This #Robot Wants to Lend Money — Is YOUR #Mortgage Business in Trouble

Posted on in Housing, TV Appearances
This Robot Wants to Lend Money — Is YOUR Mortgage Business in Trouble

Wealthfront  is now offering loans, calling the move a first among robo-advisers, which use automated investing platforms.

“This is consistent with our strategy, which is to take basically every major service that a private wealth manager offers and use software to offer it to some people who can’t afford the minimums,” Andy Rachleff, Wealthfront’s chief executive officer, said in a Bloomberg Interview.

“This is yet another wake up call to the mortgage industry,” says the Collingwood Group Chairman Tim Rood.  “The technology to facilitate an electronic mortgage has been in pace for a dozen years. What’s most recent, and most critical to success of a fully atim cavuto 11-16.jpgutomated application and closing process, is the quality and accessibility of critical underwriting data – and the acceptance by Fannie Mae and Freddie Mac. Lenders now have access to high quality income, asset, and property level data can replace much of avalanche of paper required to originate and process a mortgage loan. Fannie Mae and Freddie Mac not only accepting loans that have processed and underwritten electronically, they are driving the innovation and are cutting costs and improving experiences for lenders and borrowers alike. However, borrowers need and want service options. Some borrowers will be more comfortable and better served through a mortgage traditional paper based process. Moreover, Millennials, and yes even older generations, have gotten used to e-shopping via Amazon and other platforms that offer instant gratification and delivery, we in the mortgage business need to heed this robot warning. Millennials aren’t uniquely drawn to convenience and expediency – it’s universal.  The Collingwood Group has helped dozens of large lenders navigate the Fintech landscape.”

There is skepticism over how much of a competitive advantage the Wealthfront offering will provide. Other robo-advisers have looked into lending as well, but decided to focus on different services first. Josh Brown at Ritholtz Wealth Management said big firms could easily add the feature. 

“It’s nothing that Schwab couldn’t do tomorrow,” he said.

But, beware the Robots are coming!

>Collingwood Group Chairman Tim Rood joins Fox Business Network’s Neil Cavuto today, Friday at Noon, Eastern to discuss this and more.

Mortgage Rates Now Below 4%

Mortgage rates dropped for a fifth week, sending home-loan costs down to their lowest point since the week after the presidential election.

  • The average rate for a 30-year fixed mortgage was 3.97% down from 4.08%  last week according to Freddie Mac.
  • The average 15-year rate decreased to 3,23%  from 3.34%.

The decrease in mortgage rates may encourage homeowners to refinance in the short term as buyers take advantage of lower borrowing costs.

An improving job market is increasing demand for real estate.

Listings of existing homes for sale are scarcer than they’ve ever been, and bidding wars are becoming more common again in hot markets like the San Francisco Bay area, Denver and Boston.

More Millennials at Home with Mom and Dad

millennials 420.jpg

A new Census Bureau study,The Changing Economics and Demographics of Young Adulthood From 1975-2016,” concluding that today’s 18-to-34-year-olds “look different from prior generations in almost every regard: how much education they have, their work experiences, when they start a family”:

The Collingwood Group Chairman Tim Rood says,The most concerning part of this trend for the housing and mortgage industry is that over 60% of first-time homebuyers will be Milleniums this spring but they’ll also be white (75%) and have incomes over $90k. Minorities and low income families are being shut out which is exasperating the wealth divide.”

• More than one-third of adults live at home: 34% in 2015 vs. 26% in 2005.

• “Young people are delaying marriage, but most still eventually tie the knot. In the 1970s, 8 in 10 people married by the time they turned 30. Today, not until the age of 45 have 8 in 10 people married.”

• “More young men are falling to the bottom of the income ladder. In 1975, 25% of young men ages 25 to 34 had incomes of less than $30,000 per year. By 2016, that share rose to 41% … (incomes for both years are in 2015 dollars).”

Millennials Stay in Jobs Longer

Contrary to what many think, millennials do know how to hold down a job.

Millennial workers are as likely to stay with their current employers as members of Generation X were when they were young adults back in 2000, according to a report released this week by the Pew Research Center, a nonprofit think-tank based in Washington, D.C. Roughly 63% of millennial had been with their employer 13 months or more as of last years, versus 60% of Generation-Xers in 2000.

