By PATRICK LAVERY
When the Federal Open Market Committee meets this week analysts will be looking for signs of what’s next and it may be anyone’s guess.
At the Mortgage Bankers Association’s annual convention and expo in Philadelphia this month, MBA Chief Economist Michael Fratantoni told attendees that they expect the Feds will maintain the federal funds rate target range and do not expect an increase from them again this year.
Fratantoni projected there will be at least two cuts in 2024, and possibly more in 2025. But then Patrick Harker, the president and CEO of the Federal Reserve Bank of Philadelphia, took the stage the next day and said rates may have to stay high in order for them…
The Fed’s preferred inflation measure soared to a four-month high in September, increasing the likelihood of future Fed rate hikes.
The personal consumption expenditures price index tracks what Americans buy and for how much, offering a view into their spending habits. The core index, which excludes food and energy components, increased by 0.3% in September.
When adjusted for inflation, consumer spending rose 0.4%.
The data comes on the heels of news that the economy grew by 4.9% in Q3 2023, the fastest pace in two years and more than expected. Consumers once again waved off recession fears, but the increase puts the Central Bank in a tough position as it battles inflation.
Analysts generally maintain that another increase won’t come…
By KIMBERLEY HAAS
Leaders at Fannie Mae and Freddie Mac say they are using artificial intelligence to improve operational efficiencies.
Fannie Mae CEO Priscilla Almodovar and Freddie Mac President Mike Hutchins talked about the benefits of using AI during an on-stage conversation last week at the Mortgage Bankers Association’s annual convention and expo in Philadelphia.
Moderator Mark Jones, president of Union Home Mortgage and 2024 MBA Chairman, asked how the government-sponsored enterprises are thinking about using AI and what opportunities could arise as a result.
Hutchins said they have embraced the use of AI for quite a while.
“It’s an important part of our operations and we’re probably at the forefront of embedding AI into our models and into our…
By KIMBERLEY HAAS
A new policy that allows lenders to count income from accessory dwelling units when underwriting a mortgage will help provide affordable homes for those who need them most, according to a top housing official.
Julia Gordon, who serves as the assistant secretary for housing and federal housing commissioner at the U.S. Department of Housing and Urban Development, spoke about the changes last week during her remarks at the Mortgage Bankers Association’s annual convention and expo in Philadelphia.
“We’re going to allow both existing rental income for ADUs, and prospective rental income, to be included in the underwriting process to allow more borrowers to purchase properties with ADUs, to rehab existing houses to add ADUs, and to construct…
By KIMBERLEY HAAS
The director of the Consumer Financial Protection Bureau says it’s time to take big bank bailouts off the table.
Rohit Chopra shared his candid opinions on the subject during the Mortgage Bankers Association’s annual convention and expo last week during an on-stage conversation with MBA President and CEO Bob Broeksmit.
Chopra said although the financial system is dependent on the banking system operating day-to-day without interruption, he doesn’t think the public should be on the hook for bailing banks out when they get into trouble.
“Banks, especially big banks, get a lot of benefits from the public. Big subsidies, direct and indirect, and I don’t think the public should be on the hook for bailing them out…
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…
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…
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…
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…
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…
