CFPB finalizes new underwriting rules, Supreme Court hints a FHFA ruling, Mr. Cooper settles servicing case and more of the week's top news
December 11, 2020 4:28 PM
Biden's pick to lead HUD is Ohio Congresswoman Marcia Fudge
President-elect Joe Biden has selected Ohio Representative Marcia Fudge to lead the Department of Housing and Urban Development, according to a person familiar with the matter.
Fudge, who has served in the House since 2008, represents most of the majority-Black areas of Cleveland as well as part of Akron. If nominated, she would be one of just a few House members to leave for the Biden administration as Democrats fight to hold on to the small majority they still have in the next Congress.
(Read the full storyhere .)
Fudge, who has served in the House since 2008, represents most of the majority-Black areas of Cleveland as well as part of Akron. If nominated, she would be one of just a few House members to leave for the Biden administration as Democrats fight to hold on to the small majority they still have in the next Congress.
(Read the full story
Mr. Cooper, PNC and U.S. Bank settle government cases
On the same day that Mr. Cooper announced a settlement with state and federal authorities over its servicing practices, the Dallas company and two other lenders reached separate agreements with the Justice Department regarding bankrupt borrowers.
Mr. Cooper agreed to pay out over $91 million to consumers and state and federal regulators in order to settle charges regarding problems with loan modifications, foreclosures and mortgage insurance policy cancellations.
The Justice Department's U.S. Trustee office, which oversees the administration of bankruptcy cases and private trustees, came to its own agreement with Mr. Cooper, U.S. Bank and PNC Bank regarding noncompliance with the Bankruptcy Code and Federal Rules of Bankruptcy Procedure, which impacted over 60,000 accounts at all three companies, dating back to 2011.
(Read full storyhere .)
Mr. Cooper agreed to pay out over $91 million to consumers and state and federal regulators in order to settle charges regarding problems with loan modifications, foreclosures and mortgage insurance policy cancellations.
The Justice Department's U.S. Trustee office, which oversees the administration of bankruptcy cases and private trustees, came to its own agreement with Mr. Cooper, U.S. Bank and PNC Bank regarding noncompliance with the Bankruptcy Code and Federal Rules of Bankruptcy Procedure, which impacted over 60,000 accounts at all three companies, dating back to 2011.
(Read full story
CFPB finalizes overhaul of mortgage underwriting rules
The Consumer Financial Protection Bureau on Thursday issued two final rules revising the definition of “qualified mortgages."
It finalized one rule establishing a new general QM standard, adopting a pricing threshold to determine if loans can avoid liability under ability-to-repay requirements, replacing the current debt-to-income limit of 43%. The final QM rule would give lenders relief for loans capped at 150 basis points above the prime rate.
In the second final rule, the CFPB detailed how a loan can automatically gain QM status if a lender holds on to it for a while. Loans can earn the "seasoned" QM label if they are on the lender's balance for at least three years.
(Read full storyhere .)
It finalized one rule establishing a new general QM standard, adopting a pricing threshold to determine if loans can avoid liability under ability-to-repay requirements, replacing the current debt-to-income limit of 43%. The final QM rule would give lenders relief for loans capped at 150 basis points above the prime rate.
In the second final rule, the CFPB detailed how a loan can automatically gain QM status if a lender holds on to it for a while. Loans can earn the "seasoned" QM label if they are on the lender's balance for at least three years.
(Read full story
Retaining existing mortgage customers remains a struggle: Black Knight
Average retention rates for refinances dropped to 18% in the third quarter, down from an upwardly revised 20% the previous quarter , and 23% a year ago, according to Black Knight.
Cash-out refinances had a particularly low average retention rate of 12% in the third quarter, when their market share fell to 27%, marking the lowest share in this category in seven years.
Rate-and-term refinances had a slightly higher retention rate of 22%. Home loans originated in 2018 and 2019 also had slightly higher retention rates at 25% and 26%, respectively.
These numbers put the average retention rate at a record low for the post-crisis period that followed the Great Recession.
(Read full storyhere .)
Cash-out refinances had a particularly low average retention rate of 12% in the third quarter, when their market share fell to 27%, marking the lowest share in this category in seven years.
Rate-and-term refinances had a slightly higher retention rate of 22%. Home loans originated in 2018 and 2019 also had slightly higher retention rates at 25% and 26%, respectively.
These numbers put the average retention rate at a record low for the post-crisis period that followed the Great Recession.
