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Fannie, Freddie Loan Limits Largely Unchanged in 2015


The maximum conforming loan limits for mortgages Fannie Mae and Freddie Mac purchase in 2015 will remain at current levels, the Federal Housing Finance Agency said yesterday. That means the loan limit in most areas will be $417,000 for one-unit properties.

In high-cost areas, such as Los Angeles and Washington, D.C., the maximum will remain at $625,500. Meanwhile, limits will rise in 46 counties that have experienced rising home prices -- principally in the Baltimore, Boston, Denver, Nashville and Seattle metro areas.

---ABA Daily Newsbytes

Fannie Cuts Mortgage-Rate Outlook, but Home Buyers May Not Bite

Fannie Mae now believes the 30-year fixed-rate mortgage will average about 4.3 percent next year, down two-tenths of a percentage point from its previous forecast. Lower rates will result in smaller monthly loan payments, making homeownership more affordable. However, the latest housing-market forecast from Fannie Mae does not adjust the projection for total home sales in 2015. "The housing market continues to grind its way upward, but we don't expect a breakout performance in 2015 as the fundamentals remain somewhat muted," says Doug Duncan, Fannie Mae chief economist. Mortgage activity next year will likely be very similar to activity this year, adds Duncan.

From "Fannie Cuts Mortgage-Rate Outlook, but Home Buyers May Not Bite"
MarketWatch (11/20/14) Mantell, Ruth

Friday Rate Update

Mortgage Rates Continue to Fall.

The rate for a 30-year fixed-rate mortgage averaged 3.99 percent this week, slightly down from last week’s 4.01 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.22 percent. This week’s 15-year FRM averaged 3.17 percent, down from last week’s 3.2 percent rate. A year ago, the 15-year FRM averaged 3.27 percent---

ABA Daily Newsbytes

TransUnion: Mortgage Delinquencies Fall Nearly 17 Percent

TransUnion's data show mortgage delinquencies down to 3.36 percent for the third quarter -- still above historic norms but improving. The decline of almost 17 percent from a year earlier represents a downward pattern that has stretched out for the last 11 quarters in a row. Major markets like Miami, San Francisco, Phoenix, and Los Angeles were among the areas making the biggest strides. "It's especially heartening to see major declines in areas that were hardest hit by the mortgage crisis," said TransUnion executive Joe Mellman. "In part, it speaks to the broader rebound in the economy. As unemployment continues to decline and home values improve, consumers have both greater wherewithal and motivation to stay current on their housing payments."

From "TransUnion: Mortgage Delinquencies Fall Nearly 17 Percent"
Housing Wire (11/18/14) Swanson, Brena

Small Banks Book More Loans as Slowdown Sets In

Community banks continue to expand their loan portfolios, even as the pace of growth appears to be slowing. An American Banker analysis of 310 institutions shows a 15 percent year-over-year jump in loan portfolios at banks with less than $40 billion in assets in the third quarter, with net interest income up 11 percent. Bankers say they are making more commercial-and-industrial loans, and with bigger banks setting their sights on larger corporate clients, community banks have more opportunities these days to make small-business loans. "Larger banks don't want to do a $50,000 line of credit," says Market Insights CEO Joe Sullivan. "They'd rather do a $5 million loan. So there's a continued realignment where the big banks are pushing the small businesses out the door, and small banks are picking up the slack." The $1.5 billion-asset Needham Bank in Massachusetts reported a 32 percent jump in total loans to $1.3 billion. Executive Vice President Paul Totino attributes the gain to the economic recovery, increased demand for housing, and the addition of experienced lenders, as well as efforts to diversity its loan book.

From "Small Banks Book More Loans as Slowdown Sets In"
American Banker (11/14/14) Stewart, Jackie

Friday Rate Update

Mortgage Rates Slightly Down


The rate for a 30-year fixed-rate mortgage averaged 4.01 percent this week, down from last week’s 4.02 percent, Freddie Mac said yesterday. At this time last year, the FRM rate averaged 4.35 percent--

ABA Daily Newbytes

Alternative Mortgages Making a Comeback

Adjustable-rate mortgages, jumbo mortgages, interest-only home loans, and piggybacks are just some of the products that all but vanished after the economy imploded. Now, they appear to be making a comeback in certain regions. CoreLogic DataQuick reports that ARMs accounted for just 3.5 percent of loans used to purchase Orange County, Calif., homes in the spring of 2009. Since the first of this year, one in five Orange County purchase loans was adjustable. Nationwide, nearly one in 10 loans was adjustable this past spring -- an increase from one in 66 five years earlier, reports Black Knight Financial Services. After bottoming out in 2012, mortgage credit has become increasingly available over the last couple of years, according to the Mortgage Bankers Association's mortgage credit availability index. That measure has climbed 17 percent since February 2012. Nevertheless, credit remains very tight. MBA chief economist Mike Fratantoni says the index shows that it was nine times easier to obtain a loan in 2006 than it is today.

