Better.com hit with suit, Fannie Mae and Freddie Mac outline plan to close the racial gap in homeownership, and more of this week’s top news
June 10, 2022 4:44 PM
Fannie Mae, Freddie Mac launch plans to close racial homeownership gap
The government-related agencies released their equitable housing plan to reduce the divide between white and minority borrowers this week. The experimental approach will depend on lenders to take on new underwriting strategies around credit and appraisals.
Read the full story here .
Better.com CEO Garg misled investors, fired exec claims
A new whistleblower suit claims Better.com founder Vishal Garg misled investors about the company’s performance during efforts to go public and in mishandling the firm’s first mass layoffs. Sarah Pierce, the former second in command, says she was fired for raising concerns over Garg’s behavior. The suit paints a clear picture of Better’s inner working around the time of the firing of 900 workers.
Read the full story here.
Mortgage origination activity drops to a 22-year low
The MBA’s Market Composite Index dropped 6.5% for the week ending June 3, 55% lower than a year ago. The slide in origination is the lowest in 22 years because of weaknesses in both purchases and refinance applications.
Read the full story here.
Samuel Corum/Bloomberg
Fed delivers fuzzier rate message as it gauges impact of hikes
The Federal Reserve is shifting its message from a destination on interest rate hikes to the impact the Fed policies will have on the economy. As a half-point interest-rate increase is expected in June and July, officials' statements were unclear as their term “financial conditions” is hard to define.
Read the full story here.
Wildfire threat hasn’t deterred purchases in higher-risk areas
Median sale prices of homes with high fire risk have increased greater compared to those with low fire risk. The tight housing market in the past year has driven homeownership as a priority above all else, despite concerts of climate risk factors cited.
Read the full story here.
Mortgage statements may be subject to collection rules: 11th Circuit
In a recent 11th Circuit Court of Appeals decision, judges ruled that monthly mortgage statements could be considered communications related to the collection of a debt. Attorneys have since warned that servicers need to be more careful about the wording in their billing statements. The ruling reversed a previous decision in the lower court, and could potentially make its way up to the Supreme Court.
Read the full story here.
Home prices surged another 21% in April but experts say it’s not a bubble
Home prices continued to increase in April, but the pace seems to be slowing down according to some economists. Most of the homes closed in April had their mortgage rate locked in by March, suggesting that the increase in interest rates will erode affordability, and slow down the increase in house prices.
Read the full story here.
Al Drago/Bloomberg
FHFA, CFPB urge financial firms to offer disclosures in Spanish
The Community Home Lenders Association is asking the Department of Justice to review the Intercontinental Exchange-Black Knight $13.1 billion deal. CHLA is not only concerned with the vertical integration from Black Knight’s dominance in the mortgage servicing platform but also about other overlapping services provided by both companies. CHLA states the deal would lead to less competitive pressure to innovate and ultimately hurt consumers.
Read the full story here.
JHVEPhoto - stock.adobe.com
Figure Technologies, Homebridge end merger plans
Figue Technologies and Homebridged have ended their planned merger announced last year. Figure’s CEO Mike Cagney cited delays in completing the transaction as the reason the merger will not go forwards. However, the firms remain a partnership in blockchain integration.
Read the full story here.
VantageScore notches a win in FICO-dominated securitization market
The credit card issuer Synchrony Financial used VantageScore on a recent $1 billion securitization deal. The deal might suggest a challenge to FICO, the most dominant player in the industry. While VantageScore has much ground to make up to rise to the level of FICO, the deal is significant as Synchrony is among the largest credit card issuers.
Read the full story here.
Figure Technologies, Homebridge end merger plans
Figure Technologies and Homebridged have ended their planned merger announced last year. Figure’s CEO Mike Cagney cited delays in completing the transaction as the reason the merger will not go forwards. However, the firms remain a partnership in blockchain integration.
Read the full story here.
Michael Nagle/Bloomberg
Equifax’s credit scoring snafu ensnares lenders
An Equifax coding error that affected credit score calculations has led government-sponsored enterprises to remind mortgage companies of their obligation in ensuring accurate credit reports. Any mortgage and application in progress with an error must be resubmitted with an updated credit report. The Federal Housing Finance Agency is working with Fannie Mae and Freddie Mac to identify any impacts.
Read the full story here.
Mortgage economist Frank Nothaft dies suddenly
Frank Mothaft, chief economist for CoreLogic, died suddenly on June 5. Nothaft joined CoreLogic in January 2015 after spending 28 years at Freddie Mac rising to chief economist in 2001. Nothaft was held in high esteem, well respected and liked by his peers, even when he might be at odds with them. The cause of death is unknown.
Read full story here.
