December 2015 - Fortune Tellers

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 5 YEAR IN REVIEW Increases in home prices and the stock market pushed household wealth to nearly $85 trillion for the first quarter of 2015, according to the Federal Reserve's Statistical Release titled "Financial Accounts of the United States" released in June. A proposal to delay the effective date of the TILA-RESPA Integrated Disclosure (TRID) rule was announced by the CFPB. The proposal requested that the TRID rule be postponed from August 1 until October 3, 2015 due to an administrative error. JULY HUD announced the Affirmatively Furthering Fair Housing Final Rule. The aim of the final rule is to provide participants in HUD programs with clear guidelines and data they need to achieve the goals outlined in the Fair Housing Act of 1968, which directs HUD and its program participants to promote fair housing and equal opportunity so that everyone can have access to affordable, quality housing regardless of race, color, national origin, religion, sex, disability or familial status. Investment banking firm, Goldman Sachs, reported its highest first half net revenues in five years at $9.07 billion, according to the firm's Q2 2015 earning statement. Citigroup also experienced significant year-over- year growth in its net income with revenue reaching $4.8 billion for the bank, compared to $181 million for the same quarter last year. July 28 marked exactly one year since former San Antonio mayor Julián Castro was sworn in as HUD secretary, succeeding Shaun Donovan. During his first year as the nation's top housing official, Castro made several policy changes with the intent of increasing opportunity for more Americans to obtain affordable, sustainable housing. Several of those changes were outlined in an announcement from HUD titled "Year of Progress: Delivering on the Promise of Opportunity." AUGUST Chase announced it was downsizing its jumbo loan requirement from requiring homebuyers to have a FICO of 740 and put 20 percent down to only needing a FICO of 680 and 15 percent down. According to research, mortgage-closing costs dropped 7 percent year-over-year and now averages $1,847 on a $200,000 loan. The research also determined that origination fees lowered, while third-party costs increased. The Federal Housing Administration (FHA) announced that a new method will be used to evaluate the lending practices of FHA-approved lenders. The new method, FHA's Supplemental Performance Metric, will work jointly with the agency's existing "compare ratio" and offer different insight into a lender's specific performance while encouraging lenders to serve eligible borrowers that are not necessarily credit worthy. SEPTEMBER The number of federally insured credit unions dropped in the second quarter, but the National Credit Union Administration (NCUA) reported that total loan growth was positive. According to the NCUA, total loans at federally insured credit unions reached $745.2 billion in the second quarter of 2015, an increase of 3.2 percent from the previous quarter and 10.6 percent from last year. The U.S. Department of Justice issued a memo on containing new guidelines stating that it will pursue the prosecution of individual employees, and not just their companies, for their role in precipitating the financial crisis in 2008. Goldman Sachs received a victory in a class action lawsuit accusing the investment banking firm of knowingly selling toxic mortgage-backed securities to hedge fund Dodona I and other investors in 2007 before the financial crisis, according to media reports. U.S. District Judge Victor Marrero in the U.S. District Court for the Southern District of New York ruled that there was no evidence that Goldman knew the securities would fail or that Goldman failed to disclose any known risk to the securities. OCTOBER The combined second quarter 2015 earnings of Fannie Mae and Freddie Mac increased $2.4 billion from the first quarter to a total of $8.8 billion, according to the Quarterly Performance Report of the Housing GSEs from the Federal Housing Finance Agency. The TILA-RESPA Integrated Disclosure rule went into effect, after being postponed from its original effective date of August 1. Ocwen reported a net loss of $66.8 million for the third quarter in 2015 compared to a net loss of $75.3 million for the same quarter a year earlier. The servicer also reported a 21 percent year-over-year decline in generated revenue, down to $405 million, in Q3 2015, and a dropoff in cash flow from operating activities from $349 million in the third quarter of 2014 to $239 million in Q3 2015. NOVEMBER Banks lowered mortgage-lending standards in the third quarter of 2015, according to the Federal Reserve's Senior Loan Officer Opinion Survey on Bank Lending Practices released in November. According to the survey, 50 (out of 69 domestic banks) noted that their credit standards on GSE-eligible residential mortgage loans remained basically unchanged. On the other hand, seven banks reported that their standards eased somewhat, while one bank said its standards eased considerably. The U.S. House of Representatives passed S. 2036 by voice in November, placing a cap on the salaries of Fannie Mae and Freddie Mac CEOs right at the original amount of $600,000 per year. The bill passed unanimously in the Senate in September. The FHA's Mutual Mortgage Insurance (MMI) Fund gained $19 billion in economic value during Fiscal Year 2015, pushing its capital ratio past the 2 percent threshold required by Congress, according to HUD's annual report to Congress in November. DECEMBER The elusive interest rate hike that the mortgage industry has anticipated for quite some time may finally happen in December 2015, thanks in part to a drop in U.S. jobless claims seen in November.

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