FHFA considers fee cuts, Senate confirms CFPB chief and more of the week's news
October 1, 2021 5:21 PM
FHFA contemplates eliminating GSE-loan price adjustments
The Federal Housing Finance Agency is considering reducing risk-based fees on loans backed by Fannie Mae and Freddie Mac that critics say have priced many qualified and first-time homebuyers out of the conventional mortgage market.
Acting FHFA Director Sandra Thompson said Thursday that the agency is weighing changes to the loan-level price adjustments enacted in 2008 to help the government-sponsored enterprises manage risk.
Mortgage lenders, Realtors and housing experts have urged the FHFA for years to eliminate the fees that raise the cost of a home loan for many borrowers.
Read thefull story here .
Acting FHFA Director Sandra Thompson said Thursday that the agency is weighing changes to the loan-level price adjustments enacted in 2008 to help the government-sponsored enterprises manage risk.
Mortgage lenders, Realtors and housing experts have urged the FHFA for years to eliminate the fees that raise the cost of a home loan for many borrowers.
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Alex Edelman/Bloomberg
Senate names Rohit Chopra CFPB chief
Rohit Chopra was confirmed by the Senate to serve as director of the Consumer Financial Protection Bureau, returning a consumer watchdog to an agency that has been rocked by partisan divisions over the scope of its power.
Chopra was approved Thursday by the Senate in a 50-48 vote along party lines. He has been serving as a member of the Federal Trade Commission.
He was announced as the administration's choice to lead the CFPB nine months ago, before President Biden took office. Chopra succeeds Kathy Kraninger, who was appointed in the Trump administration after having served as a senior official at the Office of Management and Budget. She led the CFPB for two years beforeresigning in January.
Read thefull story here .
Chopra was approved Thursday by the Senate in a 50-48 vote along party lines. He has been serving as a member of the Federal Trade Commission.
He was announced as the administration's choice to lead the CFPB nine months ago, before President Biden took office. Chopra succeeds Kathy Kraninger, who was appointed in the Trump administration after having served as a senior official at the Office of Management and Budget. She led the CFPB for two years before
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Incenter takes bids on over $6 billion in Ginnie Mae MSRs
Incenter Mortgage Advisors is offering a $6.1 billion portfolio of mortgage servicing rights from securitizations insured by government agency Ginnie Mae on behalf of an unnamed seller.
More than 19% of the loans involved, which average around four years of seasoning, have been removed from securitized pools because they are delinquent or in forbearance. Delinquency rates, including forbearance, break down into the following buckets: 90-plus days, 14.57%; 30-59 days, 3.81%; and 60-89 days, 1.07%
Some investors have shown interest in investing in the secondary market for mortgages in forbearance with the aim of potentially profiting if the borrower gets back on track with payments and the loanreperforms.
Read thefull story here .
More than 19% of the loans involved, which average around four years of seasoning, have been removed from securitized pools because they are delinquent or in forbearance. Delinquency rates, including forbearance, break down into the following buckets: 90-plus days, 14.57%; 30-59 days, 3.81%; and 60-89 days, 1.07%
Some investors have shown interest in investing in the secondary market for mortgages in forbearance with the aim of potentially profiting if the borrower gets back on track with payments and the loan
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Audit finds FHFA comes short in sharing GSE counterparty issues
Federal Housing Finance Agency acting Inspector General Phyllis Fong is calling for better practices related to the sharing of regulatory information about the performance of mortgage companies and others that work with Fannie Mae and Freddie Mac.
The FHFA, which regulates the two government-sponsored enterprises, has agreed to rework and improve its procedures related to sharing information about performance issues like servicing lapses, in line with the report by its inspector general.
The recent audit on how the FHFA’s Division of Enterprise Regulation shared information about the performance of counterparties such as lenders, servicers and mortgage insurers found that the division did not follow or provide training in its information sharing procedures.
Read thefull story here .
The FHFA, which regulates the two government-sponsored enterprises, has agreed to rework and improve its procedures related to sharing information about performance issues like servicing lapses, in line with the report by its inspector general.
The recent audit on how the FHFA’s Division of Enterprise Regulation shared information about the performance of counterparties such as lenders, servicers and mortgage insurers found that the division did not follow or provide training in its information sharing procedures.
Read the
Forbearances drop below 3% for first time since March 2020
Despite a jump in the government loan sector, the overall weekly forbearance rate fell 4 basis points, returning it to a level not seen since the start of the pandemic, according to the Mortgage Bankers Association.
