more in-depth here.

 

Construction Spending Largely Unchanged as Shutdowns End*

Construction spending held firm in June, inching down fractionally from the May level and increasing a bit compared to June 2019. The U.S. Census Bureau said total spending during the month was at a seasonally adjusted annual rate of $1.355 trillion, down 0.7 percent from the $1.365 trillion spending rate in May. On an annual basis the rate was up 0.1 percent.

On an unadjusted basis there was $123.377 billion spent compared to $117.226 billion the prior month. Spending for the first six months of the year was up 5.0 percent from the same period in 2019 at $667.920 billion.

Privately funded construction expenditures were also down 0.7 percent month-over-month at a rate of $1.002 trillion compared to $1.009 trillion in May. The June rate was 1.9 percent lower on an annual basis. Read more in-depth here.

 

Fed official says lockdown now or see sluggish recovery*

The U.S. needs a national strategy to suppress the virus, Kashkari says on Face the Nation

A member of the Federal Reserve’s rate-setting Federal Open Market Committee said on Sunday that the only way to secure a robust economic recovery is to lock down the country again and reopen with a focus on testing and tracing.

The current path, which has state and local governments dealing with the virus in a patchwork fashion, will suppress economic growth for a year or more and lead to an increase in bankruptcies, according to Neal Kashkari, president of the Federal Reserve Bank of Minneapolis, who appeared on CBS’ Face the Nation.

“If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it the way that it’s happening in the Northeast right now,” Kashkari said. “That’s the only way we’re really going to have a real robust economic recovery.”

The U.S. death toll from COVID-19 passed 155,000 on Monday, according to Johns Hopkins University data. The U.S. has 4.7 million confirmed cases of the virus, about half of them occurring during July. The number of cases in America is almost double the number in Brazil, the country with the next highest number of infections. Read more in-depth here.

 

Housing Affordability Best in Four Years, Purchase Rate Locks Surge*

The last report from Freddie Mac put its 30-year fixed rate mortgage (FRM) at 2.99 percent, up 1 basis point from the all-time low. Black Knight, in its new Mortgage Monitor, says that has made home affordability the best in four years. As of mid-July, it required only 19.8 percent of the nation’s median monthly income to make the mortgage payment on an average priced home using that 30-year FRM and a 20 percent down payment. That is more than 5 percent below the average over the 1995-2003 period. The required monthly payment, $1,071, is 6 percent less than last July despite an average $12,000 increase in home prices over that same period.

Read more in-depth here.

 

Featured iLeads Solution:

Looking for the most qualified leads? iLeads credit-based leads might be the answer. Learn more…

We are ready to help you navigate through the COVID-19 mortgage environment.

 

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.

How Pandemic Insurance Can Be Available To Businesses In The Future

iLeads Mortgage 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 Why It’s Time For The Insurance Industry To Live Up To Its Promise. This week we’re bringing you:

 

The unique advantage of independent agents in a pandemic*

Independent insurance agents have a unique tool in their toolkit when it comes to helping small businesses through the COVID-19 pandemic. They have the advantage of true empathy. Why? Because the vast majority of agencies in the United States are small businesses themselves. They’ve had to weather the same storms as their small business clients; they’ve had to make the same transitions to enable remote working; and they’re all facing the same concerns and considerations about bringing people back to the workplace and safely ramping up in-person business.

These similarities, and the potential camaraderie they produce, are going to be vitally important as insurance agents help small businesses through the reopening and return-to-work process, according to Dan Killins (pictured), loss control program manager at EMPLOYERS, a small business workers’ compensation provider. He told Insurance Business: “From my experience thus far with policyholders and agents, I think this is a huge opportunity for agents to deepen and solidify their relationship with their clients. The events that have happened are tragic, and, unfortunately, they’re ongoing – but this is an opportunity for agents to really bond and become a valued partner with their clients. Read more in-depth here.

 

What impact is coronavirus having across the political and credit risk insurance market?*

It’s fair to say that the COVID-19 pandemic has had a widespread impact on the insurance market – but what about the credit and political risk sector, specifically?

Brokerage giant Gallagher has attempted to address this issue through new research it carried out in early July.

Speaking to insurers in the market it asked about claims trends and discovered that just one in three – 29% – reported claims that they considered to be attributable to the coronavirus pandemic. However, it highlighted that this is likely because much of the credit risk underwritten in the segment typically comes from Governments and companies they own, as well as sizeable corporates. It believes that their exposures are easier for those firms to deal with – and, as such, it may not be until the fourth quarter of this year and beyond that we truly grasp the full picture.

There were concerns expressed among current portfolios, however. In particular, underwriters pointed to aviation and oil and gas (both highlighted by 27%), as well as tourism (highlighted by 10%), as the main areas of concern. Read more in-depth here.

