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32 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ORIGINATION the latest ORIGINATION Fannie Mae Predicts slow but sure Housing growth Loan production projected to tally $1.1 trillion this year before edging up 5% in 2015. F annie Mae's chief economist, Doug Duncan, says he is anticipating overall weaker home sales in 2014 than in 2013. But, he expects home sales in 2015 will post their best performance since 2007 The forecast on the state of the nation's housing market and on the overall economy were includ- ed in the Fannie Mae Economic & Strategic Research Group's October 2014 Economic Outlook, published on Thursday. "We lowered our expectation for housing starts just slightly to one million units for 2014, but our view of mortgage originations has not changed," Duncan said. "Our estimate for 2013 was in line with the recent release of 2013 data under the Home Mortgage Disclosure Act, and our projec- tion of total production in 2014 is little changed at approximately $1.1 trillion. For 2015, we are cau- tiously optimistic that ongoing labor market improvements, low mortgage rates, rising inventories, and some easing of lending stan- dards will boost home sales by roughly 5 percent. However, we still believe housing will continue along its upward grind rather than have the breakout year some are expecting." Economic growth has been slow on a global scale this year, but that has not dimmed the outlook for the U.S. economy, according to the findings of Fannie Mae's ESR Group. Real economic growth in the United States seems poised to exceed 3 percent for the second half of 2014, which is expected to provide a solid basis for continued growth into 2015. Slow economic growth on the global stage may prevent the Federal Reserve Board from making any interest rate poli- cy changes until Q 3 2014, but it has not prevented a positive outlook for the U.S. economy. "Given the expected strength- ening economic activity in the United States in the second half of the year, we continue to expect to finish just above 2-percent growth for all of 2014," Duncan said. "The risks are tilted to the downside due to current geopolitical events in Russia, Ukraine, Hong Kong, and the Middle East, as well as the economic slowdown in the eurozone, China, and Japan. However, recent data suggest these factors have not significantly swayed American consumers. Real consumer spending is poised to pick up in the second half of 2014 from the first half, due in large part to improving labor mar- ket conditions, continued declines in gasoline prices, and a subdued pace of inflation." Federal Judge knocks down 'disparate impact' rule having already cost lenders millions, the controversial discrimination claim is now slated to go before the U.S. Supreme Court. a federal judge ruled that the Fair Housing Act does not allow for so-called "disparate im- pact" claims, which are allegations that can be made based on neutral practices that may unintentionally have a discriminatory effect. U.S. District Judge Richard Leon ruled in early November that only claims of direct, in- tentional discrimination can be made under the Fair Housing Act, which was passed in 1968. While the Fair Housing Act does not specifically state it allows disparate impact lawsuits, courts have allowed them for years. Leon said the belief of those in the Obama administration who interpret the Fair Housing Act to allow disparate impact claims "appears to be nothing more than wishful thinking on steroids." The disparate impact rule in housing was issued by HUD in February 2013 and has since resulted in several multimillion dollar fair housing settlements against Bank of America, Wells Fargo, and other lenders. One example of a disparate impact claim occurred in 2012 in Delaware, when the National Fair Housing Alliance sued Allstate over the company's refusal to insure flat-roofed houses. The suit alleged that this had a discrimina- tory effect on low-income minori- ties that were most likely to live in those houses. Leon's ruling is a victory for opponents of the disparate im- pact rule such as the American Insurance Association, which cur- rently has a lawsuit pending in the U.S. District Court against HUD over a disparate impact claim. Opponents of disparate impact have one more hurdle to clear, however. The issue of whether or not disparate impact lawsuits are allowed under the Fair Housing Act is likely to be heard in the U.S. Supreme Court sometime in the next few months. In October, the Supreme Court agreed to rule on a similar case in Texas involv- ing allegations of the dispropor- tionate awarding of tax credits to developers who own property in low-income, minority-dominated neighborhoods. The U.S. Supreme Court has never issued a ruling on disparate impact claims. [The belief of those in the obama administration who interpret the Fair housing Act to allow disparate impact claims] "appears to be nothing more than wishful thinking on steroids." —Richard Leon, U.S. District Judge