Digital lender Better.com launched its One Day Home Equity Line of Credit (HELOC) product that will provide approval decisions to consumers within 24 hours of locking their interest rate. 

Better launched its first HELOC product about a year ago. The One Day HELOC product is the latest upgraded version as the New York-headquartered lender looks to ramp up speed for customers seeking to access home equity funds.

“When we talk about the alternatives to a HELOC, consumers are frequently taking out credit cards or personal installment loans, and both of those products are expensive for anyone who has home equity … yet people still take those out, even though they have home equity, because they’re fast,” Better CEO Vishal Garg said in an interview with HousingWire

“So, we said, what if we could do a HELOC at the same time that it takes you to get a personal installment loan or a credit card?” 

Getting an approval decision for a HELOC generally takes about three to five days through a digital lender but multiple weeks from banks, Garg noted. 

Qualified homeowners must provide required documents — including pay stubs, W-2 forms, mortgage statements and bank statements — within four hours of locking the rate for their first- or second-lien HELOC with Better Mortgage, the company stated.

Available in 49 states and Washington, D.C., the One Day HELOC is limited to a borrower’s primary residence or second home, as well as single-family homes, condominiums and townhouses that are classified as investment properties. 

Better rolled out a One Day Mortgage product in January 2023 that allows customers to apply for a mortgage, get preapproved, lock their rate and receive a commitment letter within 24 hours.

“The demand has been crazy — over 80% of our mortgages today are One Day Mortgages,” said Garg, without mentioning origination volume.

Founded in 2014 by Garg, Better went public in August 2023 through a merger with special purpose acquisition company (SPAC) Aurora Acquisition Corp., nearly two years after Better’s initial timeline for an IPO.

In its first earnings report since going public, Better Home & Finance Holding, the parent of digital lender Better.com, reported a GAAP net loss of $340 million in Q3 2023. 

Executives shared plans to trim expenses and expected a funded loan volume of $500 million in the fourth quarter of 2023.

The New York-headquartered lender is expected to report its earnings for Q4 2023 on March 28.

Better ranked as the 64th-largest lender in the country, originating $2.5 billion in the first nine months of 2023, according to Inside Mortgage Finance



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A national syndicated columnist has taken a closer look at the reverse mortgage product category after reviewing data from the Consumer Financial Protection Bureau (CFPB) about the industry’s advertising practices, and she says that the product can have utility for older Americans as long as a prospective borrower properly understands it.

Julie Jason, an investment adviser and author, highlighted a CFPB report released in August 2023 that took a closer look at reverse mortgage advertising, both prior to and following the most restrictive period of the COVID-19 pandemic.

“The ads go beyond acquiring a reverse mortgage,” Jason said in her column. “They are also directed to households that already have a reverse mortgage, with offers of refinancing, which raises a concern. About 51% of the ads that went to people in the West region were refinancing ads in 2021-2022.”

The report led to a similar response from another commentator shortly after it was released. In September 2023, Forbes columnist John Wasik cited the CFPB data to recommend against taking out a reverse mortgage, but he did not include some key information regarding the advertising practices of the reverse mortgage business.

The CFPB report itself was centered primarily on direct mail reverse mortgage advertising and largely focused on companies that participate in the Home Equity Conversion Mortgage (HECM) program. It found that reverse mortgage advertising increased “significantly” in 2021 and 2022, registering 44 million and 48 million ads, respectively. These figures represent a sharp rise from levels observed in 2019 and 2020, two years in which the average total was 11 million.

The reverse mortgage industry enjoyed a boom in business during the onset of the COVID-19 pandemic, largely fueled by HECM-to-HECM refinance transactions. Refis comprised at least 50% of reverse mortgage volume in 2021 and 2022, according to data from Reverse Market Insight (RMI).

“While reverse mortgages can create a safety net in the right cases, they can backfire in the wrong cases,” Jason said in her column. “As always, be prepared to do your homework before getting a reverse mortgage.”

The CFPB report expressed concern that older Americans, particularly lower-income seniors, were being specifically targeted by the reverse mortgage industry. But some of the concerns outlined in the report stem from HECM program requirements that homeowners 62 or older are the only borrowers who can qualify for a loan.

The CFPB acknowledged that there are eligibility requirements but maintained its concern since the targeted potential clients could have greater levels of financial vulnerability.

Late last year, RMD reached out to industry marketing professionals at loanDepot to ask about the continued viability of direct mail advertising. Both said it was here to stay for the time being.

“I think there’s absolutely a place for the physical, still,” chief marketing officer Alec Hanson said in October. “We all get junk mail, of course, but I really think there’s going to be a place for the physical marketing that will continue to be relevant. It’s going to take creativity in what you send somebody, that can help break through the noise of just all the junk that also shows up there.”

Eddie Herda, loanDepot’s vice president and creative director of brand strategy, added that considerations about how and when direct mail is deployed should be sensitive to the needs of the senior demographic.



