Freddie Mac 3Q earnings growth backed by record single-family volume
Freddie Mac set a record for single-family mortgage loan purchases in the third quarter, helping the company to achieve higher net income both quarter-to-quarter and year-over-year. The government-sponsored enterprise had third-quarter net income of $2.5 billion, an increase of 39% over the $1.8 billion earned in the second quarter. In the third quarter of 2019, Freddie Mac earned $1.7 billion. (Read full story here.)
Agencies formally propose rule to weaken role of guidance
Five financial regulators issued a proposed rulemaking to weaken the authority of supervisory guidance, codifying an announcement from 2018 that declared that guidance does not carry the force of law. Thursday’s rulemaking, previewed at a Federal Deposit Insurance Corp. board meeting earlier this month, was issued by the Federal Reserve, Consumer Financial Protection Bureau, FDIC, National Credit Union Administration and the Office of the Comptroller of the Currency. (Read full story here.)
Title insurers' 3Q results are released
The three national title insurance underwriters that have reported third-quarter earnings so far reveal operating revenue that is clearly benefiting from the increase in mortgage transactions. Below we parse their numbers to assess the impact of high purchase and refinance activity. (Read full story here.)
CFPB issues its debt collector rule
The Consumer Financial Protection Bureau released a final debt collection rule on Friday that restricts how often collectors can call borrowers to seven calls per week but for the first time allows communications by voice mail, email and text messages. The CFPB established rules to allow the use of technologies developed after the Fair Debt Collection Practices Act passed in 1977. Consumers can opt out of such modern communications. (Read full story here.)
AmeriHome joins home lender Caliber in delaying IPO
A pair of home loan originators are backing away from initial public offerings for now as market volatility climbs. Caliber Home Loans Inc. said in a statement that it was delaying its IPO that was set for Wednesday, confirming an earlier report by Bloomberg. AmeriHome Inc. is also planning to put off its listing, according to people with knowledge of the matter who asked not to be identified because the information was private. (Read full story here.)
Fannie Mae finalizing plans for switch to hedge accounting
Fannie Mae’s long-awaited switch to hedge accounting is about to go into effect. If all goes well, that change will occur in the first quarter of next year, Fannie Mae Chief Financial Officer Celeste Brown said during a media call about its third-quarter earnings on Thursday. The accounting change, and net income gains fueled in part by the rate-driven refinance boom, may help prepare the government-sponsored enterprise fora conservatorship exit. (Read full story here.)
Black homeowners lose about $14K over the life of a mortgage
Black homeowners lose an average of about $14,000 over the life of a mortgage and about $67,000 in retirement savings due to higher interest rates, according to the National Association of Real Estate Brokers eighth annual State of Housing in Black America report.
The analysis of 2019 HMDA data found that Black borrowers locked in an average mortgage rate of 4.44% for conventional loans — 15 basis points higher than white borrowers. Though not as stark, Black consumers paid higher average interest rates across all loan types compared to their white counterparts. (Read full story here.)
CFPB fines ninth lender for misleading VA marketing practices
The Consumer Financial Protection Bureau has wrapped up a series of enforcement actions regarding deceptive mortgage advertisements sent to military personnel and veterans, bringing in $4.4 million in penalties.
All the cases involved companies that used direct mail to market their products. The investigation was started by the CFPB after the Department of Veterans Affairs expressed concern over potentially unlawful advertising. (Read full story here.)
The slowing decline of forbearances reflects an uneven recovery
After back-to-back weeks of steep declines, mortgages entering coronavirus-related forbearance only inched down 2 basis points between Oct. 12 and 18, according to the Mortgage Bankers Association. It followed a decrease of 49 points and 40 points from the two weeks earlier. Home loans in forbearance plans represent 5.9% — about 3 million homeowners — of all outstanding mortgages, down from 5.92% compared to the week before. The share of forborne loans at independent mortgage bank servicers actually rose, going to 6.35% from 6.33% from 6.65%, while depositories fell to 5.86% from 5.93%. (Read full story here.)
Zombie foreclosures rise, could be indicative of what’s to come
Just in time for Halloween, Attom’s Vacant Property and Zombie Foreclosure Report showed 200,065 properties in the foreclosure process in the fourth quarter and 7,612 — or 3.8% — sit vacant. While the total zombie foreclosures declined, the share rose from 3.7% in the third quarter and 3% year-over-year. Overall, zombie foreclosures — empty homes that are in the foreclosure process — represent one in every 13,100 U.S. residential properties. (Read full story here.)
Fannie hasn't completed any credit risk transfers to private investors since the second quarter. Some experts worry the decision — likely spurred by the company’s concerns about a recent capital regulation — could put the mortgage giant on unsteady footing.