Applications Slip As Rates Tick Up

Mortgage applications slipped after a weeks-long upward rally as rates ticked up. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — fell by 5.7%, reversing last week’s gains. Adjusted purchase applications declined by 1%, while the unadjusted index was down 3% and 10% lower YOY. Overall activity is now at its lowest level since early March. Mortgage rates rose for the first time in four weeks, with the 30-year fixed-rate reaching 7.05%. All other loan types experienced rate increases. “The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Borrowers remain…

Mortgage Industry Leaders React To Crackdowns On “Junk Fees”

By ERIN FLYNN JAY As the Biden administration’s war on “junk fees” continues, mortgage industry leaders are saying closing costs are not the source of home affordability challenges. In March, leaders at the Consumer Financial Protection Bureau asked for input in a blog post aimed at challenging these costs. “Families who manage to save up for a down payment and get approved for a mortgage often get an unwelcome surprise: closing costs that all too often are full of junk fees,” the post by Julie Margetta Morgan said. Closing costs are paid on the day a buyer finalizes the purchase of their home. They include title insurance, credit report costs, appraisal fees, origination fees, and more. According to the CFPB,…

CFPB Takes Aim At “Junk Fees” In Mortgage Servicing

The Consumer Financial Protection Bureau is taking aim at mortgage “junk fees” yet again, this time in the servicing sector. The bureau released supervisory highlights addressing what it classifies as illegal junk fees, such as prohibited fees, deceptive notices sent to homeowners, and violations of loss mitigation rules. “Homeowners cannot just simply switch providers if their mortgage servicer charges them illegal junk fees,” said CFPB Director Rohit Chopra. “Since mortgage borrowers are captive to a company they never chose to do business with, we are working hard to detect and deter violations of law.” Servicers were found to have charged property inspection fees banned by Fannie Mae and late fees greater than allowed by their mortgage agreements. They also failed…

Good Jobs Report Means Bad News for Borrowers, Experts Say

Americans watching cable news might have been cheered when they saw the latest jobs report: the United States added 303,000 new nonfarm jobs in March and unemployment fell to 3.8%. Both numbers exceeded expectations. But viewers who are also shopping for a mortgage may have had a different reaction. Economics and housing experts say less unemployment means more pressure on Federal Reserve Chair Jerome Powell to keep interest rates high. And the result has been an uptick in rates. Powell has made it clear his priority is getting inflation under control. His target number for rising prices is a 2% annual rate. Instead, prices have been rising nearly twice that fast, and the inflation rate has been higher than expected…

Could Portable Mortgages Thaw A Frozen Housing Market?

By ERIN FLYNN JAY The concept of mortgage porting, or transferring the terms of an existing loan over to a new property, has gained popularity as Americans locked into low interest rates try to figure out ways to navigate the current housing market. It is estimated that trading up to a 25% more expensive home would more than double the average mortgage holder’s monthly payment at current interest rates. Even moving to a similarly-priced home in the same neighborhood would increase principal and interest payments by 40%. Advocates for portable mortgages say if homeowners could keep their current interest rates, they would be more likely to sell their homes and buy a new one. That, in turn, would help unfreeze…

Rent Control Proposal For Subsidized Housing Meets Opposition

The Biden administration’s move to cap rent increases for affordable housing units has split support in the industry. Officials announced last week that the administration will impose a 10% cap on YOY rent increases for property owners who are part of the Low-Income Housing Tax Credit program. Currently, LIHTC allows increases of 5% or double the percentage change in national median income, whichever is higher. The proposal would limit rent increases on these properties to no more than 10% annually, doing away with the income change option. Proponents say the plan would help stabilize housing for low-income Americans reliant on subsidized housing. “The decision to prevent egregious rent increases is an important win for the millions of renters living in…

Applications Picked Up Last Week, Reversing Downturn

Mortgage applications pulled back from a weeks-long stretch of declines, increasing last week across the board. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index—a measure of mortgage loan application volume—increased by 9.7%, reversing the week prior’s 5.6% dip. Adjusted purchase applications rose by 11%, while the unadjusted index was up by 13% and was 8% lower YOY. The data is adjusted to include the President’s Day holiday. Rates moved down slightly but not by much, reaching 7.02%. This is elevated from the beginning of the year, but rate-sensitive buyers may be inclined to lock in here before they move any higher. “The latest data on inflation was not markedly better nor worse than expected, which…

Applications Down For Another Week

Mortgage applications fell for another week as rates remained above 7% and high home prices kept buyers on the bench. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 5.6%, piling onto the week prior’s 10.6% dip. Adjusted purchase applications slipped by 5%, while the unadjusted index was down by 1% and was 12% lower YOY. Rates shot moved down slightly but not by much, coming in at 7.04%. MBA’s SVP and Chief Economist Mike Fratantoni noted that this is about a quarter percentage point above the beginning of the year. “Higher rates in recent weeks have stalled activity, and last week it dropped more for…

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…

Reaching Millennials And Investing In Tech Considered A Recipe For Success

By KIMBERLEY HAAS Motivated millennials and the power of technology will shape the mortgage market in 2024, according to industry leaders who gathered this week to reflect on 2023 and strategize for the year ahead. During a “2024 Lender Strategies: What (Another) Unprecedented Year in Mortgage Taught Us” webinar hosted by Snapdocs, Michael Fratantoni, chief economist and senior vice president of research and industry technology at the Mortgage Bankers Association, said volume is predicted to increase by loan count to over five million this year. At the same time, total mortgage origination volume is expected to increase from $1.6 trillion to more than $2 trillion. Demographics will help contribute to a market rebound after a tough year in 2023. That’s…