Refi fee will wipe out millions in mortgage profits
Lenders face the prospect of millions of dollars in lower profits, and potentially losses, for an extended period because the fee will be collected on loans in which interest rates already have been locked in and cannot be adjusted. (Full story here.)
CFPB headquarters
Signage is displayed outside the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., U.S., on Tuesday, March 5, 2019. House Financial Services Committee Chair Maxine Waters will hold a hearing this week on the semi-annual review of the CFPB. Photographer: Andrew Harrer/Bloomberg
CFPB proposes a new category of 'seasoned' qualified mortgages
The CFPB said Tuesday in a 130-page notice of proposed rulemaking that first-lien, fixed-rate loans that have been held on a lender’s balance sheet for over 36 months could become eligible for so-called QM status — the current gold standard for home loans — based in part on a borrower’s past three years of payment history. (Full story here.)
Home for sale
House for sale
Existing-home sales surged in July by most on record
Closing transactions increased 24.7% from the prior month to a 5.86 million annualized rate, the strongest pace since the end of 2006 and reflecting broad gains across the U.S., according to National Association of Realtors data issued Friday. (Full story here.)
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Prepayment rate hits 16-year high as serious delinquencies spike
As interest rates tumbled throughout July, prepayments climbed to the highest monthly rate since 2004. July's prepayment activity reached 2.73%, up from 2.65% in June and nearly double the 1.43% rate of the year before. Meanwhile, seriously delinquent borrowers — those late on their payments for 90 days or more but not yet in foreclosure — rose to 2.25 million from 1.87 million in June and 444,000 year-over-year. (Full story here.)
Fannie Mae creates new C-suite role, promotes Jeff Hayward
On Aug. 18, Fannie Mae took a step towards improving representation. The GSE announced its new C-suite position of chief administrative officer and said it would promote vice president and head of multifamily, Jeff Hayward, into the role. The move makes Hayward the only Black man presently on Fannie's leadership team. (Full story here.)
Third upsized Freddie Mac deal confirms CRT demand is back on track
A string of upsized Freddie Mac single-family credit-risk transfer deals seen this summer suggests investor interest in them has become consistent again after faltering in the early days of the pandemic. On Tuesday, Freddie Mac closed a Structured Agency Credit Risk transaction called STACR 2020-DNA4, which was the third in a series of transactions it's had to upsize since March to meet demand. (Full story here.)
Mortgage rates rise, likely due to new fee, but purchases stay strong
Mortgage rates crept up this week, nearly reaching the 3% mark as lenders raised prices because of a new fee, although purchase activity remained solid, according to Freddie Mac. Zillow Economist Matthew Speakman said the rate increase was probably caused by the adverse market fee being implemented on Sept. 1 for refinancings by Fannie Mae and Freddie Mac. (Full story here.)
CFPB Director Kathy Kraninger
Kathy Kraninger, director of the Consumer Financial Protection Bureau (CFPB), speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019. The conference brings together leaders in business, government, technology, philanthropy, academia, and the media to discuss actionable and collaborative solutions to some of the most important questions of our time. Photographer: Patrick T. Fallon/Bloomberg
CFPB extends comment period on overhaul of redlining law
The Consumer Financial Protection Bureau is extending the comment period for potential changes to its rules related to the Equal Credit Opportunity Act, which prohibits discrimination in credit and lending decisions. The comment period will be extended by 60 days to Dec. 1, the CFPB said Wednesday, after a coalition of banking trade groups, consumer advocates and civil rights groups asked the bureau this month for more time. (Full story here.)
ICE prices $6.5B of debt to finance part of the Ellie Mae purchase
Intercontinental Exchange has priced a series of debt offerings totaling $6.5 billion to finance the cash portion of the purchase of mortgage technology company Ellie Mae. The transaction is valued at $11 billion, with 84% of the purchase price being paid to Ellie Mae's current owner Thoma Bravo in cash and the rest in stock. (Full story here.)
One year later, Freedom Mortgage and RoundPoint complete merger
After announcing the acquisition of RoundPoint Mortgage Servicing on May 24, 2019, the merger with Freedom Mortgage has finally closed. Through the deal, Freedom's mortgage servicing rights portfolio grows about 25% to an estimated $310 billion in unpaid principal balance by adding around $75 billion in servicing and subservicing UPB from RoundPoint. (Full story here.)