Florida Originator Issue One 2024

NEVER AGAIN

From Sea To Shining Sea.

When Sunshine State brokers and lenders need information and opportunity, Florida Originator magazine is there for them. It’s the only mortgage publication that crisscrosses all of Florida, and the only one that lets industry pros from Miami to Jacksonville, from Destin to Key West know it all.

A Bulb Lights Up Lending

The crocuses are saying hello.

To my wife, there is no surer sign of Spring's impending arrival than the crocus bulbs that have been popping up. Crocuses are wonderful allegories for mortgage lending.

Generally, they pop to life as the cool winter recedes, although they can also frequently be found poking up even when there is a fresh coating on the ground. Mortgage lending ramps up when Spring arrives, even in warmer weather states. There's just something about knowing Spring's rebirth is here that gets people looking for new spaces. It's the time when originators look for the rebirth of their business, usually after a slow Winter (even though there may be pops of business here and there, just like the curious early crocus arrivals).

For the most beauty, crocuses should be planted in clusters, and in the Fall for their glorious debut in Spring. So, too, should loan originators be working in the Fall to spread the word of their services, to build new relationships, to be thinking of additional strategies, so that when the Spring buying season finally arrives, they are prepared for a glorious surge in originations. In Autumn and Winter, LOs should be going to gatherings, visiting real estate offices, holding home borrower seminars in their local libraries — clustering, one might say.

The beauty of the crocus blossom is dependent on the climate, and of course the success of an LO's origination strategy will depend on whether there is downward movement in interest rates. But so far, the forecast for crocuses looks good, and barring an unexpected aboutface by the Fed, the outlook for slipping rates seems a lot sunnier than it did last year.

If you, like my wife, look forward to seeing the annual return of the crocus, you'll be happy to see those red and pink and yellow and purple darlings colorfully announcing a new season. And while there are groups of originators who bloom in any season, most of the community really comes alive when Spring is in full blossom, in every sense of the word.

Well, folks: the crocuses are saying hello.

Vincent M. Valvo CEO. Publisher, Editor-in-Chief vvalvo@ambizmedia.com

STAFF

Vincent M. Valvo CEO, PUBLISHER, EDITOR-IN-CHIEF

Beverly Bolnick ASSOCIATE PUBLISHER

Christine Stuart NEWS DIRECTOR

Keith Griffin SENIOR EDITOR

Erica Drzewiecki, Katie Jensen, Ryan Kingsley, Sarah Wolak STAFF WRITERS

Regina Morgan ADVERTISING SALES EXECUTIVE

Nicole Coughlin

ADVERTISING ASSOCIATES

Alison Valvo

DIRECTOR OF STRATEGIC GROWTH

Julie Carmichael PROJECT MANAGER

Meghan Hogan DESIGN MANAGER

Stacy Murray, Christopher Wallace GRAPHIC DESIGN MANAGERS

Navindra Persaud DIRECTOR OF EVENTS

William Valvo UX DESIGN DIRECTOR

Andrew Berman HEAD OF CUSTOMER OUTREACH AND ENGAGEMENT

Krystina Coffey, Matthew Mullins MULTIMEDIA SPECIALIST

Alan Nero MEDIA SPECIALIST

Melissa Pianin

MARKETING & EVENTS ASSOCIATE

Kristie Woods-Lindig ONLINE ENGAGEMENT SPECIALIST

Submit your news to editors@ambizmedia.com

If you would like additional copies of Florida Originator Mangazine Call (860) 719-1991 or email subscriptions@ambizmedia.com

www.ambizmedia.com

© 2024 American Business Media LLC. All rights reserved. Florida Originator Magazine is a trademark of American Business Media LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to:

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6

Florida Originator News Bites

A look at the news that’s important for the mortgage industry across the Sunshine State.

10

Post-Closing Pitfalls You Need to Know

Lenders are demanding brokers repurchase the scratch-and-dent loans for a hefty price. Be prepared.

14

What Climate Impacts Are Doing To Originators

Disasters both manmade and natural have led to major changes for MLOs.

The Market’s Getting Much Brighter

Experts point to what’s going to make the mortgage market better in the next two years.

20 24

People On The Move

A Roundup of Floridians landing new jobs or being awarded promotions.

Data Bank

Learn some facts about the leading real estate markets in Florida.

Coastal Connect Mortgage Expo — Jacksonville

Wednesday, April 3, 2024

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Suncoast Mortgage Expo — Tampa

Thursday, May 30, 2024

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Ultimate Mortgage Expo — New Orleans

Wednesday, July 11, 2024

Hotel Monteleone

FLA. ORIGINATOR

UCF Economist: Florida Has ‘Teflon Economy’ For Next Recession

While the timing of a national economic slowdown seems to keep moving, Florida’s economy should weather it well — and even grow — says economist Sean Snaith.

In his latest quarterly Florida forecast, Snaith says the impact of a slowdown won’t stick to Florida as it has in past recessions.

“Florida’s economy today is more like Teflon. A lot of the effects of a national slowdown will just slide right off,” Snaith says.

While the housing collapse in 200809 and the pandemic hit Florida’s economy particularly hard, Snaith says the next slowdown or recession won’t do as much damage because of the state’s ever-growing population and strong labor market.

“A recession is never good news,” he says. “But compared to what our state went through during the past two recessions, any pain we endure will be far less severe and won’t linger as long. And Florida’s economy won’t experience the worst from a national economic slowdown.”

The flip side of Florida’s growing population and strong economic growth means continued shortages in the state’s housing market, Snaith says.

“We’ve had the fastest-growing population growth rate in the country feeding the demand for housing, and it’s running headlong into a depleted supply,” he says. “This is not a pathway to affordability.”

Snaith does not forecast any drastic correction during the coming slowdown or recession and has seen prices stabilize in recent months, but that doesn’t mean housing prices will come down anytime soon for would-be buyers.

“The demand doesn’t seem to be abating, and it takes time for supply to catch up,” he says. “That will continue to be an issue for the foreseeable future.”

Housing starts have felt the bitter chill of higher mortgage rates. Total starts were 192,213 in 2022 — before higher mortgage rates and worries of a slowing economy result in a deceleration in starts to 183,134 in 2023, 158,716 in 2024, 154,424 in 2025, and 150,981 in 2026.

Florida’s Economy To Grow Faster Than The U.S. Economy Yet Again

The Floridian economy is forecast to grow by a solid 3.0% in 2024, well above the national economy’s growth of 1.4%, according to a report by Comerica Bank. While employment growth is expected to moderate from 2023’s pace, job opportunities in the Sunshine State are expected to stay more plentiful than the rest of the nation.