 

Firms consider COVID waivers before bringing workers back onsite*

As employers make plans to bring their employees back to the workplace in the fall, questions over liability and responsibility are leading some to require workers to sign waivers or acknowledgments concerning COVID-19. However, experts question whether these documents may be necessary, advisable or even enforceable.

Companies are “absolutely” concerned about the liability issue of workers coming down with COVID-19 after returning to the workplace, said Matt Zender, Las Vegas-based senior vice president of workers compensation strategy at AmTrust Financial Services Inc.

“I think the reason people are concerned about it is it’s not always 100% clear whether or not you have taken all the steps you might need to (to protect workers from COVID-19),” he said. “We see businesses feeling more comfortable having employees sign a waiver that indicates that they’ve done everything they possibly can imagine. But I’m not entirely convinced that the waivers will actually have any legal standing.” Read more in-depth here.

 

How pandemic insurance can be available to businesses in the future*

As businesses continue to see forced closures due to the pandemic, insurance company Chubb has created a partnership with the government to provide business interruption insurance. Evan Greenberg, chairman and CEO of Chubb, joins “Squawk Box” to discuss the initiative.

See more in-depth here.

 

Featured iLeads Solution:

Looking for the most qualified leads? iLeads insurance leads might be the answer. Learn more…

We are ready to help you navigate through the COVID-19 insurance environment.

 

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.

Why It’s Time For The Insurance Industry To Live Up To...

iLeads Mortgage 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 Lobby For Federal Pandemic Insurance Program. This week we’re bringing you:

 

Does “All Risk” insurance cover pandemics?*

The question of whether an “all-risk” insurance policy should cover business losses resulting from the COVID-19 pandemic continues to dominate industry headlines, as a Miami, FL-based casino sues its insurer over a denied claim.

Operators of Magic City Casino filed the lawsuit in federal court in South Florida last week, The News Service of Florida reported. The complaint names four insurance companies, which allegedly wrongfully denied the casino over business interruption losses. The four companies named are AXA XL Insurance Group, Indian Harbor Insurance (an AXA subsidiary), Hallmark Specialty Insurance, and Ategrity Specialty Insurance.

The lawsuit claimed that the four had sold “all-risk” property insurance policies to the casino, which includes covering business interruption losses. Read more in-depth here.

 

Why Elon Musk’s autonomous driving ideas don’t worry insurers*

Five years ago, the impact of technology on auto insurers was thought to be straightforward: Self-driving cars were coming soon, and they would be so safe, and people would need car insurance about as much as printed newspapers.

If only it had been so simple.

Instead, technology is coming to cars, and insurance, much more gradually. Insurance companies like Allstate, Progressive, and Berkshire Hathaway’s Geico are embracing it, but in a measured way. And the impact on their business seems likely to be slow and steady, rather than rapidly transformative.

Instead of self-driving cars, the auto industry is moving cautiously toward better safety equipment and information sharing. Research into autonomous and more-connected vehicles is helping to make those goals more attainable. And insurers are settling for baby steps like in-car monitors that let customers get discounts if they let carriers track how often they accelerate, swerve or stop suddenly — all behavior tied to accident rates. That means change is coming, but much more slowly, to a once-hidebound business that tech seers thought was next in line to get disrupted. Read more in-depth here.

 

Why it’s time for the insurance industry to live up to its promise*

If the for-profit world of business is suffering as a result of the coronavirus, you can imagine the toll that the pandemic has taken on non-profit sectors around the world. Volunteering Australia noted that the decline in volunteering during COVID-19, and specifically from February to April this year, has been substantial, with 65.9% of volunteers estimated to have stopped volunteering. Similar trends have been observed in other countries, including Canada, the US, the UK, and across Asia-Pacific.

The impact of the pandemic has also been reflected in the bottom lines of non-profit associations. Imagine Canada found that almost three-quarters of surveyed non-profits reported that donations are down, while a similar percentage of organizations in the US surveyed by La Piana Consulting reported a drop in revenue. Read more in-depth here.

 

Featured iLeads Solution:

Looking for the most qualified leads? iLeads insurance leads might be the answer. Learn more…

We are ready to help you navigate through the COVID-19 insurance environment.

 

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 7 AM to 5 PM PST, Monday through Friday.

You can also schedule a call here.

U.S. Homeownership Rate Soars To An Almost 12-Year High

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 It’s Official: The U.S. Won’t See A Housing Bubble Crash Anytime Soon. This week we’re bringing you:

 

Loans in forbearance fall for the sixth straight week*

Though the pace of borrowers exiting forbearance slowed

The total number of loans in forbearance fell for the sixth week in a row to 7.74% of servicers’ portfolio volume, according to a report by the Mortgage Bankers Association. As the country braces for the end of moratoriums and unemployment benefits under the CARES Act, the MBA estimates 3.9 million homeowners are in forbearance plans.