At 2.96%, the overall payment suspension rate was down from 3%a week earlier and back in line with March 2020 levels, but the equivalent for loans packaged into Ginnie Mae securities was up by 3 basis points at 3.42%, suggesting a concentration of distress amid broader declines. Just over half of all borrowers exited forbearance plans as current, or were able to resume normal payments and defer missed ones until the end of their loans. A little over 16% of exits were noncurrent loans with no loss mitigation in place, and another 11.76% were modifications. Most of the other exits involved loans that were reinstated or paid off.
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At 2.96%, the overall payment suspension rate was down from 3%
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Available housing inventory hits 2021 peak
The supply of for-sale homes hit its highest point of the year in September but still follows the long road to a balanced market.
The month had a total of 646,854 active listings, down 22.2% from Sept. 2020 but an improvement from August’s 641,000 and that month’s 25.8% year-over-year decrease, according to Realtor.com. However, new listings fell annually for the first time in five months, dropping 3.9%. That dichotomy represents a possible turning point for home buyers going forward, said the company’s Chief Economist Danielle Hale.
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The month had a total of 646,854 active listings, down 22.2% from Sept. 2020 but an improvement from August’s 641,000 and that month’s 25.8% year-over-year decrease, according to Realtor.com. However, new listings fell annually for the first time in five months, dropping 3.9%. That dichotomy represents a possible turning point for home buyers going forward, said the company’s Chief Economist Danielle Hale.
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Democratic senators put forward 20-year mortgages
A proposed 20-year government-backed mortgage program could allow new homeowners to build wealth twice as fast as they would with a traditional 30-year loan.
However, industry participants question whether this is the best way to help minorities and low-income familiescreate wealth through housing.
The Low-Income First-Time Homebuyers Act, LIFT for short, sponsors are all Democrats: Sens. Mark Warner and Tim Kaine of Virginia; Raphael Warnock and Jon Ossoff of Georgia; and Chris Van Hollen of Maryland.
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However, industry participants question whether this is the best way to help minorities and low-income families
The Low-Income First-Time Homebuyers Act, LIFT for short, sponsors are all Democrats: Sens. Mark Warner and Tim Kaine of Virginia; Raphael Warnock and Jon Ossoff of Georgia; and Chris Van Hollen of Maryland.
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JON MEADOWS
Cenlar appoints Sara Avery chief risk officer
Cenlar FSB, a mortgage subservicer and employee-owned wholesale bank, on Tuesday announced that it has hired Sara Avery, the former chief risk officer of Common Securitization Solutions, a joint venture owned by Fannie Mae and Freddie Mac.
Avery, who has been named CRO at Cenlar, developed and built out the enterprise risk management function for Common Securitization Solutions’ technology platform. The Common Securitization Platform plays a key role in the U.S. housing finance market because it’s used to manage the issuance of Fannie Mae and Freddie Mac’s bonds, including theuniform mortgage-backed security that the two government-sponsored enterprises launched in 2019. Avery also worked for nearly a decade at Freddie Mac in various risk-management roles, including serving as senior director of credit enterprise risk between 2009 and 2014.
Read thefull story here .
Avery, who has been named CRO at Cenlar, developed and built out the enterprise risk management function for Common Securitization Solutions’ technology platform. The Common Securitization Platform plays a key role in the U.S. housing finance market because it’s used to manage the issuance of Fannie Mae and Freddie Mac’s bonds, including the
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Extreme weather impacts home buying decisions
The increasing power and frequency of natural disasters are weighing more heavily on borrowers’ decisions regarding where to live.
A 78% share of buyers and 84% of sellers said thatconcerns about extreme weather events
factored into how they chose the location of their next home, according to a Realtor.com survey of over 3,000 consumers conducted in July. Overall, 47% of homeowners are more concerned about natural disasters now than they were five years ago, 44% said their attitudes haven’t changed over that period and 9% are less concerned.
Among recent home buyers, 72% of millennials expressed concern, followed by 66% of Generation X, 58% of Generation Z, 55% of baby boomers and 44% of the silent generation. (The survey’s results were weighted for age and other factors in order to align them with their actual demographic proportions in the population, Realtor.com noted.)
Read thefull story here .
A 78% share of buyers and 84% of sellers said that
factored into how they chose the location of their next home, according to a Realtor.com survey of over 3,000 consumers conducted in July. Overall, 47% of homeowners are more concerned about natural disasters now than they were five years ago, 44% said their attitudes haven’t changed over that period and 9% are less concerned.
Among recent home buyers, 72% of millennials expressed concern, followed by 66% of Generation X, 58% of Generation Z, 55% of baby boomers and 44% of the silent generation. (The survey’s results were weighted for age and other factors in order to align them with their actual demographic proportions in the population, Realtor.com noted.)
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Private-label securities issuance forecast to reach $96 billion
This year could be the biggest for non-agency residential mortgage-backed securitization since the Great Recession’s housing crash shut that market down, according to a report by Kroll Bond Rating Agency.
