Vaultedge newsletter - Issue #13 - Merry Christmas & more

December 25, 2020

It's hard to believe - it is already Christmas 2020. It has been a strange year, to say the least. We have come to accept many restrictions that would have been unthinkable a year ago. Olympics postponed, Christmas downgraded, handshakes and hugs almost banned. On the bright side, it gave us all a lot more time than usual with our families. Now I know what my kids' teachers go through every day, that I have very little control on what they learn and why my wife talks about wanting to just get away from home :)

At Vaultedge we all learnt to work effectively from home, bear with birds chirping & cows mooing in the background of zoom calls and lean on each other to get things done. With some help from the booming mortgage market, we signed up some of the top-10 mortgage companies and helped them turn around more loans than ever with far lesser people.

From this week, I decided to write not only about whats happening in real estate & mortgage world but also about other things that I find interesting or fun. Because I think that is the kind of newsletter I myself would like to read.

  • 2020 was a good year for mortgage lenders. But what would drive sales in 2021? Many sellers were nervous to list their homes in 2020. That would change in 2021 and there will be more supply. But demand will still outstrip supply, thanks to work from home becoming a permanent feature, migration to suburbs and rural areas. It will be a sellers market in 2021.

  • One of our customers who went live with our automation software moved 70 people from their loan boarding team to other departments soon after going live because other departments that did not have automation were crying for help to meet surging volumes. While it gave us lot of sleepless nights because it was too soon and you need a couple of months of cooling period after go-live, it proved beyond doubt the value of our software. If any of you are still wondering if you should automate, I have a compelling story for you.

  • I attended B School at Indian Institute of Management, Ahmedabad. The original buildings in the campus built in 60s were designed by legendary American architect, Louis Kahn who designed other iconic buildings like the Salk Institute in California, Kimbell Museum in Texas and Phillips Exeter Academy Library and Dining Hall in New Hampshire. Just standing in the middle of of those structures makes you feel proud. Now the institute has decided to bring down the student dormitories in the old campus and construct new buildings. Understandably many students and alumni are upset.

  • A few months back, my kids rescued a kitten and it has become part of family. I can see why cat videos are so popular. Our cat is super curious, sleeps without a worry and sneaks into our bed in the middle of the night like my kids do. Whats not to like :)

  • Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a net gain of $5,535 on each loan they originated in the third quarter of 2020, up from a reported gain of $1,924 per loan for the same period last year. That is 2.5 times in profits from last year. If there is one industry that should have no complaints about 2020, that is mortgage lending.

  • Brexit happened, finally. Britain and the European Union struck a hard-fought trade agreement on Thursday setting the terms for a post-Brexit future as close neighbours living apart. It is to be seen what fruits Britain will reap from this, but my guess is - there will be buyer's remorse in a few years.

  • Mortgage rates have dropped consistently in recent months, and now, they've reached a new record low -- the 15th this year, in fact. The average rate for a 30-year fixed mortgage fell to 2.67%, down from 2.71% last week, according to Freddie Mac. That's the lowest rate on record in almost 50 years.

  • As I write this, we are helping a large mortgage servicer onboard 8000 MSRs that are in backlog for more than a few months. It is keeping some of my team members at work through the holidays, but when we are helping a customer board 8000 MSRs in 2 weeks that is not a bad way to end the year.

Wish you all a Merry Christmas and a Happy New Year!

As the pandemic nears its end, its impact on the way we work and live will be permanent, and Americans will migrate to homes that fit their new lifestyles.

For the 13th time this year the interest rates banks are charging on a mortgage have reached the lowest point in recorded history.

Solidifi recently commissioned a consumer survey, and it looks like borrowers (still) want it all - digital experience, eSignatures but in-person closings.

Stimulus checks have long been spent and the most comprehensive eviction and foreclosure moratoria are about to disappear entirely.

IMBs made an average profit of $5,535 on each loan they originated in Q3 of 2020, up dramatically from the quarter prior, according to the MBA.