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Generally, people respect entrepreneurs. The show “Shark Tank” takes this notion to a new level as the entire program — successful season after season — glorifies entrepreneurialism and equates it with “The American Dream.” The secular success of Silicon Valley and the enshrinement of venture capital in the edifice of America (and now the world) further burnishes entrepreneurship. Risk and reward are the dyad that forms the basis of innovation and even of capitalism, as the story goes.  

One can debate the relative merits of this argument; some would argue that stable jobs at large companies are the best alternative for most. Others would suggest that capitalism is based more on socializing risk than on taking it on headfirst. But whatever the case may be, there is a strange gap in perception when it comes to some professions. Some entrepreneurs are never given the credit for being so.   

Are real estate agents undervalued?

Of these, real estate agents are in the crosshairs of the naysayers, who suggest that this group is largely paper-pushing, monopoly-driven, and low-value addition. It is a curious notion that needs to be unpacked. The issue here is not to glorify the profession but to suggest that the very logic used to elevate entrepreneurs of all sorts should also redound in favor of real estate agents. But it never does.  

We’ve heard it all.  “What value do they really add?” is a question we hear a lot. “It’s an easy 6%” is another truth bandied about. While the structure may not be perfect or logical (witness the recent lawsuit in Missouri), the canards that are passed off as truth are unfair to agents.

Let’s think about this in clear terms: Entrepreneurs take on enormous risk and expense to build a set of products, services, and relationships. They take on costs, remove themselves from the paycheck-life, and typically eat what they kill. They have enormous sunk investment before any notion of profit is possible.  Well, so far, this describes the life of an agent as well.

Entrepreneurs and others sell their expertise and know-how. Consultants, lawyers, and accountants do that and so do bankers, engineers, scientists, and software developers.  Entrepreneurs use their cultivated experience, acumen, and connections to build businesses.  Sounds a ton like real estate agents.

Entrepreneurs spend money and resources on building products and services in the hope that someone, at some time, will buy them. They invest time, money, and resources in a thing that might or might not pay off. We respect them for that. What does this sound like? The life of an agent.  

It’s just paperwork, right?

When presented with this sort of comparison, naysayers will often veer into anecdotes about a particular agent that made money just to “do paperwork” or a particular agent who is incompetent. Fair enough, but find me a profession in which the entire cadre is picture-perfect? Are all consultants, bankers, engineers, writers, lawyers, and accountants equally skilled and talented? We know the answer to that.

This is not to suggest that the role of the real estate agent won’t change, that the compensation structures are excellent, or that scrutiny is a bad thing.  But the inconsistency and the ensuing negative perceptions make no sense.  

To be honest, I believe that much of the perception stems from individuals being annoyed that they must pay when they sell their houses. But very few are honest enough to realize that whatever it is they do for a living, someone paid for as well. We all live in glass houses.    

Romi Mahajan is CEO of KKM Group and CEO of ExoFusion.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Romi Mahajan at romi@thekkmgroup.com

To contact the editor responsible for this story:
Tracey Velt at tracey@hwmedia.com



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Relitix’s Agent Movement Index continues to rise on a seasonally adjusted basis as real estate agents continue the trend of switching brokerages at a faster rate than 2023. Additionally, the drop in active agent count, representing those agents with a closing in the last 12 months, has been halted. This could represent a stabilization in the agent pool which is an additional helpful trend.

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We are continuing a trend toward normalization of the housing market. In addition, we are watching the count of active agents very closely. The active agent pool has declined by about 14% since late 2022 but that trend may be stabilizing.

The monthly AMI value finished at 101.9 with a seasonally adjusted value of 96.2. The January values were revised upward to 98.4 and 95.7 respectively.

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active_agents_mar24

Trends in the relative movement of experienced real estate agents between brokerages are an important strategic consideration for brokerage and franchise leaders. The relative amount of movement fluctuates over time on a seasonal and long-term basis.

Methodology:  The Agent Movement Index is published monthly and features monthly and seasonally adjusted, and 12-trailing-month values. The index is calculated using national-level data from a large sample of the nation’s most prominent MLS systems. The agent movement reflects the relative mobility of experienced agents between brokerages. The score is computed by estimating the number of agents who changed brokerages in a given month. To be counted the agent must be a member of one of the analyzed MLS’s and change to a substantially different office name at a different address. M&A-driven activity and reflags are excluded as are new agents and agents who leave real estate. Efforts are made to exclude out of market agents and those which are MLS system artifacts. The number of agents changing offices is divided by the number of agents active in the past 12 months in the analyzed market areas. This percentage is normalized to reflect a value of 100 at the level of movement in January 2016 (0.7313%). The seasonally adjusted value divides the monthly result by the average of the same month in prior years.

Analyzed MLS’s represent over 800,000 members and include: ACTRIS, ARMLS, BAREIS, BeachesMLS, BrightMLS, Canopy, Charleston Trident, CRMLS, GAMLS, GlobalMLS, HAR, LVAR, Metrolist, MLSListings, MLSNow, MLSPIN, MRED, Northstar, NTREIS, NWMLS, OneKey, RealComp, REColorado, SEF, Stellar, Triad, Triangle, and UtahRealEstate.