An estimated $29 billion for the third quarter, added to around $43 billion during the first half, puts annual issuance in a position to easily top its previous post-crisis high, which was set in 2019 at roughly $60 billion. While the current forecast of $96 billion for 2021 still represents a sliver of the overall mortgage market and remains a far cry from the days when the volume topped $1 trillion prior to the crash, it would represent the biggest jump in annual issuance seen in several years.
Read thefull story here .
An estimated $29 billion for the third quarter, added to around $43 billion during the first half, puts annual issuance in a position to easily top its previous post-crisis high, which was set in 2019 at roughly $60 billion. While the current forecast of $96 billion for 2021 still represents a sliver of the overall mortgage market and remains a far cry from the days when the volume topped $1 trillion prior to the crash, it would represent the biggest jump in annual issuance seen in several years.
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Mortgage rates rise above 3% for first time since June
Mortgage rates moved noticeably upward in the past week, as Treasury yields climbed following the Federal Reserve’s taper announcement.
The 30-year fixed-rate mortgage hit its highest point in three months, averaging 3.01% for the weekly period ending Sept. 30, according to the Freddie Mac Primary Mortgage Market Survey. The average jumped from2.88% a week earlier . The last time the 30-year rate rose above the 3% threshold was in the final full week of June when it reached 3.02%. In the same period one year ago, the average stood at 2.88%.
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The 30-year fixed-rate mortgage hit its highest point in three months, averaging 3.01% for the weekly period ending Sept. 30, according to the Freddie Mac Primary Mortgage Market Survey. The average jumped from
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Micah Green/Bloomberg
Pending home sales climb to seven-month high in August
A gauge of U.S. pending home sales rebounded in August to a seven-month high as prospective buyers welcomed more attractive pricing and additional inventory.
The National Association of Realtors’ index of pending home sales increased 8.1% from a month earlier to 119.5, the first advance in three months, according to data released Wednesday. The median estimate in a Bloomberg survey of economists called for a 1.4% advance.
The figures suggest housing activity is firming after retreating from the record-high levels seen last year. Historically low borrowing rates, slower price appreciation and more available properties could rejuvenate demand that has softened this year.
Read thefull story here .
The National Association of Realtors’ index of pending home sales increased 8.1% from a month earlier to 119.5, the first advance in three months, according to data released Wednesday. The median estimate in a Bloomberg survey of economists called for a 1.4% advance.
The figures suggest housing activity is firming after retreating from the record-high levels seen last year. Historically low borrowing rates, slower price appreciation and more available properties could rejuvenate demand that has softened this year.
Read the
First-time home buyers struggle to meet down payments
While record-setting price growth has boosted homeowner equity to historic levels , they’ve also made it nearly impossible for first-time buyers to save for a down payment.
As of June, the typical borrower needed 7.9 years to accumulate 20% down, compared to 7.1 years in January 2020, according to Tomo. This assumes a savings rate of 10% of income per month, which is high for most consumers.
Among the top 50 metro areas, thescalding hot market of Boise, Idaho saw the biggest jump in time-to-save over that period, going to 12.5 years from 9.3. San Diego rose to 16.8 years from 14.6 and Austin, Texas — which is expected to be the hottest market for home price growth in 2022 — went to 10.1 years from 8. Notably, Los Angeles expanded to 19.2 years — the highest overall in the country — from 17.3. The lowest times-to-save came in Rochester, N.Y., at 5.7 years, and Pittsburgh and Oklahoma City each at 5.8 years.
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As of June, the typical borrower needed 7.9 years to accumulate 20% down, compared to 7.1 years in January 2020, according to Tomo. This assumes a savings rate of 10% of income per month, which is high for most consumers.
Among the top 50 metro areas, the
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Individual investors grow pessimistic toward housing market
A 48.1% share of residential real estate investors found the environment worse than a year ago, according to a survey conducted by Attom Data Solutions affiliate RealtyTrac. Low inventory and
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Cavco completes purchase of manufactured-home builder
Cavco Industries, the Phoenix-based builder of manufactured homes, announced the close of its acquisition of The Commodore Corp. in a deal totaling $153 million dollars.
The largest independent builder of manufactured andmodular homes in the United States, Commodore operates under several different brand names including Commodore Homes of Pennsylvania, Commodore Homes of Indiana, Colony Homes, MidCountry Homes, Pennwest Homes and R-Anell Homes. As part of the deal, Cavco acquires Commodore’s six manufacturing facilities and two wholly-owned retail stores in Indiana and New York. For the 12-month period ending March 31, Commodore generated net sales of $258 million and sold 6,600 modules, equivalent to 3,700 homes.
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The largest independent builder of manufactured and
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