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Tuesday, March 31, 2015

Mortgage Picture Brightens for Banks



With the mortgage business showing signs of surprising strength, bank earnings could get a lift. The Mortgage Bankers Association's latest weekly mortgage applications survey showed the unadjusted purchase mortgage index up 3 percent from a year earlier. Meanwhile, in Fannie Mae's recent quarterly survey of senior mortgage-lender executives, more than 50 percent said demand for home loans had increased over the last three months. Seventy-one percent of lenders see demand for GSE-eligible purchase loans rising in the next three months, which has prompted a swing in profit hopes. At the end of last year, only 13 percent of executives expected better margins from mortgage lending. Currently, 41 percent do. Bigger mortgage lenders are more positive, thanks primarily to favorable interest rates. Last week, the 30-year fixed mortgage averaged 3.69 percent, marking a year-over-year decrease from 4.4 percent. Analysts say this current burst of activity will likely end if rates climb.

From "Mortgage Picture Brightens for Banks"
Wall Street Journal (03/30/15) P. C6 Carney, John

Friday, March 27, 2015

Friday Rate Update

Mortgage Rates Reach 2015 Low

The rate for a 30-year fixed-rate mortgage averaged 3.69 percent this week, down from last week’s average of 3.78 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.4 percent.

This week’s 15-year FRM rate averaged 2.97 percent, down from last week’s 3.06 percent rate. A year ago, the 15-year FRM rate averaged 3.42 percent.

House Panel Passes ABA-Advocated Reg Relief Bills
With strong bipartisan majorities, the House Financial Services Committee yesterday approved eight ABA-backed regulatory relief measures, many of which are included in ABA’s Agenda for America’s Hometown Banks:

  • H.R. 601, which would eliminate the annual privacy notice disclosure requirement for institutions that haven’t changed their policies.
  • H.R. 685, which would clarify the Qualified Mortgage rule’s points and fees test.
  • H.R. 1408, which would postpone Basel III rules on mortgage servicing assets until their impact can be studied.
  • H.R. 1259, which would establish a process for designating an area as rural or underserved for purposes of CFPB exemptions.
  • H.R. 1529, which would provide a legal safe harbor from escrow requirements for smaller institutions that hold loans in portfolio for three years.
The bills will now move to the House floor.

--ABA Daily Newbytes

Tuesday, March 24, 2015


Banks Keep Loans Close to Home

The share of mortgages held on lender balance sheets accounted for 27 percent of 2014 originations, the highest level in a decade, according to new data from the Urban Institute’s Housing Finance Policy Center. Several things appear to be driving the increase in the amount of loans banks hold for their own portfolios. The Urban Institute cites the growth of jumbo loans to 19 percent of all originations from 14 percent in 2013. Increased Fannie Mae and Freddie Mac guarantee fees are also viewed as drivers of banks’ increased proclivity to hold new loans. These fees have risen from roughly 0.2 percent of the loan amount pre-2008 to more than 0.5 percent now. That makes it much more profitable for lenders to self-insure the mortgages they make. Despite the rising share of home loans held for banks’ own portfolios, the total dollar amount of residential mortgages held by federally insured banks at the end of 2014 is actually 2.7 percent below where it stood at the end of 2012. During that period, overall bank assets have grown 7.6 percent, meaning that mortgages are falling as a share of bank assets.

From "Banks Keep Loans Close to Home"
Wall Street Journal (03/23/15) Carney, John

Friday, March 20, 2015


Banks to CFPB: Tear Down This Rate Calculator

Banking trade groups are concerned that the Consumer Financial Protection Bureau's mortgage rate calculator provides misleading information to consumers and have requested that the agency take it down. The CFPB says the rate checker is intended to provide unbiased information on average mortgage rates by state, not tell consumers which lender to use. However, these groups contend that the calculator provides incomplete information about local mortgage rates because it lacks details on points, fees, mortgage insurance, and other important elements of home loans. Their concerns about the rate checker were re-ignited when U.S. Rep. Stephen Fincher (R-Tenn.) questioned CFPB Director Richard Cordray on the reasons for releasing the calculator ahead of rules to help the market. At the March 3 hearing of the House Financial Services' oversight subcommittee, Cordray said the agency was considering suggestions made by outside parties, such as adding an annual percentage rate estimator. Meanwhile, a CFPB spokesperson said the rate checker will be updated as part of the agency's upgrade to the "Owning a Home" toolkit later this year.

