Mortgage Roundup (6/17/20) – GSEs, Bidding Wars & Confidence

Good morning! Today is Wednesday, June 17. Retail spending is surging as states ease coronavirus lockdown restrictions. A new poll finds Americans are the unhappiest they’ve been in 50 years. Many airlines are banning alcohol on planes to minimize interaction between crew and passengers and reduce the spread of COVID-19.  

And in mortgage and housing news …

GSE’S TOO BIG: FHFA Director Mark Calabria warned that Fannie and Freddie “do not have the capital necessary to withstand a serious downturn in the housing market.”

BIDDING WARS BACK: A new report by Redfin found that 49.4 percent of Redfin offers faced competition in May – up 43.9 percent in April. The uptick is being fueled by a shortage of inventory.

TASK FARCE: A group of consumer advocates allege the Consumer Financial Protection Bureau created a task force that does not serve the public interest and has secretly conducted its work in violation of federal law.

FREDDIE’S FORECAST: Low mortgage rates. Slower home sales. Slower price growth. That’s what Freddie Mac’s quarterly forecast is calling for, as markets have been hit by the COVID-19 pandemic.

BUILDER CONFIDENCE: Two months after things looked bleak, builder confidence surged in June as the nation takes additional steps to reopen after the economic shutdowns in reaction to the COVID-19 pandemic.

FDIC BANK INCOME DROP: Net income fell nearly 70 percent in the first quarter for the commercial banks and savings institutions insured by the FDIC.

MORTGAGE APPLICATIONS: Mortgage applications for new home purchases increased 10.9 percent in May over a year ago, according to the Mortgage Bank Association. 

FANNIE FREDDIE FEES: As Fannie Mae and Freddie Mac transition out of federal control, analysts expect to see an increase in fees charged to lenders, and by extension borrowers, of up to 10 basis points so that shareholders will have improved returns. 

RENT-A-BANK SCHEMES: Payday lenders are starting to make usurious loans up to 160 percent in states where those rates are otherwise illegal.

FORBEARANCE INSIGHTS: A mortgage lender CEO shares his firm’s experience as borrowers grapple with the coronavirus pandemic and recession.

RECORD PROFITS: Unemployment is high. Credit is tight. And scientists are warning that a dangerous second wave of the coronavirus is coming. But somehow, U.S. mortgage companies are having one of their best years in history

REAL ESTATE CONFIDENCE: Real estate experts across the globe are confident in the residential property market, despite the current challenges it faces as a result of the coronavirus pandemic, according to a sentiment survey conducted by estate agency Savills

MORTGAGE CREDIT STANDARDS: How mortgages get made in 21st-century America, who sets the credit standards, and why those standards are not fully immune to economic conditions.

HEALTHY NEIGHBORHOODS: Making wellness part of the equation when developing policies and supporting our most disadvantaged neighborhoods will save money and lives.