Renting

Apache is functioning normally

On the average day in the mortgage market, the average lender will offer the same mortgage rate terms for the entire day.  It’s only when the underlying bond market moves enough that lenders will make mid-day adjustments.  Today was one of those days and it involved a reprice to slightly higher levels.

For now, this is still fairly inconsequential.  Apart from yesterday (or this morning, for that matter), the average lender would still be at the lowest levels since early April.  Instead of being a hair below 7%, the average top tier conventional 30yr fixed is now a hair above.

Today’s bond market weakness began after this morning’s Import Price data came out much higher than expected, but it continued at a gradual pace through the rest of the day.  This could suggest that the stronger vibes from Wednesday’s inflation data have run their course and the rate market will now consolidate as opposed to make additional improvements.

Source: mortgagenewsdaily.com

Apache is functioning normally

LOS ANGELES (AP) — The average rate on a 30-year mortgage climbed this week to its highest level in more than five months, pushing up borrowing costs for prospective homebuyers in what’s typically the housing market’s busiest stretch of the year.

The rate rose to 7.22% from 7.17% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.39%.

When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers. That limits how much homebuyers can afford at a time when a relatively limited number of homes on the market coupled with heightened competition for the most affordable properties has kept prices marching higher.

The average rate on a 30-year mortgage has now increased five weeks in a row. It hasn’t been this high since November 30.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, lifting the average rate to 6.47% from 6.44% last week. A year ago, it averaged 5.76%, Freddie Mac said.

Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

After climbing to a 23-year high of 7.79% in October, the average rate stayed below 7% this year until last month, as stronger-than-expected economic data and inflation dimmed optimism among bond investors that the Fed would be able to start cutting its short-term interest rate sooner, rather than later.

In its latest interest rate policy statement Wednesday, the Fed said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target.

Until then, mortgage rates are unlikely to ease significantly, economists say.

“Recent data reflects a surprisingly resilient economy, which means rate cuts expectations have pushed out further into the back half of the year,” said Hannah Jones, senior economic research analyst at Realtor.com.

The uptick in mortgage rates in recent weeks is an unwelcome trend for home shoppers this spring homebuying season. On average, more than one-third of all homes sold in a given year are purchased between March and June.

“With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon,” said Sam Khater, Freddie Mac’s chief economist.

Sales of previously occupied U.S. homes fell last month as homebuyers contended with elevated mortgage rates and rising prices.

To cope with rising borrowing costs, some homebuyers are turning to adjustable-rate mortgages, or ARMs. These types of loans accounted for nearly 8% of all mortgage applications last week, the highest level this year, the Mortgage Bankers Association said Wednesday.

“Prospective homebuyers are looking for ways to improve affordability, and switching to an ARM is one means of doing that, with ARM rates in the mid-6% range for loans with an initial fixed period of 5 years,” said Mike Fratantoni, the MBA’s chief economist.

Source: apnews.com

Apache is functioning normally

Consumer Financial Protection Bureau Director Rohit Chopra called out the credit reporting industry and the strain their recent fee hikes have placed on home affordability in an already difficult lending environment. 

Speaking at the Mortgage Bankers Association Secondary Markets Conference in New York City, Chopra criticized the steep increases in charges from score provider FICO, or the Fair Isaac Corporation, the three credit reporting agencies and resellers.

Calling for more accountability, he invited comments from lenders as the bureau looks for solutions to address the “price gouging” in the market. 

“We are eager to hear from lenders and will look at possible rulemaking and guidance to improve competition, choice and affordability,” he said.

The reporting agencies, Equifax, Experian and Transunion, typically set wholesale prices resellers pay, which is then passed on to their lenders and consumers. With reports required for sale to the government-sponsored enterprises, mortgage businesses often have little choice but to pay.

“With a captive customer base, vendors have implemented annual price increases that far outpace inflation,” Chopra said. “And in order to get the credit and credit reports, mortgage lenders generally must pay twice, once to confirm eligibility, and once just before the loan closes.”

