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T. sent this one with a note saying it is from her octogenarian uncle who may
have heard this when he was in the military during WWII.)
prisoner just arrived at the prison. While he started to get acclimated, he
noticed that out on the courtyard, one of the men shouted "53!" The
whole group doubled over in laughter. Then, a little while later, another man
shouted, "24!" Once again, the whole group laughed in hysterics.
evening, the new prisoner asked his cell mate what was going on. The cell mate
said, "Here. Take this joke book. Each joke is numbered. Since we're not
allowed to gather and tell long jokes outside, we just memorize the jokes here
and yell out the number."
I get it now," said the new prisoner. So he decided to memorize one of the
jokes in the joke book.
next day on the courtyard, the new prisoner shouted out the number of the joke
he memorized, "17!" But there wasn't even a peep from the crowd! No
laughter at all.
asked his cell mate who was standing next to him what the matter was.
cell mate replied, "Some people just don't know how to tell a joke."
say plenty of things about time flying as you grow older - Sunday is May
already. ("Life is like a toilet paper role - the closer you get to the
end the faster it goes" comes to mind.) HMDA changes are a couple years
out - so why are companies worried about them now? Because time flies. In my
discussions with compliance & QC folks around the nation, the HMDA concern
revolves not around borrower issues - most of the data is already being
collected by lenders - but around the statistical testing, increased regulatory
concerns, the increase in potential extreme penalties, and the increase in FTEs
required in auditing every file. See an explanation below.
MI is hosting a "Millennials in the Workforce" webinar
session led by Kristin Messerli of Cultural Outreach Solutions. Participants
will learn how to navigate the workplace dynamics between Millennials and other
generations in their organization, which recruitment tactics will prove most
effective in sourcing talent, and how to develop a loyal workforce of
Millennial employees. Click here to register for National MI's May 2nd,
1-hour, free webinar.
you're near Columbus Ohio this Monday or Tuesday, say hello. The Ohio Mortgage Bankers
Association is holding its Annual Convention May 2-4.
May 1-3 are the dates to mark for TMBA's 100th
Annual Convention in San Antonio. This is the largest gathering of Texas real
estate finance industry leaders and top performers. Click here for more
Having trouble with BAML's warehouse monies?
You're not alone. Apologies went out to lenders due to the "technical
issues." "This was a bank-wide issue we were having with our wire system.
The highest level of executives in our treasury team were involved to resolve
this problem as quickly as possible. We did not re-issue these wires because we
were unable to cancel them; once the wire gets initiated in our system, it will
eventually get funded. The bank was not comfortable sending out duplicate wires
for every loan that is stuck in queue as this problem was not limited to just
the warehouse group and impacted multiple warehouse clients. If you do decided
to use another warehouse line, please let us know so that we can coordinate
getting the funds back from the closing agents as the wires were released this
morning." What lender, at month end, wouldn't have used another lender
in order not to negatively impact their borrowers?
The residential lending biz was thrown a
bone yesterday when the CFPB issued a letter in response to the industry, led by the MBA,
seeking additional clarity on several aspects of the Know Before You Owe (KBYO)
rule. The CFPB is not, at the moment, clarifying anything but instead is
outlining an "expedited path" to issuing a formal Notice of Proposed
Rulemaking (NPRM) to address many of the industry's outstanding questions and
concerns, and incorporating many of the issues that have been addressed so far
through informal oral guidance. The MBA notes that, "The CFPB has already
begun drafting the rule based on the ongoing dialogue with MBA and other
industry participants, and CFPB will be holding additional meetings with
stakeholders prior to the targeted July NPRM."
the CFPB announced that it will propose changes to TRID in July to provide
"greater certainty and clarity" to the mortgage industry. This
does not mean that TRID is going away. It means that they will make
adjustments and provide more clarity. Though Cordray did not provide details of
the changes, industry groups have asked for further guidance on a dozen
significant issues, including how to cure errors, account for lender credits,
and calculate cash-to-close transactions. the changes requested by the industry
do not involve policy issues but rather resolving differing interpretations of
news prompted one broker to write me saying, "We are about 7 months into
the implementation and suddenly the CFPB blinked. Why? But worse yet, why are
they waiting until July to announce the proposal. At best any changes
wouldn't come until October 2016. And it the changes are real and we need
software changes the time would be out to next spring. What changed? Is
there a major lender or lenders in trouble because of TRID? This isn't
out of the goodness of their hearts. Are larger institutions being appeased
while claiming they are asking small business for input. Something is
amiss. Congress needs to ask the GAO to do a start to finish cost assessment of
the sinking of the Titanic, I mean TRID. Just consider the losses on rate
locks, compliance, manpower, software and hardware and the national economic
impact to the RE sector of GDP all from TRID."
