MReport June 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 57 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT CFPB Outlines Diversity, Inclusion Strategies Leaders at the Bureau met with industry participants as well as members of the Offices of Minority and Women Inclusion from other federal agencies. T he Consumer Financial Protec- tion Bureau (CFPB) released a report in late April outlining the Bureau's strategies and ef- forts to promote diversity and inclusion within the mortgage industry. The report is a readout of an industry roundtable meeting held by the CFPB's Office of Minority and Women Inclusion (OWMI.) "The Consumer Bureau's mission is to protect all consumers across the diverse American marketplace, just as financial institutions seek to serve them with helpful products and services," said CFPB Director Richard Cordray. "The insights in this report from our roundtable with mortgage lenders help to show the advantages of integrating di - versity and inclusion programs in workplaces throughout the financial services industry." Participants in the meeting included mortgage industry representatives from large and small banks, as well as nonbank financial companies. In addition, staff from the OWMI at other federal agencies, including the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Federal Housing Finance Agency (FHFA), were included. Items presented in the meeting included the business case for diversity and inclusion; the importance of leadership buy-in and accountability; recruiting, hiring, inclusion, retention, advancement, and engagement; broadening the customer base with new business products; and the importance of data. Roundtable participants noted that their businesses were being affected by the changing demographics of their customer base and how a diverse and inclusive work - force would better prepare their businesses to tackle new and complex problems. "During the meeting, I was pleasantly surprised by the frank and open discussion about the complexities involved in building diverse and inclusive organizations," said CFPB OMWI Director Stuart Ishimaru. "The hard work of promoting diversity and inclusion is challenging, requiring continuous focus to engage employees, hold people accountable, and strike the right balance based on the size and resources of the organization. I was impressed by their commitment to creating diverse and inclusive workplaces and expanding ser - vices to a broader and more diverse pool of consumers." During the 2017 Five Star Diversity Symposium on May 11, Ishimaru spoke to industry leaders on the CFPB's diversity and inclusion initiatives. Note: The Five Star Institute is the parent com - pany of MReport. Refinance Volume Drops as Mortgage Rates Rise About 3 percent of refinances were completed through HARP, according to an FHFA report. R efinances fell in Febru- ary as mortgage rates rose, according to the Federal Housing Finance Agency's (FHFA) February 2017 Refinance report, released in mid- April. The average interest rate on a 30-year fixed rate mortgage in February was 4.17 percent, up from January's 4.15 percent. According to the report, borrowers completed 4,198 refinances through HARP, and since HARP's inception in 2009, the program has made 3,456,422 refinances. HARP represented 3 percent of total refinance volume, and 6 percent of loans refinanced through HARP had a loan-to-val - ue ratio greater than 125 percent. The FHFA's report found that borrowers who had a loan-to-loan value ratio greater than 105 per - cent accounted for 18 percent of HARP loan volume. Additionally, borrowers who refinanced through HARP had a lower delinquency rate than those who were eligible for the program but did not refinance through it. Over 60 percent of the 194,324 HARP-eligible loans came from just 10 states, the FHFA reported. As of September 2016, Florida was the top state for HARP refinances, with 22,856 HARP-eligible loans. Following Florida was Illinois, Michigan, Ohio, Georgia, New Jersey, Puerto Rico, Pennsylvania, New York, and California. In Nevada and Florida, HARP refinances represented 6 percent or more of all refinances. In most states, including Nevada and Florida, underwater borrowers accounted for the largest portion of HARP refinances. In these two states, un - derwater borrowers accounted for 30 percent or more of HARP volume. Streamlined refinances from Fannie Mae and Freddie Mac totaled 12,876 in February 2017. California saw the most refi - nances for both GSEs, including HARP refinances, at 16,812 for Fannie and 12,143 from Freddie.

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