Senate passes banking reform bill
The U.S. Senate passed a bill Wednesday that would ease compliance costs for smaller banks and possibly lead to more lending for residential and commercial property purchases. The Economic Growth, Regulatory Relief, and Consumer Protection Act, S. 2155—which garnered bipartisan support—would lower reporting, disclosure, and other requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010 after the financial crisis. This would free up community banks—often the most important source of loan funds in rural areas—to make a larger variety of home loans than they currently are allowed.
The bill also would require the two largest sources of mortgage financing, Fannie Mae and Freddie Mac, to accept alternative credit scoring standards that use rent and utility payment histories to better measure whether loan applicants can be reliable borrowers.
NAR President Elizabeth Mendenhall said in a statement that the bill does a good job balancing reform with continued protections against the kind of lending excesses that characterized the financial crisis a decade ago. “REALTORS believe that financial regulations need to be balanced with appropriate consumer protections, and we believe this bill achieves that goal.”
Learn more.
NAR: Banking reform may boost real estate
The National Association of REALTORS has expressed support for the Economic Growth, Regulatory Relief and Consumer Protection Act, a banking reform bill the Senate plans to take up this week. The bill could open up more lending to households aspiring to become homeowners, said NAR.
The bill balances consumer protections with changes that could make home lending more readily available to people who need it, including renters struggling to acquire a mortgage because they haven’t yet amassed a conventional credit history. The bill includes a requirement that Fannie Mae and Freddie Mac accept rent and utility payment history as part of loan applications’ credit scores.
The bill also reduces some regulatory burdens on credit unions and smaller community banks, which are often the main source of home mortgage financing in rural areas.
The House has already passed its version of banking reform, known as The Financial Choice Act. Should the Senate pass its version, the bills will have to be reconciled.
Learn more.
Mortgage rates tick up for ninth straight week
Borrowers were once again faced with rising mortgage rates this week. The 30-year fixed-rate mortgage continues to be at its highest average in four years.
Freddie Mac reported that the 30-year fixed-rate mortgage rate averaged 4.46 percent, with an average 0.5 point, increasing from last week’s 4.43 percent average. The 15-year fixed-rate mortgage rate averaged 3.94 percent, with an average 0.4 point, increasing from last week’s 3.9 percent average.
Learn more.
Home flipping flies to 11-year high
Higher home prices don’t seem to be spooking investors from buying up properties to flip. About 207,088 U.S. single-family homes and condos were flipped in 2017, the highest level since 2006, according to ATTOM Data Solutions. That compromises nearly 6 percent of all single-family home and condo sales during last year. ATTOM Data Solutions defines a “home flip” as a transaction for a single-family home or condo that occurred within the year of a previous sale of the same property.
Financing for home flippers has become more readily available in recent years, but 65 percent of flippers still used cash to buy homes flipped in 2017. That is nearly the reverse of 2004 to 2006, when 63 percent of flippers were leveraging financing to buy.
ATTOM Data Solutions’ report shows that completed home flips in 2017 yielded an average gross profit of $68,143. (That represents the difference between the median purchase price and median flipped sales price.)
Learn more.
HUD plans to change its mission statement
The Department of Housing and Urban Development is considering changing its mission statement to remove what it calls antidiscrimination language. HUD Secretary Ben Carson has been leading the charge and seeking to add in “self-sufficiency,” a major focus of his since taking the helm of HUD.
A draft being circulated of the new mission statement reads:
“HUD’s mission is to ensure Americans have access to fair, affordable housing and opportunities to achieve self-sufficiency, thereby strengthening our communities and nation.”
The mission statement has not been made final yet, nor have any updates been made to it on HUD’s website. HUD’s current mission statement, which still appears on its website, is much longer and promises “strong, sustainable, inclusive communities and quality affordable homes for all” and to make communities “free from discrimination.”
Learn more.
Survey: Owners worried, buyers excited
Consumer sentiment is following an unusual trend for a seller’s market: homebuyers are upbeat, but homeowners are less so, according to ValueInsured’s latest quarterly Modern Homebuyer Survey. Fifty-eight percent of homeowners surveyed say they want to sell, but are holding off because they don’t want to purchase again at today’s higher prices. Fifty-nine percent of owners say they believe buyers in their area are overpaying for a home.