CFPB also controls HMDA and its process. Sure we have until 2018 for collecting the expanded data required under the
revised Home Mortgage
Disclosure Act (HMDA). But
lenders and their IT staffs are already at work on it - we have plenty of lead
time, certainly more than with TRID. But experts think that the expanded
version of HMDA may prove harder than TRID was/is. And with worse penalties.
And not to look for any last-minute extensions that save lenders from
The new version of HMDA doesn't simply add to the
number of data points being collected (from 26 to 48). HELOCs will be subject
to reporting. The new rule applies to any residential loan that's secured by a
dwelling, and thus more loans will be covered by HMDA on the residential side,
and it expands the scope for commercial loans. Commercial loans covered
under the rule still have to satisfy the HMDA purpose test, which is for
purchase, home improvement or refinancing, but this is still a major change in
how HMDA affects commercial lending.
Lenders are well advised to understand HMDA's new requirements since data will
have to be integrated from multiple sources. And lenders have learned not to
rely 100% on vendors. Lenders need to know what their technology and business
processes will need to do to enable accurate compliance.
What could go wrong? Plenty: HMDA data is released
publicly and it becomes fodder for fair lending cases and issues from the
public, attorneys, and regulators. Even now companies are already
conducting the statistical analysis that consumer advocacy groups would do on
the HMDA data before lenders report it. Don't dally.
The lack of volatility continues in the
bond market although on Thursday the MBS
market ended higher in price and mostly tighter on spread, despite a rallying
treasury market, as heavy Fed demand was joined by real money interest. As
usual, the Fed was in buying billions of dollars of various securities and
coupons. At the close, the 10-year note was better by nearly .250 to yield 1.84%
while current coupon agency MBS prices improved about .125.
Today we've had more news. Anyone caring about
employment costs noted the Employment Cost Index for March was +.6% (as
expected). And Personal Income and Consumption/Spending, expected +.4% and
+.1%, respectively, were indeed +.4% and +.1%. Coming up later are the
Milwaukee and Chicago Purchasing Manager surveys as well as some University of
Michigan Sentiment figures. After the initial bout of figures rates are
higher with the 10-year at 1.87% and agency MBS prices worse .125.
"Tiny Home" movement is interesting, but...84 square feet? That is enough to store my Hot Wheels,
Match Box, and slot car collections. Am I thinking about this the wrong way?
have had a lot of housing indices announced in the last several business days,
often with apparently conflicting information. Lenders and real estate agents
prefer not to see too much appreciation, given the negative impact that
skyrocketing values have on first time home buyers and in outpacing wages. No
one wants to see housing stock prices heading down either. Let's take a look at
new home sales trends.
what the devil is a "new home?" "The Survey of Construction
includes two parts: the Survey of Use of Permits (SUP), which estimates the
amount of new construction in areas that require a building permit, and the
Non-Permit Survey (NP), which estimates the amount of new construction in areas
that do not require a building permit. Less than 2 percent of all new
construction takes place in non-permit areas." The information is overseen
by the Commerce Department but carried out by the Census Bureau and partially
funded by HUD. How many have vinyl siding or were one story? You can see stats on this site.
while back I received this note from Tom LaMalfa correcting the
all-too-widespread notion that first-timers only account for around one-third
of home buyers. Tom noted that this is not true - that is NAR propaganda based
on a weak survey methodology. For example, back in November, and based on
hard data, FTHBs accounted for 56.7%. All the details are contained in this link.
