Mortgage Industry Reacts To Powell Renomination

After weeks of waiting, President Biden announced Monday he is renominating Federal Reserve Chairman Jerome H. Powell to another four-year term. Now analysts are asking what impact another Powell term will mean to mortgage rates and the housing market. The move has been characterized as a return to the status quo in which the Fed chairman is reappointed regardless of their political identity, a tradition former President Trump bucked when he appointed Powell. The Fed chairman question has been on many industry watchers’ minds in the last two weeks. Much was made of Biden’s sit down with Fed Governor Lael Brainard, seen as the most likely candidate if Biden chose to make a change. Brainard has instead been nominated as…

CFPB Announces Stepped Up Enforcement

The Consumer Financial Protection Bureau (CFPB) released a joint statement with other government agencies to mortgage servicers announcing a return to enforcement of protections for families and homeowners. The statement cited an April 2020 decision not to take “supervisory or enforcement action” regarding the timing requirements of the Regulation X mortgage servicing rules during the pandemic. The decision would last indefinitely “as long as the servicers made good faith efforts to provide those required notices or disclosures and took the related actions within a reasonable period of time. “ Wednesday’s statement from the CFPB walked back that flexibility, saying mortgage servicers have had plenty of time to adapt their operations to the ongoing challenges of Covid-19. The agencies will return…

HUD Awards $36 Million To Help More Than 250 Communities

By Kimberley Haas More than 250 rural, suburban and urban communities will benefit from $36 million earmarked to produce about 8,000 units of affordable housing throughout the country. U.S. Housing and Urban Development Deputy Secretary Adrianne Todman held a virtual press conference on Tuesday morning to announce the “capacity-building” awards, which are expected to stimulate nearly $150 million in total investments. “We are really focused on building strong and vibrant communities through grants like this and through the work of our local and state leaders,” Todman said. Todman said it has been thrilling to work with leaders at the White House and HUD to stand up these initiatives “that we know will pay dividends for our children and grandchildren in…

Fed Outlines Plan To Taper Bond-Buying, No Movement On Rate Hikes

The Federal Reserve outlined a plan to begin tapering its emergency bond purchases. The purchases of $120 billion per month in Treasuries and mortgage-backed securities (MBS) were a government effort to keep financial markets afloat after the economic fall out from Covid-19. The Federal Open Market Committee (FOMC) met for two days this week then released a statement saying the Fed will begin tapering those purchases later this month. It will reduce its purchases of Treasury securities from $80 billion to $70 billion and from $40 billion to $35 billion for mortgage-backed securities. “In light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace…

New York Expands CRA Requirements

New York Governor Kathy Hochul signed legislation expanding the Community Reinvestment Act (CRA) ‘s anti-redlining requirements to non-depository lenders. The New York Senate delivered the bill to Governor Hochul on Friday. Now that the bill is signed, it will become law in 90 days. The CRA is national legislation enacted in 1977 in response to the redlining of poor and minority communities by banks during the 1960s and 1970s. Several states, including Massachusetts, Illinois, and New York, have their own versions. New York’s largely mirrors the federal law. It mandates that banks help meet the credit needs of communities in which they take deposits, specifically in low- and moderate-income neighborhoods. The expansion diverges from federal law, however. A New York…

Former Treasurer Summers: “Housing Inflation Is Almost Certain To Soar”

Lawrence H. Summers, who served as Bill Clinton’s Treasury Secretary and was one of Barack Obama’s chief economic advisors, says “housing inflation is almost certain to soar in coming months,” and he’s taking the current Treasury chief to task over her rosy view of inflation. Former Treasury Secretary Summers has been sounding the alarm over inflation for months, even as current Treasury Secretary Janet Yellen has claimed the problem is “transitory” and not a significant threat to the economy. In response, Summers has criticized the Biden administration’s economic response to the pandemic, warning that rising inflation isn’t a temporary concern but a long-term problem the Fed will have trouble reining in. “We are printing money, we are creating government bonds,…

‘If You Haven’t Re-fi’d, Do So Now:’ Experts Predict Inflation, Fed Will Drive Up Rates

A new poll from Fox News shows 9 in 10 Americans are worried about inflation, and they aren’t alone. A growing consensus among housing and banking analysts is that, while the Federal Reserve gets most of the attention, the real force impacting mortgage rates in the coming months is inflation. And that’s a factor much harder for policymakers to impact than the Fed. “If you haven’t yet refinanced, do so now,” says Greg McBride, chief financial analyst for Bankrate. “The likelihood is that we see higher rates, not lower rates in the months ahead.” While an entire industry has grown up around ‘Fed watching’ — tracking every hint dropped by Federal Reserve Chairman Jerome Powell and his counterparts — inflation…

Garland Announces DOJ Initiative To Combat “Modern-Day Redlining”

Attorney General Merrick Garland announced a Department of Justice (DOJ) initiative to combat discriminatory redlining policies that make homebuying more difficult for borrowers of color. In remarks to staff, Garland said the DOJ initiative will target “modern-day redlining.” The DOJ will investigate and prosecute banks with the help of U.S. attorneys around the nation, as well as the Consumer Finance Protection Bureau (CFPB) and the Treasury Department. “Lending discrimination runs counter to fundamental promises of our economic system,” he said. “When people are denied credit simply because of their race or national origin, their ability to share in our nation’s prosperity is all but eliminated.” Redlining is a practice of lenders denying loans based on the racial makeup of an…

Advocates Rally For “Robust” Housing Spending In Economic Plan

Housing stakeholders gathered at the nation’s capitol to call for the budget reconciliation package being negotiated in Congress to substantially support housing. The group included National Association of Realtors (NAR) CEO Bob Goldberg, members of the National Housing Conference (NHC), Mortgage Bankers Association (MBA), Habitat for Humanity, National Association of Homebuilders, and others. Representative Sherrod Brown (D-OH), chairman of the Senate Banking, Housing, and Urban Affairs Committee, and Representative Maxine Waters (D-CA), chairman of the House Financial Services Committee, also attended. “Housing is fundamental to an economy that works for all. Democrats and President Biden understand this,” Chairman Brown said in his speech. “Robust housing investments support families and kids, improve health outcomes, and address climate change – while creating…

Red States Are Beating Blue States in White-Hot Housing Market. Why?

The housing market in red states is white-hot compared to their blue counterparts, a new analysis finds. As U.S. housing prices remain high and experts predict the trend will continue, states led by Republican legislatures and governors are disproportionately represented among the hottest housing markets in the country, with experts offering a variety of explanations as to why that might be. Data analyst firm CoreLogic noted this month that “home prices nationwide, including distressed sales, increased year over year by 18.1% in August 2021 compared with August 2020, marking the largest annual gain in home prices in the 45-year history of the CoreLogic Home Price Index.” That price spike was driven by a sharply constricted housing supply that saw homebuyers scrambling to…