During the MBA session that was sponsored by FICO, Chopra called out the significant change in pricing structure for credit scoring at the end of last year, resembling a flat fee rather than volume-based model. Among the changes was a hike to soft-credit pulls that put them at the same level as hard pulls, despite differences in the information provided. 

Fees multiply when multiple applicants are on the mortgage and investors also require reports, meaning lenders often pay for the same information six or 12 times, Chopra said. 

Compounding costs, credit reporting agencies have found a way to profit from inaccuracies mortgage lenders find in a report, thanks to a rapid rescoring program, which Chopra referred to as a “pay-to-play” service. 

“A report full of bad data is another opportunity for these companies to leverage their position as an indispensable market utilities and extract yet more money from consumers and lenders who have no other options,” he said. 

Following the announcement from FICO late last year, lenders sharply criticized its moves, saying, ultimately, that they end up being passed down to the consumer. 

As companies generally don’t charge borrowers upfront for credit report costs, “Lenders generally have to eat the costs of the initial applicant screening for applicants who don’t qualify or decide not to pursue a loan,” he said. 

“In some sense, borrowers that close aren’t just paying for the credit reports and scores for themselves, they’re also paying for inflated fees on the applicants who don’t close,” he said.

Chopra also recommended capital markets to develop solutions for investors to assess mortgage pools and rely less on mandated credit scores.

In a discussion with MBA CEO Bob Broeksmit, Chopra also pushed back on mortgage-industry criticism of his stance toward so-called “junk fees” across the banking industry. In both his opening remarks earlier in the day and discussion with Chopra, Broeksmit took issue with the “junk fee” label and whether certain fees qualify as such if they are spelled out in advance. 

Chopra responded that “a junk fee isn’t just what’s hidden.” In the CFPB’s opinion, it also covers what is not subject to competition, or if it applies to services nobody wants. 

“I’m happy that you disclose some of these ripoffs, but they shouldn’t be a ripoff,” Chopra said.  

Source: nationalmortgagenews.com

Apache is functioning normally

Portfolio ARM; Market Intelligence, VOE Tools; Bank of England & RESPA; CFPB Ruling Interview

<meta name="smartbanner:author" content="We now have a native iPhone
and Android app.
Download the NEW APP”>


This website requires Javascrip to run properly.

Portfolio ARM; Market Intelligence, VOE Tools; Bank of England & RESPA; CFPB Ruling Interview

By:
Rob Chrisman

1 Hour, 47 Min ago

Greetings from the Arch MI meeting room space! Heard in the hallways here at the MBA’s Secondary conference in Manhattan: “Our loan officers are telling their clients, ‘Yeah, the best time to buy a house was five years ago. The second-best time is… now.’” People’s memories are short, no one writes about how our industry helped millions of people during the pandemic, and the mainstream press is always looking for sensationalism. The latest example is “zombie mortgages”: 2nd mortgages taken out during 2008-2010 and that haven’t been paid. And we’re to blame? UWM’s DPA program, purportedly tied to Freddie, has garnered some interest. There’s another saying: the stock market is not the economy. But last week the Dow Jones Industrial Average closed above 40,000 for the first time in history. Apparently, investors have confidence the Federal Reserve will get inflation under control without throwing the country into a recession. Should we attribute this to the policies advanced by President Joe Biden and Secretary of the Treasury Janet Yellen? Some will. On an annualized basis, during the Trump Administration the Dow rose 11.8 percent, Barack Obama (+12.1 percent) and Bill Clinton (+15.9 percent). (Found here, this week’s podcasts are Sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. Today’s features an interview with attorney Jay Beitel on the Supreme Court finding the funding of the CFPB constitutional.)

