HUD Updates 203(k) Rehabilitation Mortgage Insurance Program

The Department of Housing and Urban Development, through the Federal Housing Administration, updated policies for its 203(k) Rehabilitation Mortgage Insurance Program. Officials say the updates modernize and enhance the program for homeowners looking to affordably finance home renovations and rehabilitations when purchasing or refinancing. Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon and Philadelphia Mayor Cherelle Parker made the announcement at a home in Philadelphia, PA, with a borrower who used the FHA 203(k) program to finance renovations. “HUD has programs not only to help families purchase a house, but to help them repair their homes,” said HUD Acting Secretary Adrianne Todman. “Today, we are modernizing and expanding this program, helping both homebuyers and homeowners fix up their…

Opinion: A National Homeownership Month Scorecard

By SCOTT OLSON June is National Homeownership Month. So the Community Home Lenders of America (CHLA) has called on Congress to begin debate and ultimately enact a Mortgage Interest Credit (MIC) when it considers tax legislation next year to extend expiring provisions from the 2017 Tax Cut and Jobs Act (TCJA). The 2017 TCJA raised the standard deduction and capped state and local tax (SALT) deductions at $10,000. In turn, this significantly reduced the value of the mortgage interest deduction (MID). The Joint Committee on Taxation has estimated that the annual tax benefits of the MID are just $31.0 billion in 2024 – down from $63.6 billion in 2017 (and extrapolating, close to $100 billion in today’s dollars). If Congress…

CFPB Launches Inquiry Into Mortgage “Junk Fees”

The Consumer Financial Protection Bureau launched a public inquiry into mortgage “junk fees,” which it says hide in closing costs. The Bureau said closing costs have “risen steeply” and cause undue financial stress on both borrowers, who bear the burden of higher prices, and lenders, who have to pass costs along to borrowers in order to offer competitive mortgages. “Junk fees and excessive closing costs can drain down payments and push up monthly mortgage costs,” said CFPB Director Rohit Chopra. “The CFPB is looking for ways to reduce anti-competitive fees that harm both homebuyers and lenders.” Median closing costs in 2022 were $6,000 and are still rising, according to a statement from the Bureau. “The CFPB wants to understand why…

Will The Affordability Of Homes Sway Voters In 2024?

By KIMBERLEY HAAS Home affordability continues to be problematic for American families. High prices, elevated mortgage rates, and a low supply of inventory have kept adults in their 20s and 30s off the housing ladder. At the same time, homeowners with growing families are unable to move up that ladder into properties that would better accommodate their needs for the same reasons. It’s an issue that touches all generations because older adults are worried about their children and grandchildren. They’re also aging but if their house is paid off, it often does not make financial sense to move, even if they no longer need three bedrooms on a regular basis. But will the affordability of homes push people to vote…

Opinion: All Mortgage Loan Originators Should Be Qualified To Originate Loans

By SCOTT OLSON This week, the Consumer Financial Protection Bureau fined Bank of America $12 million for reporting false mortgage data. CFPB’s Press Release on the action stated that BofA “Loan officers routinely falsified forms about mortgage applicants.” In response to this action, the Community Home Lenders of America issued a statement renewing its longstanding call for all mortgage loan originators to be licensed. Despite the fact that Section 1402(a)(2) of the Dodd-Frank statute requires that all mortgage loan originators must be “qualified,” the CFPB still does not require loan originators at banks to meet any of the SAFE Act requirements that apply to all non-bank mortgage loan originators. Why is this relevant to the BofA action? The CFPB press…

Congresswoman Expresses Concerns About ICE-Black Knight Merger

By KIMBERLEY HAAS As officials at the Federal Trade Commission continue to review the proposed acquisition of Black Knight by Intercontinental Exchange, the top Democrat on the House Financial Services Committee is reiterating her concerns about the merger. U.S. Rep. Maxine Waters (D-CA) has said the two companies play a dominant role in the technology and data underlying the country’s mortgage markets and “such a monopoly would harm our nation’s consumers and our housing market.” This week, Waters sent a letter to FTC Chair Lina Khan offering recommendations for a negotiated settlement agreement, saying there are anti-trust, financial stability, and consumer protection safeguard issues to be considered. “In addition to potentially creating a housing finance conglomerate that would dwarf all…

Administration: Buyers Will Save Money On Mortgage Payments Through Premium Reduction

By KIMBERLEY HAAS The Biden administration has announced a reduction on mortgage insurance premiums in a move they say could benefit an estimated 850,000 borrowers over the coming year. New borrowers who take out loans insured by the Federal Housing Administration will see the effects of the reduced premiums, according to a press release. The premiums will be reduced from 0.85% to 0.55% for most homebuyers, which could mean an estimated savings of $678 million for American families by the end of 2023, according to officials. Vice President Kamala Harris and Department of Housing and Urban Development Secretary Marcia Fudge made the announcement in Bowie, Md., on Wednesday. White House officials said the average homebuyer in Prince George’s County –…

Reaction To Wells Fargo Announcement Lukewarm

By KIMBERLEY HAAS Leaders at Wells Fargo announced this week that they are reducing their home lending footprint and some people are saying it may be big news in the lending space, but will likely not make much of a difference to the average consumer. It was announced Tuesday that the company, formerly the nation’s largest mortgage lender, is exiting the correspondent lending channel and shrinking its mortgage servicing portfolio. Plans are to focus on serving bank customers and members of minority communities. Lawrence White, a professor of economics at the New York University Leonard N. Stern School of Business, sat down with the Mortgage Note to talk about the news on Wednesday. White said he hopes the move by leaders at…

Opinion: Community Home Lenders Of America To Influence Mortgage Policies In Washington

Editor’s Note: This article was written by a contributor and contains the individual’s views, opinions, or personal experiences. Last week, we announced the merger of the Community Mortgage Lenders of America and theCommunity Home Lenders Association under a renamed Community Home Lenders of America (CHLA). To date, both organizations have represented a similar profile of members and have historically taken similar policy positions. After extended discussion, we both concluded that combining CMLA and CHLA would mean more members, more financial resources, and more combined staff. This would enhance our ability to influence mortgage policies in Washington and explain the key role community lenders and in particular smaller independent mortgage banks (IMBs)—play in mortgage lending. Policy fights in Washington are not…

CHLA Says FHA Should Cut Premiums, End Life Of Loan

In its budget proposal this week, the Biden Administration allotted a 34% budget increase for the Department of Housing and Urban Development of $11.6 billion over the fiscal year of 2022. This proposed budget includes $32 billion for the Housing Choice Voucher Program and almost $2 billion for the HOME Investment Partnership, aimed at affordable housing strategies. The industry has so far applauded the budget for its investments in housing as affordability dwindles and many Americans struggle to find housing within their budget. “A president’s budget is a wish list of policy goals and ambitions,” Shannon McGahn, the National Association of Realtor’s chief advocacy officer, said. “Many changes will be made to this plan, but it is good news that…