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MBA’s Stevens: No Sense Pining for the way it used to be

David Stevens, President of the Mortgage Bankers Association (MBA), told an audience attending the association's s annual convention in Las Vegas that the rules for Qualified Residential Mortgages will be, as rumored, released on Wednesday. This rule, which was sent back to the drawing board two years ago after housing stakeholders complained it would shut down mortgage lending will, in this iteration, he said be aligned with the Qualified Mortgage Rule and will not have steep downpayment or strict debt-to-income requirements.  He credited the industry and consumer groups for advocating on the issue.  

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Watt Focuses on Reps/Warrants; 97% GSE Loan Mentioned Only in Passing

Federal Housing Finance Agency (FHFA) Director Melvin L. Watt focused his remarks to attendees at the Mortgage Bankers Association annual conference on the issue of representation and warranties.  He acknowledged that fears of being forced to repurchase large numbers of loans after they have been sold to one of the two government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac has created unease among lenders almost from the start of the mortgage crisis.

Watt said that the Representation and Warranty Framework in use by the GSE's provides them the necessary assurances they need to purchase loans in an efficient and responsible manner without checking each loan individually or attending every closing. They also provide the Enterprises remedies to address situations where a lender's obligations to meet the Enterprises' purchase guidelines have not been fully met.

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Mortgage Rates Holding Under 4 Percent

Mortgage rates returned to levels best characterized as "under 4 percent" today after drifting higher on Friday.  Last Wednesday was the first foray into the "high 3's" in more than 16 months.  Not every scenario will be seeing those high 3's today, but for top tier borrowers, 3.875% is slightly more prevalent today when it comes to conforming 30yr fixed rate quotes.  4.0% is a close runner-up, but 3.75% may be a viable option for borrowers interested in paying higher upfront costs.

Today's modest recovery suggests that we're in the midst of a few days of limbo relative to the bigger picture.  Historically, after a big swing down in rate followed by a big snap back (like that seen last week) there has been a time frame of a few days or even a few weeks of comparatively smaller changes before rates embark on their next noticeable move. 

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Mortgage Credit: Loose, Tight, or Just Right?

Earlier this year the Mortgage Bankers Association (MBA) began releasing its Mortgage Credit Availability Index, a measure of how "loose" or "tight" mortgage credit is when compared to the previous month or year.  In an article on CoreLogic's Insights blog, titled "Goldilocks and the Three Credit Bears," senior economist Mark Fleming describes his company's similar index.

The Housing Credit Index (HCI) measures the range and variation of mortgage credit over time and over various underwriting criteria including credit scores, debt-to-income and loan-to-value ratios and loan attributes such as whether the loan is a fixed or adjustable rate, the amount of documentation, and the loan origination channel.  CoreLogic then uses what Fleming calls "mathematical techniques popularized in the economic inflation forecasting literature to handle multiple correlated attributes."

 

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Mortgage Rates Mixed to End Wild Week

Mortgage rates moved slightly higher today, continuing a pull back from the best levels in 16 months on Wednesday.  That said, apart from the first 3 business days of this week, today's rates would also qualify as th16-month lows.  The weakness pushed the most the average top tier quote closer to 4.0% today, but 3.875% and even 3.75% remain viable options for borrowers who aren't opposed to paying a bit more upfront in exchange for a lower rate. 

Keep in mind, there is nothing deceptive, sinister, or even ill-advised about paying so-called "points" in certain circumstances.

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Quarterly Foreclosure Rate Rises for 1st Time in 3 Years

One has to hope that foreclosure data reported on Thursday by RealtyTrac is a sign that states are wrapping up the foreclosure crisis that has been ongoing since 2008, not that it signals further trouble in the housing sector.  The company's U.S. Foreclosure Market Report for both September and the third quarter of 2014 indicate that both defaults and scheduled auctions increased in the third quarter driving overall foreclosure activity to its first quarterly increase in three years. 

The increase was small; overall foreclosure filings including default notices, scheduled auctions, and completed foreclosures or bank repossessions increased 0.42 percent form the second quarter to a total of 317,171 and were down 16 percent from the same quarter in 2013.  However the increases were at the front end of the foreclosure process.  Default notices increased 2 percent from the second quarter and scheduled foreclosure auctions were up 7 percent.  These were partially offset by a 12 percent drop in completed foreclosures.

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CFPB Servicing Transfer Clarifications; Good Start but more needed

Over the last year or so mortgage servicers have transferred a number of large mortgage portfolios to other servicers.  Beyond the selling of mortgage servicing rights (MSR), many of the transfers have been from large traditional servicers to "specialty servicers" most of whom are supposedly better equipped for handling delinquent mortgages.  These increased transfers were prompted in part by servicing rules promulgated by the Consumer Financial Protection Agency (CFPB) which went into effect in January 2014.

The high volume of these transfers has led to concern and increased scrutiny on the part of regulators regarding potential risks to consumers.  This regulatory attention and lack of clarity attending it was problematic for servicers, many of which are non-depository institutions which have used bulk MSR transfers and corporat

 

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American Housing Survey – Everything you need to know

The Department of Housing and Urban Development has released the first wave of data from the 2013 American Housing Survey (AHS).  It is a massive treasure trove of virtually everything virtually anyone might want to know about the nation's housing.

The Survey is conducted biennially and, as in past years, provides current national-level information on a wide range of housing subjects.  A very wide range.

Survey participants were asked questions about their homes and the ways they live in it, ranging from the units size along various parameters, to the type of plumbing, heating, and other systems employed; amenities, the occupant's opinion of the home's condition, from what type of housing the occupant migrated, if the size of the household had grown or shrunk, and characteristics that indicate the state of emergency preparedness of the occupants.

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Construction Activity Boosted by Multifamily Sector

Increases in construction permits, starts, and completions for multifamily housing stand out from an otherwise lackluster batch of construction data issued on Friday by the U.S. Census Bureau and the Department of Housing and Urban Development.  Overall tallies of permits were relatively flat compared to August data.  Housing starts and completions were higher than in the previous month but both were driven by the multi-family sector. 

Permits for construction of privately owned residences were issued in September at a seasonally adjusted annual rate of 1,018,000, 1.5 percent above the revised (from 998,000) August rate of 1,003,000 units.  The August rate was 2.5 percent higher than a year earlier.

 

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Mortgage Rates Slightly Higher; Still Near 16-Month Lows

Mortgage rates were forced to give back some of the tremendous improvements seen yesterday as financial markets corrected after the wild swing.  Apart from the past two days, today's rates are the best in 16 months, and in many cases remain very close to Tuesday's offerings.  The most prevalently-quoted conforming 30yr fixed rate for top tier scenarios remains 3.875%.  Whereas 3.75% was merely drifting out of the realm of possibility yesterday afternoon, it's completely gone today.  4.0% is a far more deserving runner-up.

 

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