Fannie Asks Mortgage Execs How to Improve Condo Lending
Wed, 21 Oct 2020 15:04:15 GMT
The most recent Fannie Mae's Lender Sentiment Survey focuses on the complexities of lending to the condominium market. The company stresses that this type of housing can play an important role in narrowing the supply gap for affordable housing options as well as providing an attractive alternative for homeowners seeking to downsize. However, since the great recession, there has been a significant shortage of both new and existing units for sale. Condos represent 8 to10 percent of the mortgage market but tend to exist primarily and thus play a larger role in many urban areas. They also present unique risks given the financial responsibility owners share for the operation and maintenance of the common areas and shared amenities. Lenders may also face increased time and costs due to the complexity of underwriting condo project eligibility....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Mortgage Apps Steady; Forbearances Drop Under 6%
Wed, 21 Oct 2020 14:53:41 GMT
The Mortgage Bankers Association (MBA) says there was little change in mortgage application activity during the week ended October 16. MBA's Market Composite Index, a measure of mortgage loan application volume, dipped 0.6 percent from the prior week on a seasonally adjusted basis and was down 1.0 percent unadjusted. Refinancing was also flat. The Refinance Index increased 0.2 percent from the previous week although activity remained well ahead of a year earlier, up 74 percent. The refinance share of mortgage activity increased to 66.1 percent of total applications from 65.6 percent the previous week.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Calabria to Seek Input on Future Fannie/Freddie Policies
Tue, 20 Oct 2020 16:04:01 GMT
Mark Calabria, director of the Federal Housing Finance Agency (FHFA) used the annual convention and expo of the Mortgage Bankers Association to announce changes in the agency's requirements for certain operations of the government sponsored enterprises (GSEs) Fannie  Mae and Freddie Mac. FHFA is seeking comments on a proposed rule requiring the GSEs to provide advance notice to FHFA of new activities and to obtain prior approval before they launch any new products. The rule establishes revised criteria for determining if such notice is required and determining if an activity is a new product that merits public notice and comment.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Looks Like Residential Construction is Back on Track
Tue, 20 Oct 2020 15:10:43 GMT
Residential construction resumed its upward trend after a brief pause in August. The U.S. Census Bureau and Department of Housing and Urban Development reported that all three measures of construction, permitting, housing starts, and unit completions, increased in September. Permits for privately owned residential construction were issued at a seasonally adjusted annual rate of 1,553,000, up by 5.2 percent from the 1,476,000-unit annual rate (revised from 1,416,000) in August. The increase from the previous September's rate of 1,437,000 units was 8.1 percent. Analysts had expected permits to recover from their slight (0.9 percent) downturn in August but those polled by Econoday had a consensus of only 1,451,000 units. Even the high end of their 1,375,000 to 1,500,000 forecast range was well below the actual number. Single-family permits rose 7.8 percent to an annual rate of 1,119,000 units and was 24.3 percent higher than a year earlier. The August estimate was revised slightly higher, from 1,036,000 to 1,038,000. Permits for construction in buildings with five or more units rose 1.0 percent to 390,000, however this is 22.2 percent below the pace a year earlier.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Home Purchase Demand Still Strong, but Slowing Down
Mon, 19 Oct 2020 17:31:15 GMT
While applications for new home purchase mortgages jumped in September, the Mortgage Bankers Association (MBA) expects only modest changes in the September sales data. MBA's Builder Application Survey (BAS) data shows mortgage applications for new home purchases increased 38.2 percent in September compared to a year earlier but were down 5 percent from August 2020. The latter change does not include any adjustment for typical seasonal patterns. MBA estimates new single-family homes were selling at a seasonally adjusted annual rate of 869,000 units in September 2020. This estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The estimate is a decrease of 0.2 percent from the August sales rate of 871,000 units. On an unadjusted basis, MBA estimates that there were 67,000 new home sales during the month, down 1.5 percent from 68,000 sales in August.     ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Builder Confidence Sets a New Record Once Again
Mon, 19 Oct 2020 14:33:41 GMT