These job opportunities, along with the long-standing draws of low taxes, mild winters, and housing that’s more affordable than the Northeast, are expected to contribute to another solid year of population gains.

Spillovers from weaker national and global economies are expected to weigh on the critical tourism sector, contributing to a modest rise in the unemployment rate next year. Nonetheless, Florida’s unemployment rate is expected to hold notably below the national unemployment rate. Total personal income is forecast to grow around 6%, solidly outpacing inflation.

The housing sector is expected to rebound sharply in 2024 after a large decline in sales and construction in 2023. Single-family construction is projected to lead the recovery, adding

150,00

> Projected number of single-family Florida construction projects in 2024.

55,00

> Projected number of multifamily Florida construction projects in 2024.

about 150,000 units to Florida’s housing supply. Multifamily is projected to bring about 55,000 units to market. Reflecting higher supply, lower employment, and income gains, house price increases are likely to moderate further from the blistering pace of increases recorded in the last few years.

Florida And Massachusetts Law Firms Unite To Tackle Fannie Mae’s Secret Condo Blacklist

Florida-based law firm Katzman

Chandler and Massachusetts-based law firm Allcock Marcus joined forces to address the hidden “Condo Blacklist” maintained by Fannie Mae.

The firms say they are committed to helping condominium and cooperative associations currently on the blacklist, or at risk of being added, navigate this complex issue. Fannie Mae, a government-sponsored enterprise, uses the blacklist to designate properties ineligible for conventional financing, affecting thousands of residents and potential buyers.

ORIGINATOR NEWS BITES

It also impacts lenders who can’t close and sell loans to Fannie Mae in buildings on the list, which is being kept as part of the temporary requirements that Fannie Mae instituted in 2021 barring the purchase of mortgages secured by condominium or cooperative units with significant deferred maintenance and public repair directives related to unsafe conditions.

To tackle this problem, Katzman Chandler is launching CondoBlacklist.com, an informational resource for communities to check their blacklist status and explore removal options. The two law firms plan to expand their efforts nationally through strategic alliances with other Community Association Law Firms.

Fannie Mae said in a statement that it does not maintain a condo exclusionary list.

Owning In Some Florida Counties Beats Renting

A report via FloridaRealtors,com shows homeownership makes more sense than renting in some Florida counties. That’s info mortgage originators could use for first-time buyers.

The 2024 Rental Affordability Report was released by property data analytics company ATTOM.

The report shows that both renting and owning a three-bedroom home continue to pose significant financial burdens for average workers, consuming more than one-third of their wages in the vast majority of county-level housing markets.

But median rental rates still require a smaller portion of average wages than major homeownership expenses on three-bedroom properties in 296, or 88%, of the 338 U.S. counties with enough data to analyze.

The least affordable counties for renting are spread mostly through the South and West, including Collier County (Fort Myers), (153% of average local wages needed to rent); Santa Barbara County, CA (131%); Monterey County, CA (outside San Francisco) (107%); Indian River County (Vero Beach), (102%); and, Riverside County CA (101%).

Aside from Riverside County, the least affordable for renting among counties with a population of at least 1 million are Orange County, CA (outside Los Angeles) (88% of average local wages needed to rent); Los Angeles County, CA (83%); Kings County (Brooklyn), NY (72%); and, Palm Beach County (West Palm Beach), (70%).

MBA Recognizes 23 Graduates In Inaugural 2023 Class Of Mortgage Banking Bound Program

MBA Education, the award-winning education division of the Mortgage

Bankers Association (MBA), has recognized 23 graduates in the inaugural year of Mortgage Banking Bound, a certificate program for college students interested in pursuing a career in the residential real estate finance industry.

Launched earlier this year by MBA, Lennar Mortgage, and Barry University, both based n Greater Miami, Mortgage Banking Bound is a one-semester, executive certificate program delivered via a mix of in-person and virtual sessions. In-person sessions are held at Barry University in Miami Shores, Florida. The content is derived from MBA’s School of Mortgage Banking I, School of Loan Origination, and portions of School of Mortgage Banking II. Students are also required to complete pre-course work.

“Congratulations to the inaugural class of Mortgage Banking Bound for their incredible accomplishment. The lessons learned, and skills acquired through the program, will be the first step towards a successful and fulfilling career in real

estate finance,” said Laura Escobar, 2023 MBA Chair-Elect and President of Lennar Mortgage. “I personally thank each of our instructors and sponsors for their commitment in supporting the program and investing in the next generation of leaders in our industry. Increased support from MBA member companies will allow us to teach more students at Barry University, with an eye on expanding this impactful program at more colleges or universities in the coming years.”

Mortgage Banking Bound students participate in 100 hours of learning in a semester-long course comprised of lectures, case studies, and practical applications of concepts. Courses are taught by industry professionals, covering all aspects of the loan lifecycle and ecosystem, and prepare students for a path to work for any real estate finance lending institution in the country.

Graduates are given the opportunity to interview for entry-level positions and internships with local companies, and are provided with a free MBA Student Membership, which includes discounts on MBA educational offerings, access to the MBA Job Board and to a network of over 2,200 member companies within the mortgage banking industry.

Lennar Mortgage is the leading sponsor of Mortgage Banking Bound. MBA has also received donations from Enact Mortgage Insurance, Essent Guaranty, Mortgage Guaranty Insurance Corporation (MGIC), National MI, Radian Group Inc, Taylor Morrison, and Arch Mortgage. MBA has established a scholarship fund to help support students enrolling in 2024 and is looking to expand the program to another college or university.

Florida Rental Costs

See Sharp Decline

Florida’s rental market has experienced year-over-year declines, align-

ing with national trends but standing out in the extent of its decrease, a recent data report shows.

As of November, Florida holds a median rent price of $2,119 and registered a 4.84 percent year-over-year decline in asking rental prices alongside a 1.7 percent month-over-month downturn. The Miami metro area, in particular, has seen depressed rent prices, plummeting by 9.72% year-over-year and positioning itself as the second-largest decrease among U.S. metropolitan areas.

$2,119

> Florida median rent price as of November.

“Prices in the Miami metro dipped by -9.72%, the second largest yearly decline among metros,” the report states. “Despite its steep drop, asking rents in Miami is the seventh highest among metros in this study.”

Despite the decline in cost, Miami’s rental market remains one of the costliest in the South, with current asking rents averaging $2,950, which places Miami as the seventh most expensive metro nationally.