Lender and Broker Software, Products, and Services

“The first ever pizza delivery took place in 1889, when famous pizza chef Raffaele Esposito treated Italy’s King Umberto and Queen Margherita to a legendary slice. Now, almost 15 percent of all restaurant meals eaten in the U.S. are delivered. Evaluating gig income from sources such as DoorDash, Postmates, Uber and Lyft are imperative to qualifying more applicants. Argyle provides direct-source verification of income and employment (VOIE) covering 90 percent of the U.S. workforce, including more than 25 of the largest #gigeconomy employers. Lenders can trust they are getting the most complete data possible at verification, accounting for all income a borrower has at their disposal. Discover all the gig workers Argyle covers today.”

Want to know how to pick up an extra partner deal a month? With MMI’s cutting-edge mortgage transaction data feeding into Bonzo’s next-gen SMS and email automation platform, the path to unlocking an extra agent deal or two will be clear. Discover the three steps you can take to win in today’s market with MMI and Bonzo in their latest playbook. MMI and Bonzo users employ this set of simple strategies that any producer can follow. Easily find the right agents to talk to, seamlessly create targeted SMS and email campaigns, reach out at the relevant moment, and do it all without spending half your day on your laptop. Take a minute to see how it’s done. Download the playbook here and find out what you’ve been missing without the dynamic duo of MMI and Bonzo in your life.

Webinar: Surprise: First-time home buyers are on the rise. Here’s how to earn their business. Interest rates and housing inventory haven’t been hospitable for first-time buyers. Despite challenges, this segment made a notable jump in Q1 2024. What drove first-time buyers onto the property ladder, and how can lenders win their business? In this webinar, presented by Maxwell in partnership with HousingWire on May 29 at 1 p.m. CT, we’ll dig into Maxwell’s exclusive data to better understand today’s first-time buyers and explore how to cater to this valuable segment. Click here to save your seat (and if you can’t make the live event, you can still register for the on-demand recording!).

Broker and Correspondent Products

“NexBank Wholesale & Correspondent now offers 1- and 3-year Portfolio ARMs and $2,500 VLIP credit on HomeReady and Home Possible. Why partner with NexBank? Competitive pricing and products, and a streamlined experience: NexBank makes it easy for you to do business, has pricing that gives you the competitive edge, and offers a wide variety of products – Agency, FHA and VA, plus competitive portfolio Jumbo and Non-QM. We offer low-down payment and expanded financing options, HomeReady Home Possible $2,500 credit to use towards a down payment or closing costs for qualified borrowers. Wholesale Lender since 2008: Highly experienced and dedicated team understands the challenges that clients face and opportunities that help you succeed. 100 percent dedicated to Wholesale Lending: NexBank doesn’t compete with our clients for retail originations or refinancing business. We’re solely focused on building long-term relationships with our TPO clients and helping them grow their businesses. Contact us. Member FDIC. Equal Housing Lender. NMLS672886.”

The Bank of England, Veterans, RESPA, FCRA, and HMDA

Lenders and vendors should always find penalties educational. (Though some liken the situation to a herd of zebras in Africa watching one of their own be pulled down by lions.)

The Federal Deposit Insurance Corporation (FDIC) announces a settlement with Bank of England, England, Arkansas, for violations of Section 5 of the Federal Trade Commission Act (Section 5), the Real Estate Settlement Procedures Act (RESPA), the Fair Credit Reporting Act (FCRA), and the Home Mortgage Disclosure Act (HMDA). The bank has stipulated to the issuance of an Order to Pay Civil Money Penalty (CMP) in the amount of $1.5 million. (Type in “Bank of England.”)

In addition, nine former employees of the Bank of England have stipulated to individual enforcement actions. Based on the FDIC’s findings, the bank made $1.9 million in remediation to over 900 harmed consumers.

“’Veterans and their families who were deceived into refinancing their VA loans were overcharged and did not receive the loan products promised, resulting in significant consumer harm,’ said FDIC Division of Depositor and Consumer Protection Director Mark Pearce. ‘This announcement demonstrates FDIC’s commitment to ensuring consumers are treated fairly, and that those responsible, including the bank and individuals employed by the bank, are held accountable for their illegal actions.’