Rob Keefe is founder of Relitix Data Science.



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For agents navigating and servicing the American housing market, acknowledging its profound evolution over recent decades is crucial. Today’s landscape is quite different from that of 50 or even just 10 years ago. One of the most notable shifts is the surge in home prices, reaching unprecedented and often out-of-reach levels.

Looking back to the 2005 and 2006 real estate peak, lofty home prices reached a then staggering-sounding high of $230,200 in July 2006. Fast forward to today, and the national average home price checks in at $417,700 as of the fourth quarter of last year, with California coming in more than double that at $843,000, according to data from the California Association of Realtors.

Trend: Renters are staying renters longer

This steep climb in single-family home prices has led to an undeniable trend: renters are staying renters longer. Or, they are going back to renting! While affordability remains a significant factor, individuals are increasingly opting to rent for reasons beyond mere necessity. Popular factors can include increased flexibility, less responsibilities, and a desire for a simpler lifestyle.

The rise of remote work, freeing individuals from the need to live in commutable distance to their workplaces, has further buoyed this shift. Moreover, the allure of sidestepping the burdens of homeownership maintenance has added weight to the inclination towards renting. This trend is surprisingly on the rise among empty nesters, some of whom prefer going back to renting over maintaining the often larger suburban homes they raised their families in and instead opting for the convenience of urban living.

Even among the affluent, there’s a growing preference for renting well-located properties over investing in potentially farther-flung single-family homes. In short, the focus is shifting further from homeownership as the sole hope of future financial stability to prioritizing convenience and a lifestyle centered on experience today.

Rental incomes skyrocket

Since 2010, the number of renters earning annual incomes in excess of $200,000 jumped four-fold, according to U.S. Census Bureau data. Such statistics underscore the evolving perception that renting can be a more permanent lifestyle choice rather than just a temporary necessity.

The rise in rental demand is underscored across a variety of channels, including on BrightMLS systems, where data in 2023 showed a 12.4% year-over-year increase to 70,829. BrightMLS services seven states and some of the nation’s most important and diverse housing markets, including Maryland, New Jersey, and Washington, D.C.

Yet, even for those still aiming for homeownership, agents should be aware of more unconventional paths gaining traction. A climbing number of those considering purchasing a house are looking into non-traditional approaches, such as co-purchasing homes with non-romantic partners—friends or co-workers—rather than spouses. In a recent survey by JW Surety Bonds, about 13% of respondents said they had engaged in such arrangements, with an additional 48% considering it. Gen Zers are particularly open to this trend, with 70% of that age group expressing willingness to purchase homes with non-romantic partners.

The advantages of co-purchasing considered as key by respondents included sharing the financial burden, accessing better housing options, and seizing investment opportunities. For 65% of respondents, a shared purchase represented a passive rental income opportunity, while 54% viewed it as a way to acquire a primary residence.

Given today’s housing market, coupled with inflation, a climbing interest rate environment and a general shortage of homes, agents must recognize change is afoot. Whether individuals are embracing renting as a longer-term lifestyle choice or exploring unconventional paths to homeownership, the overarching theme remains clear: today’s housing market reflects evolving socio-economic conditions and changing lifestyles that redefine the American dream. This fact calls for innovative solutions and flexible approaches to supporting individuals who are navigating the increasing complexities of contemporary living.

Michael Lucarelli is the CEO and co-founder of RentSpree.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Michael Lucarelli at michael@rentspree.com

To contact the editor responsible for this story:
Tracey Velt at tracey@hwmedia.com



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The National Association of Realtors (NAR) announced Friday that it finally reached a settlement with homeowner groups that had been embroiled in lawsuits with the association since 2019. The $418 million settlement effectively ends the current NAR broker commission model, which the homeowners’ claimants alleged forced them to pay excessive commission fees. 

If a federal court approves the landmark case’s outcome, as expected, it could give the housing market its biggest shake-up yet. The commission rule changes the NAR has agreed to could restructure the entire process of buying and selling real estate and could also deliver potential home price declines across the country. 

Here are the changes at a glance and what they could mean for investors and agents alike.

The End of the 6% Commission-Sharing Structure

The most sweeping change introduced by the settlement is the elimination of the current NAR commission-sharing structure. 

Here’s how it’s always worked: Real estate agents who are Realtors are required to offer a share of commission with the buyer’s agent in a transaction, if present. Given the NAR’s dominance on agent designations throughout the United States, this effectively created an industry-standard commission, thus violating antitrust laws, as the plaintiffs alleged. 

NAR guidelines clearly state that the commission rate is negotiable and that “commission rates are set by the market.” But in practice, commission rates are always set by listing agents and almost always at a rate of 5% to 6%. For homes selling for $400,000, this can amount to a commission payout of $24,000.