Miami’s faltering rental prices marked a decisive shift from the year prior when it led the nation in rental housing cost increases through the first few months of 2022, increasing at a clip of 38.6 percent, on average. Underscoring the city’s stable standing as a highcost-of-living metro region, a separate August study found that 53 percent of households in Miami dedicate at least 35 percent of their income to rent.

Empower LOS and DocMagic Add Enhanced Integration Support

Jacksonville-based Dark Matter Technologies, an innovator in mortgage technology backed by time-tested loan origination software and leadership, announced significant enhancements to integrating the comprehensive Empower loan origination system (LOS) and DocMagic’s document generation solution.

DocMagic, a leader in fully compliant loan document generation and comprehensive eMortgage services, debuted its native integration with the Empower system last year, making it seamless for retail mortgage lenders who use the Empower system to order initial and closing disclosures from DocMagic without having to build a custom connection. As a result of the latest enhancements to the integration, DocMagic services are now also available for wholesale and home equity originations in the Empower system.

“It’s really significant when two best-in-class vendors like Dark Matter and DocMagic integrate their products so customers no longer have to build out custom integrations — now it’s a true union,” said Rich Gagliano, Dark Matter Technologies’ CEO. “We’re taking that value and convenience even further by bringing it to multiple origination channels.”

“We are thrilled to strengthen our collaboration with Dark Matter, offering top-tier documentation, compliance and eServices while also providing customers of the Empower system exceptional support backed by our award-winning customer service,” said DocMagic President and CEO Dominic Iannitti. ”We look forward to continuing to integrate our two services further, supplying our proprietary ClickSign, eNotary, and Total eClose capabilities.” b

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Post-Closing Challenges For Mortgage Brokers

How to navigate repurchase and clawback demands

By David A. Krebs, Special To Florida Originator Magazine

In the aftermath of the boom lending years of 2020 and 2021, repurchase activity in the secondary mortgage market has increased sharply. More and more, Fannie Mae, Freddie Mac, and other investors are demanding the lenders they bought the loans from to repurchase them due to discrepancies or fraud.

For example, according to a Sterling Point Advisors report on Fannie Mae’s repurchase data for single-family loans, the GSE made $1.1 billion in repurchase demands in 2020 (equating to a .08% repurchase rate), and that figure skyrocketed to $2.1 billion in 2022 (equating to a .4% repurchase rate).

> David A. Krebs

buyback demands.

The impact has trickled down to the individual mortgage brokers, as lenders are turning around and demanding the brokers repurchase the scratch-anddent loans for a hefty price.

In this environment of increased scrutiny (particularly in Florida, where foreclosures and nonperforming loans are prevalent), it is vital for mortgage brokers to understand all the ways they can be held accountable post-closing, not just repurchase demands.

This article summarizes the various clawback demands that mortgage brokers may face, even years after a loan closes.

The originating lenders are not the only ones feeling the heat from these

OVERVIEW OF CLAWBACK PROVISIONS

The notion that lenders can recapture mortgage brokers’ compensation is generally understood. However, many mortgage brokers are unaware that clawback provisions can be triggered in many ways, sometimes relatively easily.

The chart below summarizes the different categories of clawback provisions that are typically found in agreements between mortgage brokers and lenders.

COMPARISON CHART TYPES OF CLAWBACK PROVISIONS WHAT IT IS RAMIFICATIONS

REPURCHASE

EARLY PAYMENT DEFAULT (EPD)

If lender determines there was fraud, negligence, or other violation regarding the origination of the loan, broker must repurchase the loan.

If borrower fails to make the first payment within a certain time after the due date (e.g., 30 days), lender can seek damages from broker.

Broker must pay a hefty “repurchase price” equal to outstanding principal of the loan + accrued interest + broker's commission + lender's costs.

Broker must pay lender an amount equal to its damages incurred due to the EPD. The amount asked for is usually broker’s commission.

If lender itself is subject to a repurchase demand from investor, broker must automatically repurchase the loan — lender does not have to show fraud, etc.

Most provisions apply just to the 1st payment, but some encompass the 1st-6th payments; sometimes lender must show fraud, but most provisions are automatic.

broker to abide by them perfectly. For instance, the broker must represent that they comply with all federal, state, and local laws, thereby wrapping into the agreement all the requirements under federal statutes such as RESPA and state statutes such as Florida Statutes Chapter 494.

• As mentioned in the chart, the repurchase obligation can automatically be triggered if the lender receives a repurchase demand from the investor. Importantly, all that is required is for the lender to have received the demand notice, not for the lender to have already repurchased the loan.

• Moreover, it typically does not matter if there is a foreclosure. The mortgage broker’s responsibility shifts from repurchasing the loan, to purchasing the related property.

Here are the most common reasons why lenders ask brokers to buy back a loan:

• Income, employment and/or debtto-income misrepresentations

• Appraisal misrepresentations

• Occupancy misrepresentations

• Assets misrepresentations

• Undisclosed debts

• Non-performing loans

EARLY REPAYMENT

If borrower pays off the loan within a certain timeframe (typically 180 days of closing), lender can seek damages from broker.

UNDERSTANDING THE NUANCES

Next, we dive into the nuances to see the full ramifications of these clawback provisions.

REPURCHASE CLAUSES

Many mortgage brokers assume that their repurchase obligations only arise in the case of fraud or gross negligence, which can be hard to prove.

Regardless of broker’s involvement in the early payoff, broker must pay lender all compensation it received as a result of the loan.

If broker refuses to pay back its commission, lender may offset such amount against any amount due broker, i.e., commissions for current deals in pipeline.

However, the lender’s burden of proof to invoke the repurchase demand is usually much lower:

• The repurchase obligation can be triggered by simply showing that the broker breached any of the representations or warranties in the mortgage broker agreement. The list of reps and warranties is often very long and broadly worded, making it difficult for even the most compliant

In a perfect world, the lender and the mortgage broker should be equally responsible for soundly underwriting the deal. However, in the real world, these repurchase clauses essentially shift 100% of the underwriting burden to the mortgage broker.

EARLY PAYMENT DEFAULT AND EARLY REPAYMENT CLAUSES

While the risk of receiving a repurchase demand can last for several years (subject to any statute of limitations defenses), the early payment default and early repayment clauses have a much shorter shelf life. Still, there are some important points to keep in mind:

• Regarding early payment defaults, the scope is usually limited to only

the borrower’s first payment, but sometimes the scope extends to the first six payments. Typically, mortgage brokers are not in touch with borrowers when the first payment is due (two months after closing), let alone the next five payments.

• As for the early payoff clause, the lookback period is usually 180 days; again, the broker is usually out of contact by that point and has limited control over the borrower’s efforts to refinance or otherwise exit the loan early.

