Sep. 21: Remember the deficit? Trigger lead news; last time's government shutdown primer; Saturday Spotlight: TransUnion
Unlike this zoo in China that tried to pass off painted dogs as pandas, the Fed is not trying to deceive anyone. (Bumbling thief video below.) As I head to Chicago tomorrow for the Loan Vision Innovation Conference, the Fed’s move is certainly a topic in the press and emails. But what about volume, or indications of the general health of our biz? Secure Insight’s President and CEO Andrew Liput is noticing an uptick in closing agent registrations in its database, as well as increased volume in closings. “Additionally, our staff is hearing about title agencies rehiring laid off employees. New agent profile registrations topped 400 in August and are projected to exceed 500 in September, which usually indicates lender driven higher loan volume. Amanda Padd, VP of Client Development stated, " although this is anecdotal information it does point to a return to more business and, with the recent Fed rate cuts with more planned in 2025, perhaps this is a strong sign of industry recovery after the past few years of struggle." Our business motors along, helping millions every year.
Saturday Spotlight: TransUnion.com
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“Data-driven decisions. Better business outcomes.”
In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).
Established in 1968 as a railroad leasing company based out of Chicago, decades of investments in technology, strategic growth and acquisitions, and ongoing expansions into new areas like fraud, marketing, and customer-driven analytics, have drastically broadened our capabilities and transformed us into the leading credit reporting agency you know today.
TransUnion offers thousands of B2B solutions designed to address the unique needs of businesses across multiple industries. Mortgage lenders choose TransUnion for our identity-focused, data-driven mortgage insights and solutions, enabling them to achieve more desirable lending outcomes in a volatile housing market.
Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why.
We strongly encourage our associates to volunteer their time and give back to the communities where we operate, providing paid time off to those who participate (in 2023, employees recorded 6,675 volunteer hours). In addition, TransUnion has an established corporate giving program through which we donated nearly $4M in 2023 to community organizations focused on the advancement of economic inclusion, education, racial equity and others, on top of matching $525K in associate donations to eligible non-profits.
What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?
Our ongoing aim is to build a culture where everyone feels they’re in the right place and empowered to succeed. This includes offering tuition reimbursement, enterprise inclusion programs, and promoting participation in business resource groups. Our internal learning hub connects associates with a variety of educational programs and opportunities, in addition to offering career coaching, self-service mentoring guides and development resources.
Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.
TransUnion operates as a hybrid-first workplace, and we regularly run (and action inputs from) company-wide surveys that encourage employee feedback. In the most recent survey, 86% of respondents reported being satisfied with the flexibility TransUnion offers.
Things you are most proud of that don’t have to do with sales:
TransUnion’s commitment to expanding financial inclusion is a big reason many of us are proud to work here. Our partnerships with credit unions like VyStar and non-profits like HomeFree-USA help further our goal of expanding mortgage access and education to underserved consumers. For instance, we provide credit education tools (such as our CreditViewTM Dashboard) to HomeFree-USA which aims to help people of color on their homebuying journeys. And collaborations with organizations like FinLocker and MoCaFi support efforts to empower Black Americans building credit and wealth through homeownership.
Is there anything else you’d like to share along these lines?
We always aim to meet our customers where they are, and in a mortgage market that remains tumultuous and unpredictable, helping lenders meet financial goals is a high priority. One current area of focus is preapprovals. When mortgage lenders determine consumers’ creditworthiness earlier in the approval process, they can more easily ensure their time and resources are being invested for the right buyers. This customer-centric focus plays a large role in why lenders choose TransUnion, and we aim to continue delivering on their high expectations in the years to come.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
It is the government’s world; we just live in it
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Anyone with any sense of financial management noted that during the last presidential debate, the word "deficit" was never uttered by either candidate. But this is an issue of huge importance. Both candidates will probably add significantly to the national debt with either Trump or Harris being the greatest offender. (Hey, I’m not taking sides.)
Just think about how the financial situation in the U.S. has changed since 2003 when the debt was $3.3 trillion, or 33% of GDP. Over the next two decades, it rose to $28 trillion which is 99% of GDP. The consequence of this development is that debt service is consuming such a large portion of the federal budget that program options will be limited. Then when anyone imposes defense spending and Social Security and Medicare on top, we have what is a coming crisis. Many will argue that it's time for public officials to acknowledge this issue and address dealing with it in their platform.