“Section 5 prohibits banks from engaging in unfair or deceptive acts or practices. The FDIC determined that the bank, through one of its loan production offices (LPOs), violated Section 5 by misrepresenting to consumers that they would be able to skip multiple loan payments when refinancing a Department of Veterans Affairs (VA) mortgage loan. The FDIC also determined that loan officers’ or LPO’s misrepresented to consumers their relationship with the VA.

“Section 8(a) of RESPA prohibits giving or accepting a thing of value in exchange for the referral of settlement service business. RESPA was enacted to enable consumers to better understand the home purchase and settlement process and, where possible, to reduce settlement costs. The FDIC determined the bank entered into certain co-marketing arrangements and marketing service agreements in which the bank and real estate brokers agreed to market their services together using online platforms. Further, the bank also entered into desk rental agreements whereby the bank rented space from realtors and entered into agreements with online/digital platforms for lead generation.

“These arrangements and agreements resulted in the payment of fees by the bank to real estate brokers and online/digital platforms for their referrals of mortgage loan business, in violation of REPSA. Lastly, the FDIC determined the bank brokered certain reverse mortgage loans where broker fees made to the bank constituted things of value provided in return for loan referrals in violation of RESPA Section 8.

“The FDIC also determined that the bank failed to provide consumers with firm offers of credit and required disclosures as required by the FCRA, and the bank failed to report accurate data on its 2021 loan application register in violation of HMDA.

“In addition to the settlement with the bank, the FDIC also announces settlements with nine former employees of one of the bank’s LPOs for violations of Section 5 associated with deceptive and unfair practices involving VA refinance loans by: (1) luring consumers to apply for mortgage loans with low, unavailable loan prices that would not be honored and then subsequently increasing the price before closing the loan; (2) misrepresenting that consumers could skip two months of their mortgage payments; and (3) misrepresenting the LPO’s affiliation with the VA. These nine settlements include, but are not limited to, the following: Ryan Qarana, Assistant Branch Manager: Stipulated to a Prohibition Order and Order to Pay CMP in the amount of $100,000 for violations of Section 5 and engaging or participating in unsafe or unsound practices; Jasmine Jonna, Sales Manager: Stipulated to a Prohibition Order and Order to Pay CMP in the amount of $12,000 for violations of Section 5 and engaging in unsafe or unsound practices; Zack Jabro, Branch Manager: Stipulated to an Order to Pay CMP in the amount of $110,000 for engaging in unsafe and unsound practices.

“In addition to the CMP, the FDIC issued a Consent Order that requires the bank to take affirmative steps to ensure a Compliance Management System that effectively identifies, addresses, monitors, and controls consumer protection.”

Any questions about adhering to regulations? Talk to an attorney.

Capital Markets

In the ongoing battle against inflation, recent data has shown signs of progress but also lingering challenges for the Federal Reserve. Despite efforts to curb inflationary pressures through higher borrowing costs, reaching the Fed’s 2 percent inflation target remains elusive. A slight easing in the core consumer price index in April provided some relief, along with stagnant retail sales indicating cautious consumer behavior.

Yet, interest rate cuts are likely delayed due to persistent inflation surprises, particularly in service prices and fuel costs driven by global tensions. The Fed at its most recent meeting announced a slowdown in the reduction of its balance sheet, a move signaling a shift towards less restrictive monetary policy. However, inflationary expectations remain a concern, with Fed Chair Jerome Powell noting the surprise uptick in inflation and signaling a stance of maintaining current interest rates rather than raising them.

Outside of consumer and producer price inflation stats, there were plenty of non-inflationary economic releases last week that continue to help shape the overall economic narrative. Housing starts were disappointing, reflecting the impact of rising mortgage rates on buyer sentiment and construction activity. Despite a surge in multifamily developments, single-family starts declined, exacerbating worries about inventory. Unit labor costs suggested inflationary pressures from the job market are easing. Industrial production remained flat, with manufacturing output declining, indicating a slowdown in economic activity. Retail sales reflected slower GDP growth projections for 2024. Put it all together and the economic outlook remains uncertain, with inflationary pressures and monetary policy adjustments shaping future prospects.