week we learned that U.S. new home sales came in weaker-than-expected. The
decline came heavily in the West region which suggests that the overall housing
market is still fine especially after last week's strong existing home sales
reading. New home sales were slightly soft in March, following a bad miss on
housing starts and building permits data reported last week. The median selling
price fell to $288K, down 3.1% from February. Sales grew 18.5% in the Midwest
while the West saw a decline of 23.6%. At the current sales pace, the inventory
of unsold new homes stands at a 5.8 months' supply, which is closing in on the
6.0-months' supply that is typically associated with normal periods of buying
and selling. (Last year at this time there was a 5.1 months' supply of unsold
terms of overall numbers, a while back HUD reported that seasonally adjusted
annualized new home sales hit 490,000. While up, the last time new home sales
were this low before the Great Recession was in 9/91. Moreover, new home sales
hit their all-time low of 270,000 in 2/11. Since that staggering low, the
compound annual growth rate has been a profoundly lackluster 13.3%. There's no
reason to expect 2016 to show significantly improvement.
going back to last summer, New Home Sales were +5.7% in Augustat a
seasonally adjusted annual rate of 552,000 - 5.7% above the revised July rate
of 522,000 and is 21.6% above the August 2014 estimate of 454,000. The
median sales price of new houses sold in August 2015 was $292,700; the average
sales price was $353,400. The seasonally adjusted estimate of new houses for
sale at the end of August was 16,000, a supply of 4.7 months at the current
September New Home Sales were -11.5% versus the revised August rate of 529,000,
but is 2.0% above the September 2014 estimate of 459,000. The median
sales price of new houses sold in September 2015 was $296,900; the average
sales price was $364,100. The seasonally adjusted estimate of new houses for
sale at the end of September was 225,000. This represents a supply of 5.8
months at the current sales rate.Sales of new single-family houses
in October 2015 were at a seasonally adjusted annual rate of 495,000, 10.7%
above the revised September rate of 447,000 and is 4.9% above the October 2014
estimate of 472,000.
were up again (4.3%) in November to an annual rate of 490,000. This is 4.3%
above the revised October rate of 470,000 and is 9.1% above the November 2014
estimate of 449,000. The median sales price of new houses sold in November 2015
was $305,000; the average sales price was $374,900. The seasonally adjusted
estimate of new houses for sale at the end of November was 232,000. This
represents a supply of 5.7 months at the current sales rate.
of borrowers rely on the FHA's slate of programs for financing. In recent
years, given the FHA's capital issues and the continued penalties and
settlements that lenders are experiencing, we can't ignore the question of the viability
of the FHA program going forward. And the impact of FHA, HUD, and DOJ news on
Ginnie Mae and its ability to do its job in the face of budget constraints.
the government continues to be involved in the program. The Senate recently
voted 66-31 to adopt an amendment that would include energy costs in the
Federal Housing Administration's mortgage underwriting process. The amendment,
offered by Georgia Republican Sen. Johnny Isakson, would reduce the amount of
energy used in homes and help create energy efficiency retrofit and
construction jobs. "The mortgage underwriting process, as we all know
here, is about evaluating a borrower's ability to afford a mortgage, and
history tells us that if we play around with it, it does not end well when we
forget this," Sen. Richard Shelby (R-Ala.) said on the Senate floor in
opposition of the amendment. "This amendment would weaken FHA's
underwriting standards, leading to greater safety and perhaps soundness
concerns for the FHA portfolio, which received a $1.7 billion bailout in 2013.
It would require that appraisals be inflated to account for the value of energy
efficiency upgrades as determined by HUD."
Connection has its new 203(k) Calculator that automates Maximum Mortgage Amount
calculations required for both the Standard and Limited 203(k) programs. The
203(k) Calculator is accessible in both a public version on HUD.gov and a
secure version within the FHAC system. As announced with FHA's March 14, 2016, SF
mortgagees may begin using the 203(k) Calculator now but must use
the calculator version within FHAC prior to endorsement for all 203(k)
transactions with case numbers assigned on and after October 31, 2016.
Mortgagees should thoroughly review the April 18, 2016, FHA Connection
detailed information about using the calculator.
