Friday Rate Update

Mortgage Rates Reach 2015 High 

The rate for a 30-year fixed-rate mortgage
 averaged 3.87 percent this week, up from the previous week’s average of 3.84 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.12 percent. This week’s 15-year FRM rate averaged 3.11 percent, up from last week’s 3.05 percent rate. A year ago, the 15-year FRM rate averaged 3.21 percent

--ABA Daily Newsbytes

Members of Congress Issue Bipartisan Call for TRID Grace Period 

Hundreds of lawmakers wrote to the Consumer Financial Protection Bureau last week urging Director Richard Cordray to provide an enforcement grace period after the TILA-RESPA integrated disclosures take effect on Aug. 1 running through the end of 2015. The letters -- from 255 representatives and 41 senators -- note that TRID implementation is complex and that the lack of a grace period for lenders seeking to comply in good faith could “negatively impact consumers.”

The bipartisan letters -- driven in part by grassroots action by ABA members -- emphasized that a reasonable grace period would be useful in helping the banking and real estate industries continue to serve consumers during the busy fall homebuying season and would provide an opportunity for the CFPB to work with the industry to overcome implementation challenges.

--ABA Daily Newsbytes

ICBA Strongly Disagrees with U.S. Postal Service Bank Service Plan

President and CEO Cam Fine believes that the United States Postal Service entering the banking sector is a “disaster waiting to happen.” In a statement following the release of a new U.S. Postal Service Office of Inspector General’s proposal, Fine states that the last thing consumers need is more government intervention in Americans’ personal finances. “The Postal Service’s role in delivering the mail does not make it a good fit for handling credit or lending to consumers,” stated Fine in a press release. “The idea of trying to salvage a floundering operation by venturing into a new business with inherent risks and, for which the Postal Service has no qualifications or expertise, defies logic, reason and prudence.” ICBA has strongly opposed the OIG’s proposal since it was originally floated in a 2014 white paper, including in meetings with policymakers and in a joint letter to key members of Congress. In a blog post following the release of the white paper, Fine wrote that the proposal appears to be a last-ditch effort to save the struggling agency from bankruptcy and taxpayer-funded bailouts. --ICBA

Appraiser Shortage Could Gum Up the Works at Mortgage Lenders

The number of licensed appraisers in the United States is down 28 percent -- or by roughly 23,000 individuals -- since 2007, when the housing boom crested. Many workers in the field are approaching retirement age, but low pay, heavy workloads, and higher barriers to entry are discouraging young people from entering the profession. As these forces collide, the subsequent contraction in appraisal professionals could eventually create a crisis. In five to 10 years, by one estimate, there will not be enough of these specialists to handle the volume of home sales. The result could be higher appraisal fees for lenders and prolonged delays in closing loans.

From "Appraiser Shortage Could Gum Up the Works at Mortgage Lenders"
American Banker (05/21/15) Berry, Kate

Do Loan Trends Show More Homebuyers Moving Off Fence?

Mortgage origination volume spiked in the first three months of this year, RealtyTrac reports. However, the 17 percent increase from January through March was driven primarily by refinance activity, while purchase loan originations were up only slightly. Refinance originations represented almost $256 billion of first-quarter originations, or 67.8 percent of the total dollar volume of $377 billion. Meanwhile, purchase loan originations represented $121 billion, or just 32.2 percent. Of the approximately 1.6 million loan originations in the first quarter, a total of 471,822 were purchase loan originations. That is down 25 percent from the previous quarter and up less than 1 percent from the first quarter of 2014. "A dip in interest rates early in the year combined with lowered mortgage insurance premiums for FHA loans breathed some life back into the refinancing market in the first quarter," said RealtyTrac Vice President Daren Blomquist. "The purchase loan market remained largely missing in action, despite tepid growth from a year ago. The prime buying season still remains ahead, providing some hope that first-time homebuyers and other traditional buyers relying on traditional financing will come out of the woodwork in greater numbers in the coming months."

From "Do Loan Trends Show More Homebuyers Moving Off Fence?"
Investor's Business Daily (05/15/15) Much, Marilyn

Friday Rate Update

Mortgage Rates Rise for Third Straight Week

The rate for a 30-year fixed-rate mortgage averaged 3.85 percent this week, up from the previous week’s average of 3.8 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.2 percent. This week’s 15-year FRM rate averaged 3.07 percent, up from last week’s 3.02 percent rate. A year ago, the 15-year FRM rate averaged 3.29 percent.

--ABA Daily Newsbytes

FHFA’s Watt Announces Final Extension of HAMP, HARP


Fannie Mae and Freddie Mac will participate in the federal government’s Home Affordable Modification Program and Home Affordable Refinance Program through the end of 2016, Federal Housing Finance Agency Director Mel Watt said in a speech on Friday in Los Angeles.

The GSEs’ participation in HAMP and HARP was originally scheduled to end this year. Watt estimated that more than 600,000 borrowers could still qualify for HARP while interest rates remain low and he encouraged borrowers to apply.

---ABA Daily Newsbytes

CFPB Issues Report on ‘Credit Invisible’ Individuals


The Consumer Financial Protection Bureau yesterday issued a report on the 26 million Americans it calls “credit invisible” -- those without a history at a major credit reporting bureau -- and the 19 million additional Americans whose credit histories are too old or sparse to be accurately scored.

The bureau’s findings show a correlation between low incomes and being credit invisible or unscored, noting that more than 45 percent of consumers in low-income neighborhoods fit these categories. The CFPB also said that whites and Asian Americans are less likely than blacks or Hispanics to be credit invisible or unscored.


--ABA Daily Newbytes

Small-Bank Regulatory Reform Stymied as Key Senators Can't Agree

Negotiations between staffs for Senate Banking Chairman Richard Shelby (R-Ala.) and the panel's top Democrat, Sen. Sherrod Brown of Ohio, stalled recently on a bipartisan regulatory package to lighten the regulatory burden on small- and medium-size banks. Members of Shelby's and Brown's teams met at least once a week to discuss the legislation for a total of at least two-dozen meetings. However, Shelby's staff felt they made "no discernible progress" in securing specific commitments from Brown’s side -- even on community bank and credit union regulatory measures. "Democrats are ready, willing, and able to provide regulatory relief for community banks and credit unions," Brown said on April 29. Shelby’s team is in the process of drafting a bill that will include measures to ease regulatory requirements on smaller banks, with plans for the Senate Banking Committee to debate and vote on the bill on May 14. The plan is to share the draft with Brown’s office ahead of that meeting to see if he can support it. Some Democrats have been put off by Shelby’s apparent desire to add provisions that would broaden the bill’s scope. The bill might include provisions impacting the Federal Reserve, Financial Stability Oversight Council, the insurance industry, and regional banks, according to a Democratic aide.

From "Small-Bank Regulatory Reform Stymied as Key Senators Can't Agree"
Wall Street Journal (05/01/15) McGrane, Victoria

Friday Rate Update

Mortgage Rates Edge Up


The rate for a 30-year fixed-rate mortgage averaged 3.68 percent this week, up from the previous week’s average of 3.65 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.29 percent.

This week’s 15-year FRM rate averaged 2.94 percent, up from last week’s 2.92 percent rate. A year ago, the 15-year FRM rate averaged 3.38 percent.

--ABA Daily Newbytes