Additionally, a fifth of millennials have been with their company for five years or longer, again in line with Generation X. As of January 2016, the typical U.S. worker had been in their current job for 4.2 years, up from 3.5 years in 1983, per the Bureau of Labor Statistics.

One factor that could be driving this workplace fidelity is their comparatively high education levels, according to Pew, since being more educated is correlated with longer tenure. About 75% of college-educated 25- to 35-year-olds have been with their employer for at least a year in 2016, compared with 70% of Gen X women and 72% of Gen X men back in 2000. (Millennials without college degrees, on the other hand, were less likely than Generation Xers to stay with their employer for a year or more.)

There’s a downside to this job security. Some American workers are stuck in a rut. Despite improvements in education and technology, they’re staying in their jobs longer rather than seeking new opportunities. A high “churn” rate is typically seen as a reflection of a healthy economy, according to Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce.

And while higher education levels may drive improved job retention, it’s also produced a burgeoning student debt crisis among this generation. And the millennials with jobs are the lucky ones. They are more likely to be unemployed than older cohorts. The unemployment rate among people from 25 to 34 years in age was 4.5% in March, versus 3.9% for those between 35 and 44 years old.

read more: MarketWatch


Key Spring Home Sales Number Comes This Morning

Existing Home Sales for March are due in a couple of hours (10 AM, ET).

The Ten-X Residential Real Estate Nowcast predicts a slight increase in existing home sales when the numbers are tallied for this month. According to the nowcast, March sales will fall between seasonally adjusted annual rates of 5.41 – 5.77 million with a targeted number of 5.59 million, up 2.0 percent from NAR’s reported February sales and up 4.6 percent from a year ago.

sharga tv.jpg“As we enter the important Spring selling season, consumer demand appears to be strong. The big question is whether there will be enough homes for sale to meet that demand,” says Ten-X Executive Vice President Rick Sharga. “The underlying fundamentals of the market remain solid: job and wage growth are strong and interest rates remain low despite a slight uptick after the Fed move. But inventory – especially of entry-level homes – remains stubbornly low.”

For February, the Ten-X Nowcast projected home sales to take a step back from their cyclical high and the recent report from The National Association of Realtors confirmed this. NAR reported that existing home sales in February retreated to a seasonally adjusted rate (SAAR) of 5.48 million units, down 3.7 percent from January although still up 5.4 percent from a year ago.

Housing Crunch Threatens Reno’s Tech Boom

When a development company here acquired in 2015 a ranch once owned by a casino magnate, managing partner Chip Bowlby thought homes could be quickly built on the land to help meet the demands of a historic jobs boom.

But nearly two years later, the project of 691 homes at the late Bill Harrah’s Rancharrah property remains tied up in permitting, even as the inventory of homes in Reno is drying up amid soaring sales.

“We can sell everything we build,” said Mr. Bowlby of Reno Land Development Co., which is selling other homes as Rancharrah awaits final approval within weeks. “It’s limitless with the demand now.”

During the 2007-2009 recession, Reno was a poster child for the risks of overbuilding. Now, Nevada’s second-largest city is facing what many local business officials call a looming housing crisis after enticing Tesla Motors Inc. and scores of other technology companies to open manufacturing facilities here in recent years.

Part of the problem stems from the recession itself. The city of Reno cut its workforce by a third during the downturn, and a current lack of staffing is contributing to delays in securing permits, according to the city’s mayor.

The latest sign of the boom came on Friday, when Alphabet Inc. unit Google bought 1,210 acres at the Tahoe Reno Industrial Center, where it aims to eventually build a data center

read more:Wall St Journal

>Your Friday Bonus Story!

Can Your Skin Hear Me Now?

As if a world of virtual and augmented reality wasn’t enough, Facebook used the second day of its F8 conference to look even further out into the future. The social network shared two of the projects being cooked up at its secretive Building 8 unit (headed by former DARPA head Regina Dugan). One would let people type using brain waves, while another would let them “hear” through their skin.

Whether any of these moonshots comes to fruition is another question. Dugan had talked about all kinds of things as head of an advanced product unit at Motorola (and later Google). Some, like the Project Ara modular phone project, were formally sidelined while others have yet to see light of day.

What a world!  The Robots are coming!

>Watch This


  • Existing Home Sales 10 a.m. ET
  • Collingwood Group Chairman Tim Rood joins FBN’s Neil Cavuto Noon, ET

Have a prosperous day ahead and great weekend!



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Lou Giserman

Senior Media Consultant

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