CFPB allows foreclosures to resume, Better.com partners with American Express & more of the week's top news
July 2, 2021 5:19 PM
CFPB lets foreclosures resume — but with caveats
Mortgage servicers can resume foreclosures on some borrowers under a set of rule changes by the Consumer Financial Protection Bureau designed to help millions of struggling homeowners exiting mortgage forbearance plans.
The CFPB issued a temporary final rule Monday that provides added borrower protections such as required outreach and loss mitigation reviews by servicers. But the agency essentially abandoned a proposalfrom April that would have required a pre-foreclosure review period, which some said imposed a foreclosure moratorium until 2022.
"Let me be clear: Our final rule does not impose a foreclosure moratorium," acting CFPB Director Dave Uejio said on a conference call with reporters.
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The CFPB issued a temporary final rule Monday that provides added borrower protections such as required outreach and loss mitigation reviews by servicers. But the agency essentially abandoned a proposal
"Let me be clear: Our final rule does not impose a foreclosure moratorium," acting CFPB Director Dave Uejio said on a conference call with reporters.
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Forbearance re-entries rise as borrowers struggle with underemployment
Pandemic-related mortgage payment suspensions fell again on Monday but the percentage of re-entries rose as federal officials finalized transitional directives for forbearance exits.
The total forbearance rate slipped 2 basis points to 3.91% and re-entries rose to 6.2% of all suspended payments, from 5.9% the previous week , according to the Mortgage Bankers Association latest report. The payment suspension rate was last this low in early April last year, when it was 3.74%.
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The total forbearance rate slipped 2 basis points to 3.91% and re-entries rose to 6.2% of all suspended payments, from 5.9%
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FHFA lowers bar for distressed borrowers seeking loan modifications
The Federal Housing Finance Agency on Wednesday eliminated the requirement for distressed borrowers to have a current, market-rate loan-to-value ratio of 80% or higher before obtaining a type of loan modification offered by two government-sponsored enterprises.
The new terms for Fannie Mae and Freddie Mac’s standard Flex Modifications are in line with broader efforts to make it easier for borrowers to maximize home retention options as temporary payment suspensions andthe federal foreclosure ban end. The change also addresses skyrocketing home prices that have raised equity levels and put downward pressure on LTVs, making it tougher for borrowers to obtain Flex Mods. (The ratio used to determine Flex Mod eligibility compares the outstanding loan balance to the home’s current market value.)
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The new terms for Fannie Mae and Freddie Mac’s standard Flex Modifications are in line with broader efforts to make it easier for borrowers to maximize home retention options as temporary payment suspensions and
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Andrew Harrer/Bloomberg
American Express partners with Rocket and Better.com on mortgage offer
American Express has partnered with Better.com and Rocket Mortgage for its new foray into home lending.
The financial services behemoth now offers its existing card member base statement credits totaling $2,000 for conforming and $6,000 for jumbo loans if they originate or refinance through either partner company. The credits will be paid out by the lenders and the deal was created to deliver value during a hot market based on a similar limited-time pilot offer conducted in 2019, an Amex spokesperson told NMN.
Amexinvested in Better.com through its venture capital arm beginning with a Series C round in 2019 and Series D round in 2020.
Read thefull story here.
The financial services behemoth now offers its existing card member base statement credits totaling $2,000 for conforming and $6,000 for jumbo loans if they originate or refinance through either partner company. The credits will be paid out by the lenders and the deal was created to deliver value during a hot market based on a similar limited-time pilot offer conducted in 2019, an Amex spokesperson told NMN.
Amex
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Andrew Harrer/Bloomberg
FHFA addresses regulatory gap as servicers prep for foreclosure return
The Federal Housing Finance Agency on Tuesday closed a gap between the end of the federal foreclosure moratorium and the beginning of a new Consumer Financial Protection Bureau directive as mortgage and consumer groups responded to both with cautious optimism.
While industry groups had not vetted the entirety of the CFPB’s 200-plus page temporary final rule at deadline, they were relieved that the directive allows them restart of a broader range of foreclosures after the federal ban ends.
The FHFA’s announcement that it will immediately align its policies with the CFPB’s after thefederal ban ends July 31 , even though the bureau’s rule doesn’t technically go into effect until the end of August, partially appeased some consumer groups nettled by the loophole.
Read thefull story here.
While industry groups had not vetted the entirety of the CFPB’s 200-plus page temporary final rule at deadline, they were relieved that the directive allows them restart of a broader range of foreclosures after the federal ban ends.
The FHFA’s announcement that it will immediately align its policies with the CFPB’s after the
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Housing affordability takes biggest plunge since 2018
Housing affordability dropped in April at the fastest pace since December 2018 and won’t be improving any time soon, according to First American.
The Real House Price Index — a metric that adjusts residential property prices for income and interest rate fluctuations — grew 0.7% from March and 7% year-over-year. When RHPI rises, home buyer affordability falls. Median household income increased to $74,249 from $73,455 monthly and $70,542 annually while house-buying power jumped to $505,904 from $499,060 the month before and $465,906 in April 2020.