The share of mortgages in forbearance backed by Fannie Mae and Freddie Mac dropped for the seventh week in a row to 5.59% – another three-month low for the GSE’s.

According to the report, the pace of borrowers exiting forbearance slowed last week as homeowners wait for deliberation of the HEROES Act, which would grant a 60-day mortgage forbearance automatically if their mortgage became 60 days delinquent between March 13 and the day the bill was enacted.

Despite falling 30 basis points the week prior, Ginnie Mae securities – mortgages backed by the Federal Housing Administration, the Veterans Administration, and the U.S. Department of Agriculture – rose slightly by 1 basis point last week to 10.27%. Read more in-depth here.

 

Housing Affordability is Still a Challenge, but Improving*

The National Association of Home Builders’ (NAHB’) Housing Trends Report for the second quarter of 2020 found slightly less than a quarter of prospective homebuyers could afford a median-priced home in their local markets, leaving 77 percent shut out. However, Rose Quint, writing in NAHB’s Eye on Housing blog, calls that an improvement from a year ago when only 20 percent could buy. She says that lower interest rates are responsible for the change.

 

Read more in-depth here.

 

Jumbo Mortgage Rates Are No Longer the Cheapest Mortgages Around*

Record-low interest rates are helping home buyers lock in years of savings on future mortgage payments. But those searching for larger homes or inexpensive markets aren’t reaping the same rewards.

The average rate on a 30-year jumbo mortgage was 3.77% in mid-July, more than 0.4 percentage point above the average rate on smaller, conforming loans, according to Bankrate.com, a personal-finance website. From mid-2015 until this spring, jumbo rates had been consistently lower than or equal to the rates on conforming loans.

The reversal is just one of the ways the coronavirus crisis has wreaked havoc on the mortgage market. The same force pushing most mortgage rates to record lows—investors piling into safe-haven assets like government bonds—has pushed jumbo loans out of favor. Read more in-depth here.

 

MBS RECAP: Nice Recovery But Resistance Remains*

Rates were under pressure overnight with 10yr hitting the highest yields in more than 2 weeks. Since then, bonds have surged back into the stronger territory but remain more or less blocked by the same old floor.

Econ Data / Events

  • 20min of Fed 30yr UMBS Buying 10 am, 1130am (M-F) and 1 pm (T-Th)
  • Consumer Confidence 92.6 vs 94.5 f’cast, 98.3 prev

Read more in-depth here.

 

U.S. homeownership rate soars to an almost 12-year high*

Change in data-collection methods because of COVID-19 may have influenced results, Census Bureau says

The U.S. homeownership rate soared to an almost 12-year high in the second quarter as low-interest rates allowed more Americans to qualify for mortgages.

The homeownership rate jumped to 67.9%, the highest since 2008’s third quarter, from 65.3% in the prior quarter, the Census Bureau said on Tuesday. The reported noted a change in methodology that could have impacted the numbers: Because of the COVID-19 pandemic, in-person interviews were suspended and most of the survey was conducted by telephone, the release said.

The homeownership rate for Black Americans rose to 47%, the highest since 2008, from 44%, the report said. A year ago, the rate for Black families was the lowest ever recorded.

The rate for Hispanics increased to 51.4%, the highest in data going back to 1994, from 48.9%, the Census report said. Read more in-depth here.

 

Featured iLeads Solution:

Looking for the most qualified leads? iLeads credit-based leads might be the answer. Learn more…

We are ready to help you navigate through the COVID-19 mortgage environment.

 

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 7 AM to 5 PM PST, Monday through Friday.

You can also schedule a call here.

It’s Official: The U.S. Won’t See A Housing Bubble Crash Anytime...

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 What Would It Take To Trigger a Housing Downturn In The Second Half Of 2020?. This week we’re bringing you:

 

Chicago Fed National Activity “Index Suggests Economic Growth Increased Further in June”*

Note: This is a composite index of other data.

From the Chicago Fed: Index Suggests Economic Growth Increased Further in June

Led by improvements in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +4.11 in June from +3.50 in May. Three of the four broad categories of indicators used to construct the index made positive contributions in June, and two of the four categories increased from May. The index’s three-month moving average, CFNAI-MA3, moved up to –3.49 in June from –6.36 in May.
emphasis added

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. Read more in-depth here.