For only the second time in its 35-year history, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) topped 80 this month. The first time was in September. The index, a measure of builder confidence in the market for newly built single-family homes increased two points to 85, breaking the previous high of 83 set last month.  "Traffic remains high and record-low interest rates are keeping demand strong as the concept of 'home' has taken on renewed importance for work, study and other purposes in the Covid era," said NAHB Chairman Chuck Fowke. "However, it is becoming increasingly challenging to build affordable homes as shortages of lots, labor, lumber and other key building materials are lengthening construction times."  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Second Homes, Widespread but Few in Number
Mon, 19 Oct 2020 14:31:41 GMT
There were approximately 7.5 million second homes in the U.S. in 2018, the most recent year for which data is available. This is 5.5 percent of the nation's total housing stock. Na Zhao, writing in the National Association of Home Builders (NAHB's) Eye on Housing blog, says the largest share of these homes are in Florida with a total of 1.1 million homes, 14.5 percent of the country's total. The fewest homes, only 20,000, were in South Dakota NAHB defines a second home as one that qualify for the home mortgage interest deduction using the Census Bureau's 2018 American Community Survey (ACS). This does not include houses held primarily for investment or business purposes nor does it include homes under construction.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Forbearances Up Slightly After Last Week's Plunge
Fri, 16 Oct 2020 14:30:28 GMT
Last week Black Knight reported that the beginning of October saw a decline in the number of active forbearance plans of 649,000 or 18 percent as many plans reached the end of their initial period. It was the largest single week decline since the crisis began. This week the number of loans in forbearance edged up a bit. The company reported an increase of 19,000 plans, bringing the total to just under 3 million. Despite the increase, the share of mortgages in forbearance held steady at 5.6 percent. Forbearances peaked at 4.76 million plans in late May. All investor classes saw slight upticks during the week. GSE forbearances rose by 3,000 to 1.11 million or 4.0 percent of the total portfolios and both FHA/VA and Portfolio and private label securities(PLS) forbearances increased by 8,000. This brought total FHA/VA loans in plans to 1.15 million, 9.5 percent of the total and portfolio/PLS forbearances to 731,000 or 5.6 percent. Seventy eight percent of forbearance plans have had their original terms extended....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Pandemic Throwing Millions into Rent, Mortgage, and Student Loan Peril
Fri, 16 Oct 2020 13:40:54 GMT
The pandemic is endangering the credit histories of at least 30 million Americans and possibly threatening the shelter status of many of them. The Mortgage Bankers Associations' (MBA's) Research Institute for Housing America (RIHA) said on Friday that over 6 million households missed making rent or mortgage payments in September and 26 million individuals did not make payments on their student loans. The number of missed payments for rent and mortgage payments did decline slightly from the second quarter but 2.82 million households failed to pay their rent on time and in full in September while 3.37 million homeowners missed, delayed, or made a reduced mortgage payment. These numbers represent 8.5 percent of the renter population and 7.1 percent of homeowners. The share of student debt borrowers who missed a monthly payment has remained at 40 percent since May. "Rent and mortgage payment collections improved over the summer as more people went back to work, but high unemployment continues to place hardships on millions of U.S. households. There is growing concern that absent a slowdown in the number of coronavirus cases and another round of much needed federal aid, millions of households in the coming months face the prospect of falling further behind," said Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. "With the current eviction moratorium expiring in January, the situation could be even more challenging for renters. Many renter households across the country could find themselves with no place to live and no means to repay missed payments."...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Troubling Unemployment Numbers Eclipsed by a Strong Housing Market
Thu, 15 Oct 2020 16:09:02 GMT
Although the housing market continues to show strength, Freddie Mac economists say there are increasingly troubling signs in the larger economy. The third quarter forecast from the company's Economic and Housing Research Group notes an apparent stall in economic activity in early July. Even as many businesses reopened, unemployment claims continued at elevated levels, (and posted its largest one-week increase in three months last week). In mid-September claims totaled about 26 million.  Although the unemployment rate declined to 7.9 percent in September, Freddie Mac says a shift from temporary to permanent unemployment and a deterioration in labor force participation signals an underlaying labor market weakness. But then there is the housing market. One of the main drivers of the quick recovery from the March/April downturn is the historically low interest rates which hit an all-time low of 2.86 percent in mid-September (and was at 2.81 percent today.) The economists forecast they will remain flat at around 3.0 percent until the end of 2021. Total mortgage origination volumes increased as many homeowners took advantage of historically low mortgage rates. The main driver was a surge in refinance originations.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Mortgage Rates Hit Record Lows but Applications Fell Flat
