LEW SICHELMAN
THE MORTGAGE SCENE
Tech, Triumphant
Digital is disrupting the traditional mortgage and real estate business model. BY LEW SICHELMAN | CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL
B
y now, most lenders know the Federal Housing Administration has moved out of the Mortgage Dark Ages and into the 21st Century with its new Catalyst platform that streamlines the process for accepting and processing both insurance coverage and claims. In case you haven’t heard, the technology, years in the making, allows lenders to submit case binders and supplemental claims in the single-family forward mortgage insurance program. Multi-family lenders also can electronically submit insurance applications in a simplified, streamlined and secure manner. This initial phase of Catalyst is said to be the first of many that will support a transformed and fully automated FHA mortgage origination process. In the coming months, plans include a fully automated origination process, third-party verifications, validations for social security numbers and property addresses and the elimination of paper documents and ‘wet” signatures.
Now, the agency has implemented additional functionality to its claims module, achieving full digital submission capabilities for all single-family forward mortgage claims. The switch eliminates laborintensive manual, paper-based submissions for services. Catalyst is FHA’s multi-year technology modernization initiative and is supported by a $40 million appropriation from Congress. Reading the details, it all seems pretty complicated to me. But I am but a humble scribe who early on found that he was good – okay, acceptable – at putting words together that not only form sentences but also make some sense.
NEW DIGITAL WORLD In this space in December, I wrote about the advances being made in technology. But I did so generally. Other than a quick reference to FHA’s announcement, I failed to mention any specific applications. So this month, I am going to remedy that miscarriage with briefs on a handful of technology breakthroughs that seem the most interesting. Some apply directly to lenders. Some you may not like because they infringe on your business. Some apply just to ancillary players in the buying and selling process. But if one or two in the latter group tickle your fancy but don’t fit your MO, perhaps you can suggest them to a favorite real estate agent or broker with whom you work. Or maybe you can figure a way to join in. BRIDGES OVER TROUBLED WATERS – People who need to sell their house before they can buy another or are hesitant to even start looking for a new place
until the old one is sold now have an alternative to a bridge loan from a conventional lender. Knock Home Swap (www.knock.com) allows buyers to make a non-contingent bid on a home without worrying about selling the one they’re in. Offered exclusively through agents, the program allows buyers, armed with financing directly through Knock, to purchase their next house, close and move in before selling the current one. The program includes a fully integrated and competitive mortgage, an interest-free bridge loan to cover the downpayment as well as the mortgage on the new home and up to $25,000 for home prep and repairs on the old house so it can sell for the highest price possible. Similarly, Orchard (https:// orchard.com/), previously known as Perch, has launched a mortgage division to serve folks buying and selling houses at the same time. Under its program, Orchard will give buyers up to 90 percent of their home’s value up front to put toward their next house. Instant equity! When the house sells, the company gets its money back plus a 6 percent commission. If it doesn’t sell within the allotted time frame, the company gets the house and the buyers keeps the advanced equity. Knock provides access to a network of approved contractors and manages their payments. It claims that 90 percent of the homes in its program sell within 90 days or less. But just in case, it also makes a backup offer on the old house if it fails to sell within six months. The platform provides “more certainty and more buying power when selling and buying a home at the same time,” says Mark Stark
