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Friday, March 31, 2017

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

Wednesday, March 29, 2017

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

Thursday, March 23, 2017

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

Wednesday, March 22, 2017

Is The American Health Care Act Pushing Down Mortgage Rates?


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, March 17, 2017

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

Wednesday, March 15, 2017

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.

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


Friday, March 10, 2017

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"


Friday, March 3, 2017

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