But let’s turn our attention to housing. Everyone needs a place to live, not necessarily a place to work, right? This week MBA’s President and CEO Bob Broeksmit, CMB, addressed the “ROAD to Housing Act,” a broad housing bill recently introduced by Senator Tim Scott (R-SC) and seven of his Senate Banking Committee colleagues.
“Housing supply and affordability is a national problem that demands the focused attention of Congress and federal housing agencies. We are encouraged that housing is a major policy discussion this election cycle, including the airing of many proposals that require congressional action.
“We are particularly pleased by the introduction of Senator Scott’s comprehensive bill that contains provisions MBA believes will help to make housing more affordable and available. This includes enhanced housing counseling and financial literacy measures as well as beneficial reforms designed to increase manufactured housing construction, small-dollar mortgage lending, construction grants, building or preservation of housing in Opportunity Zones, and to promote regular, sustainable dialogue between federal agencies and Congress.
“MBA continues to be a fierce proponent for legislative reforms that increase housing supply and affordability. We will work with Senator Scott, and policymakers on both sides of the aisle, to build consensus and promote the enactment of workable solutions like those proposed in this bill.”
Abusive trigger lead update
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You’ll notice the language has changed from “trigger leads” to “abusive trigger leads.” That aside, everyone should encourage their elected official to vote for approval.
MBA’s President and CEO Bob Broeksmit, CMB, released the following statement after Senate Armed Services Committee Chairman Jack Reed (D-RI) and Ranking Member Roger Wicker (R-MS) included Senate Amendment 2358, the text of the MBA-supported bill to end the abusive use of mortgage trigger leads (“Homebuyers Privacy Protection Act”), as part of their managers’ amendment to the Senate’s Fiscal Year 2025 National Defense Authorization Act (NDAA):
“MBA has led a diverse set of coalition partners to help advance needed reforms that would curb trigger lead abuses while preserving their use in appropriately limited circumstances during a real estate transaction.
“We commend the bipartisanship leadership of Senator Bill Hagerty (R-TN) and Chairman Reed, along with their 40 bipartisan Senate cosponsors, to advance this carefully calibrated consumer protection amendment as part of the NDAA debate.
“MBA will continue to work with lawmakers on both sides of the aisle, including trigger lead reform champions Reps. John Rose (R-TN) and Ritchie Torres (D-NY), to highlight the importance of preserving this important proposal during the forthcoming Senate debate and eventual NDAA negotiations between House and Senate leaders later this year.”
Another government shutdown threat… great
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As if high rates, low inventories, and over-capacity aren’t enough to keep lenders awake at night, we have our government. Government shutdowns occur whenever Congress fails to pass, or the president of the United States refuses to sign or vetoes, legislation funding the operation of some or all government agencies. Non-essential federal functions are suspended. Systems including health programs, Social Security and Medicare, SNAP benefits, Food and Drug Administration inspections and small business loans would be affected. They could last a day or a couple months, who knows? Most IRS services will pause… what else?
Our national Mortgage Bankers Association remains directly engaged with lawmakers in both chambers of Congress, and affected regulators, and earlier this year created a member guide that outlines the potential impacts to single-family and multifamily government lending programs.
One organization put out a shutdown manual. A partial shutdown would necessitate a furlough of certain federal employees and significant curtailment of agency operations at the Department of Housing and Urban Development (Ginnie Mae and FHA included), Veterans Affairs, and the Department of Agriculture. National Flood Insurance Program (NFIP) authorities are scheduled to expire soon.
As a direct result of MBA's persistent advocacy, the Biden Administration last September identified the Internal Revenue Service's Income Verification Express Service (IVES) as an "essential" government activity that would continue to operate during a government shutdown.
If the past is any indication, these shutdowns are more show than substance and usually have little to no economic effect beyond pushing some growth from one quarter to the next. The IRS didn’t send tax transcripts (see below), which delayed some closings.