 

Housing market performance directly correlates with economy’s resilience*

“Resilient” cities have higher concentrations in sectors like financial services and IT that have adapted to a work-from-home market environment

How a city’s housing market fares amidst the COVID-19 pandemic correlates largely to the industries that fuel its economy, a recent report has found.

Home co-investment company Unison recently released its first Resilient and Vulnerable Cities report, in which it used data to predict which U.S. cities will likely see housing prices suffer. On the flip side of that, it also identified which cities will likely see housing prices stay stable or rise.

The report found that “resilient” cities have higher job concentrations in sectors like financial services and information technology, which have adapted to a work-from-home market environment. Job losses in those cities have not been as dramatic.

“Vulnerable” cities have high concentrations of jobs in sectors like retail, manufacturing, and hospitality. These cities have experienced severe levels of job loss due to the current pandemic.

Boston was ranked the most resilient U.S. city with numerous prestigious universities and hospitals among its top employers. It’s also home to some of the world’s largest insurance and investment management companies. Beyond education, healthcare, and financial services, Boston also has strong employment representation from biotech, technology, and government sectors, the report noted.

It was followed by Washington, D.C., and then New York City (its five boroughs) and San Francisco in terms of resilience. Read more in-depth here.

 

Construction Continues Post-Plunge Gains*

All three measures in the Census Bureaus June residential construction report moved higher, as the building industry continued to recover from its April collapse. However, of the three, only the rate of units completed was higher than its June 2019 level.

Permits increased by 2.1 percent to a seasonally adjusted annual rate of 1,241,000 units from 1,216,000 units (revised from 1,220,000 units) in May. This leaves the permitting rate down 2.5 percent from the 1,273,000 level of June 2019.

Analysts had been looking for a significantly higher number. Those polled by Econoday had a census of 1,298,000 units with a range of 1,150,000 to 1,340,000. Read more in-depth here.

 

FHFA issues housing goals for Fannie and Freddie*

Low-income purchase goal for mortgages for single-family homes remains at 24%

The Federal Housing Finance Agency, the watchdog for Fannie Mae and Freddie Mac, cited the COVID-19 pandemic as it issued annual goals for the mortgage giants on Monday that matched the levels of the prior three years.

“Due to the economic uncertainty related to the COVID-19 national pandemic, FHFA is proposing benchmarks for calendar year 2021 only, and those levels will remain the same as they were for 2018-2020,” the agency said in a release. “Once finalized, the proposed benchmark levels would extend those benchmarks that are currently set to expire on Dec. 31, 2020.”

Fannie Mae and Freddie Mac, known as government-sponsored enterprises, or GSEs, were chartered by Congress decades ago to expand access to mortgages. The FHFA establishes annual targets for both single-family and multifamily mortgages, and measures performance using data obtained through the Home Mortgage Disclosure Act. In recent years the GSEs have met or exceeded the benchmarks.

The goals for single-family homes are: 24% of mortgages purchased by the GSEs must be for low-income borrowers, and the low-income refinancing goal is 21%. The goals require 14% of mortgages to be for homes in low-income areas, and 6% of mortgages must be for very-low-income borrowers. Read more in-depth here.

 

Is It Already Time To Refinance Again?*

Markets continue to focus on coronavirus numbers first and foremost. When the news is good, we tend to see stocks and rates move higher. When the news is bad, rates tend to fall and stocks struggle to improve.

The movement is usually more pronounced for stocks. When it comes to rates, however–especially mortgage rates–recent volatility is taking place at a microscopic level compared to recent months. This could continue to be the case until we get a much clearer sense of how the pandemic will likely evolve in the context of our attempts to reopen the domestic economy.

Until that happens, of all the places to be flying in a relative holding pattern, this is as good as it gets for mortgage rates. When coronavirus first hit the bond market, it was US Treasuries that responded most convincingly. Mortgage rates weren’t able to keep pace and that turns out to have been a good thing in hindsight.

Because mortgages lagged Treasuries (the 10yr Treasury yield is the customary point of comparison), they’ve been more capable of moving lower on the good days and less susceptible to moving higher on the bad days. The net effect is a string of ever-lower all-time lows. Read more in-depth here.

 

It’s official: The U.S. won’t see a housing bubble crash anytime soon*

After holding out for July 15 housing data, HousingWire’s housing data analyst is making the call

The U.S. economy started the year off in an expansionary mode. Retail sales were positive year over year, job openings were roughly at 7 million and the housing data for the first time in a long time started to outperform other sectors of the economy. Existing and new home sales hit cycle highs, purchase application data showed steady double-digit year over year growth and housing starts had almost 40% year over year growth in February.

Then we were hit with COVID-19, and the fear of this virus along with the economic decline due to the stay-at-home orders whipped the housing bubble boys into a frenzy of crash calls.