(Read full story
Mortgage applications slip, although record low rates spur refis
Mortgage application activity decreased 1.2% on a seasonally adjusted basis last week, but refinance volume picked up as interest rates reached a new survey low, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending Dec. 4 found that the refinance index increased 2%from the previous week. The previous week’s results included an adjustment for the Thanksgiving holiday. The refinance share of mortgage activity increased to 72% of total applications from 69.5% the previous week.
(Read the full storyhere .)
The MBA’s Weekly Mortgage Applications Survey for the week ending Dec. 4 found that the refinance index increased 2%
(Read the full story
Supreme Court hints FHFA's Calabria could keep job after all
Ever since the Supreme Court agreed to hear a case challenging the constitutionality of the Federal Housing Finance Agency, many observers have expected the justices ultimately to rule that a president should be able to fire a sitting FHFA director at will. But comments by some of the justices during oral arguments Wednesday hinted that the court may stop short of such a decision.
At issue is whether the powers afforded to Senate-confirmed directors such as FHFA chief Mark Calabria, who can only be fired for cause and do not answer to a board, are unconstitutional. Justices signaled that that constitutionality question may be moot because the "net worth sweep" at the center of the case was implemented by former acting FHFA Director Ed DeMarco, who lacked Senate confirmation and therefore any protection from presidential firings.
(Read full storyhere .)
At issue is whether the powers afforded to Senate-confirmed directors such as FHFA chief Mark Calabria, who can only be fired for cause and do not answer to a board, are unconstitutional. Justices signaled that that constitutionality question may be moot because the "net worth sweep" at the center of the case was implemented by former acting FHFA Director Ed DeMarco, who lacked Senate confirmation and therefore any protection from presidential firings.
(Read full story
Credit availability expanded for second month in a row
Lenders loosened their mortgage credit standards for the second month in a row in November because of strong housing demand and an improved employment picture at the time, the Mortgage Bankers Association said.
November's Mortgage Credit Availability Index was 122.2, up 0.7% fromOctober's 121.3 , and its highest level since July. In comparison, the index for November 2019 was at 188.9, near the post-housing crisis high point for loan program availability.
(Read the full storyhere .)
November's Mortgage Credit Availability Index was 122.2, up 0.7% from
(Read the full story
Nexsys Technologies, sister to Rocket Mortgage, launches home insurance verification tool
Nexsys Technologies, this week released Clear HOI — an encrypted, cloud-based product for lenders to automate homeowners insurance underwriting — to the broader lending market. Rocket Mortgage has been using and refining the technology with Nexsys over the past year.
The automation software aims to cut down on the time spent on verifying homeowners insurance to minutes, confirming it in real time, using multiple authentications. Insurers currently on the platform include Allstate, Farmers Insurance, Lemonade and Liberty Mutual.
(Read full storyhere .)
The automation software aims to cut down on the time spent on verifying homeowners insurance to minutes, confirming it in real time, using multiple authentications. Insurers currently on the platform include Allstate, Farmers Insurance, Lemonade and Liberty Mutual.
(Read full story
2021 RMBS to benefit from tighter underwriting put in place for COVID
Tighter underwriting criteria put into place by lenders as a result of COVID-19 will mean 2021-vintage residential mortgage-backed securities should have strong credit metrics, a Moody's report predicts.
Comparing transactions from the same issuers (JPMorgan and Wells Fargo) in late 2019, the start of 2020 and this fall show measurable tightening in most metrics, including credit scores, along with loan-to-value and debt-to-income ratios.
(Read the full storyhere .)
Comparing transactions from the same issuers (JPMorgan and Wells Fargo) in late 2019, the start of 2020 and this fall show measurable tightening in most metrics, including credit scores, along with loan-to-value and debt-to-income ratios.
(Read the full story
Americans gain $1 trillion in home equity in 3Q
In the third quarter, Americans collectively added over $1 trillion in home equity on a year-over-year basis and the average gain per owner was the highest in six years, CoreLogic said.
"The housing market has remained a strong pillar in an otherwise tumultuous economic year," Frank Martell, president and CEO of CoreLogic, said in a press release. "A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity."
Homeowners with a mortgage — about 63% of all properties — found their properties added 10.8% in value when compared withthe third quarter of 2019.
(Read the full storyhere .)
"The housing market has remained a strong pillar in an otherwise tumultuous economic year," Frank Martell, president and CEO of CoreLogic, said in a press release. "A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity."
Homeowners with a mortgage — about 63% of all properties — found their properties added 10.8% in value when compared with
(Read the full story