It is, therefore, good practice for mortgage brokers to maintain communication with their clients post-closing, including by helping them sign up for autopay for their mortgage payments. And, if the borrower really wants to pay off the loan early, within 180 days by refinancing, the broker can help limit the damages if the new loan is delivered back to the same lender.

STRATEGIES TO REDUCE RISK AND LIABILITY

1. Read the fine print. The language of clawback provisions can vary dramatically, so familiarize yourself with the mortgage broker agreements you currently have in

place. Before contracting with new lenders, you can try negotiating more favorable language.

2. Have strong internal controls in place. Hire a compliance specialist or attorney to set up internal policies to filter out fraudulent borrower applications as much as possible. And post-closing, have an automated system to remind borrowers to make their first payments on time.

3. Get robust E&O insurance. If that “rainy day” comes, and a lender invokes a clawback provision against you, make sure your errors and omissions policy covers these situations and immediately file a claim. Note, however, that some E&O policies specifically exclude the insured’s refusal or failure to repurchase loans.

4. Be ready to dispute the lender’s demand. Most lenders will work with a mortgage broker to resolve the matter through some sort of settlement. After all, the lender does not want to lose your business. However, if a settlement cannot be reached, you might have to hire an attorney to go to court or arbitration, depending on the dispute resolution provision. All the while, the lender has the right of offset, meaning you might not be

entitled to your commissions for any other loans you have pending in that lender’s pipeline.

CONCLUSION

In light of the increased scrutiny lenders face in the secondary mortgage market, lenders are shifting that burden down to the individual mortgage originators.

Whether that is fair or not, it is important for mortgage brokers to understand all of their post-closing risks. Otherwise, they might be subject to a repurchase demand and end up with a nonperforming loan on its books. Or, they might have to disgorge their commission for something as simple as the borrower making their first mortgage payment 31 days late. Therefore, in this challenging environment, mortgage brokers must stay informed and prepared to mitigate these risks and safeguard their financial stability. b

David A. Krebs is president of DAK Mortgage based in Miami, Florida, and is an originator of residential and commercial mortgage loans. His residential business focuses on foreign nationals, nonwarrantable condominiums, and jumbo loans. Visit his websiteL davidakrebs.com.

Radiant Prospects: Illuminating Signs Of A Brighter Market Ahead

Experts envision clearer skies in the mortgage forecast over next two years

By Erica Drzewiecki, Associate Editor, Florida Originator Magazine

WWhile Florida loan originators aren’t yet singing the sweet chords of “I Can See Clearly Now” by Johnny Nash, housing analysts are hopeful that in the next 24 months, the clouds will be parting.

Property owners are making housing improvements, talk of insurance reform is in the air, and an evolving mortgage market is on the horizon.

No one can say for sure whether spring 2026 will hold desirable mortgage rates, competitive pricing, and more buyers and sellers than a swap meet. However, housing professionals in the Sunshine State who have found a way to thrive while others shuttered and let their licenses lapse are

encouraged by agency-level changes and other market indicators at the end of 2023.

ADJUSTMENTS

As of early December, Marshall Smith, branch manager of Fairway Independent Mortgage in Tampa, self-reported closing a total of 117 loans in 2023, totaling $42,601,072 in volume. His strategy to ensure success in a difficult market? Make adjustments.

“Right now, if you do the same things you did in the beginning of 2022 and 2021, you’re not gonna get the same results. So what are you doing differently?” Smith says. “The market is not the same as it was the last few years. There’s less activity going on right now.”

Smith foresees even more

I do think in 2024, we’re gonna see a pretty welcoming pricing and rates environment and I think activity is going to speed up quite a bit.

> Marshall Smith, branch manager, Fairway Mortgage

boom in Florida after the Earth makes its next two trips around the sun.

“These are all the reasons why we feel 2024 and 2025 are going to see a lot of activity with people getting off the sidelines and back into the housing market. I don’t think anybody would disagree by saying rates are going to be lower, especially most economic analysts. And there’s a lot of factors going into that. But number one, inflation is going to get under control.”

At the end of Q3 2023, economic analysts and housing professionals like Smith were still unsure of what the future would hold in 2024 and beyond. That all changed pretty quickly during the last few months of the year.

“Now more than ever, we do feel that rates will significantly decrease in ‘24, as opposed to before, the forecast was really that they were going to come down in the middle point of ‘25, but we think it’ll be sooner than that.”

Florida has also been an epicenter of impact from change by the agencies, at least since the June 2021 condominium collapse.

change in two years’ time, especially if and when interest rates retreat below 6%, what some are calling “the magic number.”

“I think that’s when a lot of people are going to come off the sidelines and we’re going to be maybe even overwhelmed at that point. A huge pent up demand for housing. The move up buyer specifically, who has been on the sidelines, I feel like as soon as our rates reduce, you’re going to see a heavy flow of activity come.”

Smith tries to counsel clients, partners, and agents he works with based on his own daily research into tomorrow’s market trends. “I do think in 2024, we’re gonna see a pretty welcoming pricing and rates environment, and I think activity is going to speed up quite a bit,” he says.

With low taxes and warm weather, Florida has seen an influx of new residents since the COVID-19 pandemic, when many people transitioned to working remotely. A September 2023 Forbes article ranked the state second among the top 10 moving destinations, using address-change-request data from the U.S. Postal Service.

Smith also attributed larger families and a backlog of relocations as factors for a market

“We’ve seen a ton — not a lot — a ton of complexes become ineligible for financing on Fannie and Freddie,” Smith says. “Freddie’s even tighter than Fannie. So it’s a problem. I think it’s going to take some heavy involvement with the legislature to put pressure on the insurance companies and on Fannie and Freddie to meet in the middle. They’re fighting with each other, and originators, clients, and consumers are getting caught in the middle of it because we have so many contracts that six months ago or 12 months ago would have had no issues with financing. Now, all of a sudden, there are big issues. There’s a lot of ground that needs to be made up as far as that goes because right now we’re not in a good place.”

His advice to LOs who want to stay ahead of the curve is to educate themselves and be mindful of movement in the industry. “The more knowledge you have, the better you’re going to be able to make the correct decisions. And align yourself with the right company.”

Real estate agents will be grasping for partners who can help them maneuver the landscape, Smith adds. “If you’re issuing pre-approvals for condos, it’s not helping our agents. Agents are having a hard time understanding what’s happening with that. So the more we can educate ourselves on what’s happening with the market

with interest rates and advise clients on the correct way to do the right thing and make good decisions, the more success we’re going to have in getting contracts and getting clients to help.”