Because the sellers pay the commissions, the key argument is that it inflates the prices of homes to make up for it. Seemingly, now that the settlement has gone through, we could very well see a reduction in home prices.

Ultimately, listing agents will no longer be required to offer commission to buyer agents, which will bring more competition amongst agents as sellers search for the lowest commission offerings.

It’s anyone’s guess how much commission real estate agents will now charge, but some economists think that we will see a reduction of up to 30%.

The End of the MLS Subscription Requirement 

This brings us to the second sweeping change introduced by the ruling: Real estate agents will no longer be required to sign up for their regional Multiple Listing Service (MLS). The MLS itself will no longer include any information about the commission offered on a sale. This change would end the practice of “steering,” where buyer agents select properties that are more expensive and pay a higher commission. In addition, the new rules abolish the requirement that Realtors subscribe to an MLS in order to perform their services.

This doesn’t mean that real estate investors will no longer need to have relationships with local agents. Agents will compile their own databases of homes for sale—which still will be an important resource for investors, and which agents will likely still charge for. But with the element of open competition thrown into the process, it’s also likely that agents will work harder to scout out properties they know buyers and investors will want to buy.  

One question that remains unanswered is how all these new broker-buyer relationships will be regulated, if at all. The NAR settlement will require any MLS-subscribing broker to enter into a written agreement with a buyer so that they “understand exactly what services and value will be provided, and for how much.” We can only speculate whether buyer-broker agreements will become the norm where there is no MLS access involved.

Kevin Sears, NAR president, said in a statement: “NAR exists to serve our members and American consumers, and while the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost.” 

These changes, if approved by the federal court, will come into effect in July 2024.

Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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It’s spring 2024 and we have a Federal Reserve meeting this week. The 10-year yield is at the same critical point as last year before the Fed went hawkish and sent mortgage rates to 8% and the 10-year yield to 5%. Could this happen again? This is the week the balls are all in the Federal Reserve’s court. I believe it is in the Fed’s interest to keep existing home sales depressed. Here is the interview I gave on CNBC on the day the Fed went hawkish, explaining why.

A serious 10-year yield and mortgage rate talk

My work on housing moves around the 10-year yield and the economics that move that. The growth rate of inflation has fallen a lot on the year-over-year data, but mortgage rates haven’t gone down, which isn’t surprising to me as my mantra has been: “Labor over Inflation.”

For 2024, the 10-year yield running between 3.80%-4.25% looks perfectly normal to me as long as the economic data is firm and the Fed hasn’t pivoted. I can’t see the 10-year yield below 3.37% unless the labor market breaks — meaning jobless claims over 323,000 on the four-week moving average. That means I can’t see mortgage rates going below 6%, especially with the spreads being bad, until the labor market or the economy gets weaker.

However, now we are at the same spot as last year, near the critical 4.34% level and we have the Federal Reserve meeting coming up. This is a big week, as you can see in the chart below.


With mortgage rates above 7% again, we will have to see what the Fed says at this meeting because, in the past few meetings, they have made it clear that policy is restrained and that they don’t want it to get too restrictive. This is what happened last year when the 10-year yield headed to 5% and we had 8% mortgage rates. However, there is a risk of the Fed sounding too hawkish again which would send the 10-year yield higher.

Purchase application data

As mortgage rates have been falling recently, we saw back-to-back weeks of growth in the purchase application data, which aligns with what we saw last year. Remember, we are working from extremely depressed levels in this data line, so the bar is so low that it doesn’t take much to move the needle.

Since November 2023, we have had 10 positive and five negative purchase application prints after making holiday adjustments. Year to date, we have had four positive prints versus five negative prints. Clearly, if mortgage rates can head toward 6% and hold we will get rising demand, but I believe the Federal Reserve wouldn’t be able to sleep at night if more people were buying homes.

Weekly housing inventory data

The one positive story for me in housing this year is that inventory is growing year over year for both active inventory and new listing data. I know it’s not a lot, but growth is growth. The one benefit of higher rates is that inventory can grow in the post-2010 qualified mortgage world as long as higher rates create softness in demand. It hasn’t been a lot of growth historically, but growth is growth. 

Last year, the seasonal inventory bottom happened on April 14, which was the the longest time to find a seasonal bottom ever. This means we will show more than normal inventory growth until we get past tax day 2024. 

Here is a look at the inventory last week:

  • Weekly inventory change (March 8-15 ): Inventory rose from 500,579 to 507,160
  • The same week last year (March 9-16): Inventory rose from 413,199 to 414,967
  • The all-time inventory bottom was in 2022 at 240,194
  • The inventory peak for 2023 was 569,898
  • For some context, active listings for this week in 2015 were 982,639

New listings data

New listings are growing yearly, which is another plus for housing. Last year, II picked up on the trend that new listing data was creating a historical bottom as the data line wasn’t heading lower with higher rates. The growth is a tad lighter than what I was hoping for. But as someone who didn’t buy the mortgage rate lockdown premise that inventory can’t grow with higher rates, this year is a good test case. 