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The Real House Price Index — a metric that adjusts residential property prices for income and interest rate fluctuations — grew 0.7% from March and 7% year-over-year. When RHPI rises, home buyer affordability falls. Median household income increased to $74,249 from $73,455 monthly and $70,542 annually while house-buying power jumped to $505,904 from $499,060 the month before and $465,906 in April 2020.
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Reverse lender can foreclose on non-borrowing spouse: Fla.'s top court
A divided Florida Supreme Court ruling will allow foreclosure on the non-borrowing spouse of a reverse mortgage holder who failed to redeem the property after the note became due.
The case, WMVF v. Palmero, centered on discrepancies between the promissory note and the mortgage document. Prior Florida Supreme Court rulings for forward mortgages dating back nearly 100 years stated that in those cases, the note takes priority over the mortgage. This decision extends that to reverse mortgage legal proceedings.
The ruling sends the case back to the trial court, which is expected to approve the foreclosure motion, said William McCaughan, the lead counsel for WMVF, who argued the case before the Florida Supreme Court.
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The case, WMVF v. Palmero, centered on discrepancies between the promissory note and the mortgage document. Prior Florida Supreme Court rulings for forward mortgages dating back nearly 100 years stated that in those cases, the note takes priority over the mortgage. This decision extends that to reverse mortgage legal proceedings.
The ruling sends the case back to the trial court, which is expected to approve the foreclosure motion, said William McCaughan, the lead counsel for WMVF, who argued the case before the Florida Supreme Court.
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CoreLogic to acquire settlement services platform ClosingCorp
CoreLogic announced on Wednesday that it would acquire the outstanding shares of ClosingCorp , with the merger between the two data-and-analytics providers expected to close in third quarter 2021.
The deal will combine CoreLogic’s analytics with ClosingCorp’s platform, which offers streamlined settlement services during the closing process.
“The combination of ClosingCorp and CoreLogic digital solutions, platforms and domain expertise is clearly additive for our clients and the broader housing ecosystem,” said Frank Martell, CoreLogic’s president and CEO.
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The deal will combine CoreLogic’s analytics with ClosingCorp’s platform, which offers streamlined settlement services during the closing process.
“The combination of ClosingCorp and CoreLogic digital solutions, platforms and domain expertise is clearly additive for our clients and the broader housing ecosystem,” said Frank Martell, CoreLogic’s president and CEO.
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Lumber prices tumble, dropping to five-month low in June
A steep drop in lumber prices is creating optimism for homebuilding for the second half of 2021.
Lumber futures ended June with a closing price of $737.40 per thousand board feet after starting the month at $1,267.50 and spiking to an all-time high of $1,670.50 on May 7, according to data from Nasdaq. While still above the year-ago rate of $431.60, it reached the lowest point since $700 on Jan. 20. The recent fall represents drops of 55.9% from May’s peak and 41.8% throughout the month — the largest monthly decrease on record dating back to 1978, according to CNBC.
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Lumber futures ended June with a closing price of $737.40 per thousand board feet after starting the month at $1,267.50 and spiking to an all-time high of $1,670.50 on May 7, according to data from Nasdaq. While still above the year-ago rate of $431.60, it reached the lowest point since $700 on Jan. 20. The recent fall represents drops of 55.9% from May’s peak and 41.8% throughout the month — the largest monthly decrease on record dating back to 1978, according to CNBC.
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Former Zillow execs raise $70 million to launch mortgage fintech Tomo
Lending startup Tomo Networks announced on Wednesday that it received $70 million in seed funding, after initially raising $40 million eight months ago. Ribbit Capital led the second round, alongside DST Global, NFX, SVB Capital and Zigg Capital,which recently served as lead investor to mortgage fintech Spruce.
Zillow’s former Vice President of its Premier Agent business, Carey Armstrong, and former President of media and marketplace, Greg Schwartz, co-founded Tomo in October 2020 with the aim of improving the buying experience — apopular mission for digital lenders in a crowded field. They plan to forgo refinancings altogether.
Readthe full story here .
Zillow’s former Vice President of its Premier Agent business, Carey Armstrong, and former President of media and marketplace, Greg Schwartz, co-founded Tomo in October 2020 with the aim of improving the buying experience — a
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Refinancings lead title insurers to their best first quarter ever
Benefitting from the still-hot refinance market, title insurers wrote nearly 45% more premiums in the first quarter this year compared with one year prior, the American Land Title Association reported.
Mortgage originations topped $1 trillion in the first quarter — Fannie Mae estimates $1.27 trillion while the Mortgage Bankers Association pegs the figure at $1.1 trillion. Both agree that refinancings made up 71% of that total.
That led to $5.68 billion of title insurance premiums written during the period, down from approximately $6 billion in the fourth quarter but up from $3.92 billion one year ago. Fourth quarter 2020 originations were $1.34 trillion according to Fannie Mae, or $1.26 trillion by the MBA's estimates, while the first quarter last year was at $752 billion and $563 billion respectively.)