Smith plans to teach his son how to be an MLO when he gets older — a gift he might not have wanted to impart circa 2008. “It’s a great industry to have growth and to have a high ceiling. It’s great for entry-level people and people that have been in the business for a long time. I think it’s a great career choice. Back then, I don’t know if I would have said the same thing.”

THE CONDO CONUNDRUM

It’s impossible to talk about Florida’s housing market without a mention of condominiums, and their sale and purchases are going through their own evolution.

The government-sponsored enterprises (GSEs) recently finalized changes to their condo project manager (CPM) system, a tool lenders use to certify condominium projects.

As of December 2023, the CPM system now provides details about specific properties, indicating if they have been ‘Project Certified’

— meeting the GSEs’ general eligibility requirements for financing. Lenders can also use it to file a Project Assessment Request.

“With a downturn in the market, with lenders understanding what’s happening in this space right now, and with the agencies setting up the industry to have more clear and accurate access to data and signing off on buildings, I think what’s eventually going to happen is there’s going to be a lot more clarity and a really great map for loan officers and lenders to follow.”

Orest Tomaselli, partner and president of project review at CondoTek, anticipates that the agencies will complete this project in the next 24 months.

He anticipates home values dropping across the state because people can no longer afford to live where or how they had been.

“I think you’re going to see values plummet in most of the state. And I think that’s going to happen relatively quickly within the next 12 to 36 months … if you look historically when a market is stagnant, it’s in a high-interest rate market environment, very few units move. But because of the financial uncertainty in the condominium marketplace in Florida, it may very well be a boon to loan officers in the state.” b

Veteran Mortgage Exec Named Market Executive

Regions Bank has named Cynthia Valenti Smith, who has more than 20 years of experience in mortgage lending, as market executive for the Naples area.

Smith, who will continue in her leadership role as Southwest Florida mortgage production manager for the bank, will report to Steve Pickett, senior vice president and Florida mortgage regional manager, according to a statement. Birmingham, Alabama-based Regions is one of the largest banks in the country, with $154 billion in assets.

Smith worked for the Washington Trust Co. in Rhode Island for 22 years, including a stint as vice president for mortgage lending, according to her LinkedIn profile. She then worked for City National Bank before joining Regions in February 2020.

Pickett, in the release, notes Smith’s leadership during Hurricane Ian, during which Smith’s own home was nearly destroyed, was particularly impressive.

ON THE MOVE

“She led her team and the community through a massive and traumatic situation,” he recals. “I’ve never seen someone lead with more empathy and a steadier hand. I never once heard Cyndi complain. It was always about her team and what can she do for them. It’s the fact that she’s a selfless leader. It’s something I’ll never forget.”

Smith says she enjoys talking to people about what brought them to the Sunshine State.

“Everyone has a different story,” she says in the statement. “They also have different income levels. For example, rentals are high everywhere. But if you compare rent to a mortgage, you’ll often find a mortgage is cheaper than rent in the long run. Those are the

Cynthia Valenti Smith

Serena Wolfe

Michael Housch

Scott Keith

Jennifer Smith

kinds of conversations we use to connect with new residents. And we must never lose sight of the fact that we’re here to deliver what they value most from a bank — personal service that helps them accomplish their goals.”

Lennar Elects Serena Wolfe To Board

Lennar Corporation, one of the nation’s leading homebuilders, announced that Lennar’s Board of Directors has elected Serena Wolfe to serve as a member of the Board of Directors, for a term extending until Lennar’s 2024 Annual Meeting of Stockholders.

Wolfe has served as chief financial officer of Annaly Capital Management, a leading diversified capital manager with investment strategies across mortgage finance since December 2019. Before joining Annaly in 2019, Wolfe served as a partner at Ernst & Young since 2011. Wolfe held various roles across industries since beginning her career at Ernst & Young in 1998, including most recently as Ernst & Young’s Central Region Real Estate Hospitality & Construction leader from 2017 to November 2019.

Wolfe has nearly 25 years of experience in accounting, of which 18 years were focused solely on the real estate and financial services sectors. She is also currently a director of Doma Holdings, Inc., where she serves as the chair of the Audit & Risk Committee.

Stuart Miller, executive chairman of Lennar, said, “I have worked alongside Serena for two years as a director of Doma Holdings, Inc., a publicly traded real estate technology company in which Lennar has an investment and where Serena also serves as a director and chair of the Audit Committee. I have had the opportunity to watch the credible work that Serena has brought to the Board and the Audit Committee at Doma. Her outstanding credentials include two decades of experience in public accounting. Serena’s election to our Board will

assure that Lennar continues to provide the precision and transparency in our financial reporting and to meet the rigorous standards for the conduct of our business that our investors have come to expect from our company.”

Dark Matter Technologies Hires New Chief Risk And Information Security Officer

Dark Matter Technologies, a provider of mortgage technology backed by time-tested loan origination software and leadership, announced the appointment of Michael Housch as chief risk and information security officer. Housch, a C-suite and information security veteran of 25 years, joins Dark Matter following an eight-year stint with Black Knight Inc.

“Mike is a leader whose unparalleled credentials and industry experience are perfectly matched to the challenge Dark Matter is undertaking, which is nothing less than a dramatic reimagination of the mortgage lending process,” said Dark Matter CEO Rich Gagliano. “For nearly a decade, Mike ensured our team’s security kept up with our pace of innovation, and he’s got the discipline and imagination Dark Matter needs to accelerate that pace and unleash our industry’s untapped potential.”

As Black Knight’s chief information security officer (CISO), Housch developed and managed the company’s information security vision and strategy to effectively safeguard its information assets and technology. At Florida-based Dark Matter, Housch will likewise oversee a comprehensive DevSecOps program spanning vulnerability management, identity access, cloud architecture, incident response, governance and regulatory audit oversight. In addition, Housch will be responsible for assessing and mitigating Dark Matter’s operational, compliance and strategic risks at the enterprise level.

“Rich’s vision for Dark Matter presents an invigorating opportunity to ap-

“Mike is a leader whose unparalleled credentials and industry experience are perfectly matched to the challenge Dark Matter is undertaking, which is nothing less than a dramatic reimagination of the mortgage lending process."

> Rich Gagliano, CEO, Dark Matter

ply the wealth of knowledge I’ve gained and lessons I’ve learned over a 25-year career,” said Housch. “The allure lies in Dark Matter’s limitless potential. It’s an open field where we can pioneer new approaches and reshape the mortgage landscape from the ground up, with risk and security woven into our strategy from day one. We’re about to transform the industry where we’ve all dedicated our careers.”