Wed, 14 Oct 2020 13:34:00 GMT
The volume of mortgage applications dipped slightly last week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, was down 0.7 percent on a seasonally adjusted basis during the week ended October 9 and was 1 percent lower on an unadjusted basis. The Refinance Index slipped 0.3 percent from the previous week and was 44 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 65.6 percent of total applications from 65.4 percent the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier and 1 percent unadjusted. The Index was 24 percent higher than the same week one year ago, continuing a string of year-over-year gains that started during the week ended May 22.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Late-Stage Delinquencies Now Twice Great Recession Peak
Tue, 13 Oct 2020 17:08:27 GMT
Mortgage delinquencies continued to rise in July according to CoreLogic's new loan performance report. The company found that 6.6 percent of all mortgages were at least 30 days past due (including those in foreclosure.) This represents a 2.8-percentage point increase in the overall delinquency rate compared to July 2019, when it was 3.8 percent. It was, however, a lower rate than the 7.1 percent reported for June, at that point a 3.1-point annual increase. The improvement was in early stage delinquencies, those loans 30 to 59 days past due. They declined from 1.8 percent in July of last year after spiking in April of this year to 4.2 percent. The rate of adverse delinquencies, loans 60 to 89 days past due, rose to 1 percent from 0.6 percent a year earlier, but were down from 2.8 percent in May. These improvements were offset by serious delinquencies, loans at least 90 days past due, including loans in foreclosure. That category surged from 1.3 percent in July 2019 to 4.1 percent. It is the highest serious delinquency rate since April 2014.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

California Law Seeks to Restrain Wall Street's Potential Landlords
Tue, 13 Oct 2020 17:04:01 GMT
California is taking steps to avoid a repeat of the conversion of thousands of single-family homes from ownership to rental properties as occurred during the Great Recession. In late September, the state's governor Gavin Newson signed a bill that will give tenants, affordable housing groups and local governments the first crack at buying foreclosed homes. As homes were foreclosed by the millions following the housing crisis, Wall Street stepped in and investors, according to Zillow, gobbled up over 5 million homes, turning them into rental properties. They were bought as individual homes, via bulk sales of lender real estate owned (REO), or as distressed loans upon which the investors later foreclosed. It was expected that these houses would return to owner-occupied status once home prices recovered and the investors, largely big hedge funds, could realize a profit. Instead they have found ways to manage the geographically dispersed properties and continue to hold hundreds of thousands of them....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Pandemic and Recession are Changing the Way People Rent and Buy
Tue, 13 Oct 2020 12:54:27 GMT
Robert Dietz says you can count him as among those who believe the geography of housing demand is being changed by the pandemic and the resulting recession. He also thinks some of the changes will endure beyond the dual crises. Dietz, chief economist of the National Association of Homebuilders (NAHB) says the changes aren't solely the result of what has happened this year, but a continuing evolution of the market due to already existing factors. "Declining housing affordability in high-density markets were due to limited resale inventory and insufficient levels of home building. The impact of COVID-19 on prospective home buyer concerns and preferences have accelerated these changes." He says, for example, that the virus itself is creating a competitive disadvantage for residences that require an elevator or utilize a great deal of common space....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Forbearance and Late Payments are Making Mortgages Harder to Get
Tue, 13 Oct 2020 12:48:46 GMT
Mortgage credit tightened again in September, reaching a second successive six-year low. The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) dropped another 1.9 percent to 118.6. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The new number is down 63.3 points from the level it reached in January before interest rates started an unprecedented decline and servicers were instructed to grant forbearances to existing borrowers. Three of the four components of the MCAI declined compared to August. The Conventional MCAI decreased 6.1 percent and its two components, the Jumbo MCAI and the Conforming index fell by 2.1 percent and 9.5 percent, respectively. The Government MCAI increased by 1.4 percent....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.