TheMReport — News and strategies for the evolving mortgage marketplace.
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6 | M R EP O RT (MBA) reported that the na- tional median mortgage payment reached $2,012 in October, up $629 in the first 10 months of the year, a 45.5% increase. "Freddie Mac reported that the average commitment interest rate for a 30-year, conventional, fixed-rate mortgage was 6.90% in October, more than double the rate of 2.96% across all of 2021," said McGarry. "With the rising costs of loans in today's increasingly com- petitive housing market, we want to continue to find creative ways to help prospective buyers achieve homeownership and start building family wealth. Introducing Guild's Payment Advantage will help our clients save on their loan payments now, as well as offer the ability to refinance without lender fees through December 2025 with our Payment Protection program." Guild Mortgage offers four Homebuyer Protection programs to give homebuyers the confi- dence they need to know their purchase is protected. Credit Approval Protection (CAP) is de- signed to stand behind our credit approvals to protect our borrow- er's earnest money, Homebuyer Express (HBE) is Guild's 17-day closing guarantee, Lock and Shop allows buyers to lock in their rates while they shop for a home, and Guild's Payment Protection Program provides a rate and term refinance with no lender fees. With Payment Protection, Guild allows for a rate and term refinance with no lender fees to qualified applicants. A rate and term refinance allows a borrower to replace their current home loan with a new one, changing their mortgage term or interest rate to help them pay less for their loan over time, pay off their loan faster, or lower their monthly payments. The borrower must close their purchase loan on or before July 31, 2023 with a non-bond, FHA, VA, USDA or conventional confirming or high balance loan to be eligible for the program. Additionally, the refinance must be a first lien rate and term refinance for the same property and must be paying off a loan originally financed by Guild Mortgage and must close by December 31, 2025. Overcoming TRID Compliance Concerns BLACK KNIGHT ENHANCES ITS ERNST FEE SERVICE B lack Knight, Inc., a provider of integrated software, data and analytics solutions, reports that its Ernst Fee Service solution has been enhanced to help clients address the challenges that are resulting from a growing number of municipalities requir- ing additional and more complex real estate transaction taxes. According to Ernst Fee Service data, there is a shift taking place in how real estate transaction taxes and fees are being levied. Historically, increases to these taxes and fees were infrequent, made at the state level and had lengthy execution timelines—allow- ing mortgage lenders to implement changes in a timely and accurate manner. Recently, a fast-rising trend has developed, with munici- palities implementing real estate transaction fee changes to support local policy issues. These changes are frequently marked by complex, variable schedules, short implemen- tation timelines and substantial fee increases, making them difficult for lenders to track and adhere to. Following the November election, a significant number of localized changes must now be incorporated into lenders' operations to remain TRID compliant. The changing tide in the way real estate transaction taxes are being used at the local level is of special consequence to mortgage lenders because TRID classifies these line items as zero tolerance fees. Except under specific cir- cumstances, fees that fall into the zero-tolerance category should not increase after the delivery of the Loan Estimate. If they do, lenders may have to pay borrowers a fee cure covering the difference between the amount they were quoted and the amount they were charged. "Federal rules give lenders zero tolerance in the disclosure of real estate transaction taxes and were designed at a time when these fees were implemented with great uniformity at the state level," said Rich Gagliano, President of Black Knight Origination Technologies. "But the paradigm has shifted, and there is a growing discon- nect between the localities that are rapidly implementing vari- able tax tiers for specific neigh- borhoods and the resources it takes for lenders to compliantly implement these changes at scale and on time. By doing the heavy lifting and the legwork for our clients, the Ernst Fee Service helps lenders roll new requirements into production workflows on time and meet increasingly short deadlines." Failure to properly disclose up- dated fees can be extraordinarily costly for lenders. For instance, in Los Angeles, a ballot measure was passed that places a 5.5% transfer tax on properties sold for $10 mil- lion or more. Through March 31, 2023, a $10 million property in Los Angeles is subject to a $45,000 lo- cal transfer tax. But one day later, on April 1, 2023, that same prop- erty will be subject to a $595,000 local transfer tax. "The cost of fee cures due to faulty disclosures can be sub- stantial and is continuing to increase. Ernst Fee Service helps alleviate the challenge of keeping track of the changing municipal tax increases and implement- ing them on short timelines," added Gagliano. "The platform is especially valuable today, when so many new and specifically local- ized rules, fees and taxes must be absorbed into lenders' workflows." Ernst Fee Service automates end-to-end fee management for mortgage lenders to support lender TRID compliance and minimize zero percent and 10% tolerance fee cures. An integration with Empower, the Black Knight loan origination system (LOS), al- lows Ernst Fee Service to generate the Loan Estimate and Closing Disclosure forms prefilled with up-to-date transfer and property tax fees, as well as title, recording, settlement, and inspection fees. Black Knight's Fee Cures Suite completes the process by helping lenders identify costly cure trends and assisting lenders with mitigat- ing cures in the future. MTECH "Federal rules give lenders zero tolerance in the disclosure of real estate transaction taxes and were designed at a time when these fees were implemented with great uniformity at the state level." —Rich Gagliano, President, Black Knight Origination Technologies