Prior to Black Knight, Housch served as chief information officer at First Federal Bank of Florida for more than a dozen years. There, he was responsible for keeping the bank on the cutting edge of innovation while also overseeing dayto-day operations and decisions related to institutional growth and efficiency, including oversight of information technology (IT), information security, physical security, electronic banking and business continuity. Housch earned his master’s degree in business administration from Florida’s Jacksonville University in 2022.

Pinnacle Financial Expands To North Florida

Pinnacle Financial Partners has entered the North Florida region with

the addition of five veteran financial services professionals to build the firm’s presence from their home base in Jacksonville. Scott Keith will serve as Pinnacle’s regional president for North Florida, with Debbie Buckland and Bryan Taylor by his side as area managers.

Financial Advisor Vaughn Winmond and Credit Analyst Fatima Bowen round out the initial team, which is expected to grow rapidly as more associates come on board to offer a full suite of financial services for business and personal needs.

Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses

Florida, with an entrepreneurial spirit at a founder-led firm, is a once-in-a-lifetime opportunity.”

Buckland has a 27-year banking history in Jacksonville and joins Pinnacle as a leader for commercial banking. Taylor spent 21 years with BB&T/Truist, serving in various roles in Kentucky, Atlanta and then Jacksonville.

Nations Lending Expands in Orlando; Brings On Jennifer Smith As Branch Manager

Nations Lending, a leading full-service national mortgage lender, is

estate and mortgage, Smith has gained in-depth knowledge of the customer buying experience from beginning to end. Throughout her 14-year career, she has consistently performed at the highest level, receiving Top Performers status and now is expanding Nations Lending’s footprint in the Florida area.

“I am looking forward to growing my business with Nations Lending and leveraging their resources and platform,” says Smith . “My goal is to become a leading provider in my industry, and with the support of Nations, I am confident I can achieve that level of success.”

“Jennifer and her team are a great cultural fit and we are excited to

THE LO DOWN

For the State of Florida

SUNSHINE STATE MARKET INSIGHT

The best originator is a prepared originator. Part of being prepared is knowing the facts and figures in the real estate markets across Florida.

To keep you better informed, Florida Originator Magazine tracks information provided about the Sunshine State from various data sources.

For example, it’s important to know which segments of the market are attracting the most sales. It could help you better focus your na.

Hurricanes will always be a problem in Florida with various parts of the state being affected at different times. See what areas are bouncing back. There’s one area coming back that is great when it comes

to affordability for those earning $75,000 or less.

Where the market has been is almost as important as where it is headed. Research compiled by Florida Realtors shows the growth in active listings is particularly strong along the bottom half of the major west coast towns along with an active swath of activity through the center of the state. b

Haveanydatasourcesyouwouldliketoseefeatured? Sendustherequestateditors@ambizmedia.com andwewillseewhatwecanfindoutforyou.

THE SURFSIDE EFFECT

Adjusting to new regulations in the aftermath of the Surfside collapse

New rules, new roofs, no problems? Not likely.

By Erica Drzewiecki, Associate Editor, Florida Originator Magazine

Carriers were quick to yank up insurance premiums when the first major hurricane in over a decade slammed Florida in 2017. Still, state and federal actions to mitigate the impact of climate change on housing infrastructure have been unrushed in the six years since. Then, on June 24, 2021, when a 12-story beachfront condominium in the Miami suburb of Surfside disintegrated, killing 98 people, the sense of urgency kicked into high gear. This is despite the fact that the collapse was attributed to the building’s poor structural design and deferred maintenance and not a direct result of any particular weather event.

Now, Florida homebuyers and loan originators alike are wrapping their minds and means around a host of new requirements (coupled with higher and more fees) — ultimately designed to protect them and their investments. And, of course, continued insurance pains. Those who have a handle on this wild ride are keeping informed, prepared, and unbroken.

NEW GSE GUIDELINES

After Surfside, Fannie Mae and Freddie Mac made big moves in how they treat loans for condo-type properties. The government-sponsored enterprises updated their

I think there’s less people potentially wanting to buy in the condo market because of what happened, and maybe more people wanting to sell.

> Marcy Downey, MLO, Motto Mortgage, Daytona Shores

condominium and cooperative project eligibility standards for properties with five or more units. The new rules — which went into effect this past September, mandate a review of a property’s repair status before mortgage approval. This review covers ownership structure and composition, reserve funds, litigation, and insurance. The agencies’ updated eligibility standards also denote the difference between critical and routine repairs and the role special assessments and inspections play in review of maintenance concerns.

“I think Fannie Mae and Freddie Mac have done a spectacular job in closing the door on lending into developments that are not compliant or a financial risk,” says Orest Tomaselli, partner and president of project review at CondoTek and CEO of Strategic Inspections LLC.

CondoTek handles residential mortgage compliance for more than 750 U.S. lenders. Tomaselli says the enterprises updated the rules to protect homebuyers and their future assets. “I don’t think the agencies could have done this any differently,” he says. “I think Surfside was certainly a wake-up call. It’s time to get these developments up to code.”

Homeowner associations (HOAs) are now scrambling to deal with items on their crumpled to-do lists, sometimes tripling or quadrupling fees that haven’t risen in decades.

“Those kicking the can down the road … it’s all coming back to bite them now,” Tomaselli says.

The changes also mean CondoTek is busier

than ever, especially in the Florida market, where it reviews an average of 1,000 to 1,500 properties monthly. The company adjusted its own review policies to accommodate the new guidelines.

“We’ve exploded in Florida. From a business perspective, we’ve become an excellent resource in the industry for a lender to make a determination on whether or not they want to lend in a property because if they extend a mortgage and then try and sell it to Fannie Mae and that building is not compliant, they have to buy back that mortgage. If they lend enough into the wrong building, they can go out of business. So from a financial perspective, we’re like an insurance company for the lenders, making sure that these buildings are compliant.”

Looking at homes and housing units through this new regulatory lens, many no longer comply mechanically, structurally, or financially. If a hurricane or another natural disaster were to hit the state now, it would be even more difficult for these properties to secure financing.

“The process to get that building compliant again is a long one because not only do they have to go to their insurer and file a claim, get paid on the claim, get their permits in place in order to do the work, decide what they’re going to do, and choose their contractors,” Tomaselli says, “but they also have to complete the work in order for that building to become compliant again. Those buildings are completely unwar-

rantable with residential mortgage financing. The agencies don’t want those loans because there’s a risk to lend in a building like that. If the work isn’t completed, they’re lending into a property that essentially is not up to par. And that’s been one of the biggest issues.”