My long-standing core thesis has been that the housing market would have the weakest recovery from a crash in the years 2008 to 2019, but it would improve in years 2020-2024 because U.S. demographics would become favorable for housing. Read more in-depth here.

 

Featured iLeads Solution:

Looking for the most qualified leads? iLeads credit-based leads might be the answer. Learn more…

We are ready to help you navigate through the COVID-19 mortgage environment.

 

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.

Insurers Lobby For Federal Pandemic Insurance Program

iLeads Mortgage 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 Berkshire Hathaway Fires Back In COVID-19 Coverage Dispute. This week we’re bringing you:

 

QBE reveals forecast of first half results*

QBE Insurance Group, which will be officially releasing its first half financial results in August, has published its expected numbers – and the forecast isn’t rosy. In a July 22 update, the Sydney-headquartered global insurer said it expects a net statutory loss after tax of approximately $750 million for the period.

According to QBE, the preliminary figure largely reflects the impact of the coronavirus pandemic, catastrophe experience and prior accident year claims development, as well as a $125 million net investment loss due to extreme investment market volatility.

“While the landscape remains highly uncertain, at this stage QBE currently estimates total COVID-19 related costs to be around $600 million pre-tax,” stated the insurance group. Read more in-depth here.

 

W.R. Berkley reports lower profit as pandemic takes toll*

W.R. Berkley Corp.’s profit plummeted in the second quarter of 2020 as coronavirus-related losses hit the insurer and investment income fell.

The Greenwich, Connecticut-based company reported second-quarter net income of $71.3 million on Tuesday, compared with $216.7 million in the same period in 2019.

Berkley previously reported that its results would be hurt by $145 million in catastrophe losses, including $85 million in losses related to the COVID-19 pandemic.

In addition, second-quarter net investment income fell to $85.4 million, compared with $188.3 million in the same period last year.

“Net investment income was adversely impacted by a $58 million loss from investment funds, which are reported on a one-quarter lag. The loss was driven by the first quarter downturn in the financial markets resulting from the COVID-19 related economic shutdown,” a Berkley statement said.

Gross premiums written increased 2% to $2.13 billion. Read more in-depth here.

 

Insurers lobby for federal pandemic insurance program*

One look at the numbers, and the problem is clear.

U.S. businesses are losing an estimated $1 trillion a month as businesses are disrupted due to the coronavirus pandemic, according to estimates by the American Property Casualty Insurance Association. Yet, insurers collect only $4.5 billion a month for all commercial property policies.

This month, the groups representing the underwriters, the brokers and the agents are lobbying members of the House Financial Services Committee on a proposal to provide a type of pandemic coverage for the future.

The proposed Business Continuity Protection Program or BCPP would offer, in part, government-subsidized revenue replacement and protection for up to 80% of specific losses, like payroll expense or operational losses for up to three months.

The program would function something like the Federal Flood Insurance Program – with the government as the underwriter and insurers administering the policies. Read more in-depth here.

 

Featured iLeads Solution:

Looking for the most qualified leads? iLeads insurance leads might be the answer. Learn more…

We are ready to help you navigate through the COVID-19 insurance environment.

 

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.

What Would It Take To Trigger a Housing Downturn In The...

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 Just Got Even Lower. This week we’re bringing you:

 

5 things mortgage pros must know about Quicken Loans’ Rocket Companies IPO*

How the Rocket brand might also fuel fintech valuation and more

This week a Quicken Loans SEC filing confirmed the company will IPO with Rocket branding, as I predicted in HousingWire last month. Below, I explain why this is important, what it means for consumers and key things all mortgage pros must know about this milestone event in our industry.

1. Rocket Brand Power Is Real For Consumers
The Quicken Loans/Rocket Mortgage machine had 20.2 million interactions with prospective clients in 2019, which is 80% more than it had in 2014. You’ll recall Rocket Mortgage was launched as the company’s digital mortgage brand in October 2015, and that’s when it began an aggressive brand push. From 2015 to 2016 alone, that brand push increased prospective client interactions from 11.7 million to 16 million.

Interacting with this many leads led to becoming America’s top retail mortgage lender two years ago – and the company held that slot – funding $145 billion in originations in 2019 and $51.7 billion Q1 2020. Read more in-depth here.

 

Mortgage Rates Fight The Urge To Move Higher*

Mortgage rates recovered to some extent today, after moving slightly higher on Friday and yesterday. The bond market (which underlies rate movement) was surprisingly resilient (good for rates) even as stock prices moved up roughly 1%. Rising stock prices frequently coincide with rising bond yields in the shortest of terms. In other words, it’s more common to see rates move higher on a day like today. Read more in-depth here.

