FBI: Email Scams Cost $750M Since October ’13

The FBI issued an alert warning about the rising use of a social engineering scam targeting businesses that regularly perform wire transfer payments. According to the FBI, criminals used Business Email Compromise to steal nearly $750 million from more than 7,000 U.S. companies from October 2013 to August 2015. The FBI separately reported that Email Account Compromise, a similar scam in which criminals compromise the email accounts of unsuspecting victims, led to 21 complaints and reported losses of almost $700,000 between April 1 and June 30 of this year. For example, a scammer may compromise a senior bank manager’s account to make it appear to an employee that an email is legitimate. ABA Daily Newsbytes

HOUSING FINANCE
Fannie Mae Loan Product to Consider Family Income

Fannie Mae yesterday announced a new mortgage product called HomeReady, which it said is intended to expand access to affordable home loans for low- and moderate-income families. The loan will allow income from other household members, in addition to the borrower, to be included in the calculation of the loan’s debt-to-income ratio. It will also allow income from non-occupants, such as parents, to be counted, as well as prospective rental income, such as from a basement apartment.

“Fannie Mae’s research indicates that these extended households tend to have incomes that are as stable or more stable than other households at similar income levels, positioning them well for homeownership,” the company said. Borrowers will be required to complete a course on homeownership.

Fannie’s Desktop Underwriter platform will automatically flag borrowers potentially eligible for a HomeReady loan. The new product is expected to be available later this year, and Fannie will provide further details to sellers in the coming weeks.

--ABA Daily Newsbytes

Mortgage Rates Edge Down Slightly 

The rate for a 30-year fixed-rate mortgage averaged 3.93 percent this week, down from last week’s 3.94 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.1 percent. This week’s 15-year FRM rate averaged 3.15 percent, down from last week’s 3.17 percent rate. A year ago, the 15-year FRM rate averaged 3.23 percent.---   ABA Daily Newsbytes

TransUnion: Mortgage Delinquency Rates Continue Rapid Decline

The rate of borrowers at least 60 days delinquent on their mortgages continues to fall, declining to 2.72 percent in the second quarter of 2015, TransUnion reports. The mortgage delinquency rate fell 20 percent in the last year and by half in the last three years. Consumers under the age of 30 experienced a 26.9 percent decline in delinquencies from 2.32 percent in the second quarter of 2014 to 1.7 percent in the second quarter of 2015. Forty-eight states and the top 10 major metropolitan statistical areas reported double-digit, year-over-year decreases in seriously delinquent balances, with the largest declines in Miami and Los Angeles. "This is largely due to foreclosures and other seriously delinquent accounts continuing to work their way through the foreclosure process, as well as a reflection of the high credit quality of recent originations," says Joe Mellman, vice president and head of TransUnion's mortgage group.

From "TransUnion: Mortgage Delinquency Rates Continue Rapid Decline"
Housing Wire (08/17/15) Garrison, Trey

Housing Starts Climb to Seven-Year High

Housing starts were up 0.2 percent in July, rising to a seasonally adjusted annual rate of 1.206 million units, the Commerce Department said yesterday. Starts -- up 10.1 percent from a year ago -- reached the highest level since October 2007. Permits for new construction, which are considered a gauge of future demand, fell 16.3 percent to an annual rate of 1.119 million.

--ABA Daily Newsbytes

Mortgage Lenders Still Shunning Subprime Borrowers

While the foreclosure crisis is nearing an end, it still affects lenders' attitudes toward risk. Only 8 percent of mortgage origination volume in the second quarter went to "subprime" borrowers with credit scores of 660 or lower, researchers at the Federal Reserve Bank of New York found. In comparison, 50 percent of U.S. mortgage origination volume went to borrowers with credit scores of 780 or higher. "Underwriting standards for mortgages have loosened only slightly in the years since the Great Recession," the researchers wrote. The study found that the median Equifax Risk Score of a mortgage borrower in the second quarter of 2015 was 764 but had fallen as low as 707 during the heyday of subprime mortgages in 2006. Many observers believe that credit standards remain too tight.

From "Mortgage Lenders Still Shunning Subprime Borrowers"
American Banker (08/14/15) Wack, Kevin

How Student Loan Debt Hobbles So Many Americans

According to Bankrate.com, mounting education debt is resigning borrowers in the Millennial generation to delay major life events, such as buying a home or car, and hold off saving money for retirement as they try to whittle down what they owe in student loans. Based on the new survey of 1,000 adults, 56 percent of Americans between the ages of 18 and 35 are holding off on big-ticket purchases because of current or past student loans, compared to 43 percent of older adults. "Student debt is often portrayed strictly as a Millennial issue, but the truth is that Americans of all ages have put their lives on hold due to student debt," says Bankrate analyst Steve Pounds. "Delaying major life milestones ... doesn't only affect the individual and his or her family, it also has ill effects on the overall economy." The study also found that Millennials were less likely to have ever had student loan debt compared to the previous generation. However, more than half of all respondents felt they were not fully educated on the financial risks of the loans they took out.
From "How Student Loan Debt Hobbles So Many Americans"
CBSNews.com (08/05/15) Kennedy, Bruce

Friday Rate Update

Mortgage Rates Fall for Second Straight Week

The rate for a 30-year fixed-rate mortgage averaged 3.91 percent this week, down from last week’s 3.98 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.14 percent. This week’s 15-year FRM rate averaged 3.13 percent, down from last week’s 3.17 percent rate. A year ago, the 15-year FRM rate averaged 3.27 percent. 

---ABA Daily Newsbytes

HOUSING FINANCE
Freddie Mac Profits Strong in Second Quarter
Freddie Mac yesterday reported a $4.2 billion profit in the second quarter, up significantly from the $1.4 billion the company earned in the second quarter of 2014 and marking Freddie’s 15th consecutive profitable quarter.

The rise in Freddie’s income was largely due to derivatives gains on rising interest rates, which totaled $3.1 billion. The company said it will make a $3.9 billion payment to the U.S. Treasury in September, bringing the total it has returned to taxpayers since being bailed out in 2008 to $96.5 billion.

--ABA Daily Newsbytes 

House Committee Passes TRID Grace Period

Pressure from housing and mortgage groups paid off on Capitol Hill as a House panel agreed to grant lenders temporary reprieve from enforcement of new disclosure rules taking effect this fall. Lenders are supposed to start using the new TILA-RESPA Integrated Disclosure forms on Oct. 3, but the Homebuyers Assistance Act would protect them from enforcement actions through Feb. 1. A similar proposal in the Senate would extend the safe harbor through Dec. 31. However, some Democrats and consumer advocates have challenged the measure. U.S. Rep. Maxine Waters (D-Calif.), ranking member on the House Financial Services Committee, said the grace period is not warranted since the Consumer Financial Protection Bureau has already vowed to take lenders' good-faith efforts to comply with the new rules into consideration if the issue of enforcement arises.

From "House Committee Passes TRID Grace Period"
Scotsman Guide (07/29/2015) Whitman, Victor