NOTE: The shutdown preparations below were taken from previous information published by the government, Agencies, and correspondent investors. It is meant to serve as a guide only, and lenders are advised to check with their partners for current details. That said, there may be little difference between “then” and “now” but let’s hope they resolve it!
Remember late 2018 and early 2019, the last major shut down. Many, if not most, lenders temporarily suspended the requirement for Tax Transcripts. Once the shutdown ended, lenders obtained the transcripts after purchase for impacted loans. If issues were discovered upon receipt of the transcripts, loans may be subject to repurchase. In general lenders continued to require a signed 4506-T in accordance with program guidelines.
“In consideration of current events and a potential shutdown, Citi is issuing the following reminder addressing impacts of a potential government shutdown. Many Federal employees will be affected, including employees who work for government contractors, vendors and other businesses that rely on work from government agencies such as the National Flood Insurance Program and the Social Security Administration.
“Citi will continue business as usual and proceed with review of closed loan packages submitted subject to the following guidelines, unless we have communicated otherwise: All required documentation and verifications must be present at the time the closed loan file is delivered to Citi. Citi will not purchase loans without all required documentation.”
Here’s what borrowers read in the press about their problems under the shutdown.
Ginnie Mae issued a release of information regarding its operations during a lapse in government funding, as did Freddie Mac and Fannie Mae.
The 2018/2019 Federal Government shutdown had no direct impact on Freddie Mac. It continued normal operations without interruption during the shutdown. Review its 2018 system and customer service hours of operation for Freddie Mac technologies. Borrowers who may be impacted by the shutdown are eligible for relief options, including forbearance, as detailed in Chapter 9203 of the Freddie Mac Single-Family Seller/Servicer Guide (Guide).
Remember that The FHA has issued FHA Info Bulletin #18-52 which provides additional clarity for HUD mortgagees regarding which systems are operational, and which FHA customer support operations are functional, though limited. The FHA’s reverse lending program has been put on hold along with USDA mortgage insurance endorsements.
As a result of the 2018/2019 Federal Government shutdown due to a lapse in appropriations, the Federal Housing Administration’s (FHA) Office of Single-Family Housing and its mortgage insurance program operated with limited services. As was the case in previous shutdowns, under a lapse in funding, FHA’s actions and decisions about which operations continue, or not, are governed by the Constitution, statutory provisions, court opinions, and Department of Justice (DOJ) Opinions, which provide the legal framework for how funding gaps and shutdowns have occurred in recent decades. A full descriptions and details can be found in the Department of Housing and Urban Development’s (HUD) Contingency Plan for Possible Lapse in Appropriations document posted on HUD.gov.
During the previous shutdown, as announced on December 22, 2018, during a lapse in government funding, Ginnie Mae continued to remit timely payment of principal and interest to investors. There was no disruption of essential functions, including the granting of commitment authority and support for continued issuance of Ginnie Mae-guaranteed Mortgage-Backed Securities (MBS) and Real Estate Mortgage Investment Conduits (REMICs).
Freddie Mac published Bulletin 2019-1 to provide temporary selling and servicing requirements to assist borrowers who may have been impacted by the federal government shutdown. These temporary requirements are effective immediately and will automatically terminate once the federal government resumes full operations.
Fannie Mae issued a Lender Letter to provide temporary guidance on selling and servicing policies that may be impacted by the federal government shutdown that began on Dec. 22, 2018.
In late 2018 USDA announced it would not issue commitments during a partial government shutdown, despite rumors of companies funding these loans. Rural Housing Service (RHS) loans that have a valid Conditional Commitment in effect as of the date of closing are eligible for closing/funding.
Back then, despite the government shutdown, The Federal Emergency Management Agency (FEMA) announced that the NFIP program will resume the sale, renewal, and monetary endorsements for flood insurance policies.
Whether or not these same 2019 policy and procedure changes occur in 2023 remains to be seen. But it is always good to be prepared.
A shutdown lasting a few days would slightly inconvenience single-family and multifamily mortgage markets. A longer delay would have more severe impacts on members and the consumers and customers they serve. MBA will remain directly engaged in all relevant conversations regarding government funding and the NFIP and will provide an update later this week.
Well, if you’ve ever wondered if there are videos of dumb criminals, you’re in luck.
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