From ICBA...

CFPB Sues Online Lenders for Deceiving Consumers

The Consumer Financial Protection Bureau sued four online lenders for allegedly deceiving consumers by collecting debts they were not legally owed. The federal lawsuit says Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial and Majestic Lake Financial could not legally collect on these debts because the loans were void under state laws governing interest rate caps or the licensing of lenders.

Friday Rate Update

Mortgage Rates Fall Again
 
The rate for a 30-year fixed-rate mortgage averaged 3.97 percent this week, down from the previous week's 4.08 percent rate and the first drop below 4 percent since November, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.59 percent. This week's 15-year FRM rate averaged 3.23 percent, down from last week's 3.34 percent. A year ago, the 15-year FRM rate averaged 2.85 percent.

--ABA Daily Newsbytes

Survey: New, Experienced Buyers See Value in Homeownership
 
A quarter of prospective first-time homebuyers said they expect to purchase a home in the next two years, according to Bank of America's second Homebuyer Insights Report released yesterday. To prepare for the purchase, 61 percent say they are paying off their current debt, 47 percent are working to improve their credit score and 45 percent are saving money to put toward their home purchase.

First-time and experienced homebuyers differed slightly in what they look for in a home, the survey found. More than half of first-time buyers said they preferred a home that they could make changes to, whether minor cosmetic changes or major renovations. Experienced buyers were more likely to seek move-in ready homes that would require no improvements.

When asked to define homeownership, nearly half of first-time buyers said they associated it with responsibility. Current homeowners, on the other hand, associated homeownership most strongly with financial investment; 70 percent reported spending their free time working on their homes, and 82 percent said they look for ways to make their homes more valuable.

The survey also noted that an increasing number of millennials are understanding the value of homeownership. Seventy-nine percent of millennial homeowners (those ages 18 to 34) agreed that buying a home would have a positive impact on their long-term financial life, and 86 percent said they view owning a home as a more affordable option than renting. The majority of millennial homeowners -- 68 percent -- said they view their current home as a stepping stone toward the home they want to end up in. Read the report. 

--ABA Daily Newsbytes

                                          Have a safe and pleasant Easter weekend. 

Consumers Weigh Closing Costs, Customer Service When Choosing a Mortgage Lender
 
When selecting a mortgage lender, a vast majority of consumers say that a lender's reputation for service is nearly as important a factor as interest rates and closing costs, according to a new study released yesterday by Ally Bank. Virtually all respondents said they consider interest rates and closing costs an important factor, while 93 percent said they would weigh a lender's reputation heavily when making a decision.

Eighty-one percent of Americans who have had a mortgage or plan to apply for one in the future said that total closing costs did or would factor significantly into their decision. Of those, four in five said that they would be influenced toward one lender over another by a $500 incentive to help offset costs.

Eighty-five percent of past or present homeowners said they were somewhat or very satisfied with the mortgage application process, while the remaining 15 percent were not satisfied. Key reasons for dissatisfaction were poor customer service (48 percent) and poor communication (46 percent). Nearly 40 percent expressed dissatisfaction over high closing costs.

--ABA Daily Newbytes

Fed Survey: Small Biz Performance, Loan Applications Tick Down
 
Small business performance and financing success rates dipped slightly in 2016, according to the latest Small Business Credit Survey -- a joint effort by the 12 regional Federal Reserve banks, conducted nationwide for the first time -- released yesterday. Slightly smaller shares of firms reported profitability, revenue growth and employment growth. Seven in 10 expect revenue to grow in 2017, while less than half expect to add more jobs.

Forty-five percent of firms applied for financing, a slight tick down from 2015. Three-quarters said they received at least some financing, and 40 percent said they received the full amount -- down from 50 percent the year before. Traditional bank lending remains the primary source of financing for the nation's small businesses, with small banks approving at least some of the amount requested for 67 percent of credit applicants, while large banks approved credit for 54 percent of applicants.