Previously, FHA required lenders to utilize 2% of the
outstanding balance to establish the monthly student loan payment when the
payment is zero or not available. Effective immediately for FHA transactions, PennyMac is aligning with FHA's update. In addition, effective immediately, for all VA
transactions, PennyMac will be aligning with VA's policy clarification
regarding unreimbursed business expenses (2106). Analysis of unreimbursed
business expenses will be dependent on the borrower's source of qualifying
income. Click here to read
FHA published Mortgagee Letter
Permissive Loss Mitigation for Home Equity Conversion Mortgages (HECMs) and
Mortgagee's Optional Extension to Submitting a Due and Payable Request. The
ML provides mortgagees with an optional extension when submitting a due and
payable request where borrowers are behind on the payment of their property
taxes and/or hazard insurance premium by less than $2,000.
IN addition, FHA published its quarterly Lender Insightnewsletter. Issue #11 includes information on: annual
recertification's, voluntary withdrawals, quarterly loan review update, test
cases and more.
FHA also published Mortgagee Letter
2016-08, Student Loans,
which provides revised guidance for mortgagees when calculating student loan
obligations for use in a borrower's debt-to-income ratio calculation. FHA
believes that its approach provides the appropriate balance between expanding
access to credit and ensuring that the borrower is able to maintain successful,
Pacific Union Financial, LLC has
documented its policy and requirements for properties secured by FHA Site
Condominiums. The FHA Site Condominium Policy is available via the Pacific
Union Website and contains standard HUD requirements with zero overlays.
Properties meeting the definition of a Site Condominium according to the
criteria within this policy are not required to be included on the FHA Approved
Condo List. In addition, Site Condominiums as defined within the policy
do not require prior approval with HUD prior to submitting to Pacific Union.
Standard 203(k) Rehabilitation Mortgages, the Department of Housing and Urban
Development (HUD) requires the use of a HUD-approved 203(k) Consultant. Under
the new HUD Handbook 4000.1, lenders are required to select FHA-approved 203(k)
Consultant from the FHA 203(k) Consultant Roster in FHAC. The HUD Consultant
must be selected from an approved list that has also been reviewed by Sun West
prior to ordering any Consultant services or making any agreements with the
Consultant or the borrower.
Bank is now offering Manufactured Housing financing through its Correspondent
Lending channel. Some requirements include Title II properties only; no
single-wide units or leased lots. FHA 203(b) only, with minimum 660 FICO.
The unit must have been built after June 15, 1976 and must be affixed to a
permanent foundation. Contact your Account Executive for all requirements
including availability per state. In Mortgagee Letter 2016-08 FHA
announced a change in how to calculate and document monthly Student Loans
payments, regardless of payment status. This change can be applied immediately,
but is required for FHA Case Numbers ordered on or after 6-30-16 for
reminded customers that FHA underwriting guidelines have been clarified or
updated related to the following topics: Net Tangible Benefit, Housing Payment
History for Streamline Refinances, Tax Abatements.
to the bond markets, we did have some news Tuesday. Durable Goods Orders were
up 0.8% in Mar, an increase of $1.8 billion, per the U.S. Census Bureau. This
increase, up two of the last three months, followed a 3.1% February decrease.
And the S&P/Case-Shiller US Home Price Index was +.4% in February.
Lastly the Consumer Confidence Index was "94.2" in April, down from
96.1 in March. "Consumers' assessment of current conditions improved,
suggesting no slowing in economic growth. However, their expectations regarding
the short-term have moderated, suggesting they do not foresee any pickup in
momentum." The $34 billion 5-year note auction was met with average
demand. The news was enough to nudge rates higher yesterday, and yields moved
up to multi-month highs, in spite of some folks saying that the news was
morning we've had the MBA's Mortgage Index showing that apps last week (-4%,
purchases -2% and refis -5%). Coming up are the March Pending Home Sales
figures - not typically a bond market mover - and then later in the day the
April FOMC rate decision - don't look for any changes. Tuesday we closed the
business day with the 10-year sitting at a yield of 1.93% and in the early going
this morning it is at 1.90% with agency MBS prices better by about .125.