From "Banks to CFPB: Tear Down This Rate Calculator"
American Banker (03/17/15) Witkowski, Rachel

Tuesday, March 17, 2015


ICBA said it supports the Consumer Financial Protection Bureau’s proposed amendments to its mortgage-servicing rules, which the bureau issued following ICBA and industry advocacy.

 

One proposed amendment would permit small servicers to service seller-financed mortgages in which the bank is not the creditor and to retain their small-servicer status, which ICBA and community bankers advocated in bureau meetings. ICBA said this change would allow small servicers to continue serving clients while being reasonably compensated.

 

The association raised concerns with a proposal that would require extensive tracking of successors in interest. ICBA asked the CFPB to exempt small servicers from any prescriptive requirements in this area and to provide clear guidance regarding who can be a successor in interest.

Friday, March 13, 2015

Friday Rate Update

Mortgage Rates Climb

The rate for a 30-year fixed-rate mortgage averaged 3.86 percent this week, up from last week’s 3.75 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.37 percent.

This week’s 15-year FRM rate averaged 3.1 percent, up from last week’s 3.03 percent rate. A year ago, the 15-year FRM rate averaged 3.38 percent

Monday, March 9, 2015

Bigger Mortgages Likelier to Go Into Foreclosure

Although CoreLogic data shows that the nation's foreclosure rate dipped to 1.4 percent at the end of last year -- the lowest level since March 2008 -- inflated foreclosure rates persist at the high end of the market. The foreclosure rate for mortgages of $750,000 or more hit 2.5 percent in December -- an anomaly that has come to characterize the 2008 crash and its aftermath, according to CoreLogic deputy chief economist Sam Khater. The report shows that the foreclosure rate for mortgages of $750,000 or more was 0.1 percent in January 2006, versus an overall rate of 0.5 percent. However, by the end of 2008's first quarter, the high-end foreclosure rate was up to 1.5 percent, compared to 1.4 percent overall, and it eventually topped 6.8 percent in May 2012. While foreclosure rates have steadily declined since then, the upper end of the housing market continues to see higher foreclosure levels, thanks in part to a stock market crash that accompanied the housing meltdown. Additionally, several states with significant stocks of luxury housing have some of the highest foreclosure rates in the nation.

From "Bigger Mortgages Likelier to Go Into Foreclosure"
Wall Street Journal (03/06/15) Bonislawski, Adam

Friday, March 6, 2015

Friday Rate Update

Mortgage Rates Dip

The rate for a 30-year fixed-rate mortgage averaged 3.75 percent this week, down from last week’s 3.8 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.28 percent.

This week’s 15-year FRM rate averaged 3.03 percent, down from last week’s 3.07 percent rate. A year ago, the 15-year FRM rate averaged 3.32 percent.

Wednesday, March 4, 2015

Fannie, Freddie Regulator Puts New Rules on Delinquent Loan Sales

New rules issued by the Federal Housing Finance Agency on March 2 indicate that investors taking over delinquent mortgages backed by Fannie Mae and Freddie Mac must do more to reach agreements that enable borrowers to keep their homes. Investors must consider extending loan terms, forbearing or forgiving mortgage principal, or pursing a short sale before foreclosure. When investors foreclose, the new rules require them to consider selling properties only to nonprofit groups or people who plan to live in the homes -- not other investors -- during the first 20 days after a property is marketed. While the rules could limit foreclosures, investors insist they will reduce prices for the loans and generate steeper taxpayer losses by making them go through extra steps.

From "Fannie, Freddie Regulator Puts New Rules on Delinquent Loan Sales"
Wall Street Journal (03/03/15) P. A2 Light, Joe