Here’s the weekly new listing data for last week over several previous years:

  • 2024: 59,542
  • 2023: 41,415
  • 2022: 54,542

For some historical context, new listing data this week in 2010 was 306,020.

Price-cut percentage

Every year, one-third of all homes take a price cut before selling — this is regular housing activity and this data line is very seasonal. The price-cut percentage can grow when mortgage rates move higher and demand gets hit. When rates fall, they go lower than an average year.

Inventory is higher than last year, and we might have found the bottom already, so as the year progresses, the number of homes taking a price cut should increase. The goal is to see how the mortgage rate variable plays into this data line. This is why this week’s Fed meeting is key, to see if the 10-year yield can break higher, which should increase the price-cut data.

Here’s the percentage of homes that took a price cut before selling last week and how that compares to the same week in previous years:

  • 2024: 31%
  • 2023: 30%
  • 2022: 17%

Week ahead:  The Fed and housing data

The Federal Reserve’s language and the dot plot are the two things to watch this week. The dot plot should still show many Fed members having two to three rate cuts in play for 2024, with some going the opposite way from that group. We also will have tons of housing data coming out this week, including the builders’ confidence, housing starts, existing home sales, and Zillow home price data. However, the key is the Fed, Fed and the Fed!



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The National Association of Realtors (NAR) settlement of commission lawsuits nationwide is expected to force mortgage lenders and loan officers to find new ways of approaching listing agents and borrowers, give LOs a more significant role in the home-buying process, and encourage housing professionals to pursue dual-licensing, industry experts told HousingWire.

Mortgage pros have closely monitored the commission lawsuit developments since a Kansas City, Missouri jury determined that NAR, HomeServices of America, and Keller Williams conspired to inflate or maintain high commission rates through NAR’s so-called Participation Rule. These housing professionals have been gaming out the potential impact on buyers’ agents – a significant source of referrals.

Loan officers and mortgage executives expect home sellers and homebuyers to negotiate more aggressively on commission paid to buyer agents, potentially bringing costs down. At this early stage, it’s unclear how such commissions would be paid since buyers could pay their agents out of their pockets or negotiate commissions as a seller concession in the closing costs.

Meanwhile, trade groups representing lenders believe that more details on the settlement are needed to understand its coming impact on the housing market. However, they already worry about some groups of considered vulnerable borrowers who could not pay for the buyers’ agent commission due to affordability challenges. 

On Friday, NAR announced a settlement that includes a $418 million payment for damages and a ban on any rules allowing a seller’s agent to set compensation for a buyer’s agent. Also, fields displaying broker compensation on MLSs must be eliminated, there is a blanket ban on the requirement that agents subscribe to MLSs to offer or accept compensation and buyers’ agents must have written agreements. 

NAR said that the changes, if approved by the court, will go into effect in mid-July 2024.

Getting referrals and cozying up to the sell side 

Mike Kortas, CEO at NEXA Mortgage, sent a clear message to the over 2,300 mortgage LOs at his mortgage brokerage: “Keep your eyes open, keep your ears open, listen for opportunities that are going to present themselves, and be ready to assist more buyers. You should be finding buyers before real estate agents anyway.”

NEXA has always been focused on purchase loans, which means some of its LOs do significant business with buyers’ agents. Kortas believes that good buy-side agents will remain highly relevant and garner more business as competitors wash out. Thus, LOs will have to find ways to connect to listing agents or directly with buyers, who will need more guidance during the home-buying process

These efforts include having open house programs to help seller agents and co-marketing home listings with these professionals, using social media to reach borrowers, and sometimes buying leads, according to Kortas. He said he’s also interested in seeing where homes will be listed since they will no longer be required to be in the MLS system.

Matthew VanFossen, CEO at New Jersey-based Absolute Home Mortgage Corporation, believes that the NAR’s settlement was probably the best outcome to the trade group as it focuses on consumer choice and disclosure. It also avoids new copycat lawsuits, uncertainties, and further potential showdowns with the Department of Justice (DOJ).

On average, about 50% of referrals to a retail LO come from buyers’ agents, VanFossen said. However, with the NAR settlement, listing agents may start dealing directly with homebuyers. That’s a problem because mortgage LOs traditionally have not “forged as deep of inroads” with sellers’ agents. 

“Originators may have to pivot by developing better relationships and ways to assist listing agents,” he said. “You may see buyers’ agents still be relevant, but LOs need to find vehicles to educate their buyers’ agents, educating them on how to use seller concessions, for example, to finance buyer-paid broker fees.”

Assisting homebuyers and their agents adds more to an LO’s plate.

Nick Caccia, a Greenville, Rhode Island-based producing sales manager at CrossCountry Mortgage, said that it’s hard enough getting a loan to the closing table, especially with the rates where they are. Having to be somebody’s confidant and advisor on the real estate part would be “tough.” 

