MReport March 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 7 MONTH IN REVIEW 1 The Bureau of Labor Statistics re- leased its most recent Employment Situation Summary, which shows U.S. jobs increased by a total of 227,000 in January alone. The construction sector saw particular growth, gaining 46,000 jobs for the month and 229,000 over the last year. Experts say this should improve housing supply, which will key in combating the rising mortgage rates expected in the coming months. 2 According to the New Residential Construction Report released by HUD and the U.S. Census Bureau, 2017 is the best year for housing starts since 2007. This is thanks to an 11.3 percent increase in privately- owned housing starts in December. 3 Steven Mnuchin was confirmed as Treasury Secretary. He suc- ceeds Jacob Lew, who served as Treasury Secretary for almost four years before stepping down on January 20. Adam Szubin served as interim Treasury Secretary while awaiting Mnuchin's confirmation. 4 President Donald Trump signed an executive order demanding an official review of the Dodd-Frank Wall Street Reform and Consumer Protection Act is his first real step to- ward fulfilling a promise he made in his campaign to overhaul the banking rule. 5 The Massachusetts Attorney General Maura Healey an- nounced she is joining a coalition of 16 other attorneys to intervene in a federal appeals court case concerning the constitutionality of the Consumer Finance Protection Bureau (CFPB) In PHH Corporation v. CFPB—the case in question—the court ruled that re- strictions on the president's ability to remove the bureau's director without cause were unconstitutional. 6 According to Redfin's Real-time Housing Market Tracker, housing demand in December was at an all-time high, increasing 15.1 percent over the previous month. In fact, one- third of all homes sold were under contract within just two weeks. Redfin attributed the jump to limited supply. 7 The Department of Justice has settled its lawsuit with Credit Suisse, which involved the company's sale of residential mortgage-backed securities (RMBS). The case resulted in a $5.28 billion settlement, $2.8 billion of which will go toward relieving underwater homeowners, distressed borrowers, and affected communities. 8 Fannie Mae's gross mortgage portfolio fell for the fourth straight month, with a contraction rate of 51.9 percent in December. The GSE's unpaid balance amounted to $272.4 billion at the end of the month—a $17 billion decrease from November. August 2016 was the last month the GSE's portfolio saw expansion when it grew 9.1 percent. 9 Freddie Mac's portfolio, on the other hand, hit an eight-year high in December, growing at an annualized rate of 10 percent. This marked a 6.5 percent increase from November and the highest rate of any month in 2016. It was also the highest rate the GSE's portfolio has seen since March 2009. 10 CitiMortgage has made moves to speed up its exit from the mortgage servicing industry, announcing a transfer of $97 billion in unpaid principal balance to New Residential Investment Corp. The organization plans to increase focus on retail banking customers while phasing out its mortgage lending efforts. Change is Afoot Jobs are growing, housing demand is at an all-time high, and construction is poised to make a comeback, all while the new administration—and its newly appointed leaders—gain a foothold.

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