The Urban Institute (UI) is advocating for a streamlined refinancing program similar to the Home Affordable Refinance Program (HARP) which aided many homeowners during the Great Recession to assist those impacted by the pandemic. HARP, which was used by more than 3.4 million borrowers between 2009 and 2018, offered simplified documentation, automated appraisals, no or reduced loan-level pricing adjustments, and mortgage insurance transferability to existing GSE (Fannie Mae and Freddie Mac) borrowers. Because home prices had dropped dramatically, leaving many borrowers underwater, eligibility was determined without regard to a mortgage's current loan-to-value (LTV) ratio. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Incoming data for March has caused Fannie Mae to again revise its forecast for the year's growth in gross domestic product (GDP). The company's Economic and Strategic Research (ESR) team said a sharp uptick in the economy last month followed a weather-related retreat in February. Most evident was a jump in employment to 916,000 new jobs in March from 468,000 in February, the fastest pace since August 2020. This growth is expected to continue. Auto sales were also up, and consumer confidence surveys jumped to their highest levels since the April 2020 downturn. As a result of these and other heightened indicators, Fannie Mae now sees growth reaching 6.8 percent by the fourth quarter on a year-over-year basis, up from 6.6 percent in the earlier forecast. Expectations for 2022 are unchanged at 3.0 percent. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The House Committee on Financial Services (FSC) held a virtual hearing last week on ways to provide equitable and affordable housing infrastructure. The memorandum setting out the hearing's purpose stated that, not only is affordable housing a crucial part of the nation's infrastructure and a stable asset that boosts individuals, families, and communities' ability to thrive, but it also generates construction activity and jobs that stimulate the economy. Prior to the hearing the FSC published 17 draft bills centering around housing that have been introduced into the current congressional session. They deal with everything from flood insurance to lead paint abatement to housing on Native American lands. One proposal, presented as a draft for discussion, is the "Downpayment Toward Equity Act of 2021." It is of particular interest because it builds on a much discussed housing policy set out during the presidential campaign. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Residential construction recovered in March after a serious decline the prior month. The U.S. Census Bureau and Department of Housing and Urban Development said all three measures rose, with housing starts hitting a 15 year high. Some regional increases topped 100 percent. Permits for residential construction were issued at a seasonally adjusted annual rate of 1.766 million in March, a 2.7 percent increase from February's rate of 1.720 million. The latter is an upward revision from the 1.682 million permits originally reported for February, erasing some of the near 11 percent loss originally reported. The permitting rate for the month was 30.2 percent higher than in March 2020. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
There was little change in the number of active forbearance plans over the past week, but Black Knight reminds, in its regular Friday report, that this it was simply another mid-month lull as servicers finished processing the prior month's expired plans. Even so, the number of plans did decline for the seventh straight week, even if it was by a mere 1,000 loans or 0.04 percent. There are 380,000 plans set to expire at the end of April so Black Knight says the possibility remains of further improvement over the next two weeks. Even with the minimal decline of the past week, the number of outstanding plans is still down by 296,000 (11.4 percent) over the last month. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
True to tradition, new home sales appear to have moved higher in March as the calendar closed in on the start of the spring market. The Mortgage Bankers Association (MBA) estimates sales of newly constructed homes increased by 7 percent compared to February and are 12 percent higher than a year earlier. This change does not include any adjustment for typical seasonal patterns. Based on the application data, MBA forecasts that home sales were at a seasonally adjusted annual rate of 714,000 units in March. This is a decline of 4.5 percent from the February rate of 748,000 units. On an unadjusted basis, the forecast is for 72,000 new home sales in during the month, an increase of 10.8 percent from 65,000 sales in February. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
New home builders seem to be slowly getting their mojo back. After recovering from the hit they took in the first days of the pandemic, they encountered labor shortages, supply chain issues, and rising material costs. The National Association of Home Builders (NAHB) said that builder confidence in the new home market, driven by strong buyer demand, ticked up slightly this month with the NAHB/Wells Fargo Housing Market Index (HMI) rising 1 point to 83. It is still down by 7 points from the all-time high it reached in November. Robert Dietz, NAHB's chief economist, said builders continue to face challenges in order to add much needed new homes to the market. While mortgage interest rates have trended higher since February and home prices continue to outstrip inflation, housing demand appears to be solid for now as buyer traffic reached its highest level since November. NAHB's forecast is for ongoing growth in single-family construction in 2021, albeit at a lower growth rate than realized in 2020. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Freddie Mac's Economic and Housing Research Group finds a lot to like in the present economic environment. . The company's quarterly forecast credits the increasing availability of COVID-19 vaccines and the easing of virus related restrictions, the passage of the American Rescue plan and its cash stimulus for households, as setting the stage for economic growth and sending consumer confidence to a post pandemic high in March. The labor market, while still needing to add 8.4 million jobs, put 916,000 on the books last month, the greatest gain since August. