Morning Roundup (9/1/2021) – Mortgage Applications Down 2.4%, Q2 HPI Sees Largest Gain In History

Good Morning! Today is Wednesday, September 1. President Biden defended his Afghanistan withdrawal strategy in a speech Tuesday. Hospitals in New Orleans are operating on backup power after Hurricane Ida left the city powerless. Trustees for the Social Security trust fund said the program is expected to pay benefits that exceed its income in 2021. The S&P 500, Dow Jones, and Nasdaq ended August near record highs.And in mortgage and housing news… Mortgage Applications Down: Mortgage applications decreased 2.4% last week despite continuing low rates, according to the MBA’s Weekly Mortgage Application Survey. FHFA HPI: The FHFA’s Q2 House Price Index saw the largest annual gain in its history, with house prices rising 17.4% year-over-year, up from 12.6% in the…

FHFA HPI Beats Its Own Record, Again

The FHFA’s Q2 House Price Index (HPI) saw its largest ever annual gain, with house prices rising 17.4% year-over-year, up from 12.6% in the last quarter. This surge in home prices breaks the previous record, set in Q1. The FHFA HPI measures the movement of single-family house prices by reviewing repeat mortgage transactions on homes whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975. “During the second quarter, house prices peaked in June with an 18.8 percent growth rate compared to a year ago,” said Dr. Lynn Fisher, Deputy Director of FHFA’s Division of Research and Statistics. “For the quarter, annual gains surpassed 20 percent in the Mountain, New England, and Pacific census divisions and…

Morning Roundup (8/31/21) – Forbearance Numbers Unchanged, Freddie Mac Confirms Disaster Relief

Good Morning! Today is Tuesday, Aug. 31. The war in Afghanistan ended yesterday when the final US military plane left Kabul. President Biden, who was silent yesterday, is expected to address the nation this afternoon. Hurricane Ida left more than one million people with no electricity or water on the Gulf Coast. California ordered an evacuation along Lake Tahoe due to the Caldor fire.And in mortgage and housing news… Forbearance Numbers Hold: The number of mortgage loans in forbearance remains unchanged from last week, holding at 3.25% according to the latest report from the Mortgage Bankers Association. Freddie’s Here To Help: Freddie Mac reminded homeowners and mortgage servicers of its immediate disaster relief options for those affected by Hurricane Ida. In Further Freddie News: Freddie Mac now projects that…

Morning Roundup (8/26/21) – Interest Rates Flat, Neat Capital Offers Vax Bonus

Good Morning! Today is Thursday, Aug. 26. Reports of a looming terror attack at the airport in Kabul has added new chaos to U.S. evacuation efforts. House Democrats are putting together a sprawling, $3.5 trillion spending bill that targets climate change, poverty, college financial aid and Medicare. Delta Airlines is charging unvaccinated employees $200 more on their health plans. A federal judge in Michigan sanctioned pro-Trump lawyers who sued officials over alleged voter fraud. And in mortgage and housing news… Mortgage Rates Hold Steady: Freddie Mac announced Thursday morning that mortgage rates were essentially unchanged, at 2.87 percent. “Throwing Money At The Problem”: Neat Capital is offering refinance and mortgage applicants a $500 discount if they’re vaccinated. LA Eviction Moratorium Upheld:…

Mortgage Rates Hold Steady at 2.87%

Mortgage rates held steady despite a tug-of-war between economic recovery and the fiscal impact of rising Covid-19 cases, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS®). The 30-year fixed-rate mortgage averaged 2.87 percent with an average 0.6 point for the week ending August 26, 2021, up slightly from last week’s 2.86 percent. A year ago at this time, the 30-year FRM averaged 2.91 percent. The 15-year fixed-rate mortgage averaged 2.17 percent with an average 0.6 point, up slightly from last week when it averaged 2.16 percent. A year ago at this time, the 15-year FRM was 2.46 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.42 percent with an average 0.2 point, down slightly from last week when…

Investigation Finds Freddie and Fannie Algorithm Negatively Impacts Borrowers of Color

An investigation by The Markup found that lenders in 2019 were more likely to reject loan requests from people of color than white people, even if their finances looked much the same. The Markup examined more than 2 million conventional mortgage applications using statistical analysis that held 17 factors steady to account for explanations traditionally used to explain racial disparities in lending: the borrower’s credit history, debt-to-income (DTI) ratio and loan-to-value (LTV) ratio. According to The Markup, the bias was evident in the credit scoring algorithm “Classic FICO,” which was developed in the 1990s. Fannie and Freddie require lenders to use Classic FICO to determine whether an applicant meets their minimum threshold. Classic FICO focuses on traditional credit but does…

Mortgage Refinancing Sees a Boost After FHFA Fee Repeal

Mortgage refinancing exploded in July, according to mortgage data analyst Black Knight.  The report shows rate lock volume, the number of borrowers who locked in their mortgage rate, jumped by 5.5% in July. Rate/term refinance grew 24% month-over-month, while cash-out refinance grew 20%. The Federal Housing Finance Agency (FHFA) decided in mid-July to remove the adverse market refinance fee put in place in 2020. The 0.5% fee was intended to alleviate any future financial burden placed on Fannie Mae and Freddie Mac by the effects of the pandemic. Instead of a downturn, the housing market soared. The boom in refinancing is directly linked to the FHFA’s decision to reverse course. And now “[r]efinance volumes were undoubtedly boosted” by its repeal, Black Knight…

UWM’s Complicated System for Refunding Adverse Market Fees Raises Questions

Mat Ishbia appears to be the odd man out when it comes to handling fees from customers the feds are no longer collecting. On July 16, the Federal Housing Finance Agency (FHFA) announced it was ending the adverse market refinancing fee for loan deliveries effective August 1, 2021. The fee, designed to address risk from anticipated losses due to COVID-19, was always unpopular. Proposed by the Trump administration last summer, it was repeatedly delayed before going into effect in December. It was welcome news to the entire industry — data show a surge in mortgage applications in the week after the 50 basis point fee was lifted — but it may have been exceptionally good news for United Wholesale Mortgage…

Refinance Option Available To Low-Income Borrowers

The Federal Housing Finance Agency announced a new refinance option that will provide low-income borrowers with reduced interest rates and lower monthly payments. The new option is available to borrowers with Freddie Mac and Fannie Mae backed loans. It includes: A requirement that the lender provides a savings of at least $50 in the borrower’s monthly mortgage payment, and at least a 50-basis point reduction in the borrower’s interest rate.A maximum $500 credit from the lender for an appraisal if the borrower is not eligible for an appraisal waiver (the Enterprises will provide the lender a credit of $500 upon the loan’​s sale to an Enterprise).A waiver of the 50 basis point up-front adverse market refinance fee for borrowers with loan balances…

Freddie Mac Reports $7.3B In Net Income

Freddie Mac on Thursday announced net income of $7.3 billion for 2020, up $100 million from the year before as the housing market surged amid pandemic-induced record low interest rates. Freddie Mac also reported: Net worth increased to $16.4 billion, from $9.1 billion at the end of 2019. Net income of $2.9 billion and comprehensive income of $2.5 billion in the fourth quarter, up $400 million and $100 million, respectively, from the prior quarter, driven by a reserve release due primarily to realized house price growth during 4Q 2020. “In 2020, Freddie Mac continued to serve the important role for which it was founded: supporting the housing market in all economic conditions. In the face of extraordinary economic uncertainty caused…