Peter Davies was on holiday in Kenya after graduating from Louisiana State
hike through the bush, he came across a very young bull elephant standing with
one leg raised in the air. The elephant seemed distressed, so Peter approached it
very carefully. He got down on one knee, inspected the elephants foot,
and found a large piece of wood deeply embedded in it. As carefully and as
gently as he could, Peter worked the wood out with his knife, after which the
elephant gingerly put down its foot.
elephant turned to face the man and with a rather curious look on its face,
stared at him for several tense moments. Peter stood frozen, thinking of
nothing else but being trampled. Eventually the elephant trumpeted loudly,
turned and walked away. Peter never forgot that elephant or the events of that
years later, Peter was walking through the Chicago Zoo with his girlfriend. As
they approached the elephant enclosure, one of the creatures turned and walked
over to near where Peter and his girlfriend Misty were standing. The large bull
elephant stared at Peter, lifted its front foot off the ground, then put it
down. The elephant did that several times then trumpeted loudly, all the while
staring at the man.
the encounter in 1986, Peter could not help wondering if this was the same
elephant. Peter summoned up his courage, climbed over the railing and made his
way into the enclosure. He walked right up to the elephant and stared back in
wonder. The elephant trumpeted again, wrapped its trunk around one of Peter
legs and slammed him against the railing, killing him instantly.
wasn't the same elephant.
news swirling of US Bank's mortgage reorganization last week, let's not forget
the regulator that touches every residential lender: the CFPB. There is
industry chatter that it is skipping TRID-related presentations at conferences,
which hopefully is not true as we all are looking for firm guidance and rules
on the topic seven months into it. And there is also the PHH/CFPB situation.
But Director Richard Cordray, whose term is due up in 2018, is also watching
other court cases in establishing exactly what the bureau can and can't do. For
example, the CFPB was dealt a setback last week. "A federal judge struck a blow to
the Consumer Financial Protection Bureau's recent foray into college
accreditation, ruling that the bureau lacks the authority to investigate
how accreditors approve for-profit colleges."
had an agent say to you "I am already working with another loan
officer"? Ever been used as the lender of last resort? The challenges of
winning agents over and avoiding being relegated to the lender who gets the
loans that others won't approve are one of the toughest challenges when trying
to increase purchase volume. Successful agent relationships develop when you
know exactly what to say and how to say it. National Mortgage Professional
Magazine hosts a FREE webinar presented by Ron Vaimberg, President of Ron
Vaimberg International and Executive Director of NMP University titled "How to Deliver the Ultimate Agent Presentation"
this Thursday, April 28 at 2PM EDT/11AM PDT.
5th is the date to join Maryland Mortgage Bankers Association
(MMBA) for its Annual Conference featuring fabled MBA Chief Economist Mike
Michigan Mortgage Lenders Association (MMLA) and MORBANPAC for its luncheon May 11th in East Lansing. Learn about legislative and
regulatory issues. on the state and national level. You will also be helping
MORBANPAC, the MMLA's Political Action Committee. Please take a moment to click on the video to watch this
message from MMLA Immediate Past President and Legislative/MORBANPAC Chairman,
Andy Baker. Strength in number helps the MMLA press forward on the many issues
that are impacting our industry. Click here to register.
March 25, 2016, all 4506T forms submitted to Freedom Mortgage Wholesale
for processing by the IRS must be completed on the revised form dated 09-2015
and have the attestation box marked. If the wrong form is completed or the
correct form without the attestation box marked it will be returned for
correction and will delay the processing of the tax transcripts/W2s.
Wholesale issued a reminder regarding policy as it relates to 4506T
transcripts and Extension requirements. For transactions after April 15th,
2016and an extension was filed, the following must be provided: Copy of the
extension (IRS Form 4868), If money is due on the extension, include a copy of
the cancelled check for the IRS tax payment. 4506T results must show "No
Results Found" for 2015. If the borrower has filed their 2015 tax return
and the tax transcript is unavailable, the following must be provided: A copy
of their 2015 tax return. 4506T results must show "No Results Found"
for 2015. Evidence the refund for 2015 has been received or a copy of the
cancelled check for the IRS tax payment.
about changes in how underwriters view credit?
