$20 Million Multistate Settlement With ACI Worldwide Reached

By KIMBERLEY HAAS A multistate settlement has been reached after a testing error led to the unauthorized withdrawal of $2.3 billion from the accounts of nearly 480,000 mortgage holders serviced by Mr. Cooper. ACI Payments, a processor for a variety of third-party clients, erroneously initiated the electronic withdrawals in April of 2021, causing consumers stress nationwide. So state banking officials from 44 states and 50 state attorney generals joined together to take action against ACI Worldwide, levying a total of $20 million in fines. In addition to paying the states, the settlement announced on Tuesday requires ACI to use artificially created data instead of real customer data when testing systems or software. Testing, development, and quality insurance work will now…

Fed’s Policies Take Center Stage At MBA Convention In Philadelphia

By KIMBERLEY HAAS The president and CEO of the Federal Reserve Bank of Philadelphia knew he was facing a tough crowd when he took the stage during a Monday morning session at the Mortgage Bankers Association’s annual convention and expo. “I stand here this morning fully aware of the mood in this room and I am also fully aware of the way the actions we on the FOMC have taken over the past 18 months in our efforts to tame inflation to get it back to a 2% annual target have, in their own way, contributed to the current mortgage climate,” Patrick Harker said. Harker said he met with community members this summer to see firsthand the impacts that monetary…

How Capitol Hill Chaos Affects The Mortgage Market

Turmoil in Congress is making headlines, but will it impact the economy – and the mortgage industry – more broadly? The House this week voted 216 to 210 to remove Kevin McCarthy (R-CA) from his position as speaker. He was the first speaker to be ousted through a vote in the middle of a congressional term. No new speaker has been appointed, though several Republicans have put themselves in the running. “It’s uncharted territory because we’ve never done that in the history of the United States,” Matthew Green, a politics professor at Catholic University, told CBS News. The short-term impact of this week’s turmoil has been felt immediately in the mortgage market. Redfin Economic Research Lead Chen Zhao said that…

Opinion: Connecting The Dots On The Helper Act

By TOBIAS PETER As rising home prices continue to undermine the American Dream of homeownership for hard-working Americans, Congress is considering a bipartisan bill modeled after the successful VA home loan program, to help first responders and teachers buy a home. However, as long as there is a housing shortage, first-time homebuyer assistance programs, such as the Homes for Every Local Protector, Educator, and Responder (HELPER) Act of 2023 are part of the problem, not the solution. The HELPER Act, with over 100 cosponsors in the House and Senate, aims to exempt potential buyers from putting any money down or purchasing mortgage insurance, which is typically required for homebuyers putting less than 20% on a down payment. In addition, the…

Mortgage Applicants Denied For Insufficient Income At Increasing Rates

As affordability sank in 2022, potential buyers struggled against rising fees and were denied loans for a lack of income, according to a new analysis from the Consumer Financial Protection Bureau. Mortgage applications and originations declined last year as the market corrected from the low-rate-fueled pandemic housing boom. At the same time, affordability sunk to new lows, fees rose more than 20% YOY, and borrowers faced rising monthly costs. “The higher interest rate environment had profound effects on the mortgage market in 2022, with borrowers paying much more in monthly payments,” CFPB Director Rohit Chopra said. “These trends are likely to continue given further increases in interest rates in 2023.” Today, the national median payment applied for by purchase applicants…

Feds Consider One More Rate Hike Despite Impacts On Housing Market

By CHUCK GREEN The housing market has been slowing down due to interest rate hikes, but that likely won’t stop officials from pushing further in their fight against inflation. And average American homebuyers and sellers will be affected by their decisions as affordability continues to be a concern nationwide. Last week, the Federal Reserve Board voted to hold interest rates steady at their monthly policy meeting, keeping the federal funds rate target range between 5.25% and 5.5%. Chairman Jerome Powell said in his remarks that despite the pause, “We are prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we are confident that inflation is moving down sustainably toward our objective.”…

Federal Reserve Holds Rates Steady

By PATRICK LAVERY It wasn’t a reversal by any means, but the Federal Reserve Board voted Wednesday to maintain the federal funds rate target range. Following the July unfreezing of June’s pause, that range is, for now, staying at 5.25% to 5.5%. Federal Reserve Chairman Jerome Powell, in remarks to the press following the board’s latest release on monetary policy, stated once again his “dual mandate” to stabilize prices while keeping employment high. “Given how far we have come, we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks,” Powell said. “Real interest rates now are well above mainstream estimates of the neutral policy rate, but we are mindful of…

Fannie Still Predicts Recession

Despite recent optimism surrounding the Federal Reserve’s “soft landing” strategy, economists at Fannie Mae are still expecting a mild recession next year. Fannie Mae’s Economic and Strategic Research Group wrote in a note that mixed economic signals this month make it difficult to guess the near future, but a “modest contraction” in early 2024 remains the most likely outcome of the Fed’s inflation fight. They cite consumption outpacing incomes, big differences between gross domestic product and gross domestic income over the past three quarters, and previous policy tightening still moving through the systems as signs of what’s to come. Additionally, households are expected to restrict spending in the latter part of the year as inflated prices catch up to budgets.…

Rate Hike Pause Predicted, Investors Watching Closely For End Of Year Indicators

By PATRICK LAVERY With the end of the third quarter of 2023 in sight, indications are that the Federal Reserve will pause hiking its federal funds rate this week – as it did in June before again raising the target range in July – and investors will be watching closely on Wednesday to see if Chairman Jerome Powell gives any indication as to what they might do to end the calendar year. The FOMC’s course of action, while holding no direct bearing on mortgage rates, acts as a strong indicator of what direction those rates will go in next. According to Business Insider, a pause on the part of the Fed won’t do much to move mortgage rates, currently above…

Low Income Housing Getting Solar Panels, More From Program Established By Inflation Reduction Act

By KIMBERLEY HAAS Officials at the U.S. Department of Housing and Urban Development have awarded funding from a program established by the Inflation Reduction Act to owners of assisted multifamily housing properties and the money is going to climate-related investments. The act, signed into law by President Joe Biden on Aug. 16, 2022, has done little to reduce inflation but is considered the most significant policy action on clean energy in United States history. It established the Green and Resilient Retrofit Program, providing HUD with $837.5 million in grant and loan subsidy funding and $4 billion in loan commitment authority. According to a press release issued on Wednesday, money from the program will enable building owners to invest in geothermal…