Fed talks 2023 interest rate hikes, First American penalized by SEC, Black Knight chairman steps down & more of the week's top news
June 18, 2021 7:27 PM
Samuel Corum/Bloomberg
Fed holds rates at zero, projects two hikes by end of 2023
Federal Reserve officials held interest rates near zero while signaling they expect two increases by the end of 2023, pulling forward the date of liftoff and projecting a faster-than-anticipated pace of tightening as the economy recovers.
“Progress on vaccinations has reduced the spread of COVID-19 in the United States,” the Federal Open Market Committee said in a statement released Wednesday following the conclusion of its two-day policy meeting. “Amid this progress and strong policy support, indicators of economic activity and employment have strengthened.”
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“Progress on vaccinations has reduced the spread of COVID-19 in the United States,” the Federal Open Market Committee said in a statement released Wednesday following the conclusion of its two-day policy meeting. “Amid this progress and strong policy support, indicators of economic activity and employment have strengthened.”
First American penalized by SEC over data breach disclosures
Title insurance underwriter First American Financial agreed to pay a $487,616 penalty to the Securities and Exchange Commission regarding disclosures made in connection with the 2019 discovery of a data breach.
Both First American and the SEC said the company neither admitted to nor denied the allegations made by the regulator, in respective announcements issued on Tuesday.
"We're pleased to resolve this matter with the SEC and remain committed to compliance with all SEC disclosure control requirements," a statement from a First American spokesman said.
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Both First American and the SEC said the company neither admitted to nor denied the allegations made by the regulator, in respective announcements issued on Tuesday.
"We're pleased to resolve this matter with the SEC and remain committed to compliance with all SEC disclosure control requirements," a statement from a First American spokesman said.
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Mortgage lending activity hit 13-month low in May
In spite of 14 million high-quality refinance candidates, mortgage origination volume hit a 13-month low in May, according to Black Knight.
In the shadow ofthe severe housing supply shortage , the Originations Market Monitor Report showed activity fell 4.8% from April , including drops of 3.4% for purchases, 3.4% for cash-out refinances and 8.2% for rate-and-term refinances.
Annually, overall lending activity dwindled by 0.7% as rate-and-terms decreased 44.8% while purchases and cash-out refis grew by 43.4% and 32.2%, respectively. The30-year fixed-rate declined again, falling to a 3.15% average from 3.23% in April.
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In the shadow of
Annually, overall lending activity dwindled by 0.7% as rate-and-terms decreased 44.8% while purchases and cash-out refis grew by 43.4% and 32.2%, respectively. The
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Fannie Mae makes cuts to purchase mortgage estimates
Fannie Mae significantly reduced its second and third quarter home sales estimates as supply-side factors — such as the low number of listings for existing residences and limits on new construction — run up against demand.
Those trends also play intothe inflationary impact housing is likely to have on the U.S. economy.
The government-sponsored enterprise's June forecast expects home sales to run at an annualized pace of 6.6 million units in the second quarter and 6.5 million in the third, compared withMay's forecast of 6.9 million and 6.7 million respectively.
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Those trends also play into
The government-sponsored enterprise's June forecast expects home sales to run at an annualized pace of 6.6 million units in the second quarter and 6.5 million in the third, compared with
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Foreclosures grow annually for first time under CARES Act
While foreclosure numbers treaded near historic lows, blanketed by CARES Act protections , filings spiked from the year before, according to Attom Data Solutions.
Foreclosure filings — inclusive of default notices, bank repossessions and scheduled auctions — totaled 10,821 in May,down 8% from 11,810 in April and up 23% from 8,767 the year before. A total of 5,909 properties started the foreclosure process, falling 7% monthly from April’s 6,355 while surging 36% annually from 4,356 properties in May 2020.
Even though the annual growth in both categories marked the first in the moratorium period, the overall figures are still relatively small, explained Rick Sharga, executive vice president of Attom's consumer-facing business, RealtyTrac.
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Foreclosure filings — inclusive of default notices, bank repossessions and scheduled auctions — totaled 10,821 in May,
Even though the annual growth in both categories marked the first in the moratorium period, the overall figures are still relatively small, explained Rick Sharga, executive vice president of Attom's consumer-facing business, RealtyTrac.
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Housing market conditions relax (a bit) in May
The inventory rebound also dovetails with Fannie Mae’s borrower purchase sentiment bottoming out to the lowest point in its survey history and mortgage origination volume slowing to a 13-month low , according to Black Knight. While some predicted that more inventory would hit the market in June, rapidly loosening pandemic restrictions ushered it in earlier.
“A steady increase in new listings appears to have finally started turning the tides, bringing a long-anticipated turn toward more choices for buyers," Zillow Economist Treh Manhertz said in the report. "Builders are rushing to churn out new homes, while widespread vaccinations and improved confidence in the economy should help current owners feel more comfortable listing their homes for sale."
