Racial Bias in Mortgage Biz? New Data Says No, Researchers Find

By Randall Bloomquist In the mortgage public-policy cosmos, studies alleging racial bias in lending are like comets. They blaze across the industry skyline on a regular basis, drawing attention from the media and outrage from fair housing activists. The latest flare came from a report alleging Black applicants are nearly twice as likely to be denied a conventional mortgage as compared to White applicants with similar financial profiles. The study, which claims to advance the case for widespread lending discrimination through the analysis of newly available data about loan applicants, was generated by the non-profit investigative website The Mark-Up in partnership with the Associated Press. But according to some industry analysts, The Mark-Up’s j’accuse! moment comes up short. Those data crunchers say the…

NAR: Student Loan Debt Major Barrier To Homeownership

After eight years of examining its impact, the National Association of Realtors (NAR) says that student loan debt is one of the most significant barriers for potential homebuyers. A poll by NAR found that more than half of non-homeowners say their student loan debt has delayed their ability to buy a home. Of 1,995 respondents, 51% said their student loan debt delayed them from buying a home, with 47% saying it prevents them from saving for a down payment. For millennials, that number jumps to 60%. Forty-six percent of debt holders say they would use their additional funds to buy a home if their loans weren’t an issue. “Housing affordability is worsening, leaving future home buyers with student debt at…

FHFA Suspends “High Risk” Provision on Fannie, Freddie

The Federal Housing Finance Agency (FHFA) and the U.S. Department of the Treasury have suspended proposed rule changes for Preferred Stock Purchase Agreements (PSPAs), FHFA announced in a press release. The goal of these changes, put in place at the end of the Trump administration, was to limit Freddie Mac and Fannie Mae’s ability to back certain types of mortgages, including on second homes, multifamily homes and homes bought with higher risk loans. “This suspension will provide FHFA time to review the extent to which these requirements are redundant or inconsistent with existing FHFA standards, policies, and directives that mandate sustainable lending standards,” Acting Director Sandra L. Thompson said. FHFA will consult with Treasury on the scope of the review…

White House Details Plan to Bolster Affordable Housing

President Joe Biden on Wednesday announced a major initiative to bolster affordable housing in the face of a surge in home prices that is preventing some Americans from becoming homeowners. “The large and long-standing gap between the supply and demand of affordable homes for both renters and homeowners make it harder for families to buy their first home and drives up the cost of rent. Higher housing costs also crowd out other investments families can and should make to improve their lives, such as investments in education,” the White House said in a statement. “President Biden is committed to using every tool available in government to produce more affordable housing supply as quickly as possible, and to make supply available to…

Freddie Mac: Homeowners Affected By Ida Have Relief Options

Freddie Mac has confirmed that homeowners and mortgage servicers impacted by Hurricane Ida are eligible for disaster relief options. Hurricane Ida made landfall in Louisiana Monday, leaving about one million homes and businesses without power. Federal officials said it could be weeks before power is fully restored.  The storm slammed the Gulf Coast as a Category 4 hurricane, and continued moving through Mississippi as a tropical storm. Ida has caused severe flooding, ripped roofs off buildings, and destroyed power lines. For homeowners, the impact could be catastrophic. A statement from the National Weather Service in New Orleans warned that parts of southeast Louisiana “uninhabitable for weeks or months.” On Tuesday night, Gov. John Bel Edwards (D-La.) urged those forced to…

Evictions Could Lead To Homes For Sale, Squeezing Rental Market

A wave of evictions could mean more options for homebuyers, but fewer rental properties on the market. Today, the Supreme Court lifted the Biden administration’s eviction moratorium, declaring that it is almost certain the Centers for Disease Control exceeded their authority by imposing it.  The ruling exposes millions of Americans who are late on their rent to the possibility of eviction, and could impact an estimated 3.6 million households. It is unclear exactly how many evictions will take place. Many local governments have their own eviction moratoriums in place. Some landlords may decide instead to work out repayment plans with their tenants rather than risk their property sitting empty.  But if evictions do happen, the booming housing market could be…

Powell: Fed Will Rein In Pandemic Policies, But Low Interest Rates Remain

In a speech at the annual Jackson Hole symposium, Federal Reserve Chairman Jerome Powell said the central bank is likely to begin withdrawing some of its pandemic policies before the end of the year. Still, interest-rate increases won’t be coming overnight. That means the Fed will likely begin cutting the amount of bonds it buys each month before the end of the year. But Powell stressed that these cuts should not be seen as indicators that rate increases are around the corner. “The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent…

Supreme Court Ends Biden’s Eviction Moratorium

In an unsigned opinion released Thursday, the Supreme Court lifted the Biden administration’s latest moratorium on evictions, declaring that it is almost certain the Centers for Disease Control exceeded their authority by imposting it. The conservative majority sided with the Alabama Association of Realtors who argued that imposing such a moratorium requires congressional action, which is the position Justice Brett Kavanaugh took in his June, 2021 ruling on the issue. At least 11 million renters are considered seriously delinquent on payments, and an estimated 3.6 million households could face evictions in the coming months. “It would be one thing if Congress had specifically authorized the action that the CDC has taken,” the Court’s 8-page opinion states. “But that has not…

LA Eviction Moratorium Upheld By 9th Circuit Court

The 9th Circuit Court of Appeals upheld Los Angeles’ COVID-19 eviction moratorium, rejecting an effort by Southern California’s largest landlord organization to reverse the restriction. The Apartment Association of Greater Los Angeles sued the city on June 11, 2020, challenging the eviction ban, prohibitions on late fees and interest on unpaid rent, and moratorium on annual rent increases. AAGA consists of 55,000 rental property owners and managers. Judge Daniel Aaron Bress wrote for the three-judge panel that upheld the moratorium, writing “the moratorium’s provisions were likely ‘reasonable’ and ‘appropriate’ given the circumstances of the COVID-19 pandemic” and adding that there was “no apparent basis” on which the moratorium violates the U.S. Constitution’s Contracts Clause, as the landlord association alleged. The clause…

Could Homestead Exemption Move Needle For First-Time Buyers?

As first-time and lower-income buyers are being squeezed out of bidding wars against cash-rich investors, the homestead exemption could help combat take over by Wall Street, columnist and investment professional Conor Sen argued in Bloomberg. FHFA is attempting to address this issue by awarding a higher percentage of federal-backed mortgages to low-income households or for homes in minority communities. But Sen suggested that goal, while admirable, might not actually lead to major change and suggested that relying on the homestead exemption might prove more fruitful. The homestead exemption is a legal exemption that can shield owners from property taxes, but only for people actually living in the home. Sen argues that local governments can help homebuyers by increasing the amount…