Mortgage Applications On The Rise

Mortgage applications rose again despite rates moving slightly up last week. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – jumped 3.7%, adding to the week prior’s 10.4% spike. Adjusted purchase applications rose by 8%, while the unadjusted index increased by 3% and was 18% lower YOY. Demand may have been tempered by rates ticking up slightly from 6.75% to 6.78%. Still, even as buyers remain sensitive to rate movement they do appear to be leaping to lock in rates under 7%. “Mortgage rates increased slightly last week, but there continues to be an upward trend in purchase activity. Conventional and FHA purchase applications drove most of the…

Former FHA Commissioner And MBA President Remembered For Impact On Housing Industry

By KIMBERLEY HAAS Federal officials and members of the mortgage industry are mourning the loss of David Stevens, who helped the country navigate the aftermath of the 2008 housing crisis before serving as president and CEO of the Mortgage Bankers Association for seven years. Stevens worked as the Federal Housing Administration Commissioner at the U.S. Department of Housing and Urban Development under former President Barack Obama. There from 2009 to 2011, he focused on restoring the administration to fiscal health and was a key player in drafting housing policy, according to an article by Reuters. HUD Secretary Marcia Fudge said on Wednesday in a statement, “This country is better because of David’s service and contributions.” “Over the course of his…

FHA, VA Loans Saw Delinquencies Rise In November

Delinquencies rose in November but remain historically low despite some worrying data about FHA and VA loans. That’s according to ICE’s First Look at November Mortgage Performance, which clocked delinquencies at 3.39% last month. This is down 10 bps YOY and remains 64 bps below pre-pandemic levels. Serious delinquencies– loans with missed payments more than 90 days late– increased to 459,000 but are 21% lower than the same time last year. But while loans remain strong overall, FHA delinquencies hit a 9-year high (excluding the immediate aftermath of the pandemic). Early-stage delinquencies for VA loans also surged, reaching their highest non-pandemic levels since 2009. Recently originated mortgages are suffering the most thanks to the high interest rates of late 2023.…

Refinances Drive Application Surge As Rates Hit 5-Month Low

Refinance applications drove a spike in mortgage applications last week as rates slipped to nearly 7%. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – saw a 7.4% boost, up from the week prior’s 2.8% increase. Adjusted purchase applications jumped by 4%, while the unadjusted index fell 1% from the week before and was 18% lower YOY. The data highlights borrowers’ rate sensitivity, as the 30-year fixed rate slipped to 7.07%, its lowest point since July. A recent round of positive disinflation data put downward pressure on rates. Analysts feel more optimistic about the possibility of Federal monetary policy changes in 2024. “Borrowers who had seen rates near…

Home Prices Soar For Eighth Straight Month

Home prices hit another record high in September as stock shortages spurred competition for well-priced homes. Year-over-year, prices rose 3.8%, up from 2.5% in August, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index. Prices were up 0.3% month-over-month before seasonal adjustment and 0.7% after. This is the eight straight month of increases. Prices were up month-over-month in 15 of 20 cities, and both the 10- and 20-city composites analyzed saw prices exceed both their year-ago and January levels.  The National Composite surpassed its previous record high with this data, and ten individual cities hit record-breaking prices. “On a year-to-date basis, the National Composite has risen 6.1%, which is well above the median full calendar year increase in…

loanDepot Offers Zero Down To FHA Borrowers

FHA borrowers with loanDepot can now put zero down upfront with its new “accessZERO” program. The program offers up to 5% of a home’s purchase price in down payment assistance structured as a 10-year fully amortized repayable second mortgage. It is geared towards buyers who are struggling with saving for a down payment as home prices soar.  Down payments by percentage have fallen in 2023 after inflating during the pandemic buying boom when buyers used them to outbid their competition. This is partly because FHA and VA loans, which allow borrowers to pay less upfront, have gained traction as homebuying gets more expensive. As inflation runs rampant and home prices remain high, many Americans have struggled to save for a…

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…

Opinion: Time For A Consumer Mortgage Bill Of Rights

By Taylor Stork, President CHLA and EVP, COO Developer’s Mortgage Company and Kelly Welch, Executive Vice President, Equity Resources, Inc. When a consumer goes into the market to obtain a mortgage loan, they enjoy consumer protections that are arguably more extensive and specific than any other financial product. A few examples: TRID requirements for disclosures which hold lenders to early fee estimates, RESPA prohibitions against charging for services not provided, and LO Comp prohibitions on loan originators steering loans or varying their fee based on how much they think the borrower would pay. The same is true for the servicing of mortgage loans. Servicers must follow detailed rules, and for the two-thirds of loans that are “federal agency loans” (FHA,…

Mortgage Rates Tick Down Thanks To Fed Pause

Mortgage rates ticked down again, the second consecutive week of declines. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.69%, down from 6.71% the week prior. A year ago at this time, the 30-year FRM averaged 5.78%. The 15-year fixed-rate mortgage increased, however, up from 6.07% to 6.10%. A year ago, it averaged 4.81%. “Mortgage rates decreased slightly this week in anticipation of the pause in rate hikes by the Federal Reserve,” said Sam Khater, Freddie Mac’s Chief Economist.  The pause did come: after ten consecutive increases, the Fed declined to raise interest rates at its June meeting.  “We have been seeing the effects of our policy tightening on demand in the most interest-rate-sensitive sectors of…

CHLA, NAR Offer Tweaks To FHA 203(k) Program

The Community Home Lenders of America and National Association of REALTORS sent a letter to the Federal Housing Administration offering advice on the 203(k) loan program. Section 203(k) insurance enables allows homebuyers to pay for both a house and the cost of its renovation through a single mortgage. It applies to refinances as well, so long as the home is more than a year old and the repairs cost at least $5,000. Both organizations applauded the program, saying the loans “create an opportunity for low to moderate income and first-time buyers to participate in homeownership by facilitating the financing of homes in need of rehabilitation.” There are 16 million vacant homes in the U.S., many of which are uninhabitable due…