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“A steady increase in new listings appears to have finally started turning the tides, bringing a long-anticipated turn toward more choices for buyers," Zillow Economist Treh Manhertz said in the report. "
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Agnes Lopez
Foley steps down as Black Knight's chairman
William Foley, the chairman of Black Knight since the mortgage technology company's spin-out from Fidelity National Financial in 2015, will retire from its board following the company's annual meeting on Wednesday.
Current CEO Anthony Jabbour will add the chairman's position at that time with Foley becoming chairman emeritus.
"Foley decided not to stand for re-election at the annual meeting in order to reduce the overall number of public company boards on which he serves," a Securities and Exchange Commission filing stated.
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Current CEO Anthony Jabbour will add the chairman's position at that time with Foley becoming chairman emeritus.
"Foley decided not to stand for re-election at the annual meeting in order to reduce the overall number of public company boards on which he serves," a Securities and Exchange Commission filing stated.
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CHLA decries 3% caps for some on Fannie vacation home, investor loans
Fannie had warned lenders in March that it would be “monitoring deliveries of second home and investor loans on a lender-level basis” and would be “working with” those that had “excessive” sales above the 7% based on year-to-date unpaid principal balance. The GSE had asked mortgage lenders with deliveries in excess of that amount to try to adjust their volumes by June 1. On average per unit basis, roughly 10% of all loan applications have been for a non-primary residence in the past year, according to the Mortgage Bankers Association.
Freddie Mac also recently set a lower limit for purchases of loans backed by second home and investor properties starting in July but the change is less drastic. That limit is 6% or 6.5%, depending on whether lenders meet certain other volume criteria. Freddie is cc’ed but not directly addressed in the CHLA’s letter.
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Freddie Mac also recently set a lower limit for purchases of loans backed by second home and investor properties starting in July but the change is less drastic. That limit is 6% or 6.5%, depending on whether lenders meet certain other volume criteria. Freddie is cc’ed but not directly addressed in the CHLA’s letter.
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As military lifts travel restrictions, new housing needs open up
Pandemic-related travel restrictions have been lifted on the majority of military installations, and that’s the catalyst for new lending needs within the Department of Veterans Affairs market as base transfers resume.
Just a few months ago, more than half of all installations had limitations when it came to movement between bases. They’ve now been lifted on 207 out of 230 or 90%, according to a report issued by the Department of Defense. VA lenders are reporting there’s been a relative uptick in permanent change of station assignments in response, bringing the level of activity back closer to levels seen before the pandemic.
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Just a few months ago, more than half of all installations had limitations when it came to movement between bases. They’ve now been lifted on 207 out of 230 or 90%, according to a report issued by the Department of Defense. VA lenders are reporting there’s been a relative uptick in permanent change of station assignments in response, bringing the level of activity back closer to levels seen before the pandemic.
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Vendors hope for digital data verification boom in mortgage servicing
Government-sponsored enterprise Fannie Mae recently began explicitly allowing mortgage companies to use vendor technology that could help reduce the turnaround time when submitting information used to evaluate distressed borrowers for loan modification options.
The automation, which gives mortgage companies consumer-permissioned access to bank or payroll information, has been used to help qualify a borrower for a new loan, but it is used less frequently in servicing, where the implementation of new technologies overall was less common prior to the pandemic.
So Fannie Mae’s decision to spell out that it allows digital data verifications of income and asset data in its “borrower response package” could come in handy as pandemic measures expire and a wave of people need to transition to new options. But what the servicer and borrower adoption rate will be like remains to be seen.
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The automation, which gives mortgage companies consumer-permissioned access to bank or payroll information, has been used to help qualify a borrower for a new loan, but it is used less frequently in servicing, where the implementation of new technologies overall was less common prior to the pandemic.
So Fannie Mae’s decision to spell out that it allows digital data verifications of income and asset data in its “borrower response package” could come in handy as pandemic measures expire and a wave of people need to transition to new options. But what the servicer and borrower adoption rate will be like remains to be seen.
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While volume dropped, new-home loans hit a price record in May
New-home purchase application volume fell for the second consecutive month in May, as soaring prices pushed more potential buyers out of the market and the costs of building materials remained high.
These applications dropped 9% from April and 5.9% year-over-year, according to the Mortgage Bankers Association’s Builder Application Survey. The rate of new-home sales fell 3.8% month-over-month as well,a recent trend that caused Fannie Mae to reduce its purchase volume forecast for the rest of the year.
May’s seasonally adjusted annual estimate of 741,000 sales marked a decrease from April’s pace of 770,000 units. The annual rate of sales dipped 20% after hitting a survey high of 927,000 in October 2020 due to strained inventory and price growth, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting. Unadjusted estimates showed 68,000 new-homes sold in May, down 5.6% from 72,000 in April.