As of the first week of December, the GSEs amended their Condo Project Advisor to include a new status of property, Project Certified. This label indicates that a condo project meets their general eligibility requirements for financing and is an effort to streamline the process of underwriting loans. Lenders can also make a Project Assessment Request to quickly learn if a property is eligible for the designation.

“What the agencies are doing — it’s not a secret — is they’re collecting all the data and they’re trying to make decisions and trying to clear buildings for lenders. They’re trying to do a bang-up job of ensuring that they also have a stake in the game; so they want to make sure it’s easier for originators,” says Tomaselli. “The condo marketplace, I think it’s like 70% of the marketplace in Florida, so you really have to take a good look at that marketplace. I think what’s going to happen over the next two years is that data is going to get better.”

“I think the adjustment period is where we are right now, and eventually we’re going to get a much clearer path, provided not only by the agencies, but by the lenders themselves doing their due diligence. And loan officers clearing a pathway as well for themselves.”

Two years from now, he foresees that the eligibility status of condo buildings and the nature of their compliance issues will be easily accessible by LOs.

“I think that most buildings are either going to have a checkmark next to them or an X next to them. It’s going to take a while for those buildings to get compliant, but originators are going to have better information in order to make educated decisions about what to wait on, what to spend their time on, and what not to waste their time on.”

The marketplace of non-warrantable and Non-QM lending has to make its own adjustments as the tide shifts.

“We’re having lots of conversations with the secondary market about what their risk tolerance is for buildings that aren’t compliant,” Tomaselli says. “I think that lots of new programs are going to be established over the next two years. Lots of non-warrantable lending is going to be estab-

lished, and there is going to be a home for these loans that’s eventually going to get created that are non-warrantable and won’t meet Fannie Mae, Freddie Mac or FHA policy guidelines. I think that’s in process right now, but we’re not there yet.”

A lender his company works with recently rejected 200 buildings for various structural violations, post origination. This is an example of how business can change almost immediately with the advent of new practices and rules. “As units go into foreclosure, as properties take the time to kind of reestablish themselves as financially, structurally, and mechanically sound, and spend the money that’s necessary in order to fix themselves and be compliant,” Tomaselli says, “I think there are going to be a lot of opportunities for loan officers who understand the guidelines.”

STATE AND FEDERAL ACTION

The federal Fifth National Climate Assessment ranked the Southern U.S. high for climate risks, with increasing heat waves, inland and coastal flooding, as well as wildfires. The report indicates that preparedness levels remain low in Mississippi, South Carolina, Georgia, and Alabama. The exception is Florida, which ranks among the top six most well-prepared of all 50 states, with over 80 climate change mitigation and adaptation activities recorded since 2018. Perhaps the most impactful of these was Senate Bill 4D (SB4D), passed by Florida’s Legislature

in May 2022. Also known as “the Surfside bill,” this law heightened building safety and maintenance standards throughout the state.

SB4D allows for more flexibility in roof repairs as long as the remaining portion of the roof is still in good condition. Another provision mandates that condominium and cooperative association buildings over three stories high and 30 years old undergo a “milestone inspection” of structural integrity every 10 years. This also applies to buildings located within three miles of a coastline, upon reaching age 25 and every 10 years thereafter. These groups must conduct a structural integrity reserve study every 10 years as well to estimate the cost of future repairs and maintenance, then set aside reserves to fund them.

The Federal Emergency Management Agency (FEMA) redrew its flood map a few years back to include areas previously thought to be impenetrable. FEMA now requires “substantially damaged homes” (with repair costs exceeding 50% of assessed value) to be brought up to new standards of resilience. “Rebuilding to current standards decreases peril to life and property and prevents fu-

ture disaster suffering,” FEMA said in its fact sheet. But not everybody can afford to build a fortress by the sea.

Technology-powered real estate brokerage Redfin predicted in its 2023 annual end-of-year report that homeowners in places like South Florida, where prices have soared the last few years, will cash out their equity and move to more affordable areas.

INSURANCE

Lauren Maxwell, executive vice president of the Maxwell Mortgage Team of CrossCountry Mortgage in Naples, and one of the state’s top producers, says securing affordable insurance for borrowers has been her team’s biggest challenge lately.

“I can tell you that we’ve had last-minute things happen with insurance, and we have had to find a different agent that can insure the property for enough that the lender will accept,” Maxwell explains. “We can get insurance. It’s having it be affordable to the borrower so they can afford

‘Worsening

Winds:’ Report Finds 13.4M Properties

By Gary Rogo, Special To Florida Originator Magazine

Over 13.4 million properties in the United States will be newly exposed to tropical cyclones in 30 years, and Florida can expect a shift in the landfall of hurricanes from the south in cities such as Miami to more northern locations such as Jacksonville.

Those are two major conclusions of First Street Foundation in its peer-reviewed wind model, which identifies the likelihood and financial impacts of tropical cyclones in the contiguous U.S. up to 30 years in the future.

Titled “The National Risk Assessment: Worsening Winds,” the Brooklyn-based nonprofit research and technology foundation also released the findings and methodology leveraged to quantify this risk. The research combined high resolution measurements of well over 50,000 synthetic storm tracks to determine likely sustained wind direction and speed, adjust for local surface roughness effects on wind speed, and quantify the probability and magnitude of 3-second gusts that drive the majority of wind-related losses.

“Quantifying hurricane wind exposure and the resulting financial implications for every property

their monthly payment. Hopefully, there will be some form of insurance reform next year, but right now, we do the best we can.”

Maxwell has encountered some prop erties that are uninsurable altogether because HOAs have not acquired the correct coverage. “Unless an in-house lender in a bank wants to hold a loan for a totally larger payment and a higher interest rate, they will not be able to get normal loans in these projects,” she says. “We have run into that.”

The state-backed Citizens Insurance is available, but in many cases, it’s not compliant with lending guidelines. “So con do associations and boards are trying to cut costs in any way they can,” Tomaselli says. “And sometimes, when they cut costs or increase their deductibles, that also relegates them to

not having mortgage financing available because they run afoul of lending guidelines. This is the underlying problem that comes after the tragedy that happened. There’s a second tragedy that happens financially for

Just like an auto insurance company telling its accident-prone customers to take a hike, these insurers don’t have much tolerance for the unexpected and the overly

“Once a building files a claim, what we’re finding is their insurers are dropping them almost immediately,” Tomaselli says. “So they’ll pay the claim, and then the insurer drops

> Lauren Maxwell, executive vice president of the Maxwell Mortgage Team, CrossCountry Mortgage

Compared to the historic location and severity of tropical cyclones, this next generation of hurricane strength will bring unavoidable financial impacts and devastation that have not yet been priced into the market.