According to the TransUnionQ4 2015 Industry
Insights Report, as more
consumers, and more nonprime consumers, are receiving auto loan and credit card
access, delinquency levels for these credit products have only risen slightly
and remain at relatively low levels. Both mortgages and personal loans
experienced yearly drops in their delinquency levels, with mortgages dropping
nearly 30% in the last year. This report states the mortgage delinquency rate
declined from 3.29% in Q4 2014 to 2.37% in Q4 2015. While delinquencies
dropped, mortgage debt per borrower increased from $187,139 in Q4 2014 to
$189,707 in Q4 2015. The rapid decline in delinquency but increase in debt is a
positive sign for the residential mortgage market, per TransUnion. TransUnion
data show that at the conclusion of 2015 there were 1.26 million more subprime
borrowers with credit card accounts showing a balance, and 1.21 million
additional subprime consumers with auto loan accounts, compared to the end of
2014. The share of subprime accounts compared to other risk tiers also rose
slightly in the last year. TransUnion's report includes auto loan, credit card
as well as mortgage loan statistics.
and Associates published its Mortgage Originator Survey indicating a
continuation of a solid purchase market. Survey respondents reported a 19
percent YoY increase in purchase applications in February, compared to a 15
percent average in 2015. Applicant credit quality index reached 62.3 in
February, slightly down from 62.5 the prior month. The drop in the index is
largely due to a greater share in first time home-buyers and the
recession-impacted consumers. Underwriting criteria also dropped to 61.8 in
February from 62.4 a month earlier as lenders have reduced credit overlays,
particularly on LTV and credit score restrictions. Entry-level mortgage
credit availability rose to 66 from 65.7 last month and private mortgage
insurance index decreased to 72.3 in February due to less availability of LPMI.
Refinance applications increased 3 percent YoY compared to a 24 percent decline
in January. As TRID has been underway for five months, most of the
industry has adjusted to the new guidelines, but post-closing loan sale
challenges remain. For more information regarding the Mortgage Originator
Survey, contact Ivy
lenders are reacting. For example, "To improve transparency and to help
clients better understand how a borrower's credit is reviewed during the manual
underwriting process, Sun West has updated its manual underwriting
guidelines specifically for the review of a borrower's credit. The updated
guidelines include additional information on how various risk factors
associated with a borrower's credit are analyzed during a manual underwriting
all this going on in the industry, at least things are relatively quiet in the
capital markets arena although it is still "up a little, down a
little." Monday U.S. Treasuries, and agency MBS prices, declined slightly
for no real reason. In fact, the only news, in theory, should have moved rates
lower: new home sales were slightly soft in March, following a bad miss on
housing starts and building permits data reported last week. The $26 billion
2-year Treasury auction was met with moderate demand.
news today we'll have Durable Goods - always volatile depending on things like
aircraft orders, and also the S&P/Case Shiller series of numbers if you
want to find out housing prices in February. And let's not forget Consumer
Confidence. We closed the 10-year Monday at a yield of 1.90% and this morning,
in the very early going, it has improved slightly to 1.89% - one would expect
agency MBS prices to be slightly better but not enough to impact rate sheets
for borrowers. That may change as the economic news comes out.
pompous, pretentious and newly promoted Colonel in a foreign military is exploring
his brand new office. While sitting at his desk, he contemplates his good
fortune as he ponders what to do next.
then, through the glass door he becomes aware of a Private who is knocking.
Colonel waves him in as he grabs his telephone and says, "Yes General.
Thank you General. I appreciate your good wishes."
hangs up he glances with annoyance at the Private and says, "What do you
Private responds, "Nothing sir, I just came to connect your new
call home improvement projects 'teaching my son to swear" jobs." One
group of folks not swearing are people in the residential lending industry - at
least those who can handle the nearly overwhelming and overlapping myriad of
rules. For me April has included visits to Colorado, Kansas, North Carolina,
Tennessee, Idaho, and Northern California. March and April were great months
for many in terms of fundings, and the mood has been good, not great, as
companies do their best to help their clients in spite of the palpable fear of
making a mistake in a loan file.
is becoming more and more of a trend for lenders and financial institutions
that don't want the regulatory burden of home lending, Embrace Home Loans,
a direct lender for Fannie Mae & Freddie Mac and an issuer for Ginnie Mae, announced
a partnership with Orlando, Fla.-based McCoy Federal Credit Union. As part
of the partnership, McCoy FCU will now offer its more than 58,000 members home
financing through Embrace's Affinity Mortgage Solution which offers residential
mortgages. "As a private label, outsourced program, Affinity removes all
regulatory oversight from McCoy FCU while managing the credit union's brand and
speaking of regulatory burden, the U.S. Department of Housing and Urban
Development (HUD) announced a $1 million agreement between the Fair Housing
Project of North Carolina Legal Aid and North Carolina-based Fidelity Bank
to resolve allegations the mortgage lender engaged in unfair lending practices
against minority applicants. Read the agreement.