Buyers still have plenty of concerns, such as saving for a down payment and eroding housing affordability, particularly in the nation’s hottest housing markets.
But millennials say they are ready to make some sacrifices in order to afford their first home. They say they’d be willing to give up or cut down on eating out; take on a second job; give up most or all vacations; give up most or all clothes shopping; and return to or stay living at their parents’ home to save money.
Learn more.
Mortgage applications finally edge up again
A brief pause in the rise of interest rates helped buoy mortgage application volume last week, following several weeks of declines. Total mortgage applications for home purchases and refinancings rose 2.7 percent compared to the previous week, according to the Mortgage Bankers Association. Applications, however, are 2.4 percent lower than a year ago.
The bulk of last week’s increase was driven by homebuyers. Mortgage applications to purchase a home rose 6 percent during the week, and are 3 percent higher than a year ago.
Learn more.
New home sales fall in January for Northeast
Sales of newly-built, single-family homes in January fell 33.3 percent to a seasonally adjusted annual rate of 24,000 for the Northeast, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Nationally, sales fell 7.8 percent to a rate of 593,000.
Learn more.
Quicken Loans becomes nation’s top lender
Quicken Loans has surpassed Wells Fargo as the number one mortgage lender in the country, the company announced. In the fourth quarter of 2017, Quicken Loans garnered $25.1 billion in originations compared to Wells Fargo’s $22.9 billion, according to data from Inside Mortgage Finance. But for the entire year, Wells Fargo was still the leader, with $94.7 billion in originations compared to Quicken Loans’ $86 billion.
Still, Quicken Loans may be able to maintain a longer lead over Wells Fargo, which has been ordered by the Federal Reserve to restrict company growth until it “sufficiently improves its governance and controls” and demonstrates compliance with industry regulations.
Learn more.
Disaster victims get more mortgage relief
The Federal Housing Administration (FHA) is expanding mortgage relief to FHA-insured homeowners who live or work in areas that were affected last year by Hurricanes Harvey, Irma, and Maria, as well as wildfires and mudslides in California. Mortgage servicers in those areas will offer additional payment options to help disaster victims remain in their homes.
The FHA is launching a “Disaster Standalone Partial Claim” option, which covers up to 12 months of missed mortgage payments through an interest-free second loan on the mortgage. That loan is payable only when the borrower sells the home or refinances the mortgage. Further, the option requires no trial period or balloon payment and allows borrowers to keep their existing low-interest rate, loan term, and monthly mortgage payment.
Learn more.
HUD gives $35 million to aid low-income families
The U.S. Department of Housing and Urban Development (HUD) announced that it is awarding $34.9 million to help low-income residents become more self-sufficient. The money will be allocated to public housing authorities, public housing resident associations, Native American tribes, and nonprofit organizations across the country. It will be used to hire or retain service coordinators to help low-income residents find jobs, educational opportunities, and achieve economic and housing independence.
The funding will be provided through HUD’s Resident Opportunities and Self-Sufficiency Service Coordinators Program. The program supports locally driven strategies that link public housing assistance with public and private resources so that HUD-assisted families can increase earned income and reduce or eliminate the need for welfare assistance.
New York will be awarded the most in grants at $2.7 million, followed by California at $2.6 million and New Jersey at $1.7 million.
Learn more.
NAR: Existing-home sales slip 3.2 percent in January
Existing-home sales slumped for the second consecutive month in January, and experienced their largest decline on an annual basis over three years, according to the National Association of REALTORS (NAR).
Total existing-home sales fell 3.2 percent in January to a seasonally adjusted annual rate of 5.38 million from a downwardly-revised 5.56 million in December 2017. Sales are 4.8 percent below a year ago, and at their slowest pace since last September.
January existing-home sales in the Northeast declined 1.4 percent to an annual rate of 730,000, and are now 7.6 percent below a year ago.
Learn more.
