May 2016 - Rise and Fall

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 9 MONTH IN REVIEW It seems the entire industry broke big news this month, with announcements from the FHA, CFPB, Fannie Mae, Freddie Mac, and more. Check out the headlines you might have missed along the way. 1 The Federal Housing Administration (FHA) has clarified what banks are liable for in terms of mortgage errors. According to Ed Golding, head of the FHA, minor mistakes—ones that do not impact the loan decision—are not a focus of the FHA's compliance efforts. 2 The Government Accountability Office (GAO) has called for increased oversight on nonbank mortgage services, particularly from the Federal Housing Finance Agency and the Consumer Financial Protection Bureau. A recent report from GAO showed nonbank mortgages have quadrupled in the last four years. 3 The Federal Housing Finance Agency will soon require both Fannie Mae and Freddie Mac to offer principal reductions to seriously delinquent borrowers. Dubbed the Principal Reduction Modification program, eligible borrowers must be presented with their modification options by October 15. 4 The Consumer Financial Protection Bureau has expanded qualifications for small and rural mortgage lending, allowing more originators to take advantage of special lending provisions designed for rural areas. The change builds on the Helping Expand Lending Practices in Rural Communities act, which was recently passed by Congress. 5 Fannie Mae has made its largest Credit Insurance Risk Transfer to date, shifting approximately $19.5 billion in unpaid principal balances. The balances stem from 30-year fixed-rate loans with LTV ratios between 60 and 80 percent. 6 The FHFA House Price Index revealed that Denver; San Francisco; Austin, Texas; Nashville, Tennessee; and Oklahoma City have seen the most bounce-back on home prices since the Great Recession. Cities with the furthest to go include Cape Coral and Fort Lauderdale, Florida; Tucson, Arizona; Orlando, Florida; and Riverside, California. 7 The Federal Reserve Board released its Financial Accounts of the United States report for the fourth quarter of 2015, and analysis shows home equity is on the rise. Both holdings of real estate and outstanding mortgage debt increased, though holdings outpaced debt significantly. 8 Freddie Mac's recent survey shows that despite realities, 70 percent of renters still believe renting is more affordable than owning a home. Additionally, 55 percent plan to continue renting for at least the next three years. 9 The Hispanic Wealth Project issued its State of Hispanic Homeownership Report, which showed that homeownership rates have spiked in the Hispanic demographic over the last five years. The report also predicts Hispanics will be the primary driver of new homeownership for the next decade. 10 The American Enterprise Institute released its First-time Buyer Mortgage Share Index, which shows that first-time buyer activity has begun to pick up steam for the first time since the implementation of TRID in October. Activity is up for both govern- ment-backed and private mortgages. MCS Valuations is committed to providing the best possible service and most reliable value to our clients. Backed by industry-leading data and experts with decades of experience, MCS Valuations is your trusted resource for all of your valuation needs. 8 0 0 . 7 9 1 . 7 1 4 5 | M C S V A L U A T I O N S . C O M | I N F O @ M C S V A L U A T I O N S . C O M

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