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These applications dropped 9% from April and 5.9% year-over-year, according to the Mortgage Bankers Association’s Builder Application Survey. The rate of new-home sales fell 3.8% month-over-month as well,
May’s seasonally adjusted annual estimate of 741,000 sales marked a decrease from April’s pace of 770,000 units. The annual rate of sales dipped 20% after hitting a survey high of 927,000 in October 2020 due to strained inventory and price growth, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting. Unadjusted estimates showed 68,000 new-homes sold in May, down 5.6% from 72,000 in April.
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Nonbank mortgage share now tops 60%
The share of mortgages originated by non-depository institutions climbed to nearly 61% in 2020 from a little over 56% a year earlier, according to Home Mortgage Disclosure Act data released by the Federal Financial Institutions Examination Council on Thursday.
The data distributed by the Consumer Financial Protection Bureau was in line withearlier private analyses of individual lenders’ HMDA reports that had shown some large nonbanks moving up in the rankings at the same time certain depositories dropped in the rankings.
The FFIEC data also confirmed that disparities in lending to racial and ethnic groups persisted in the past year.
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The data distributed by the Consumer Financial Protection Bureau was in line with
The FFIEC data also confirmed that disparities in lending to racial and ethnic groups persisted in the past year.
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Mortgage rate falls again, but a reversal may be in store
The average 30-year fixed-rate mortgage fell for a third-straight week , hitting its lowest mark since mid February, but remarks from Wednesday’s Federal Reserve meeting immediately led rates to spike and could portend a reversal of the trend.
The 30-year average fell to 2.93% for the weekly period ending June 17, according to Freddie Mac’s Primary Mortgage Markets Survey, down three basis points from 2.96% the previous week. The last time the average was lower was four months ago, whenit came in at 2.81% for the period ending February 18. In the same week a year ago, the 30-year fixed-rate mortgage averaged 3.13%.
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The 30-year average fell to 2.93% for the weekly period ending June 17, according to Freddie Mac’s Primary Mortgage Markets Survey, down three basis points from 2.96% the previous week. The last time the average was lower was four months ago, when
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Nontraditional mortgage lender Sprout builds out retail
After a niche market it did business in experienced secondary-market disruption last year, Sprout Mortgage — a wholesale funder and buyer of nontraditional loans — changed its tack, and it's now taking another step to that end.
The private company announced Tuesday it will be expanding its retail origination channel in line with its goal to become a top 10 player by maintaining the growth trajectory it’s established over the past four years. Former Wells Fargo Senior Vice President Michael Johnston (pictured) will lead the buildout of the company’s retail network through direct-to-consumer operations, brick-and-mortar branches and joint ventures.
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The private company announced Tuesday it will be expanding its retail origination channel in line with its goal to become a top 10 player by maintaining the growth trajectory it’s established over the past four years. Former Wells Fargo Senior Vice President Michael Johnston (pictured) will lead the buildout of the company’s retail network through direct-to-consumer operations, brick-and-mortar branches and joint ventures.
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Only one-third of employers envision a hybrid work environment
More than a year into the coronavirus pandemic, employers and employees are searching for an answer: What does the future of work have in store? Despite agreeing a return will be gradual, these populations disagree on important points concerning the cadence of remote work and how to support a workplace in flux.
Bridging this communication gap will require continuous conversations about the role of technology, supportive employee benefits and safety strategies to ensure that business can thrive and employees can bring their best selves to work.
This study from Arizent — parent company of Accounting Today, American Banker, Bond Buyer, Digital Insurance, Employee Benefit News, Financial Planning, National Mortgage News and PaymentsSource — explores business attitudes around remote work and provides new insight into how both business leaders and employees are thinking about navigating work in the future.
Read thefull story here.
Bridging this communication gap will require continuous conversations about the role of technology, supportive employee benefits and safety strategies to ensure that business can thrive and employees can bring their best selves to work.
This study from Arizent — parent company of Accounting Today, American Banker, Bond Buyer, Digital Insurance, Employee Benefit News, Financial Planning, National Mortgage News and PaymentsSource — explores business attitudes around remote work and provides new insight into how both business leaders and employees are thinking about navigating work in the future.
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Homespire, Nations Lending, CapStar make new hires across the country
SimpleNexus, developer and operator of a homeownership platform serving parties across the mortgage process, announced its founder Matt Hansen would step down as CEO. Company president Cathleen Schreiner Gates has been promoted to the chief executive position, and Hansen will continue to lead software developers and sales teams at SimpleNexus while developing skunkworks, a newly formed unit within the company.
Homespire Mortgage appointed David Lewis as national renovation manager, a newly created role at the residential mortgage lender based in Gaithersburg, Md. Lewis will lead the renovation lending division at Homespire, which is licensed to operate in 41 states. An expert ofrenovation lending , Lewis built platforms for other companies and wrote a book about the topic in his 25-year career. He will lead efforts to develop renovation lending capabilities across Homespire’s network, creating efficient platform for customers and partners.
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Homespire Mortgage appointed David Lewis as national renovation manager, a newly created role at the residential mortgage lender based in Gaithersburg, Md. Lewis will lead the renovation lending division at Homespire, which is licensed to operate in 41 states. An expert of
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