Credit approval rates fell in all lender categories, including nonbank alternative lenders and credit unions, which saw approval rates fall by 13 points. Small banks and credit unions shared a high satisfaction rating (75 percent on net) among customers. Larger banks saw net satisfaction of 46 percent. Community development financial institutions also rated highly, at 76 percent satisfaction. And while they improved their satisfaction rating 12 points from the previous year, nonbank alternative lenders earned a far lower satisfaction rating than their depository competitors at only 27 percent. Consumers cited lack of transparency and high interest rates as reasons for dissatisfaction.

Firms with revenue of more than $1 million were more likely to have credit approved from all sources except for CDFIs, which approved applications at a rate of 77 percent regardless of the size of the business.

--ABA Daily Newsbytes

Friday Rate Update

Mortgage Rates Fall 
 
The rate for a 30-year fixed-rate mortgage averaged 4.1 percent this week, down from the previous week's 4.14 percent rate, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.59 percent.

This week's 15-year FRM rate averaged 3.36 percent, down from last week's 3.39 percent. A year ago, the 15-year FRM rate averaged 2.88 percent. This week's decrease marks the second straight week of downward movement.

--ABA Daily Newsbytes

ICBA Meets with Treasury Officials on Reg Relief!



ICBA community bankers met with Treasury Secretary Steven Mnuchin and staff at the Treasury Department to discuss how federal policymakers can address the impact of overregulation on community banks and the customers they serve. The meeting was held under President Donald Trump’s executive order directing the Treasury Department to review existing financial services laws and regulations.

---ICBA


  We are looking forward to seeing progress on regulatory relief.
Read more here.



 

New Post From ICBA

Community Banks Make Communities Better

Mar 31, 2017

Small business creation is about as American as apple pie and is essential to our nation’s economy. More than half of Americans either own or work for a small business, and small businesses create about two out of every three new jobs in the U.S. each year.

But did you know that community banks like Bank of the West in Grapevine, Texas, are the primary economic engines behind small businesses on Main Street—funding more than half of all small-business loans? 

“I was able to give my hairstylist, Kim, a loan to acquire a salon when the owner died. She was a young lady, she had good credit, but didn’t have a lot of collateral,” Cynthia Blankenship said during testimony before the House Small Business Committee. In total, nine stylists were employed because of that loan, noted Blankenship who serves as vice chairman, chief financial officer and corporate president at Bank of the West.

“It’s our job to put that customer in the right finance tool to get them their credit availability. Our reputation and integrity is riding on this as well.”

This April, in recognition of Community Banking month and the symbiotic relationship community banks have with their customers, we’re highlighting examples of community banks that are making their communities better places to live and work.

Giving Back

Community banks do much more than provide capital, however. They fill key roles as trusted financial advisors, mentors and philanthropists.

Mike Kochenour, chairman and CEO of York Traditions Bank in York, Pa., has built a thriving career and bank. Like many community bankers, Kochenour is eager to pass on what he’s learned to up-and-coming business owners.

“Word has gotten around that you can call him and he’ll answer! He wants to serve as a resource to help everyone reach their potential,” Suzanne Becker, marketing director at the bank shared with IB magazine.

Community banks are known for courting customers and now Allied First Bank in Oswego, Ill., has taken that role literally—building a basketball court into its headquarters for sports, fundraisers and community activities.

“Many, many times I’m out in the community talking about the bank or trying to attract new customers and inevitably what I hear is, ‘Oh, you’re the bank with the basketball court. I’ve got to come see that,’” said Allied First president and CEO Kenneth Bertrand.

When Citizens Bank of Edmond, Okla., is not helping local small businesses and consumers across its community, the bank is making a splash in its neighborhood with Herd on Hurd. With President and CEO Jill Castilla leading the charge, the bank’s Herd on Hurd street festival is bringing together families, friends and small businesses every third Saturday from March through October.

“With $4 million in local economic impact, our little bank community’s appreciation event is making a big impact in the Oklahoma City metro area,” Castilla told the Edmond Sun.

Read more here.

For more examples of community banks and bankers making a difference across the nation during ICBA Community Banking Month and beyond, follow #BankLocally hashtag on Twitter. To find your local community bank, visit ICBA’s Community Bank Locator at www.banklocally.org.

