FHA Axes Mortgage Credit Reject Screen

In a move geared toward improving and streamlining credit access to qualified borrowers, the FHA is getting rid of the Mortgage Credit Reject screen. Up until now, the FHA required lenders to flag information about denied applications due to a provision in its Single Family Housing Policy Handbook. That information was flagged for a six-month period, to be reviewed by one of the agency’s Homeownership Centers when applicants tried for an FHA-insured loan from other lenders. Borrowers may have been denied a loan again because of this initial rejection, even if they qualified otherwise. FHA officials have concluded that the process “does not improve risk management and is often why other lenders will reject an applicant even when that applicant…

MBA Appoints George Rogers VP, Legislative Affairs

Prominent political player and lobbyist George Rogers has joined the Mortgage Bankers Association as vice president of legislative affairs, the group announced in a press release. Rogers will advocate on behalf of MBA’s legislative and policy priorities, focusing largely on Republican members of the United States Senate. He holds a Juris Doctor from Indiana University School of Law and a Bachelor of Arts in Foreign Affairs from Miami University in Oxford, Ohio.  Prior to the MBA, he co-founded Republican Consulting, LLC, a government relations and lobbying firm. In his decades working for the Senate and House, Rogers managed six committees on behalf of Rep. John Boehner (R-OH). Notably, he served on the presidential transition team of Donald Trump. Rogers also…

It’s Been 15 Years Since Fannie Mae, Freddie Mac Conservatorship

By CHUCK GREEN Back in 2008, Fannie Mae and Freddie Mac were in trouble. In fact, without government intervention, they faced imminent collapse, and on Sept. 6 of that year, both were placed in conservatorship by the director of the Federal Housing Finance Agency. With those conservatorships hitting their 15th anniversary, William Emmons, an adjunct lecturer at Washington University in St. Louis, said the takeover was historically significant because they were the first large-scale government interventions in what came to be known as the Global Financial Crisis. “In other words, their collapse was a bellwether of things to come. Lehman Brothers failed one week later, which triggered the chain reaction of collapsing banks, AIG, and market confidence,” Emmons told The…

Taking A Closer Look At Home Appraisal Reforms

By SCOTT KIMBLER As officials work to address racial bias in home valuations, leaders at a public policy think tank in Washington, DC, are saying recent recommendations made by a federal task force miss the mark. The Interagency Task Force on Property Appraisal and Valuation Equity, or PAVE for short, was created in June of 2021 to tackle the problem of racial and ethnic bias in home valuations. Comprised of 13 federal agencies and offices, it is co-led by officials at the U.S. Department of Housing and Urban Development and the White House Domestic Policy Council. In March of 2022, the PAVE Action Plan was released, and this past June the Biden-Harris administration announced a set of actions to deliver…

How To Increase Homeownership Rates For Millennials

By KIMBERLEY HAAS Addressing affordability issues by allowing for creative living solutions may be the key to getting more Millennials into homeownership. According to the 2023 Home Buyers and Sellers Generational Trends Report published by the National Association of Realtors, the share of Millennial buyers has declined. Millennials between 24 and 42 years old made up 28% of all buyers surveyed. The share of Millennial buyers dropped because Baby Boomers between 58 and 76 years old were on the move in the last half of 2021 and the first half of 2022. They made up 39% of buyers and were the largest share of homebuyers, taking the top spot from Millennials, who had held the position for eight years. Overall,…

Mortgage Assistance Available To Maui Wildfire Victims As Developers Told To Stay Away

By KIMBERLEY HAAS Federal housing officials have pledged to support people affected by the wildfires on the Hawaiian island of Maui as the state’s governor warns developers to stay away. Officials from Ginnie Mae, the Federal Housing Administration, the Federal Housing Finance Agency, the United States Department of Agriculture, and the United States Department of Veterans Affairs issued a joint statement on Friday saying they are “committed to providing homeowners flexibilities and assistance so they feel the security of knowing they will have the option to return and rebuild when it is safe to do so.” FHA-approved lenders doing business in Maui are encouraged to familiarize loan officers and operational teams with FHA’s 203(h) Disaster Mortgage, which provides up to…

Freedom Mortgage To Pay $1.75M For Illegal Kickbacks

Freedom Mortgage has been sanctioned by the Consumer Financial Protection Bureau for providing illegal incentives to real estate brokers and agents for mortgage loan referrals. The CFPB says Freedom offered agents and brokers perks for past and future loan referrals, a violation of the Real Estate Settlement Procedures Act. In at least forty cases, Freedom paid for marketing services that were never performed by the brokerages, which the CFPB says amounts to paying for referrals. RESPA particularly addresses illegal marketing service agreements, and the CFPB released detailed guidelines on their use in 2020. Agents who worked with Freedom were also incentivized through paid subscription services offering important industry data, but they typically had to agree to be paired with a…

Price Appreciation Returns To Opportunity Zones

Low-income redevelopment zones continue to benefit from home price appreciation around the country, and some are faring better than their neighbors. ATTOM’s Q2 2023 review of low-income Opportunity Zones targeted by Congress for economic redevelopment found that 61% of the 3,909 data zones saw price increases. In half of those, prices were up 5% or more. Opportunity zones exist in and around low-income neighborhoods where the federal government offers tax breaks to advance economic development. Overall, these areas follow home price trends in other parts of the country. Values declined in the last half of 2022 before recovering in 2023, a pattern that has impacted most U.S. neighborhoods. But prices in many zones rose faster than the nationwide trend both…

Feeling The Pain: Fed’s Hikes Affect Housing Market

By CHUCK GREEN Mortgage rates are hovering around 7% as the summer winds down and with potential homebuyers facing high monthly payments for the few properties for sale, people are wondering when the Federal Reserve will loosen its grip on monetary policy so the housing market can free up again. Last month, Chairman Jerome Powell announced the key interest rate would be lifted to 5.25% to 5.5% — the upper figure representing a level not seen since 2001, according to the Associated Press. Powell said that they don’t expect to reach their goal of 2% inflation until 2025, and they do not intend to cut rates until next year. “The Fed’s rate hikes attempt to combat inflation, increasing mortgage interest…

Opinion: The Fed Is Engaged In Monetary Policy Overkill

By DESMOND LACHMAN There is good news and bad news for the U.S. housing market. The good news is that by this time next year, mortgage rates will be substantially lower than they are today. The bad news is that by this time next year, the U.S. is more than likely to be in a meaningful economic recession. The main reason for believing that next year we will have both lower interest rates and a recession is that the Fed is currently engaged in monetary policy overkill and that monetary policy operates with long and variable lags. Those lags are thought to be between 12 and 18 months. That means the economy, which is already showing clear signs of slowing,…