anyone who has been out of the country for the last several decades, the Fair
Housing Act makes it unlawful to make housing unavailable or to
discriminate in the terms, conditions, or privileges of the sale of a dwelling
because of race. "The Fair Housing Act also makes it unlawful for any
person or entity whose business includes residential real estate-related
transactions to discriminate in these transactions, or related terms or
conditions, because of race. Banks and other lenders are prohibited from
discriminating with respect to home mortgage loans."
press release read, "'Whether intentional or not, stark disparities exist
in lending patterns and access to credit along racial and ethnic lines,' said
HUD Assistant Secretary for Fair Housing and Equal Opportunity Gustavo
Velasquez. 'HUD remains committed to not only enforcing the law, but also
facilitating productive relationships between lenders and advocacy groups that
help make lenders more aware of their obligations under the Fair Housing
the agreement, Fidelity will make investments and community development loans
in predominantly minority census tracts where at least 40 percent of these
loans will specifically promote affordable housing. For this purpose, the Bank
has committed to earmarking at least $500,000 each year for two years, for a
total of $1 million.
complaint was rooted on the belief that the bank denied or made housing and
home mortgage loans unavailable because of race. HUD notes that last year 28 percent
of all fair housing complaints filed with HUD and Fair Housing Assistance
Program agencies (HUD partners,) cited race as the basis for the complaints.
gears somewhat, the folks who follow such things say that American consumers
are actually out shopping for homes - especially their first affordable ones -
they just don't have enough supply to meet demand. Lower-priced homes are being
picked up quickly whereas more expensive ones are languishing on the market,
making competition intense as spring home buying season approaches.
the refinance side of things Ben Graboski, SVP of Data & Analytics at Black
Knight, wrote to me a while back saying, "It's a fact that homeowners
aren't tapping their equity. And we have the data to prove it. There's $4.2
trillion in 'tappable' equity amongst US mortgage holders.
Black Knight last looked at the refinanceable population just two months ago,
there were 5.2 million potential candidates, and that number was on the
decline," said Graboske. "That analysis was shortly after the Federal
Reserve raised its target rate by 25 basis points, at which time the prevailing
wisdom was that mortgage interest rates would rise in response. Global economic
shocks then sent investors looking for the safety of U.S. Treasuries, driving
down yields on benchmark 10-year bonds. Mortgage interest rates began to fall
in defiance of prevailing wisdom, and the refinanceable population grew by 30
percent in the first six weeks of 2016.
a result, an additional 1.5 million mortgage holders could now likely both
qualify for and benefit from refinancing, bringing the total number of
potential refinance candidates to 6.7 million. Given that refinance
originations fell by 27 percent from Q1 to Q4 2015, and prepayment rates
-- historically a good indicator of refinance activity -- hit their lowest
level in two years in January -- this expansion of potential candidates could
very well provide a welcome and unexpected lift to the market as we move
forward in 2016."
Knight released its latest Home Price Index report this morning, looking at
February 2016 real estate transaction data. U.S. home prices showed stronger
monthly gains than they have since last April, rising 0.7% from January, and
were up 5.3% from last year. National home prices are now 27.5% above where
they were at the bottom of the market at the start of 2012. Using Black
Knight's figures, at $254K, the national level HPI is now just 5% off its June
2006 peak of $267K.
no one's surprise California, Colorado, and Washington showed particular
strength, with multiple metros in each of these states among the month's best
performing areas. Washington led all states with 1.8% appreciation from
January, followed by Colorado at 1.7%; Oregon (1.3%), California (1.3%) and
Hawaii (1.2%) rounded out the top 5. San Jose, CA led metro areas with 2.4%
growth from January, followed by Seattle, WA at 2.1%. Not exactly laggards, San
Francisco & Denver each saw 2% monthly appreciation, and the rest of the
top 10 metros saw 1.4% or better. In fact, CA, CO & WA accounted for 9 of
the top 10 performing metro areas.
isn't all unicorns and rainbows. Black Knight's report showed that Connecticut,
Rhode Island, and New Jersey were the only states to see negative price movement
in February, and together accounted for 7 of the 10 worst performing metro
there is certainly the argument to be made that younger, non-home owners are
not participating in this improvement in home prices, and in fact are being
negatively impacted by some markets growing increasingly unaffordable.