This week’s calendar contains much less first tier economic data than last week with updates on Fed surveys, flash S&P Global PMIs, housing-related data, durable goods orders, and Michigan sentiment before the early close ahead of the Memorial Day weekend. The minutes from the April 30/May 1 FOMC meeting will also be released on Wednesday. Regarding MBS, Class D 48-hours is today. And speaking of today, the calendar is all about Fed speakers without any economic releases of note. We begin the week with Agency MBS prices unchanged from Friday, the 10-year yielding 4.41 after closing last week at 4.42 percent, and the 2-year at 4.82 percent.

Employment

A 49-state licensed mortgage lender with a large servicing and strong capital base is seeking to expand retail footprint by partnering with large production teams or regional mortgage banks interested in a capital partnership. The goal of the relationship is to leverage back-office mortgage functions (e.g., secondary, technology, compliance, operations, and licensing) to provide you with long-term production growth opportunities. By partnering with us, you can utilize our mature systems to add loan officers and scale your operations across the US. If you are a strong retail loan origination team feeling constrained by layers of management, or an independent mortgage lender looking for new options for your team, we offer a compelling alternative to standard “branch” offerings. Confidential and serious inquiries can email Anjelica Nixt.

Movement Mortgage is dedicated to serving the veteran community! The Top 10 purchase lender will host its first-ever VA Summit on June 5, exclusively available to Movement loan officers. The event will feature keynote speakers, panels of expert VA home loan focused LOs, and more. Attendees will gain firsthand knowledge and insights into serving the veteran community. In addition to the VA Summit, Movement continues to support veterans in other ways as well, including through GraceWorks grants. These grants address the basic needs of veterans, from medical care to mental health initiatives. Most recently, the company has given grants to vital organizations like the EOD Warrior Foundation and Home Base. For more information on Movement’s VA initiatives, please visit movementmilitary.com.

(Hey, if you know someone who’s out of work, Ginnie Mae is hiring. Also, resumes can be posted for free at www.lendernews.com and employers can view them for a nominal charge for several months.)

U.S. Bank announced that John Hummel has been appointed to lead the East Market for Retail Home Lending. Hummel previously led the correspondent and Housing Finance Agency (HFA) business at U.S. Bank, a top 10 mortgage loan originator by volume. John will lead a team of 750 sales managers and mortgage loan originators that have grown the region to produce $7 billion in originations. Congratulations!

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

The average rate on a 30-year mortgage in the U.S. fell for the second straight week, giving some relief to home shoppers already facing sky-high prices and a shortage of supply.

The average 30-year rate fell to 7.02% from 7.09% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.39%.

Source: oregonlive.com

Apache is functioning normally

Kitreel – stock.adobe.com

Initiatives that aimed to reduce costs involved with purchasing a home were a key portion of the White House’s activities both before and after President Biden’s State of the Union speech earlier this spring.

But creating affordable housing access has long been a focus of the mortgage lending community, albeit mandated for depositories as part of the Community Reinvestment Act.

For example, prior to gaining notoriety for contributing to the excesses that created the Great Financial Crisis, Countrywide Financial and its CEO Angelo Mozilo were known as being the largest boosters of affordable housing programs.

In 1999, he announced a $30 billion increase in the company’s five-year commitment to serve low-income and minority borrowers, to a total of $80 billion. The first year of the commitment, Countrywide originated $20 billion of these loans.

Here are some of the latest items, both government announcements as well as from within the industry, aimed to aid people who need assistance buying a home:

Source: nationalmortgagenews.com

Apache is functioning normally

Mortgage rates have had a great month of May so far with almost every day being a winner up until yesterday and today.  Even then, the 2 day losing streak began from the lowest levels in just over 5 weeks.  Perhaps more importantly, apart from the past 2 days, today’s rates would still be the lowest in more than a month.

