The Latest Mortgage Industry News
Topics: Flood Bill Becomes Law, Key Tax Benefits May Be Renewed,Senate Passes Flood Bill, Zaio Corp to Purchase Axis AMC, Hardest Hit Fund, Counselor Finder, Underwater Mortgages, REO Incentives, CHLA Wants Reduced Insurance Premiums, Late Mortgage Payments, National Appraisal Congress, Jumbo Loans, Flood Insurance Vote Delay, Wells Credit Requirements
March 17, 2014
Flood Insurance Bill Signed Into Law
On Friday, March 21, 2014 President Obama signed legislation aiming to delay the rise of flood insurance premiums into law. Worry still persists that coastal real estate markets will be damaged when rates eventually go up. Congress drafted the legislation after hearing from many homeowners whose flood insurance rates were set to skyrocket due to a 2012 flood insurance reform and the redrawing of FEMA flood maps.
Key Tax Benefits May Be Renewed by Congress
Congress allowed some tax write-offs, including those for mortgage debt forgiveness and energy efficiency upgrades, expire. There are now signs that Congress is considering renewing these popular tax benefits. The so-called “extenders” package is said to be high on Senate Finance Committee chair Wyden’s priority list.
March 10, 2014
CFPB Issues Source Code for Finding HUD-Approved Counselors
The CFPB recently published open source code for mortgage lender use in finding the 10 nearest HUD-approved housing counselors for loan applicants. The code is open source so lenders can build it into their own tools. They previously released an online tool to find counselors in November 2013. Download the source code or view the online tool.
TARP “Hardest Hit” Funds Used to Demolish Blighted Homes
Cities like Detroit are taking advantage of the Troubled Asset Relief Program’s (TARP) Hardest Hit funds to demolish derelict homes that depress surrounding property values. The Hardest Hit fund was originally used to help prevent foreclosures, but as the rate of foreclosure slows unspent program money is being used to deal with the problem of dangerous abandoned properties.
March 3, 2014
Underwater Rates Falls Below 20%
The rate of homeowners underwater in their mortgages fell significantly in 2013, as shown in Zillow’s Negative Equity Report. Negative equity declined to 19.4% nationally equaling 9.8 million homeowners. There are, however, still many homeowners who have 20% or less equity in their homes, about 38%. The falling of the negative equity fall is expected to slow over the course of 2014 and a few markets could even see the rate rise.
Fannie Mae & Freddie Mac Getting Creative to Sell REO Properties
Fannie Mae and Freddie Mac, dealing with a large inventory of foreclosed homes, have created some limited-time incentives to increase sales of the REO properties to owner-occupants. Fannie will pay cash toward closing costs equal to 3.5% of a property’s purchase price. Freddie isn’t offering cash, but a $500 allowance toward a home warranty as well as special financing options in some areas. Fannie’s deal is open from mid-February through March for offer submittal with closing taking place by May 31, 2014. Freddie’s program is open from February 18 to April 15, with a closing deadline of May 31, 2014.
February 24, 2014
Community Home Lender Association (CHLA) asks for Reduced FHA Insurance Premium
The industry trade group proposed that the FHA lower the annual premium from its current highest-ever rate of 1.35% to 0.75% and 0.5% for borrowers who complete a HUD-approved counseling session. The CHLA is concerned that high fees will hold down volume as interest rates continue to rise.
Mortgage Late Payment Rate Falls in 4Q
The rate of US homeowners who are late on their mortgage payments has reached its lowest level in over five years. TransUnion said the 4Q rate was 3.85%, compared with 5.08 percent the year before. It was also down from the 3Q rate of 4.09%. The good news stems from rising home values, an improving job market and home loan restructuring programs.
February 17, 2014
National Appraisal Congress Launched
The Five Star Institute recently announced that it has created a National Appraisal Congress (NAC) to address the need for appraisal industry thought leadership and promotion of best practices. The NAC will function as a collection of subject matter experts that aim to increase collaboration within the appraisal industry.
Jumbo Loans Becoming More Popular
2014 is shaping up to be a year of increased jumbo loan action. Interest rates on jumbo loans, those over $625,500 in expensive parts of the country and above $417,000 in lower-priced markets, are quickly falling to the same or lower than those on conventional mortgages. Jumbos are not governed by the new QM rules, giving lenders increased flexibility in offerings to these borrowers.
February 10, 2014
House Blocks Vote on Delay in Flood Insurance Hikes
The bill aims to delay most of the largest increases in federal flood insurance program premiums for four years while affordability studies and the accuracy of new flood maps are assessed. House Republicans blocked a move by Senate Democrats to bring the measure to a vote. FEMA’s first rewriting of flood maps in nearly 30 years has placed many homeowners into flood zones for the first time, necessitating the purchase of flood insurance. Constituents are eager to see the delay of rate hikes as they face the possibility of premiums as much as 30 times higher than their current payments. Concerns that properties will become unsellable also loom large. The House is working on its own bill to delay the rate hikes.
Wells Fargo Eases Credit Score Requirements for FHA Loans
Wells Fargo, a huge force in mortgage lending, is slowly beginning to ease credit score requirements for mortgage borrowers as QM guidelines implemented by the bank over a month before regulations came into effect reduce their repurchase risk. The minimum FICO credit score for FHA loans is now 600, down from 640 announced Vice President Franklin Codel.
National Mortgage News (subscription)