Millennials are the largest group by population, outnumbering baby boomers.
Does everyone like them? No - here's an interesting Google app, sent in by Ceci B., for those
with a sense of humor.
someone say "rent?" Market research firm Reis Inc. reports the
national vacancy rate was 4.5% in the first 3 months of this year.
Meanwhile, apartment research company Axiometrics Inc. reports average rents
climbed 4.1% to $1,248 over the same period. Both data points indicate the multifamily
lending sector is slowing down, so bankers should monitor this closely in
coming months and quarters before issues develop in the lending book.
1 million homeowners regained equity in their home in 2015, while 4.3 million
homes remain in negative equity, according to CoreLogic. Equity rose YoY by
$682 billion in the last quarter of 2015 and 91.5 percent of all mortgaged
properties had equity at the end of Q4 2015. The number of homes in negative
equity did rise 2.9 percent from Q3 2015 but the value of negative equity
declined 10.7 percent in 12 months. Looking at properties with a mortgage,
which encompasses more than 50 million properties, 18.9 percent have less than
20 percent equity and 2.3 percent have less than 5 percent equity. The states
with the largest share of homes in negative equity include Nevada, Florida,
Illinois, Arizona and Rhode Island, while the states with the greatest percent
of homes in positive equity are Alaska, Hawaii, Montana and Colorado. The
majority of homes with positive equity tend to be centralized at the higher end
of the housing market. For example, 95 percent of homes that are valued greater
than $200,000 have equity compared to 87 percent of homes that are valued less
RentRange released the top 25 cities with the largest rental rate increases.
Not surprising, nine out of the twenty-five metro areas are on the West
Coast. The rise in rental prices boasts well for real estate investors,
particularly those in the South as rent prices are on the rise along with gross
yield, which demonstrates income return from an investment. Whereas some of the
West Coast markets experience low gross yield, as they are consistently among
the lowest on the list. Some of the top cities with the greatest rental rate
increase include, Cape Coral-Fort Myers, FL, New Orleans, LA, Daytona Beach,
FL, San Jose-Sunnyvale-Santa Clara, CA, Little, AR and Knoxville, TN. Other
notable cities on the list include Charleston, SC, Portland, OR, Denver, CO,
Dallas, TX and San Diego, CA
determined the top and bottom counties where Millennials are most likely to
purchase a home and found that the most popular metros are those with
strong and growing economies, with opportunities for income growth. According
to the analysis, there is an expected shift from Millennials purchasing homes
in less expensive areas that border the improving counties to more expensive
housing markets in the heart of the improving counties. The top ten counties
include Douglas, CO, Fairfax, VA, Boulder, CO, Forsyth, GA, Placer, VA and
Hamilton, IN. The bottom counties include Lackawanna, PA, Clayton, GA, Bronx,
NY, York, ME, Miami, FL and Cameron, TX.
had a dearth of scheduled economic releases during the past few weeks, but that
is about to change. We have a ton (a technical term) of it this week, ranging
from housing to manufacturing. We start today with New Home Sales at 10AM.
Tomorrow is Durable Goods - always volatile depending on things like aircraft
orders, and also the S&P/Case Shiller series of numbers if you want to find
out housing prices in February as well as Consumer Confidence. Wednesday are
the MBA's application numbers for last week, but also Pending Home Sales and
the FOMC rate decision - don't look for any changes to overnight Fed Funds.
day after "hump day" we'll have Initial Jobless Claims and GDP for
the 1st quarter. We wrap up the week with the Employment Cost Index
(a favorite of the Fed to follow), Personal Income and Consumption, some
Personal Consumption Expenditure figures, the Chicago Purchasing Manager's
survey, and the University of Michigan Consumer Sentiment figures. And for
anyone trying to guess where rate sheets are going to be today we closed the
10-year at a yield of 1.89% and this morning its sitting at 1.88% with
agency MBS prices better a tad.