In other words, rates have pulled back only slightly after a solid winning streak.  Granted, you could take an even longer term view and say rates only managed the winning streak because they were at their highest levels in more than 5 months by the end of April, but nobody likes a party pooper.

The fact is that everything is almost always relative when it comes to assessing whether rates are doing well or not.  In the biggest picture, little has changed.  Rates are close enough to the highest levels in decades, but they still have a chance to look back at October 2023 as being the long-term high.  

Our ability to avoid revisiting last year’s highs relies on incoming economic data.  This week’s Consumer Price Index (CPI) was palatable enough to keep hope alive, but it will take a better showing in June (and probably July and August) if we hope to see true confirmation of a shift.  

Source: mortgagenewsdaily.com

Apache is functioning normally

Advertisement

SKIP ADVERTISEMENT

You have a preview view of this article while we are checking your access. When we have confirmed access, the full article content will load.

A Little-Known Way Home Buyers Can Beat High Mortgage Rates

Assumable mortgages — or low-rate mortgages that home buyers can take over from home sellers — are making a comeback. The process can be challenging.

Ellen Harper was able to obtain a mortgage at less than half the current rate of 7.09 percent on 30-year-fixed loans, the most popular type of mortgage.Credit…Kendrick Brinson for The New York Times

Published May 9, 2024Updated May 10, 2024

Home prices were already high when Ellen Harper, a software architect living in Atlanta, started searching for a house in 2021. But she couldn’t have anticipated the quick surge in interest rates the next year, and, even with a large down payment, the new math made her uneasy.

This year, however, she stumbled upon what felt like a portal to the not-so-distant past: listings of thousands of homes that come with a low-rate mortgage, which can be transferred from the existing homeowner to a new home buyer, known as an assumable mortgage.

Ms. Harper, who is in her 50s, managed to snag one of these homes, closing two weeks ago on a four-bedroom brick colonial in Fairburn, Ga., with a $1,400 monthly payment. It’s an amount she’ll be able to comfortably afford into retirement thanks, in large part, to a 2.49 percent mortgage rate. That’s less than half the current rate of 7.09 percent on 30-year-fixed loans, the most popular type of mortgage.

“I didn’t want to get a bad mortgage and be in a ball-and-chain situation where all I would be able to do is pay the mortgage,” Ms. Harper said. She found her home through Roam, a start-up that went live in September and that lists homes with assumable low-rate loans and assists buyers through the process.

gimmick; it’s a built-in benefit on certain government-backed mortgages, as long as the new owners qualify. The process won’t work for all would-be buyers because there are several hurdles they may need to clear before they can claim the keys, often including a hefty down payment. For home sellers, it can be advertised alongside marble countertops, to attract more potential buyers.

We are having trouble retrieving the article content.

Please enable JavaScript in your browser settings.

Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.

Thank you for your patience while we verify access.

Already a subscriber? Log in.

Want all of The Times? Subscribe.

SKIP ADVERTISEMENT

Source: nytimes.com

Apache is functioning normally

One key question emerging following a recent Financial Stability Oversight Council report on nonbank mortgage risks is whether it will lead to the new authorities for Ginnie Mae in line with its recommendations.

A growing number of reactions to the report, which also advocates for other measures like expanded powers for the entity that regulates government-sponsored enterprises Fannie Mae and Freddie Mac, are centering on Ginnie’s role in the market 

“The most significant advance responsibilities that servicers have are in the Ginnie Mae program. They’re much higher than Fannie and Freddie’s,” said Scott Olson, executive director the Community Home Lenders of America.

The CHLA, which was in the midst of elaborating on what’s been a broad call for greater financial and hiring resources at Ginnie when the council’s report came out, considers the issue a particularly prominent one within the council’s study, Olson said.

“FSOC is this broad agency, they’re not going to focus on just this one thing, but we think they should,” he said.