ABA Survey: Non-QM Lending Fell in 2016 as Banks Grapple with Reg Burden
 
An overwhelming 95 percent of bankers agreed that regulation has had a negative impact on business production and consumer credit availability, according to ABA's Real Estate Lending Survey released yesterday during the association's annual Real Estate Lending Conference in Orlando, Fla. A majority of respondents said they have seen increased compliance costs and have had to hire additional compliance staff to keep pace with new regulations, particularly in the mortgage area.

In addition, lenders reported making fewer non-qualified mortgages last year; the share of banks' non-Qualified Mortgage loans fell from 14 percent in 2015 to 9 percent in 2016. More than 30 percent said they have stopped making non-QM loans altogether. "Non-QM loans have been subject to heightened regulatory requirements and risk, reducing the willingness of banks to extend these loans to even the most creditworthy borrowers," said ABA EVP Bob Davis. "Despite ongoing regulatory hurdles, community banks remain resilient in their ability to manage risk levels, increase productivity and introduce more first-time homebuyers into the market."

The survey showed that single-family mortgage lending to first-homebuyers was up in 2016, rising to 16 percent -- a record high in the survey's 24-year history. The foreclosure rate fell from 0.63 percent in 2015 to 0.37 percent in 2016, while the single-family delinquency rate ticked up from 1.27 percent to 1.42 percent. The 30-year fixed-rate mortgage remained the most popular loan type on the market, at 47.7 percent.

Looking ahead to 2017, bankers said they were most concerned about increased regulatory burden -- including compliance with the TILA-RESPA integrated disclosure rule -- rising interest rates, inventory in the housing market and increased operating costs. A total of 159 banks participated in the survey, 76 percent from institutions with less than $1 billion in assets.

--ABA Daily Newsbytes

Economy Bytes

Consumer Confidence Jumps to Highest Since December 2000
The Consumer Confidence Index improved significantly in March, landing at 125.6 -- up from February's reading of 116.1 and reaching the highest level since December 2000, the Conference Board said yesterday.

The sharp rise was attributed to "much greater optimism regarding the short-term outlook for business, jobs and personal income prospects... and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months," said the Conference Board's Lynn Franco. Read more.



Home Price Growth Reaches Three Year High 
 
Home price growth in 20 major metro areas continued to rise in January with year-over-year growth at 5.9 percent, up 0.2 percent from the month prior, according to the Standard & Poor's/Case-Shiller Home Price Index released yesterday. Prices have grown at a rate of 5 percent or higher since early 2015. Thirteen cities reported increases from December. Year-on-year growth was reported in twelve cities, with the highest growth seen in Portland, Seattle and Denver. Read more. 

--ABA Daily Newsbytes

Economic Update

Existing Home Sales Turn Downward Existing home sales fell 3.7 percent in February, landing at a seasonally adjusted annual rate of 5.48 million and following a 10-year high the month prior, the National Association of Realtors said yesterday. The increase was attributed to weakening inventory and affordability conditions. Sales were up 5.4 percent from a year prior, NAR said. 




FHFA Index: Home Prices Hold Steady
U.S. home prices were unchanged in January, according to the Federal Housing Finance Agency's House Price Index released yesterday. January's stagnancy followed a 0.4 percent rise the month prior. Year on year, prices were up 5.7 percent. The FHFA's monthly index is calculated using the prices of houses bought with mortgages backed by Fannie Mae and Freddie Mac. 

--ABA Daily Newsbytes

Is The American Health Care Act Pushing Down Mortgage Rates?

