DS News - Digital Archives

connectivity capabilities. With all the scrutiny around foreclosure processing, servicers will need technologies that take into account not only what the servicer and attorney need, but also what the investor needs. A direct foreclosure workstation with the latest foreclosure tracking systems to provide direct connectivity between the servicer and an attorney network, along with the latest pre-foreclosure checklists and invoicing capabilities, are a must. As we approach the new year, both technology companies and servicers are working hard to refine their platforms to become more relevant to the new and changing market. These adjustments will ensure servicers meet their compliance needs, maximize spending, and fulfill investors' performance requirements. John Vella is responsible for implementing Equator's growth strategy. With more than 27 years in the industry, he is recognized as an expert in both mortgage origination and mortgage servicing. O R I G I N A T I O N ROHIT GUPTA PRESIDENT AND CEO, U.S. MORTGAGE INSURANCE Genworth Financial Inc. Genworth expects the housing market to continue its recovery in 2013. Our mortgage insurance volume this year is the highest it's been since 2008, and the Mortgage Bankers Association expects a 16 percent increase in purchase originations next year. After going through the worst housing crisis since the Great Depression, the private mortgage insurance industry is poised to take on a greater share of risk in 2013. We expect the administration to continue with its plans to reduce the Federal Housing Administration's (FHA) footprint in the market with additional loan limits, restrictive guidelines, competitive pricing, or enforcement changes. Genworth strongly supports the administration's desire to bring more private capital into the mortgage market, and Genworth has the financial strength to make good on that commitment.  Private mortgage insurers shoulder their share of the risk when a loan defaults—the industry has paid about $33 billion of losses on Fannie Mae and Freddie Mac loans since 2007. Of course, the first line of defense in effective default risk management is ensuring that a mortgage loan is properly underwritten at the point of origination. Private mortgage insurance facilitates sustainable low down payment mortgage lending 60 and helps ensure the integrity of the loan origination process. The highest-quality originators know it's important that their teams are properly trained in how to deliver a quality mortgage loan under the credit parameters and review processes that exist today. That's why more than 8,200 participants this year have taken Genworth training related to underwriting and originating a quality mortgage loan. Sometimes, even the high credit quality borrowers we're seeing today experience a financial setback or life event that puts them at risk of losing their home. In those cases, Genworth works with borrowers to keep them in their homes. Our homeowner assistance efforts helped more than 13,279 borrowers remain in their homes through October 2012 using workouts and loan modifications. However, even with a growing originations market, and continued strong refinance activity expected through the first half of 2013, the industry should guard against returning to the unsuitable products and bad risk practices of the past. Although current credit guidelines are the tightest in recent memory, we're beginning to see a few originators offer stated-income jumbo loans or 80-10-10 loans as alternatives to insured mortgages despite clear evidence that such loans performed much worse than loans with mortgage insurance during the housing crisis. We can't afford to repeat the mistakes of the past. We must continue to do the right things, in the right way, on every transaction. Finally, Genworth believes we need housing policies that strike an appropriate balance between private sector and government participation so that first-time, low down payment borrowers are encouraged to purchase homes through safe, sound loans they can repay. That's the most effective default risk management strategy of them all. Rohit Gupta joined Genworth in 2003, and after several SVP roles and a period as chief commercial officer, was promoted to head the company's U.S. mortgage insurance division in May 2012. O R I G I N A T I O N RON LOPEZ MANAGER, CONSUMER DIRECT Gateway Mortgage Group It is unlikely that we'll see dramatic changes in interest rates in 2013; however, economic times are uncertain, hard to predict, and given the current state of our country's economic landscape, we could see origination levels continue to trend down. As with most years, the employment rate is a major factor in this equation so the housing market may grow modestly, but originators must be focused on a few things to prepare for 2013. Have a Business Plan | Over the years, it has become evident that originators who have a business plan and begin their planning for next year in December, tend to be more successful. Assessing the mix between the amount of purchase and refi business is key. As refis most likely will continue to slow, originators who have had a balanced approach to the mix of purchase business and refis will be reaping the benefits in 2013, while others are just beginning to sow their seeds Unfortunately, if unemployment stays at current levels, default rates will continue to rise and new home loan originations may slow further. Some sources say there may be more than a 50 percent decrease in refis next year so originators who continue to rely on refis as the majority of their business may struggle to survive. Bigger Is Not Better | The myth that it is better to get a loan from a larger lender is still out there. However, larger lenders can have stringent and challenging processing constraints due to their larger inventory, which lengthens the loan process and becomes cumbersome for the homeowner. Smaller regional lenders have the speed, value, and competitive rates that larger lenders sometimes lack. Smaller regional lenders should continue to gain precedence over the bigger lenders in 2013. Avoid Defaults | The best strategy for avoiding loan defaults is to develop a stronger relationship with customers. In turn, having a disciplined customer contact methodology, not just in an effort to avoid defaults, also impacts an originator's new production volume levels. Mail campaigns, automated dialers that leverage mid-month, end of month, and daily reports can yield tremendous returns on investment. Ultimately this constant communication with borrowers ensures them that the lender and servicer have their best interests in mind. Another major factor to avoiding loan defaults is the continual development of originators' critical thinking skills. Even with the onset of things like Fraud

• Cover