MReport September 2021

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44 | M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T CFPB/FHFA Poll Examines Pre- Pandemic Borrower Experience Officials say the data provides a baseline for mortgage market trends and consumer sentiment about the origination process prior to COVID-19. A mericans who applied for mortgages in 2017- 2019 reported slightly increasing apprehension about not being approved than in previous years, more used a mort- gage broker, and a large portion of the respondents to a survey by two federal agencies said paper- less online mortgage processes are vital when choosing a lender. Agency officials point out that the datasets reflect consumers' views just prior to the onset of the pandemic, which could mean valuable insight for lenders and brokers in the months ahead. The results come from a bor- rower-experience study by Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB), which includes updated loan-level data mined by the National Survey of Mortgage Originations (NSMO) from people obtaining residential mortgages. "The NSMO data released today sets a baseline about how borrowers viewed the mort- gage process just prior to the COVID-19 crisis," FHFA Deputy Director Lynn Fisher said. "Releasing this data to the public helps promote an understanding of the specific challenges and suc- cesses that borrowers experienced during the mortgage process." Hearing directly from borrowers involved in the origination process can bring clarity and understand- ing to market trends, added Mark McArdle, CFPB Assistant Director for Mortgage Markets. "The data collected in this sur- vey will provide us with a fuller picture of borrowers' experiences and will improve the lending process for future borrowers." Below are several of the key takeaways from the study: » The percent of survey respon- dents who reported not being concerned about qualifying for a mortgage during the applica- tion process increased some- what from 2018 to 2019 (from 48% to 51% for home purchase mortgages and 57% to 66% for refinances). » The percent of survey respon- dents who reported a paper- less online mortgage process being important in choosing the mortgage lender/broker re- mained relatively high and un- changed from 2018 to 2019 (40% for home purchase mortgages and 44% for refinances). » The percent of survey respon- dents who reported applying for a mortgage through a mortgage broker increased from 2018 to 2019 (from 42% to 46% for home purchase mortgages and 30% to 38 % for refinances. The percent of survey respondents who applied directly through a bank or credit union decreased from 2018 to 2019 (from 54% to 49% for home purchase mortgages and 67% to 61% for refinances). More recent client satisfaction data: A J.D. Power-published survey that rates customers' experience with their mortgage servicers showed an increase of overall sat- isfaction by a significant six points during the past year, as the in- dustry combined relief efforts and pivoted to digital solutions in order to help clients weather the effects of a global health crisis. That said, the data analytics and consumer intelligence company's 2021 U.S. Primary Mortgage Servicer Satisfaction Study indicated that, as stated in a press release, "the pandemic-driven goodwill belies a larger collection of client-satis- faction challenges, especially for bank-affiliated lenders. As loan for- bearance programs come to an end and more normalized customer interactions resume, traditional banks are starting to lose their edge over nonbank lenders." NYCB Finalizes Acquisition of Flagstar The combined company will feature nearly 400 traditional branches in nine states and 86 retail lending offices across 28 states. N ew York Community Bancorp Inc. (NYCB) and Flagstar Bancorp have jointly announced that, at their respective shareholder meetings, they each received the necessary approval for the consummation of their planned merger. Originally announced in late April, the transaction is ex- pected to close during Q 4, subject to the satisfaction of certain closing conditions and the receipt of all necessary regulatory approvals. "We are extremely pleased by the overwhelming support received from both sets of shareholders in favor of this transaction," Chairman, President, and CEO of NYCB, Thomas R. Cangemi said. "The strong approval confirms the financial and strategic benefits of the transaction. I am looking forward to working with Flagstar to create one of the top regional banks in the country." Upon closing, the combined company will have $85 billion in total assets, operating nearly 400 traditional branches in nine states, and 86 retail lending offices across 28 states. It will have its headquar- ters based in Long Island, New York, with regional headquarters in Troy, Michigan, including Flagstar's mortgage business. "I am very pleased with today's vote, which validates the share- holder value created by the merg- er," said Sandro DiNello, President and CEO of Flagstar. "The entire organization is very excited about the opportunities which lie ahead for the combined company, while maintaining a strong commitment to our employees, customers, and to all the communities we serve." Cangemi will serve as President and CEO of the combined com- pany, and DiNello will become Non-Executive Chairman, with John Pinto serving as Senior EVP and CFO of the combined com- pany. Lee M. Smith will continue to lead the Mortgage Division as Senior EVP and President of Mortgage, and Reginald Davis will head up consumer and commercial banking, and serve as Senior EVP and President of Banking. The remaining key roles will combine the best talent from both companies. The Board of Directors will be comprised of 12 directors—eight from NYCB and four from Flagstar. Flagstar reported Q2 2021 net income of $147 million, compared to a Q1 2021 net income of $149 million. NYCB reported a Q2 2021 net income of $152 million, up 45% compared to the $105 million year over year.

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