___

Published Date 3/22/2017

The day started where yesterday left off, interest rates working lower and MBS prices up. Stock indexes in pre-opening trade were generally unchanged prior to actual open. What is happening in the bond market, and why have the stock indexes lost most of their earlier momentum? We warned about it since the beginning of the Trump euphoria, the Trump policies are progressing very slowly. The healthcare reform, tax cuts and increases in fiscal spending that investors lapped up as done deals are now in question. Not that they may not happen, but all of those lofty goals will not happen as rapidly as equity markets and the bond markets had expected.
Tomorrow the House is set to vote on the healthcare bill, now dubbed as RyanCare; the prognosis isn’t good that it will pass with a number of Republican conservatives already at odds with the bill. Then even if it does pass, the Senate will not go along with it as it is presently structured. That leads to months of debate and politicking and in turn will delay any tax cuts and fiscal spending. Reality has set in that even though the political landscape has undergone a major shift, politics. The result, money leaving equities and searching for a momentary respite. Not news here; we have warned stocks are overbought and some pull back is likely. I doubt the strong bullish undertone will change but at current levels and the reality that the benefits promised won’t occur soon…. maybe not even this year.
At 9:00 am FHFA reported that Jan home prices were unchanged from Dec; forecasts were for an increase of 0.5%. Yr/yr prices 5.7% down from +6.2% in Dec.
Feb existing home sales just released at 10:00 AM EST; estimates were for a decline of 2.5% to 5.55 mil from 5.69 mil in Jan. As reported, sales were down 3.7% to 5.48 mil units yr/yr sales +5.4%; inventories dropped another 6.4%, median sales price $228.900 (yr/yr +7.4%).
The vote on health care tomorrow that looks iffy has pushed yields lower as investors are taking out insurance policies against the possibility stocks will succumb to additional sales pressures. The target we have now for the bellwether 10 yr note is 2.32% (2.40% now). Yesterday’s decline in stocks and declines in interest rates is not yet a trend, so far just a down day yesterday. Our models and other technical indicators have turned bullish now but still the wider outlook remains for higher interest rates with the Fed talking at least two more increases this year. Of course, that will not occur if the economic outlook changes or stocks collapse.
 

Source: TBWS

Friday Rate Update

Mortgage Rates Climb 

 
The rate for a 30-year fixed-rate mortgage averaged 4.3 percent this week, up from the previous weeks 4.21 rate. At this time last year, the 30-year FRM rate averaged 3.73 percent.

This weeks 15-year FRM rate averaged 3.5 percent, up from last weeks 3.42 percent. A year ago, the 15-year FRM rate averaged 2.99 percent.

--ABA Daily Newsbytes

Slightly Larger Down Payments....

First the good news: down payments among first-time homebuyers are getting slightly bigger.
Now the not-so-good news: that’s not saying much.

In 2009, when the National Association of Realtors started tracking such data in its monthly Realtors Confidence Index, nearly three-quarters of first-timers made down payments of between 0% and 6% of the purchase price. In February, only 65% did.

–– ADVERTISEMENT ––

By that metric, any down payment not in the 0-6% range is bigger, and therefore probably better both for the system and for most individual buyers. But just barely: the median among first-timers in 2016 was 6%, according to separate data NAR tracks. Among all buyers, the median is 10%.

--by Andrea Riquier-- Market Watch  --Read more




  

ICBA meets with President Trump

ICBA community bankers met with President Donald Trump and other senior officials at the White House to discuss targeted regulatory relief that will unleash the power of community banks. ICBA Chairman Rebeca Romero Rainey, ICBA Chairman-Elect R. Scott Heitkamp, ICBA Vice Chairman Timothy K. Zimmerman and ICBA President and CEO Cam Fine shared examples of how excessive regulatory burdens affect lending and economic growth.

The meeting with President Trump, Treasury Secretary Steven Mnuchin, National Economic Council Chairman Gary Cohn and White House Chief of Staff Reince Priebus included a discussion of the most burdensome rules and ICBA’s Plan for Prosperity regulatory relief platform. Trump said community banks “play a vital role in helping create jobs by providing approximately half of all loans to small businesses” and pledged to continue taking on regulatory burdens that inhibit lending.

“Community banks are the backbone of small business in America,” Trump said. “We are going to preserve our community banks"

--ICBA

Friday Rate Update

Mortgage Rates Take Downward Turn
 
The rate for a 30-year fixed-rate mortgage averaged 4.10 percent this week, down slightly from the previous weeks 4.16 percent rate, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.64 percent.

This week's 15-year FRM rate averaged 3.32 percent, down from last week's 3.37 percent. A year ago, the 15-year FRM rate averaged 2.94 percent.

--ABA Daily Newsbytes

Dispelling Lending Myths....