Caccia said that 80% of his business comes from buyers’ agents. He shows up for open houses and teaches courses at real estate brokerage firms, which allowed him to build relationships with agents throughout his career. 

Because most of the agents he works with are full-time, dedicated professionals, he’s not expecting a decline in business as a result of the settlement.

The hybrid LO-agent?

On another front, VanFossen believes that due to the commission lawsuit, LOs may start getting real estate licenses and/or real estate buyer agents may become LOs. It would “bridge the gap in lower commission” by these professionals “starting to take both sides of the deal.” 

According to VanFossen, that’s a “definite potential outcome that a lot of mortgage lenders are looking at, legally and in a compliant manner,” including Absolute Home Mortgage, which is doing tests with this dual-licensing structure. The company had 274 LOs and 38 active branches as of Friday, per the National Mortgage Licensing System (NMLS). 

However, since real estate agents would transition to lenders, the dual-license trend would also have an “unintended consequence” for marketing servicing agreements (MSAs) between mortgage companies and real estate brokerage firms. 

Another consequence could be the emergence of real estate agents creating their brokerages and forming joint ventures with lenders, he said. 

It would also inevitably lead to even more dark grey areas in RESPA compliance.

More negotiations, lower commissions 

Per the terms of the settlement, MLS participants working with buyers must enter into written representation agreements before touring a home. 

Consequently, mortgage industry executives believe buyers will pay agents out of pocket or ask sellers to pay their agent fees through concessions. As negotiations are in place, the expectation is that the commission will be reduced. An average real estate transaction typically pays 5% to 6% in agent commissions, including 2% to 3% to the buyer’s agent. (LOs on average get about 1%.)

Kevin Leibowitz, CEO of broker shop Grayton Mortgage, expects that “commissions will get squeezed,” and some buyers’ agents will exit the industry. He has been focused on getting referrals from prior clients and online. Thus, he expects the settlement will impact his business far less than LOs who rely on buyer agents as referral partners. 

Ryan Tomasello, managing director at Keefe, Bruyette & Woods, agrees that more negotiations may happen. Of course, the devil will be in the details, and there are a number of questions about how these written representation agreements will work. 

“Key questions include whether these agreements must stipulate compensation terms, as well as if any permissible compensation offers from listing agents and sellers are prohibited from being higher than the original compensation terms already agreed to by the buyer and their agent,” Tomasello said in a report on Friday. 

“In KBW’s view, the combination of mandated buyer representation agreements and the prohibition of blanket compensation offers made by listing agents and sellers should result in significant price competition for buyer agent commissions,” Tomasello added.

Disadvantaged borrowers? 

According to mortgage trade groups, if the settlement can reduce buyer agent commissions, it can also make some underserved borrowers more vulnerable. 

Borrowers trying to buy with a mortgage from the Department of Veterans Affairs appear to be at the biggest disadvantage

Under current policy, fees or commissions charged by a real estate agent or broker in connection with a loan from the VA may not be charged to or paid by the veteran-purchaser. It’s unclear whether the VA or the Department of Housing and Urban Development (HUD) will be able to alter the policy by mid-July.

Seller concessions for VA borrowers are also capped at 4% of the home’s purchase price or appraised value and can also cover some closing costs, including the VA funding fee and prepaid taxes. And under existing FHA rules, sellers can contribute up to 6% in concessions to FHA borrowers to cover closing costs, prepaid expenses and discount points.

This could be a key part of the equation for borrowers with VA or FHA loans, as they’re typically using discount points to lower their mortgage rate, paid by sellers.

“Agent commissions have never been a closing cost from a buyer perspective,” Ryan Grant, co-founder and division president of Neo Home Loans, told HousingWire in November. “We don’t even know if the buyer’s agent fee would be an allowable closing cost because they might not even be a material necessity to the transaction.”

If FHA borrowers, for instance, used all 6% of seller concessions towards paying their agent’s commission, “you’re taking away either temporary or permanent interest rate buy-down opportunities,” Brian Covey, EVP of Revolution Mortgage, said in November.

In a December letter to federal housing agencies, the Community Home Lenders of America, which represents small lenders, wrote that “traditionally, lenders financed buyer’s agent commissions as part of the mortgage financing process, reflecting the fact that 100% of brokerage commissions were incorporated into the sale price.”

But its members noticed “many real estate agents are already writing sales contracts that require the buyer to pay the buyer’s real estate commission.” CHLA said the new model could potentially leave buyers to cover the commission out of pocket or forego representation.

On Friday, the trade group said that the NAR settlement will impose challenges mainly to underserved, veteran, and minority borrowers with low down payment capabilities “who must be protected with respect to underwriting rules, so they are not disadvantaged by changes to commission structures.”

“CHLA continues to engage Congress and federal regulators to immediately draft solutions to ensure homebuyers are not adversely impacted – especially those with limited funds to apply to the mortgage purchase process,” Scott Olson, executive director at CHLA, said in a statement. 

