ICBA: 73 Percent of Community Banks Say Regulations Hurt Mortgage Lending

New mortgage regulations are preventing community bankers from making more residential mortgage loans, according to 73 percent of community bankers surveyed by the Independent Community Bankers of America. A large number are no longer active in the residential mortgage market, are considering an exit from this line of lending, or are leaving the market, reveals the ICBA's 2014 Community Bank Lending Survey. ICBA also reports that 44 percent of respondents said they originated fewer first-lien residential mortgage loans last year compared with 2013. Moreover, half of all rural banks said they do not qualify for the Qualified Mortgage rule's "rural" exception, which suggests that exemptions from the standard are too narrow and are limiting access to credit for customers who need it.

From "ICBA: 73 Percent of Community Banks Say Regulations Hurt Mortgage Lending"
Housing Wire (01/27/15) Garrison, Trey

News From ICBA

73 Percent of Community Banks Say Regulations Inhibit Mortgage Lending

Approximately three-quarters of community bankers responding to an ICBA survey said new mortgage regulations are keeping them from making more residential mortgage loans. Among its other findings, the 2014 Community Bank Lending Survey also found that: significant percentages of community banks are no longer active in the residential mortgage market, are considering an exit or are exiting the market, 78 percent of respondents reported increasing the number of staff members dedicated to lending compliance over the past five years, and 66 percent of respondents said they do not provide loans that are outside the Consumer Financial Protection Bureau’s Qualified Mortgage definition or would only do so in special cases. ICBA said the results show the negative impact of excessive community bank regulation and the need for Congress to act on ICBA’s Plan for Prosperity for the 114th Congress. ICBA’s regulatory relief platform includes a variety of provisions to protect community banks from the CFPB’s mortgage rules and other regulatory burdens.

Friday Rate Update

Mortgage Rates Lowest Since 2013


The rate for a 30-year fixed-rate mortgage averaged 3.63 percent this week, down from last week’s 3.66 percent and at its lowest level since May 2013, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.39 percent.

This week’s 15-year FRM rate averaged 2.93 percent, down from last week’s 2.98 percent rate. A year ago, the 15-year FRM rate averaged 3.44 percent.

--ABA Daily Newsbytes

Survey: Six in Ten Americans Checked Their Credit Report in Past Year
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Sixty percent of Americans have checked their credit report in the past 12 months, according to a survey conducted for ABA by Ipsos Public Affairs. Of those who accessed their credit report, nearly three in 10 have disputed something on their report.

Eighty-five percent say they are aware that they are legally entitled to a free credit report, while 44 percent believe a credit score and a credit report are the same thing with a different name. Consumers’ self-reported credit scores were in line with FICO’s average score of 692, and 49 percent believed that they had a score of 700 or above.

“The more consumers know about their own credit history, the better they can position themselves for lower rates when applying for loans,” said ABA SVP Molly Wilkinson. The survey, released in the latest issue of The Credit Line, polled more than 1,000 U.S. adult.

ABA Daily Newsbytes

Friday Rate Update

Mortgage Rates Continue to Fall

The rate for a 30-year fixed-rate mortgage averaged 3.66 percent this week, down from last week’s 3.73 percent and falling for the third consecutive week, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.41 percent.

This week’s 15-year FRM rate averaged 2.98 percent, down from last week’s 3.05 percent rate. A year ago, the 15-year FRM rate averaged 3.45 percent.

Mortgage Applications Soar as Consumers Snap Up Low Rates

Home loan demand registered the biggest weekly gain in more than six years, reports the Mortgage Bankers Association. Application activity spiked 49 percent in the week ended Jan. 9 as borrowers scrambled to lock in mortgage interest that has dipped to a nearly two-year low. Anecdotal evidence from mortgage brokers suggests that favorable borrowing costs, coupled with a recent White House announcement about lower fees for a popular federal loan program, motivated many prospective home buyers to get off the fence. Existing homeowners, however, drove last week's frenzy. MBA's refinance index reflected a 66 percent jump in volume, but the boomlet is not expected to last long, considering the limited number of existing borrowers who still carry high interest rates.

From "Mortgage Applications Soar as Consumers Snap Up Low Rates"
Wall Street Journal (01/14/15) Light, Joe

Many Homebuyers Spend More Time Shopping For A TV Than Looking For The Right Mortgage

By Ashlee KielerJanuary 13, 2015

 

 

Potential homeowners might spend months nitpicking and fretting over the features of a seemingly endless series of houses they could buy, but a new report from the Consumer Financial Protection Bureau claims that half of American homebuyers aren’t taking the same care when it comes to shopping around for the right mortgage, often putting themselves in precarious lending situations and missing out on savings.

To combat the rise of the uninformed mortgage borrower the Bureau is releasing a toolkit aimed at helping consumers gain greater control over the outcomes of the mortgage process, while maximizing the benefits of this major transaction.

The latest CFPB report [PDF] found that while it’s true that the mortgage industry is less risky than it was before the housing market crash, there are still varying terms and features that can wreak havoc on consumers’ finances if they aren’t fully informed about the products.

“People may well put more time and effort into shopping for smaller products such as appliances and televisions than they do in shopping for the right mortgage,” CFPB director Richard Cordray says.

“The failure to look around can mean real money lost for consumers.”

Read more here.

HUD Chief Defends FHA Premium Cut, Saying 'It's the Right Time'

U.S. Department of Housing and Urban Development Secretary Julian Castro expressed support for President Barack Obama's plan to cut Federal Housing Administration premiums after Republicans criticized the decision. Republicans pointed out that the FHA's fund remains well short of its statutory minimum. Castro countered that the annual mortgage insurance premium reduction will delay reaching the 2 percent minimum by just a few months. He also told reporters that struggling borrowers who are having trouble obtaining credit need more assistance as quickly as possible.

From "HUD Chief Defends FHA Premium Cut, Saying 'It's the Right Time'"
American Banker (01/09/15) Collins, Brian

Friday Rate Update

Mortgage Rates Continue Dropping

The rate for a 30-year fixed-rate mortgage averaged 3.73 percent this week, down from last week’s 3.87 percent and reaching the lowest level since May 2013, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.51 percent.

This week’s 15-year FRM rate averaged 3.05 percent, down from last week’s 3.15 percent rate. A year ago, the 15-year FRM rate averaged 3.56 percent.

Mortgage Rates Rise Slightly

The rate for a 30-year fixed-rate mortgage averaged 3.87 percent last week, up from the previous week’s 3.83 percent but still near 2014 lows, Freddie Mac said last week. At this time last year, the 30-year FRM rate averaged 4.53 percent.

Black Knight: Mortgage Delinquency Rate Surges to 10-Month High

After holding below 6 percent since February, U.S. mortgage delinquencies came in above that threshold last month. Black Knight reports that the pace increased 12 percent from October, taking it to the highest point in 10 months. The company also noted, however, that foreclosure inventory continues to shrink and is now the smallest it has been since January 2008. Additionally, foreclosure starts are down on a monthly basis to the lowest volume since May 2006.

From "Black Knight: Mortgage Delinquency Rate Surges to 10-Month High"
Housing Wire (12/30/14) Swanson, Brena