 By Danny Gardner, vice president of single-family affordable lending, Freddie Mac


Obstacles in the path to homeownership have reached mythical proportions, preventing many would-be homebuyers from even starting the journey. Loan originators are in a unique position to help cut borrowers’ concerns down to actual size and give them confidence that they can achieve their goals.

Myths about mortgages abound in the minds of many homebuyers. Loan originators must be aware of the presence of these myths and, armed with the facts, provide potential borrowers with a better understanding of the realities and possibilities of the loan-origination process. Let’s take a look at some of the most common myths, along with the facts originators can use to dispel these fairy tales.

Downpayment-amount myth

The notion that downpayments have to be in the 20 percent range is the most persistent myth out there, and we need to debunk it. The average downpayment among first-time homebuyers in 2016 was 6 percent, and for repeat buyers, downpayments were between 13 percent and 14 percent, according to the National Association of Realtors. Some mortgage products let eligible borrowers put down as little as 3 percent — or even less, in some cases.
Many people believe that the best — perhaps only — low-downpayment option is a Federal Housing Administration (FHA) loan. It’s worth checking into other offerings. A conventional product might prove more affordable for some borrowers. Loan originators can help spread this word to real estate professionals and consumers.
A survey of real estate professionals conducted for Freddie Mac by market-research company, GfK, found that 50 percent of potential borrowers trust real estate professionals to educate them on mortgage products that best meet their needs. Eighty percent of respondents were extremely or moderately familiar with FHA products, yet only around one-quarter knew about low-downpayment products from Freddie Mac or Fannie Mae (the government-sponsored enterprises, or GSEs).
More importantly, loan originators need to know that the return of low-downpayment loans does not mean we’re about to repeat the housing crisis. The eligibility requirements on these new loans set a higher creditworthiness bar and aim to expand homeownership responsibly.

Read the rest here.

Mortgage Rates Edge Up
 
The rate for a 30-year fixed-rate mortgage averaged 4.16 percent this week, up slightly from the previous week's™s 4.15 percent rate, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.62 percent.

This week;s™s 15-year FRM rate averaged 3.37 percent, up from last week's™s 3.35 percent. A year ago, the 15-year FRM rate averaged 2.93 percent.

--ABA Daily Newsbytes

 

Friday Rate Update

Mortgage Rates Edge Down 

The rate for a 30-year fixed-rate mortgage averaged 4.15 percent this week, down slightly from the previous week's 4.17 rate. At this time last year, the 30-year FRM rate averaged 3.65 percent.

This week's 15-year FRM rate averaged 3.35 percent, down from last week's 3.39 percent. A year ago, the 15-year FRM rate averaged 2.95 percent.

---ABA Daily Newsbytes

Economic Update

Fed Expects Moderate Economic Expansion, Gradual Rate Increases 

The U.S. economy will likely continue to see moderate expansion, a strengthening job market and inflation gradually rising to 2 percent in the months ahead, Federal Reserve Chairman Janet Yellen said yesterday in her semi-annual report to Congress on the state of monetary policy. She added that the Federal Open Market Committee expects additional gradual increases in interest rates, cautioning that "waiting too long to remove accommodation would be unwise" and could lead to market disruption.

Yellen cited a lower unemployment rate and increased consumer spending, GDP and personal consumption expenditures as signs of a strengthening economy, but noted that "considerable uncertainty attends the economic outlook. Among the sources of uncertainty are possible changes in U.S. fiscal and other policies, the future path of productivity growth, and developments abroad."

In a question and answer session following her testimony, Yellen highlighted an increase in bank lending, both overall and specifically to small businesses, with greater numbers of consumers reporting that they were successful in securing financing. U.S. banks are also continuing to gain strength relative to their international competitors, she added.

Yellen also expressed support for the "core principles" for financial system regulation outlined in President Trump's recent executive order, and pledged to work constructively with newly confirmed Treasury Secretary Steven Mnuchin and others members of the Financial Stability Oversight Council to conduct a review of current regulations to ensure that they are effective and appropriately tailored. Read Yellen's testimony. http://abamaestro.aba.com/trk/click?ref=zt50ebrbb_0-11cigiv-0-3bb8x2860cx3122917&

--ABA Daily Newsbytes