The Federal Housing Finance Agency has rescinded a rule changing upfront fees based on borrowers’ debt-to-income ratios.
If it had gone through, the policy would have created an adjustment for DTIs higher than 40% that Fannie Mae and Freddie Mac would acquire.
Back in March, the agency delayed the implementation of these fees to talk it through with industry leaders, who largely opposed the move.
One major concern was that small lenders would be hindered by compliance: disclosure laws require lenders to alert borrowers of pricing throughout the application process, but a borrower’s income and expenses can change dramatically throughout the loan procedure, requiring an unmanageable compliance burden.
The Community Home Lenders Association argued against the adjustment at the time,…
By CHUCK GREEN
Industry leaders and economists are sharing their opinions about changes to fees for loans backed by Fannie Mae and Freddie Mac after reports that homebuyers with good credit scores and substantial down payments will pay more so fees for borrowers limited by income or wealth can be reduced.
The changes to the loan-level price adjustment matrix by officials at the Federal Housing Finance Agency went into effect on May 1 and are the target of two bills in Congress.
Rep. Stephanie Bice of Oklahoma, vice chairwoman of the Republican Main Street Caucus, introduced the Free Market Mortgage Act. She said the changes will force homebuyers with good credit to pay more for their mortgages to subsidize loans…
Consumers are becoming more optimistic that the housing market will turn in their favor in the coming year, though affordability concerns continue to weigh them down.
Fannie Mae’s Home Purchase Sentiment Index (HPSI) jumped to its highest level since May 2022 in April, up 5.5 points to 66.8. This is the largest increase in more than two years.
Every component increased month-over-month as consumers start to see the light at the end of the tunnel for their homebuying struggles.
As the market is still seized by affordability concerns, the components remained negative, with the full index down 1.7 points YOY. However, more respondents say they expect the tide to turn in their favor.
The component associated with mortgage rate expectations…
By KIMBERLEY HAAS
The new vice president of public policy at Rocket Central says his goal is to increase opportunities for people who have historically had difficulties achieving home ownership because of a host of barriers.
Karan Kaul, a housing finance veteran who worked as a principal research associate in the Housing Finance Policy Center at the Urban Institute prior to joining Rocket, said that means focusing on first-time homebuyers, people of color, and low- to moderate-income borrowers.
In a recent interview with The Mortgage Note, Kaul said a well-documented hurdle to homeownership is a lack of an adequate down payment, especially with the increase in home prices over the last decade.
“So what can we do to make sure…
By KIMBERLEY HAAS
Changes to fees for loans backed by Fannie Mae and Freddie Mac are under scrutiny after recent reports that homebuyers with good credit scores and substantial down payments will pay more starting May 1.
Last week, The Washington Times published an article with the headline “Biden to hike payments for good-credit homebuyers to subsidize high-risk mortgages.” Author Dave Boyer, a White House correspondent, wrote that although the changes are part of the Federal Housing Finance Agency’s push to make housing more affordable, they will negatively impact traditional borrowers.
“Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who…
As technology improves, the concept of valuation modernization is gaining traction and some industry leaders say in a few years in-person appraisals could be a novelty instead of the norm.
Last month, leaders at Fannie Mae announced an update to their selling guide which includes newly available valuation options. They said valuation modernization helps lenders, appraisers, and risk investors manage collateral risk more efficiently while also benefiting customers with greater appraisal accuracy, lower costs, and an increased speed of loan decisions.
Matt Stepanovich, vice president of national sales, hybrid valuations and quality control at SingleSource Property Solutions, recently sat down with Editor Kimberley Haas to talk about what he is seeing.
SingleSource, located in Canonsburg, Penn., is a nationwide service…
Homebuyers and sellers were feeling pessimistic about the market last month due to affordability and job security concerns.
Leaders at Fannie Mae said the Home Purchase Sentiment Index fell by 3.6 points in February, breaking three straight months of increases and pushing the index closer to a record low recorded last October.
“The decline was partly driven by a substantial decrease in consumers’ sense of home-selling conditions, with most respondents who indicated it’s a ‘bad time to sell’ citing unfavorable economic conditions and mortgage rates as the primary reasons for that belief,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.
“With home-selling sentiment now lower than it was pre-pandemic – and homebuying sentiment remaining near its all-time…
By TOBIAS PETER
Last month, at the behest of the Federal Housing Finance Agency, Fannie Mae and Freddie Mac, the government-sponsored enterprises, announced new risk-based pricing guidelines that loosen mortgage credit for higher-risk loans. Since the Federal Housing Administration traditionally serves higher-risk borrowers, this move represented the latest salvo in a renewed battle for such borrowers.
As a response, FHA is rumored to announce today (2/22/2023) a 30 bps mortgage insurance premium cut that will expose taxpayers and not help prospective homebuyers.
The last time FHFA imposed credit loosening on the GSEs in 2014, FHA responded shortly thereafter in kind with a large 50 bps MIP cut. At the time, FHA predicted that this cut would lead to 250,000 new…
By KIMBERLEY HAAS
Leaders at ActiveComply say their new digital service helps companies in highly regulated industries stay compliant while employing remote workers.
Banks, mortgage lenders, credit unions, and investment banking firms have to follow strict agency guidelines, as well as state and federal laws. Remote Office Inspection allows compliance teams at those institutions to document their efforts when employees are working outside of the office.
Rob Nunziata, co-founder and CEO of ActiveComply, uses the example of FHA home loan files, which must be protected under rules established by officials at the U.S. Department of Housing and Urban Development.
Nunziata said the most important thing to regulators is that consumer data is protected.
“We had a conversation with HUD early…
Annual single-family home price growth dipped from Q3 2022 to Q4 2022, according to Fannie Mae’s Home Price Index. Prices rose by 9.2% YOY in Q4, down from 13.1% in Q3. They increased just 0.2% quarter-over-over when seasonally adjusted, and fell 1% unadjusted. The index measures the average quarterly price change for all single-family properties in the United States, excluding condos. “The rise in mortgage rates over the past year and record inflation have constrained the purchasing power of prospective homebuyers. The resulting affordability pressures are evident in the home price declines of the past two quarters, along with the downturn in home sales,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist. Demand has dwindled as many…