From "Alternative Mortgages Making a Comeback"
Orange County Register (CA) (11/09/14) Collins, Jeff

Election Results Show Community Bank Muscle

ICBA released a special post-election memo for the 2014 midterms outlining the key election results for community banks, the implications on community bank issues and the industry’s position heading into the 114th Congress. ICBA’s bipartisan political action committee contributed $1.7 million to support more than 290 pro-community bank candidates and committees. In a press briefing this week, Senate Republican leader Mitch McConnell (R-Ky.) said the Senate Banking Committee will review the impact of the Dodd-Frank Act on community banks.   ---ICBA

Community Banks Most Trustworthy

More Than Half of America Doesn't Trust Banks, Prefers to Keep Money Local

Half of Americans have lost trust in banks over the last few years, and even more have lost faith in mortgage lenders, according to a new Harris Interactive Poll. Only 9 percent of Americans say they trust banks more than they did several years ago. These changing attitudes are largely due to consumers' experiences, including customer service and the quality of banking products. More consumers are using businesses closer to home, as local options appear to have a better reputation among consumers. The survey results "suggest a financial institution's sphere of influence might inversely relate to Americans' trust in it," researchers reported. Credit unions and community banks were considered the most trustworthy, with more than 75 percent of respondents rating them highly. Customer trust does not seem to impact a bank's bottom line. Even as they lost a lot of public confidence, major banks posted record-breaking profits.

From "More Than Half of America Doesn't Trust Banks, Prefers to Keep Money Local"
MainStreet (11/04/14) Reed, Eric

ABA Analyzes What Midterm Elections Mean for Bankers


ABA’s government relations team has prepared an analysis of how the Republican victory in Tuesday’s election will affect the banking industry. The analysis, which is available on aba.com, reviews the likely impact on such key issues as Dodd-Frank regulatory fixes, the Consumer Financial Protection Bureau, overall regulatory burden, data security, GSE reform and tax reform.

There is cautious optimism about the potential for tweaks to Dodd-Frank and more oversight of financial regulators, the analysis indicates. "Congress can play a critical role ... in terms of both legislation and aggressive oversight of regulatory actions," the analysis found. "The U.S. Senate under current Democratic leadership has been reluctant to take on that role. We anticipate that the incoming leadership will be more active in their oversight responsibilities and will originate and consider some regulatory relief bills in the 114th Congress. Read the analysis.

The election represented the fruit of ABA's electoral engagement efforts. Through BankPac, bankers supported more than 480 candidates with the $3.2 million -- 90 percent of that raised through state bankers associations -- they raised for the 2014 election cycle. Meanwhile, ABA's 501(c)(4), the Financial Education and Advocacy Initiative, was successful in all five of the races where it supported get-out-the-vote efforts: Arkansas, Colorado, Georgia, Iowa and Kentucky.

--ABA Daily Newsbytes

Why Housing Is Dead: First-Time Buyers Collapse To 27-Year Lows

by ZeroHedge • November 3, 2014

From Zero Hedge

 

The Millennials (one of the biggest generations in US history) are just not getting with the status quo program. As we detailed previously, with lower credit scores, less disposable income, and a soaring number of people living with their parents; so it should be no surprise that The National Association of Realtors (NAR) today admitted that first-time homebuyers plunged to the lowest level in 27 years. The blame – of course – rather than low/no-growth fiscal policies, student debt servitude, and inequality-driving cheap-funding monetary policy, is price competition from ‘investors’ and too “stringent credit standards,” perfectly mirroring FHFA’s Mel Watt’s Einsteinian insanity desire to dramatically ease lending standards and slash minimum down-payments (as we noted previously). Perhaps NAR accidentally stumbles on the biggest reason no one is buying in their profiling: the typical first-time buyer was 31-years-old, while the typical repeat buyer was 53 – smack in the middle of the Millennial collapse.