> Matthew Eby, founder and CEO, First Street Foundation.

in the country ushers in a new era in the understanding of the physical impacts of climate change,” Matthew Eby, founder and CEO of First Street Foundation, said. “Compared to the historic location and severity of tropical cyclones, this next generation of hurricane strength will bring unavoidable financial impacts and devastation that have not yet been priced into the market.”

The increasing exposure of the 13.4 million properties is due to the greater proportion of hurricanes that are expected to reach major status (Category 3-5) today and into the future, and the greater likelihood that storms will track farther northward along the East Coast. The shift in location and strength of hurricanes in Florida, the most exposed state, results in the

number of properties that may face a Category 5 hurricane from 2.5 million in 2023 to 4.1 million by 2053.

In partnership with the New York City global consulting and engineering firm Arup, First Street calculated the dollar value of expected damage and the associated downtime for each specific building structure. These property level damage estimates show that on average, the country can expect to see an annual loss of $18.5 billion this year resulting from hurricane winds, increasing to just under $20 billion dollars in 30 years. Of that $1.5 billion in additional damages, roughly $1 billion of that comes from increased exposure in Florida alone. b

We have lots of loan officers and banks in Florida that come to us and say, ‘What do you mean the building’s not compliant? We have to close this loan on Friday.’ And unfortunately, the answer is you needed to do your homework to understand why the building wasn’t compliant before originating a loan in that building.

> Orest Tomaselli, partner/president of project review, CondoTek

the client, and for a condominium association in Florida to get new insurance on a property is incredibly difficult. In some cases, we’ve seen 300 and 400% increases in cost for the association.”

When a hurricane is in the forecast, insurance companies respond accordingly. Motto Mortgage’s Marcy Downey has their number, as the phrase goes.

“Typically, what will happen is the carriers within the state of Florida will stop writing policies for a specific window of time,” the Daytona Beachbased MLO says. “Even if the hurricane doesn’t hit us or it hits another part of the state, they’ll shut down for a few days or weeks.”

LOs who anticipate this happening tend to fare the storm better than those left in the dark.

“Make sure your buyers have their new policies bound and ready to go prior to the halt of policies being written because that could slow down or make you miss a closing,” Downey says.

A strategy she employs is to work with insurance companies willing to provide coverage at the time of closing while affording buyers a two- or three-month window to complete repairs.

“They’ll close with a roof that maybe is older and has a little bit of damage; then they’ll have to get those repairs done before their insurance policy will continue. Sometimes, they’ll use the seller’s credit

at the time of closing and put it towards the roof. The buyer can do it after if the insurance company is willing to give them that window … or they can use the rehab loan to have that money distributed after closing to have the roof completed.”

FINDING VALUE

Appraisals also put LOs, buyers, and sellers through the wringer after flood damage.

“There are quite a few single-family residences that were affected by the floods,” Downey says. “It’s difficult for people to purchase homes that flooded and weren’t finished. An appraiser is going to go in there, and the value is going to be subject to the completion of the repairs.”

It’s also not easy to finance homes with outstanding assessments, even if an LO has dealt with a particular property before. “There are a few condos that used to be easier to get financing for but that are harder now because the insurance premiums have gone up, so the condo associations have chosen different policies which are not adequate for financing. That has made it a little bit challenging.”

In many neighborhoods, the homes themselves weren’t damaged, but other structural elements like seawalls and pools still need to be rebuilt prop-

erly. Unless a buyer obtains an appraisal waiver, which is not permitted with agency loans, these repairs need to happen before closing.

Buyers with renovation stars in their eyes often have misinformation about the FHA’s 203(h) program, also known as the rehab loan. “They feel like, ‘we can fix this ourselves’ but the work has to be done by a licensed contractor,” Downey says. “They thought they could do it cheaply then tend to walk away when they realize it’s not as good of a deal as they had originally thought or hoped.”

LOs are relieved to encounter new construction to counter the state’s deteriorating infrastructure. New housing developments are being built to higher standards to meet the guidelines and withstand increasingly severe weather events.

“I would think that’s helping to mitigate future issues with natural disasters that might come in the future,” Downey says. “I think there’s less people potentially wanting to buy in the condo market because of what happened, and maybe more people wanting to sell.”

COST-CUTTING AND FEE-MULTIPLYING

Less than a decade ago, Florida home buyers asked very few questions of HOAs in regard to reserve money, maintenance fees, and structural issues. Today, those topics are critical to securing a mortgage and affording it for the life of the loan.

“Right now, we’re in this period of flux where there’s an education process that has to happen to board members and owners of condominium units in the state, and that education process doesn’t happen quickly,” Tomaselli says. “Anytime guidelines have been issued, it takes a while for that to promulgate throughout the industry and for property managers, board members, owners, and real estate agents to understand it completely.”

He predicts a “major shift” in home values during this new era, which beckons full disclosure about a property’s condition and mortgage eligibility. “Homeowners are now privy to what a reserve study is, and they want a copy of the report and analysis before they purchase their unit. I think it’s the reason unit values are going to plummet in certain areas of the state.”

Once a buyer discovers an HOA is planning a $3 million project in five years and fees will double,

I think that most buildings are either going to have a check mark next to them or an X next to them. It’s going to take a while for those buildings to get compliant, but I think originators are going to have better information in order to make educated decisions about what to wait on, what to spend their time on, and what not to waste their time on.

> Orest Tomaselli, president of project review, CondoTek

that could be a dealbreaker. In the state with the second-highest elderly population, many Floridians are on fixed income, making it impossible to pay more.

“Increased insurance costs, inflation costs on the repairs that need to be done … it’s going to become unaffordable for a lot of owners and values will have to drop,” Tomaselli says.

He urges LOs to educate themselves on the regulations and the compliance status of properties in the areas they do business. “We have lots of loan officers and banks in Florida that come to us and say, ‘what do you mean the building’s not compliant? We have to close this loan on Friday.’ And unfortunately, the answer is you needed to do your homework to understand why the building wasn’t compliant before originating a loan in that building. The loan officers and originators who take the time to look at their marketplace and create a list internally … I think they are going to do incredibly well,” Tomaselli says. “The smart ones always succeed. And that is one of the keys to unlocking massive wealth in this marketplace for loan officers.” b

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APRIL 3

COASTAL CONNECT MORTGAGE EXPO

Jacksonville, FL | coastalconnectexpo.com

Keep your pipeline filled, and gain the tools and directions you need to stay profitable, efficient, and effective. We're bringing together the best in the business to create a top tier event specifically designed for mortgage origination pros.

MAY 30

SUNCOAST MORTGAGE EXPO

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JULY 11

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