 

Redfin: Over half of home offers were in a bidding war in June*

Less inventory and low mortgage rates fueling competition for homes

More than half of Redfin offers were part of bidding wars for the second month in a row in June, according to new data from the brokerage.

More homebuyers are entering the market while mortgage rates continue to hit record lows, and as a result, 53.7% of Redfin offers faced competition last month. This is up from a revised rate of 51.8% in May and 44.4% in April, Redfin said.

Redfin noted that more than half of all offers faced bidding wars in 12 of the 24 metros included in its analysis.

“Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades,” said Redfin Economist Taylor Marr in a written statement.

Renters and move-up buyers alike are competing for the small number of single-family homes on the market “as they realize they need more space for their families,” Marr added.

The most competitive markets? Boston, San Diego and Salt Lake City. Read more in-depth here.

 

Forecasters See Surprisingly Strong Housing Rebound, But There Are Risks*

The reopening of the economy in several states from the COVID-19 shutdowns has moved Fannie Mae’s Economic and Strategic Research (ESR) Group to raise its estimate for the 2020 full year GDP from the 5.4 percent decline it predicted in June to a 4.2 percent downturn. The economists say this improvement is almost entirely due to a stronger pace of recovery than they had anticipated. They caution that the current surge of cases in many areas will drag on growth in the future, however, they expect any future shutdowns and behavioral changes will be less severe than in the first round. Furthermore, given that consumer spending is still down, future behavioral responses will likely translate into only a drag on growth rather than a sharp decline, as occurred in the early spring.

They also revised their Q2 GDP forecast from a 37.0 percent annualized decline to 34.8 percent and raised their Q3 estimate by 7.9 percentage points to 27.4 percent annualized.

The risks to their forecast are balanced between upside and downside risks and revolve around the pandemic. The downside is the current resurgence in cases which could lead to regional shutdowns and self-imposed quarantines by consumers and businesses. To the upside, if the current wave doesn’t translate into severe cases, then consumer spending made be more robust than currently expected. There is also uncertainty about the extension of unemployment benefits and the passage of additional stimulus packages. Read more in-depth here.

 

What would it take to trigger a housing downturn in the second half of 2020?*

Plus, how likely –or unlikely– any of these events happen

At its beginning, the COVID-19 crisis had many consumers and housing professionals alike bracing for a housing crash. And with good reason: We were, and are, facing the biggest health and economic shock in recent modern-day history.

But what many didn’t account for was that the U.S. housing market was somewhat inoculated against the economic turmoil of the COVID-19 crisis by having great demographics for housing along with long-standing low mortgage rates. 

U.S. demographics in the years 2008-2019 were too young and too old to generate strong demand for home purchases, and this was one of the reasons we had the weakest housing recovery ever recorded in history, even with low mortgage rates. In fact, MBA purchase applications, adjusted to population, were lowest in 2014, five years into the last expansion with mortgage rates under 5% for most of the cycle.

Today, the rate of growth in purchase applications is faster on a year-over-year basis than before the COVID-19 crisis, and at a higher level than in 2018 and 2019. For the last four weeks, the rate of growth in purchase applications was +21%, +18%, +15% and +33%, compared to the same weeks last year. This high, double-digit rate of growth is so impressive that it is unlikely to be sustained in the second half of 2020. Read more in-depth here.

 

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

You can also schedule a call here.

Berkshire Hathaway Fires Back In COVID-19 Coverage Dispute

iLeads Mortgage 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 Newcomers See Chance To Step Into Insurance Market Amid Pandemic. This week we’re bringing you:

 

AHT Insurance acquires Mason & Mason*

AHT Insurance, a Virginia-based property and casualty brokerage and consulting firm, has today announced its acquisition of Mason & Mason Insurance (Mason).

Mason, which has offices in Whitman, MA, and North Conway, NH, has been in business for more than 40 years, delivering P&C insurance programs to fit the needs of businesses and individuals. The brokerage has a focus on niche businesses and is recognized as a specialist service provider for venture capital, technology and life science firms. It is also one of the largest providers of insurance to custom home builders and remodelers in Massachusetts and is the managing agent for Builders and Remodelers Association of Massachusetts sponsored insurance program.

AHT and Mason are well-known to each other and they share similar strategies and areas of focus. They are two of the founding agencies of TechAssure, a non-profit association dedicated to advancing corporate insurance and risk management for technology, life science and venture capital related risks. AHT president and CEO David Schaefer expressed his excitement about the synergies to come. Read more in-depth here.

 

Property data expert launches integrated insurance technology*

Global insurance industries in North America, Australia, New Zealand, and Europe can now benefit from CoreLogic’s new insurance technology, as the property insights and solutions provider rolls out its first fully-integrated proposition designed to seamlessly engage and protect policyholders and portfolios.

