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Home appraisal’s ugly history and uncertain future

This is Part I of a deep dive into the home appraisal industry. Today we explore the origins of the appraisal industry and its current lack of diversity.

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Politics & Money

Lender Forges Ahead with Hope for Homeowners Outreach Platform

Melville, N.Y.-based Lend America announced Tuesday it will launch a direct-to-consumer Hope for Homeowners outreach platform to educate borrowers on the H4H program. Chief business strategist Michael Ashley said the company on Dec. 1 will launch a series of 30-minute educational TV spots that tell consumers about H4H and Lend America’s “structured refinancing” program. The next step, Ashley told HousingWire, will be to address the borrower’s current mortgage. Lend America will approach the borrower’s lender “to see if they will cooperate and reduce whatever they have to reduce on the outstanding principal balance and participate in the closing costs.” It’s unclear as of yet what kind of response the program will generate, although several large banks — JP Morgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) — told HW last week they would participate in H4H only for loans held within their own portfolios. HW‘s sources have said mid-tier lenders, on the other hand, are finding themselves shut out of H4H due to a lack of buyers willing to purchase the loans. Lend America does not share the same issues surrounding funding, according to Ashley, and is planning to find that issuing H4H loans will be an easier process — if the lenders of the original loan are willing to work with the organization, of course. Lend America, a direct lender, is able to package loans it originates into securities without having to wait for investor approval. It’s no wonder mid-tier lenders have found it difficult to follow Lend America’s initiative to provide H4H refinancing, chief marketing officer Mary McPhail told HW. “A lot of [mid-tier lenders] are going to encounter resistance, especially those that are not Ginnie Mae-approved,” she says. “Our Ginnie Mae approval helps us to be able to circulate these loans, whereas they don’t have the ability to do that.” Lend America’s program until now has worked with financial institutions, Wall Street investors and hedge funds willing to participate in order to recapture principal from non-performing residential mortgage portfolios. The organization launched the program on Oct. 17 to originate H4H loans, fund them and bundle them into whole loan pools that become part of a Ginnie Mae mortgage-backed security. With the launch of a direct-to-consumer platform, Lend America will soon be soliciting consumers outside of their usual institutional customers. While the process might prove easier for Lend America than for independent, mid-tier lenders, it’s unclear now just how many more H4H loans the organization will be able to originate. HW reported FHA operational data as of late October showed just 42 mortgage applications had been filed under the H4H program in the first weeks of operation and none were endorsed. This low number can be expected in the early weeks of operation when H4H loans are in the first stages of origination, Lend America’s Ashley told HW. “It’s hard to tell how many Hope for Homeowners originations there are because until we actually close them, HUD doesn’t know that we’ve originated them,” he said. “We’ve already got several hundred that we’re processing.” Write to Diana Golobay at diana.golobay@housingwire.com.

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