Other commentators like independent analyst Chris Whalen also spotlighted Ginnie as a risk-management priority because servicers’ responsibility for advancing payments to mortgage securitization investors when borrowers aren’t paying is greatest in that market.

“The liquidity problem discussed in the FSOC report is specific to Ginnie Mae servicing assets,” said Whalen in his Institutional Risk Analyst blog. (Whalen also is a regular columnist for this publication.) 

The issue is one Ginnie has long had its eye on, Sam Valverde, acting president of the government mortgage securitization guarantor, recently reminded FSOC.

“We have been raising this source of concern for over a decade,” he said. “We have spent just as long deploying our existing authorities to develop a suite of risk management and oversight tools to manage these risks, but we need new authorities,” he added.

Ginnie’s budget and salary authorizations should be increased in line with current costs and so they’re competitive with those of other agencies, Olson said, calling for an increase in its current $54 million in funding to $67 million for fiscal year 2025.

The agency could use the additional funding to oversee issuers, put issuer financing pacts in place more quickly and transfer servicing if needed, the CHLA said.

It also could expand and make permanent the temporary liquidity program available during the pandemic as recommended by the FSOC report and previously by Ginnie itself. 

That Pass-Through Assistance Program facility was only lightly used during the pandemic due to its last-resort nature and the Federal Reserve’s decision to lower interest rates as a form of relief. Rate-driven refinancing returned cash to mortgage companies to cover advances.

However, there is concern that heavy advancing responsibilities could re-emerge in a market environment where this source of cash would not be available to the industry, particularly given that many borrowers have now recently refinanced at record-low rates.

While some in the industry back suggestions in the FSOC report for an expanded PTAP or a former Ginnie chief’s proposal for a guaranteed commercial paper facility, they’ve been less enthusiastic about another recommendation in the study for an industry-funded resource.

While the idea of expanding Ginnie’s authorities is gaining momentum in the wake of the FSOC report, it ultimately depends on Congressional intervention that might not be forthcoming.

The Ginnie liquidity problem “cannot be fixed without legislation,” Whalen noted.

Stock analysts at Keefe, Bruyette & Woods issued a research note on Thursday skeptical of such intervention.

“We believe that congressional action to increase regulation is very unlikely, especially because the larger nonbank servicers appear well capitalized,” said Bose George and Alexander Bond, analysts at KBW, in a report.

Ginnie has issued a nonbank, risk-based capital rule for mortgage servicing rights set to go into effect at the tail end of this year.

The rule received some pushback from mortgage firms early on, with some indicating it could discourage the holding of MSRs and push companies toward subservicing. Others have called it manageable.

Ginnie has pledged to work with companies that foresee challenges on implementation.

Source: nationalmortgagenews.com

Apache is functioning normally

The latest data on new residential construction from the U.S. Census Bureau paints a somewhat mixed picture of the housing market. While housing completions surged in April, Housing starts only increased modestly and building permits declined both building permits slipped to the lowest level since last summer.

The following bullet points break down the numbers in seasonally adjusted annual rates for the 3 phases of construction:

  • Building Permits 
    • 1.44 million versus 1.48 million forecast and 1.467 last month
    • Of that, 976k were single family permits and 408k were 5+ units
  • Housing Starts (breaking ground phase)
    • 1.36 million versus 1.42 million forecast and 1.29 million last month
    • last month revised down from 1.32 million
    • Of that, 1.031 million were single family  and 322k were 5+
  • Housing Completions
    • 1.62 million versus 1.495 million last month, a 10.3 percent increase
    • Of that, 1.092 were single family and 516k were 5+

We could attempt to over-analyze the month to month changes in this notoriously noisy data series, but in the bigger picture, permits and starts have been flat for more than a year while completions continue to improve.

Zooming out a bit more, the takeaway isn’t much different, but it adds context from the previous highs and also shows starts and permits remaining near pre-covid highs.

Source: mortgagenewsdaily.com