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Mortgage originations topped $1 trillion in the first quarter — Fannie Mae
That led to $5.68 billion of title insurance premiums written during the period, down from approximately $6 billion in
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Fannie, Freddie keep MIs dividend restrictions, haircut in place
Restrictions placed on private mortgage insurers upstreaming dividends to their parent company will now remain until the end of the year and the insurers can still apply a 70% haircut to delinquent loans with a pandemic-related forbearance, according to revisions in Fannie Mae Private Mortgage Insurer Eligibility Requirements Guidance 2021-01.
The dividend restriction was extended instead of expiring on June 30 as scheduled, the latest update to secondary market capital requirements said. Allowing the restriction to lapse created concerns that the FHFA and the government-sponsored enterprises decision permitting the MIs to hold less capital against delinquent loans would be ended as well, said Bose George, a Keefe, Bruyette & Woods analyst, in a note on the announcement.
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The dividend restriction was extended instead of expiring on June 30 as scheduled, the latest update to secondary market capital requirements said. Allowing the restriction to lapse created concerns that the FHFA and the government-sponsored enterprises decision permitting the MIs to hold less capital against delinquent loans would be ended as well, said Bose George, a Keefe, Bruyette & Woods analyst, in a note on the announcement.
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What use of office space in U.S. could look like by 2022
As COVID-19 spread across the U.S. in 2020, emptying offices and forcing businesses to adapt quickly to a remote-working environment, many predicted a looming crisis in the commercial office market. But as the American economy recovers at a faster-than-anticipated pace a year later, the attitude from companies and workers now seems to have shifted toward a more optimistic, “Let’s wait and see.”
Over half of American companies expect to maintain a similar physical footprint or even expand in the post-pandemic environment, according to a recentsurvey of employees in professional and financial services conducted by Arizent , the parent company of National Mortgage News. However, COVID-19 still dealt a huge financial blow to the commercial office market, and it will be months before a complete picture emerges of the pandemic’s effect.
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Over half of American companies expect to maintain a similar physical footprint or even expand in the post-pandemic environment, according to a recent
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June sees slight improvement in housing inventory
After potentially reaching an inflection point in May , housing inventory saw an uptick in June, according to Realtor.com’s monthly housing report.
New listings jumped 10.9% month-over-month and 5.5% year-over-year. While the overall supply of homes for sale stood 43.1% lower than June 2020, it rose from May’s inventory, which was 50.9% lower from the year before. In spite of the still significant lack of homes for sale, June’s data bodes well for home buyers, according toRealtor.com Senior Economist George Ratiu.
Readfull story here .
New listings jumped 10.9% month-over-month and 5.5% year-over-year. While the overall supply of homes for sale stood 43.1% lower than June 2020, it rose from May’s inventory, which was 50.9% lower from the year before. In spite of the still significant lack of homes for sale, June’s data bodes well for home buyers, according to
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What housing bubble? Price growth driven by fundamentals, analysts say
Mortgage industry analysits like Chief Economist at Fannie Mae, Doug Duncan and his counterpart at the Mortgage Bankers Association, Mike Fratantoni, are adamant that there is no housing bubble and that a collapse similar to the financial crisis is not imminent.
"To me a bubble would be prices moving really apart and adrift from fundamentals and everything I've talked about here really is a fundamental story — that we have strong demand from an improving economy, very favorable demographics asmillions upon millions of millennials hit peak first time home buyer age," Fratantoni said at an economic research conference the trade group held last week.
Backing that up, he said, was data from Moody's regarding short-term home purchasers, also known as flippers. Back in 2005, 20% of buyers owned the property for one year or less.
Currently, the number is down to about 7%.
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"To me a bubble would be prices moving really apart and adrift from fundamentals and everything I've talked about here really is a fundamental story — that we have strong demand from an improving economy, very favorable demographics as
Backing that up, he said, was data from Moody's regarding short-term home purchasers, also known as flippers. Back in 2005, 20% of buyers owned the property for one year or less.
Currently, the number is down to about 7%.
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What is FHFA's next move?
Following last week’s ouster of the Trump appointee atop the Federal Housing Finance Agency, mortgage industry officials and community advocates alike are hoping new leadership will rethink many of the policies the agency put in place last year that they say run counter to the missions of Fannie Mae and Freddie Mac.
Acting FHFA Director Sandra Thompson — who was appointed by the Biden administration to run the agency last Wednesday after a Supreme Court ruling gave the president the authority to fire her predecessor, Mark Calabira, at will — is already facing pressure to reconsider many of Calabria’s hallmark achievements, including recent reforms to the government’s oversight of the companies.
“I do hope there's a chance for course correction with new leadership,” said Doug Ryan, a senior fellow at Prosperity Now, a nonprofit consumer advocacy group. “I think there's an opportunity for this to support the larger housing goals of the Biden administration.”
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Acting FHFA Director Sandra Thompson — who was appointed by the Biden administration to run the agency last Wednesday after
“I do hope there's a chance for course correction with new leadership,” said Doug Ryan, a senior fellow at Prosperity Now, a nonprofit consumer advocacy group. “I think there's an opportunity for this to support the larger housing goals of the Biden administration.”
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