Features include virtual workflow platforms for both underwriting and claims; what was described as unique data-driven insights that will help in decision-making; as well as portfolio management and risk monitoring services.

According to CoreLogic, the new offering makes it easy for clients to connect to a host of innovative third-party insurtech solutions, thanks to its open architecture and “industry-leading” application programming interface framework. Read more in-depth here.

 

Berkshire Hathaway fires back in COVID-19 coverage dispute*

Berkshire Hathaway Inc. asked a federal court on Monday to dismiss a lawsuit filed by a policyholder of one of its insurance units that sought business interruption coverage for losses related to the coronavirus.

In a motion to dismiss, Berkshire Hathaway said the National Fire & Marine Insurance Co. policy included a virus exclusion barring coverage, and other terms of the policy included a requirement for direct physical loss or damage to trigger business interruption coverage.

In the original proposed class-action suit filed last month in federal court in Pittsburgh, 1 S.A.N.T. Inc. d/b/a Town & Country and d/b/a Gatherings Banquet & Event Center v. Berkshire Hathaway Inc., a New Castle, Pennsylvania, restaurant and tavern argued that Berkshire Hathaway wrongly denied its claim for business interruption coverage for income lost during the COVID-19 lockdown. Read more in-depth here.

 

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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.

Mortgage Rates Just Got Even Lower

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 U.S. Pending Home Sales Surged a Record 44% in May. This week we’re bringing you:

 

2021 Could See First Decline in Home Prices in 9 Years*

Did the housing happy talk just get a little less so?

CoreLogic’s Housing Price Index Forecast (HPI) over the May 2020 to May 2021 window is seeing more rapid price deceleration in the face of the COVID-19 situation than did their previous 12-month forecast that ended in April of next year.

In its report last month CoreLogic said it expected that “the housing market may be equipped to lead the broader economy through the recovery” but that home prices increases would slow and that the gain from April to May would be only 0.3 percent. They went on to predict that 2021 would bring the first decline in nine years, and by April 2021 the national price gain would turn negative, down 1.3 percent. Read more in-depth here.

 

Tappable home equity rises to record $6.5 trillion*

More than 75% of homeowners with tappable equity have mortgage rates above 3.5%, Black Knight says

Tappable home equity, meaning the equity homeowners could borrow against while leaving a 20% buffer, rose to a record $6.5 trillion in the first quarter, Black Knight said in a report on Monday.

More than 75% of homeowners with tappable equity have interest rates above 3.5%, the report said. With rates currently near 3%, the amount they would save each monthly likely would outweigh the cost of the transaction, the report said.

While cash-out refis might provide support to the economy in the future, as people tap equity to renovate homes or pay down credit cards, the levels have fallen this year, the report said.

“Driven by record-low 30-year mortgage rates, the first quarter saw overall refinance lending climb to a 7-year high,” the report said. “At the same time, the number of cash-out refinances, as well as the dollar value of equity withdrawn via refinance, fell for the first time since early 2019.”

Cash-outs accounted for 42% of refinance loans in the first quarter, the lowest share in four years, the report said. The $38.7 billion in equity withdrawn via cash-out refis was down 8% from the prior quarter. Read more in-depth here.

 

Quicken Loans drops S-1 under the name Rocket Companies*

The Detroit-based company revealed a proposed maximum offering price of $100 million under the symbol “RKT”

Quicken Loans on Tuesday filed an S-1 with the U.S. Securities and Exchange Commission under the name Rocket Companies.

Last month, we reported that the largest online mortgage lender in the U.S. had confidentially filed for its prospectus for an IPO.

Today, the Detroit-based company revealed that it will list its common stock on the New York Stock Exchange under the ticker symbol “RKT.” The company lists a figure of $100 million for the initial public offering, but the form notes that number is “estimated solely for the purpose of calculating the registration fee.”

Founded in 1985, Quicken Loans/Rocket Companies has been seeing record numbers of refinance and purchase applications in recent months in the midst of the COVID-19 pandemic.

The corporate structure for the newly public entity is sophisticated, and notably, Dan Gilbert will still retain significant control over the public company. Specifically, he will control approximately 79% of the combined voting power of Rocket Companies’ outstanding common stock. Read more in-depth here.

 

Is now a good time to buy a home? Over 60% of surveyed Americans say yes*

That’s a 9-point climb in Fannie Mae’s HPSI measurement

Fannie Mae’s Home Purchase Sentiment Index, a composite index designed to track consumers’ housing-related attitudes, intentions and perceptions, increased nine points in June to 76.5. Although the HPSI is down 15 points year-over-year, June’s gain marked the second rise in HPSI since April’s almost record low.