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Black Knight has launched a new monthly report covering mortgage origination activity as gathered through its Optimal Blue loan product and pricing engine. The company says its Originations Market Monitor will publish a series of key indicators drawn from Optimal Blue data as well as secondary market insight from Black Knight's hedging platforms. The initial report covers activity for March and shows that at month's end the average 30-year conforming rate had increased by nearly 60 basis points over the course of the month to 3.34 percent. Still, this was 20 basis points below the rate at the same point in 2020. Average rates by loan product are shown below....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Higher interest rates drove the volume of mortgages applications lower again last week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, decreased 3.7 percent on a seasonally adjusted basis during the week ended April 9. On an unadjusted basis, the Index was down 3 percent compared with the previous week. The Refinance Index was 5 percent lower week-over-week and 31 percent below its level during the same week in 2020. The refinance share of mortgage activity decreased to 59.2 percent of total applications from 60.3 percent the previous week. The seasonally adjusted Purchase Index dipped 1 percent on both an adjusted and unadjusted basis and was 51 percent higher than the same week one year ago. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
While most of us couldn't wait for 2020 to be over, it turns out to have been a superlative year for mortgage originators. The Mortgage Bankers Association's (MBA's) annual Mortgage Bankers Performance Report shows the profit independent mortgage banks and mortgage subsidiaries of chartered banks made on each loan they originated was nearly three times their profit in 2019. Bankers made an average of $4,202 on each loan originated in 2020, up from $1,470 in 2019. While servicing profits were down, production profits more than compensated. Ninety-nine percent of the firms posted overall pre-tax net financial profits in 2020, compared to 92 percent in 2019 and only 69 percent in 2018. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The national delinquency rate posted its fifth consecutive decline in January, retreating to the lowest level since the start of the pandemic. CoreLogic says 5.6 percent of all mortgages were at least 30 days past due during the month, including those loans in foreclosure. This was an increase of 2.1 points compared to the 3.5 percent rate in January 2021. The rate has been declining since August 2020. The early stage delinquency rate, the percentage of loans 30 to 59 days past due, is now lower than the pre-pandemic rate in January 2020, 1.3 percent versus 1.7 percent. The next most adverse bucket, loans 60 to 89 days past due, is down from 0.6 percent to 0.5 percent. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Both Fannie Mae and Freddie Mac (the GSEs) have released information to their lenders confirming that any loans they purchase after July 1, 2021 must conform to the agreement made on their behalf in January by the Federal Housing Finance Agency (FHFA) with the Department of Treasury, amending the Preferred Stock Purchase Agreement (PSPA). Although there were several requirements in the amended PSPA designed to limit risk, last weeks letters were specifically concerned with the new qualified mortgage (QM) rule from the Consumer Financial Protection Bureau (CFPB). The revised PSPA specifically prohibits the GSEs from acquiring loans that do not meet this rule. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
American home owners received bills for $323 billion in property taxes last year, a 5.4 percent increase from $306.4 billion in 2019. ATTOM Data Solutions says that the average bill for each of the 87 million single-family homes in the country was $3,719, an effective tax rate of 1.1 percent. This average was up 4.4 percent from $3,561 in 2019 while the effective property tax rate of 1.1 percent in 2020 was down slightly from 1.14 percent in 2019.= "Homeowners across the United States in 2020 got hit with the largest average property tax hike in the last four years, a sign that the cost of running local governments and public school systems rose well past the rate of inflation. The increase was twice what it was in 2019," said Todd Teta, chief product officer for ATTOM Data Solutions. "Fortunately for recent home buyers, they have mortgages with super-low interest rates that somewhat contain the cost of home ownership. But the latest tax numbers speak loud and clear about the continuing pressure on both recent and longtime homeowners to support the rising cost of public services." ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Black Knight reports that the number of loans in forbearance programs declined last week for the sixth straight time and it was the largest drop in six months. As of April 6, the number of loans in active plans was 2.312 million or 4.4 percent of all homeowners with mortgages. This is down by 228,000 from the previous Tuesday, a 9 percent drop in a single week. A company spokesperson said the decrease was not unexpected. It was driven largely by those who entered the program shortly after it was authorized exiting their plans at the 12-month mark. That would have been their final expiration point prior to recent extensions. The improvement was widespread. All investor classes saw significant improvement in their numbers. The largest change was among those loans serviced for FHA and VA, down 94,000. This was followed by downturns of 69,000 and 65,000 in GSE (Fannie Mae and Freddie Mac) and portfolio/private label security (PLS) plan forbearances, respectively. At the end of the reporting period there were 753,000 GSE, 954,000 FHA/VA and 605,000 portfolio/PLS loans remaining in programs....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.