The Mortgage Bankers Association (MBA) added, “While full details of the apparent settlement are not yet public, MBA will monitor the outcome as well as the likelihood of new approaches to buyer agent commissions that develop as a result.”

“We will also continue our engagement with the Federal Housing Administration, Department of Veterans Affairs, and Fannie Mae and Freddie Mac about any possible guideline changes that may be needed in the future,” the trade group said in a prepared statement. 

Caccia, the LO at CCM, expects homebuyers to request a closing cost credit to cover their agents’ commissions. He believes it could be more common among first-time homebuyers, “who don’t have the cash for a down payment plus commission payments on the purchase of their homes.” However, concessions are more challenging to get in competitive markets.  

“In a market like ours, where there’s not a lot of inventory, it’s tough right now to buy a house, no matter what. A lot of my FHA buyers, the bond programs, don’t have enough for the down payment, to get through the guidelines, and to throw another 2% of the cash up front [for the agent commission],” Caccia said. 

“I would think some of them would just go directly to the listing agent, but I don’t know if that’s a sustainable model,” he added. 

VanFossen said there are talks about the “mortgage industry figuring out methods to finance the buyers’ real estate agent commission.” 

“As lenders, we are avidly against that. We do not want to, as we already have a vehicle through the sellers’ concession. We should not be putting borrowers in a place to finance 2% to 3% additional of the transaction over the period of 15, 20 or 30 years in the terms of a mortgage. And we don’t feel that our regulators, such as FHA and FHFA, are too keen on that either.”  



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Homeowners 62 and older saw their collective home equity levels drop in the fourth quarter of 2023 by roughly $119 billion to $12.84 trillion, the third quarterly fall in the last year.

This is according to the Reverse Mortgage Market Index (RMMI), a measure of senior-held home equity from the National Reverse Mortgage Lenders Association (NRMLA) and data analytics firm RiskSpan.

The RMMI fell to 449.02 in Q4, a slight decline from the Q3 level of 453.19. Senior home values fell from $15.28 trillion in Q3 to $15.18 trillion in Q4, which could have been driven by an increase in senior-held mortgage debt to $19.8 billion.

RiskSpan’s analysis of the data asserted that this drop corresponds with a seasonal downturn in overall home sales, according to an email alert distributed to NRMLA’s membership.

The RMMI is often cited by reverse mortgage companies as a sign of the unrealized market potential of the industry. During Finance of America Companies Q4 earnings presentation last week, the company cited the Q3 2023 RMMI figure of $13.08 trillion as indicative of the potential for the home to serve as a senior’s “greatest retirement asset.”

Senior homeowners were big beneficiaries of the run-up in home prices observed during the COVID-19 pandemic. In 2011, the collective level of senior-held equity sat at roughly $3 trillion while in Q3 2021, the RMMI index rose by 4%, topping $10 trillion for the first time, while the index grew by 3.98% in Q4 2021. The RMMI grew by 4.91% during Q1 2022 — when it first topped $11 trillion. In Q2 2022, the RMMI grew by 4.10%.

The collective senior housing wealth figure reached a threshold of over $9 trillion for the first time in July 2021, and $8 trillion for the first time in April 2021. It had previously topped $7 trillion for the first time in March 2019.



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Let’s face it: joint ventures (JVs) and affiliated business arrangements (ABAs) are all the rage in the residential real estate space right now. And why not? In times of depressed revenue, it makes sense to seek any and all reasonable paths to revenue.

In fact, there aren’t many mortgage lenders, builders or real estate brokerages that haven’t at least fleetingly entertained the notion. After all, a successful affiliated title operation brings not only the potential for new business but, done well, an opportunity to control more of the transaction, bringing with it the possibility for improved customer experience and better cost controls.

So why aren’t more commercial real estate (CRE) entities – investors, principals, banks, law firms or developers – seeking the same? Market conditions have certainly trended downward for residential or commercial real estate. CRE firms are also suffering through the highest interest rates seen in years. Unlike their residential counterparts, CRE JVs offer a real opportunity for increased profitability, making them an intriguing prospect. In fact, a well-run JV brings with it the very real possibility for a passive, seven-figure profit. One would think CRE businesses would be knocking down the door to harvest new forms of income.  Instead, they’re leaving money on the table.

A significant opportunity

To be sure, there are title agencies eager to partner with CRE principals and funds. Traditionally, joint ventures have been perceived as a means to diversify revenue streams and expand market reach, primarily within the residential sector. However, with residential order volume down and competition fierce, owners and decision-makers are seeking new avenues for growth.

This quest for expansion has led to a pivot towards commercial real estate, where the potential for substantial returns beckons. However, unlike residential ventures, CRE transactions (whether involving a JV or not) involve a myriad of complexities, ranging from regulatory compliance to risk assessment, thereby requiring a nuanced understanding and specialized expertise.

Office buildings, retail spaces, industrial complexes and other CRE properties generally command higher price tags and offer greater revenue-generating potential compared to residential properties. That’s probably why so many title and closing firms have tried their hand at CRE business in the effort to diversify.