According to the report, 61% of Americans now believe it is a good time to buy a home – an increase of 9 percentage points from May’s 52%. The share of respondents who say it is a good time to sell also increased to 41% from 32% the month prior.

“The share of renters who say it’s a good time to buy a home is now at its highest level in five years, suggesting favorable conditions for first-time home buying, consistent with the recent rebound in home purchase activity,” said Doug Duncan, senior vice president and chief economist of Fannie Mae.

Despite predictions by CoreLogic that home prices will decline 6.6% by May 2021, the number of HPSI respondents who say home prices will go up in the next 12 months increased in June from 26% to 34%, whereas the percentage who said home prices will go down decreased from 35% to 25%. Read more in-depth here.

 

Mortgage Rates Just Got Even Lower*

Mortgage rates were already at all-time lows yesterday, and had been holding at those levels for at least 3 business days for the average lender. I normally tell people that mortgage lenders are hesitant to drop rates very aggressively when they’re already at all-time lows, and that’s always been the case. At least it had been the case before coronavirus.

Even then, the past 3 business days were making a similar case. Rates had bottomed out and the broader bond market (which ultimately drives mortgage rates) looked like it preferred a flat trajectory to one that continued to even deeper all-time lows.

The bonds that specifically underlie the mortgage market had other ideas. So far this week, they’ve improved much more noticeably than the bond market’s poster child the 10yr Treasury yield. 10yr yields aren’t even back to last week’s best levels. Mortgage bonds, on the other hand have blown right past theirs.

There are several reasons for this–all of them relatively confusing. Read more in-depth here.

 

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Finding highly affordable leads to keep sales coming in

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

You can also schedule a call here.

Newcomers See Chance To Step Into Insurance Market Amid Pandemic

iLeads Mortgage 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 Insurance Industry Is Incredibly Well Capitalized, Lloyd’s of London CEO says. This week we’re bringing you:

 

Who are the industry’s up-and-coming talents?*

Standing out amid a pool of immense talent can be a challenge, and, year after year, Insurance Business America makes it a point to recognize professionals who are rising above the pack, despite their young age.

Once again, IBA is on the look-out for individuals, aged 35 or younger, who are emerging leaders in their companies and are quickly rising to influential roles. If you know someone who fits the bill, take a few minutes to complete this short nomination form. Self-nominations are also accepted. Read more in-depth here.

 

Excess liability capacity shrinks as rates shoot up*

Buyers of excess liability and umbrella coverage faced the one-two punch of soaring rates and a capacity crunch at July 1 renewals, market sources say.

Some policyholders paid more for coverage and some bought less, while others were unable to achieve their past or desired levels of protection, they say.

In addition, insurers introduced more exclusions as they tried to limit their exposures, particularly for historic sexual abuse and molestation claims.

Commercial auto rates are also seeing rate hikes, after several years of increases, and primary general liability rates are rising but at a lower rate, sources say.

Excess and umbrella insurance markets have seen the exodus of some $500 million in capacity, said Anthony DeFelice, managing director, national casualty in New York for Aon PLC’s risk services division. The largest coverage tower achievable is roughly $500 million to $600 million in limits, down from about $1.2 billion last year, he said.

Policyholders that “buy the market” could previously have built $1.2 billion, but now can access only $600 million in total capacity, agreed Jon Drummond, New York-based head of casualty broking, North America, for Willis Towers Watson PLC. Read more in-depth here.

 

Newcomers see chance to step into insurance market amid pandemic*

(Reuters) — Commercial insurers are facing hefty claims from the coronavirus crisis but are also seeing a steep rise in premiums — tempting companies and industry veterans to raise capital, launch new businesses or expand into new lines.

New insurance ventures sprang up after Hurricane Andrew in 1992, the 9/11 attacks in 2001, and Hurricane Katrina in 2005. The industry is hoping to replicate that process as premiums increase because of the fallout from the pandemic.

Convex, a Bermuda and London-based insurer, for example, is launching cover for one of the areas worst hit by the current crisis — event cancellation.

Many firms are reducing the amounts of business they do in certain types of insurance, creating space for new entrants, said Convex Deputy Chief Executive Paul Brand.

John Cavanagh, former head of broker Willis Re and a founder of insurance venture capital firm Beat Capital, is seeking to raise funds in the “low hundreds of millions of pounds” from long-term investors for new insurance projects. Read more in-depth here.

 

Featured iLeads Solution:

Looking for the most qualified leads? iLeads insurance leads might be the answer. Learn more…

We are ready to help you navigate through the COVID-19 insurance environment.

 

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.