Mortgage Roundup (2/10/20) – January Jobs, No Broker Fees & Waiting To Buy

President Trump will propose a $4.8 trillion budget, with big cuts to foreign aid and safety net programs. The Iowa Democratic party released updated numbers that show Mayor Buttigieg the winner and Bernie Sanders second in Iowa caucuses. Meanwhile in mortgage news …

The January jobs report bodes well for the housing market. The US Department of Labor announced that 225,000 jobs were created in January, while the unemployment rate was 3.6%, slightly higher than December as more people entered the work force. The labor force participation rate increased to its highest point since 2013.

Home mortgage giants Fannie Mae and Freddie Mac announced they will stop purchasing adjustable-rate mortgages tied to the London Interbank Offered Rate (LIBOR) after 2020. Fannie and Freddie will begin accepting mortgages linked to the Secured Overnight Financing Rate (SOFR), which the Federal Reserve has been promoting as a replacement. As the leading secondary market for home mortgages in the U.S., Fannie and Freddie’s decision to shun LIBOR and embrace SOFR is likely to spur a similar shift among loan originators, both banks and non-bank mortgage lenders.

Mortgage applications reached their highest volume since 2013, according to a Mortgage Bankers Association report. Gains in the Market Composite Index were due to refinancing strength.

A commentary piece in American Banker warns that big mortgage lenders are flirting with disaster by lowering origination fees and loosening underwriting standards.

U.S. long-term mortgage rates fell for the third straight week, as the benchmark 30-year loan marked its lowest point in three years. Mortgage buyer Freddie Mac reports the average interest rate for a 30-year fixed-rate mortgage is now just 3.45%.  A new report based on research from and the National Association of Realtors warns that this spring could be the last affordable home buying season for a while.

The National Association of Realtors praised President Trump’s State of the Union for its support of Opportunity Zones, infrastructure reform, and association health plans. 

What will it take to see housing take center stage in the 2020 election? Candidates have plans and policies, but will they take off? Housing Wire makes a plea for candidates to prioritize housing – one of the most important segments of the economy.

Predictions for the 2020 U.S. Housing market continue to roll in. Point2Homes analysts identify five factors that will affect home sales: 1) New construction will increase; 2) More millennials will buy vs. rent; 3) Gentrification will continue; 4) More baby boomers will sell; and 5) Home prices will continue to climb

The US government’s Financial Stability Oversight Council issued its “Final Interpretive Guidance” regarding its authority to regulate financial companies. Mondaq breaks down what it means for the residential mortgage industry.

Regulators unexpectedly banned broker fees for New York renters, which have long amounted to as much as 15 percent of the annual lease. New York is one of the few cities in the country with a broker industry that has significant financial leverage over how people rent apartments.

Using the Iowa caucus result errors as a cautionary example, security experts warned Mortgage Banker Association’s Independent Mortgage Bankers Conference goers that cybersecurity only works if the people using it are prepared for pitfalls. The experts’ advice includes encouraging businesses to test back-up technologies and have data stored in a source other than the “cloud” and partnering with an FBI agency.

The mid-Atlantic group fines brokers $5K for marketing listings without putting them in the MLS. But days after those fines went into effect, everyone appears to be complying.

Single-family rental investors are completing more of their transactions online to reduce time and cost. The trend is likely to get bigger with click-and-buy strategies becoming the future of real estate investing, the National Real Estate Investor predicts. Analysts warn investors using online platforms to be aware of pitfalls when completing transactions.

Housing Wire follows seven big events that could push global interest rates down even more.

By the end of 2020, Zillow expects to have brokerage licenses in all 50 states. The move is part of a growth strategy for the online real estate database that now has a New York state residential brokerage license and an address in Manhattan’s Flatiron neighborhood. However, the company says they are no operating as a traditional brokerage.

New survey data shows that 11 percent of Americans are planning on buying a house this year, but among Millennials that share almost doubles. According to the new Housing Trends Report from the National Association of Home Builders, about one in every 10 Americans has plans to buy a home in the next 12 months. More than 40 percent are actively looking to find one.  Among Millennials, 19 percent have homebuying plans and 46 percent of those are currently searching for a home.

Housing Wire encourages agents to educate prospective buyers about what factors contribute to credit scores. The publication provides a list of inexpensive, lesser-known steps buyers can take to improve their credit score.

Low mortgage rates have experts predicting an uptick in homebuying this year. But changes to the FICO credit scoring model taking effect in a few months, have some prospective buyers wondering if they’ll qualify for those lower rates.

House hunters are taking longer to commit to buying. According to the Housing Trends Report from the National Association of Home Builders, 60 percent of actively engaged buyers reported spending at least three months searching for a home the final quarter of 2019. The trend is closely related to continued declines in inventory of new and existing homes for sale.

Fannie Mae reports a total of 65 potentially fake companies identified on loan documents. The 65 companies – all located in California – were listed as the borrower’s purported place of employment.

The managing partner of Better Homes and Gardens Rand Realty believes New York City’s housing market improved when brokerages started sharing active listing data. Now he is demanding they fix access to sales data.

Experts share a range of predictions for the New Year with MarketWatch, including: Mortgage rates should stay below four percent. Home building will remain strong. The supply of homes for sale will be tight. And more homes will be sold directly to real estate companies.