The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac will implement a new refinance option for low-income borrowers with GSE-backed single-family mortgages. Eligible borrowers will benefit from a reduced interest rate and lower monthly payment. FHFA estimates that borrowers who take advantage of the new refinance option could save an average of between $100 and $250 a month. The new refi option includes a requirement that the lender provides a savings of at least $50 in the borrower’s monthly mortgage payment, and at least a 50-basis point reduction in the borrower’s interest rate; a maximum $500 credit from the lender for an appraisal if the borrower is not eligible for an appraisal waiver; and a waiver of the 50 basis point upfront adverse market refi fee for borrowers with loan balances at or below $300,000. To qualify, a borrower must have a mortgage on an owner-occupied, single-family home; have an income at or below 80% of the area median income; a loan-to-value ratio no greater than 97%, a debt-to-income ratio no greater than 65%, and a FICO score no lower than 620. They must have no missed payments in the past six months and no more than one missed payment in the past 12 months.
Finance of America Mortgage has announced that it intends to acquire the wholesale operation of Parkside Lending LLC for approximately $40 million. The transaction, which is expected to close in the second quarter of 2021, is intended to strategically increase Finance of America’s third-party origination (TPO) coverage by more than 1,000 seasoned brokers with little customer overlap.
RMR Mortgage Trust and Tremont Mortgage Trust have announced that they have entered into a definitive merger agreement. Tremont will merge into RMR, with RMRM continuing as the surviving company. The merger is aimed at creating a more diversified commercial mortgage real estate investment trust (REIT) focused on middle market transitional bridge loans with assets expected to approach $1 billion when fully invested. The merger is expected to be accretive to distributable earnings in 2022, with the potential to realize annual expense savings of $1.4 million to $1.6 million due to the elimination of certain duplicative public company costs.
LoanDepot and home builder LGI Homes have announced a new joint venture partnership named LGI Mortgage Solutions. Kirk Hudson will serve as the president of LGI Mortgage Solutions, which will operate in Alabama, Arizona, California, Colorado, Florida, Georgia, Maryland, Minnesota, Nevada, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, Washington and Washington, D.C. LGI anticipates closing between 9,200 and 9,800 homes this year across about 120 communities.
Veritex Community Bank has announced a definitive agreement to acquire a 49% interest in Thrive Mortgage for $53.9 million in cash. Upon completion of the investment, Veritex will obtain the right to designate a member to Thrive’s board of directors. The investment, which is expected to close in the middle of 2021, is subject to receipt of required regulatory approvals and other customary closing conditions.