Rapidly advancing technology and data analytics have also revolutionized the commercial real estate landscape, offering scores of new avenues for value creation and risk mitigation. CREs need not go it alone. Title firms collecting and making use of advanced analytics and proprietary technologies can provide invaluable insights into housing market trends, property valuations, and risk assessment. They can be, in essence, the “boots on the ground” for investors and developers alike.

And yet, more than a few title agencies taking their shot at entering the CRE space, without proper preparation or experience, have struggled in that sector. Similarly, because of lack of expertise or experience, more than a few ABAs have closed their doors not long after being established. Not only title agencies that were unprepared, but lenders, brokers and builders have learned, the hard way, that building a successful, profitable ABA takes more than a brand name and the announcement that they’ve entered into a JV.

The challenges facing CRE JVs – all title agencies were not created the same

That could be one reason CRE firms hesitate when considering title ABAs. Another could be, quite simply, that they don’t recognize the opportunity. The title business is not truly or widely understood outside of the title industry – even among other real estate-related market segments. And, far too often,  the few commercial businesses that do try to enter into title business don’t put sufficient resources into properly building the JV.

Not to mince words: title is hard. Title agents are tasked with playing the role of central communicator; compliance wizard, data (and fee) collector, project manager and technology curator in every single real estate transaction. Let’s not forget that compliance is not done just at the federal level. It’s a state-by-state; county-by-county and even city-by-city proposition. And it’s the title agent’s job to understand that and master it.

Now, let’s look at it from the title agent’s perspective. After all, while principals, investors and banks may not be clamoring to get into the title business for CRE transactions, not many title agencies do it well, and many of those only know certain markets. The ever-evolving needs of investors and developers seeking to diversify their portfolios and optimize returns only complicates that. Good CRE title firms know their clients; understand their clients’ clients and know the markets where their customers operate.

Right now, we’re generally seeing more mixed-use developments and multifaceted commercial projects. We’re seeing single-family residence investors hesitating as to when to get back into the game, but as we saw in 2021 to 2022. When they do, there will again be serious potential in that sector. Affiliated title firms taking their shot at specializing in CRE joint ventures absolutely must understand the transaction and the market, no matter how complex.

As challenging as a residential real estate transaction can be, there’s no doubt that CRE deals are much more complex. The participants in the process are generally less emotional and far better trained or educated in the process than many of their counterparts (e.g. buyers and sellers) in a residential deal. CRE assets are subject to a myriad of regulatory requirements, zoning laws, and environmental considerations that don’t apply to home sales, requiring thorough due diligence and compliance measures. Additionally, commercial transactions often involve multiple stakeholders with divergent interests and objectives, requiring deep negotiation skills and effective conflict resolution mechanisms.

Finally, the financing dynamics of a CRE transaction differ significantly from residential transactions, with larger capital requirements, longer investment horizons, and greater exposure to market fluctuations. Title agencies taking their shot at the CRE space have to understand and navigate the intricacies of commercial financing structures.

The potential return is worth the effort

Despite the inherent complexities, CRE joint ventures offer substantial rewards for title agencies willing to venture into this burgeoning market segment. With the potential for higher transaction volumes, larger deal sizes, and greater revenue generation, CRE joint ventures present a compelling opportunity for title agencies to diversify their service offerings and capture a larger share of the commercial real estate market.

The key to it all is, for CRE partners, to do the deep due diligence required for selecting such an important partner. It’s not enough for a title agency to hire a CRE-focused business development pro and hang out its new CRE shingle. It’s not even enough for a CRE-focused title business with ample experience in, for example, the Miami marketplace to suddenly proclaim itself comfortable with transactions in New York City or Chicago.

It’s also critical for banks, lenders, investors, developers and principals entering into CRE-related ABAs to realize that locating and working with title entities that have the expertise and experience necessary is just the first ingredient for success. All partners should be prepared to invest the capital and resources in the partnership that they would have building any other business from the ground up. It’s not as simple as flipping a switch. The JV will need the resources any other business would need to establish itself in the market and win business.

For title agencies and CRE firms alike, ABAs offer a very real and potentially substantial new revenue stream. While the first step comes with recognizing the potential, success also requires adequate due diligence to locate a partner or title entity that not only knows what it’s doing, but knows what the partner wants to do as well as understanding the markets in which they wish to succeed. Finally, it requires a legitimate commitment by all parties to supporting and sustaining the affiliated operation. Without these ingredients, all of the partners are simply throwing a dart. But with the proper effort and investment, the partners could well realize not only a revenue windfall, but a competitive advantage as well.


Matt Einheber is the driving force behind TitleEQ, a settlement services agency serving clients nationwide, and TitleBox, the developer of technology designed to streamline the settlement process.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story: Matt Einheber at matt@titleeq.com

To contact the editor of this story: Tracey Velt at tracey@hwmedia.com



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