Category Archives: Lending

Federal Reserve signals it won’t raise interest rates at all this year

At the conclusion of its March meeting, the Federal Reserve announced it is not raising the federal funds rate. In fact, the Fed is signaling it is done with the idea of rate hikes for the rest of 2019.

The Federal Open Market Committee’s statement indicated that the Fed is taking a cautious tone with the rates as it monitors the rate of inflation and other global economic conditions and developments.

 “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes,” The FOMC statement said.

The committee said it will maintain its target range for the federal funds rate at 2.25-2.5%. For the most part, everyone thinks this is a good move. Therefore, is an interest rate cut the next step?

This sentiment echoes the FOMC’s earlier statements from its January meeting earlier this year.

The FOMC statement explains that the Fed has looked at recent indicators pointing to slower growth in the first quarter of the year.

National Association of Federally-Insured Credit Unions Chief Economist Curt Long issued the following statement after the conclusion of the Federal Reserve’s March Federal Open Market Committee meeting:

“While the Fed’s decision to hold rates steady comes as no surprise, the abrupt and sizable adjustments to its forecast were,” said Long. “Where the FOMC’s median member forecast called for two rate hikes in December, that has been slashed to zero.”

Mike Fratantoni, the Mortgage Bankers Association’s chief economist, said it appears the Fed is done raising rates.

“As expected, the Federal Reserve left short-term rates unchanged at their March meeting,” he said. “The job market is quite strong, and even though wage growth has accelerated, inflation has not picked up and shows no signs of doing so. With that combination, Fed officials are comfortable leaving rates at their current level. If inflation were to increase, they might be forced to hike again, but it appears that we are at the end of the rate hiking cycle.

At its meeting, the Fed also announced it would slow the monthly reduction of its holdings of Treasury bonds from up to $30 billion to up to $15 billion beginning in May, confirming its intent to end its balance sheet runoff in September, if the economy and market conditions go as expected.

“The bigger news from this meeting was the clear signal that the Fed will stop allowing their balance sheet to shrink, and will begin to allow it to grow again starting this fall. Fed officials have noted that they would like to return the balance sheet to primarily Treasury assets, meaning that MBS will continue to roll off, with the proceeds being invested in Treasury securities,” Fratantoni said. “The Fed also noted the potential to sell “residual holdings” of MBS at some point, but that they would give plenty of notice before doing so. Over time, these changes could put some upward pressure on mortgage-Treasury spreads –  and ultimately – mortgage rates.”

Article source: https://www.housingwire.com/articles/48483-the-federal-reserve-signals-it-will-not-raise-rates-in-2019

HUD still pursuing Facebook for allowing housing discrimination despite ad changes

Facebook may have announced massive changes to its advertising practices surrounding housing, lending, and employment ads, but that doesn’t mean that the government is done pursuing its claims that the social media giant enabled housing discrimination with its previous ad policies.

Last year, the Department of Housing and Urban Development took action against Facebook, claiming that the site’s advertising platform allowed property owners to discriminate against prospective renters and buyers based on their race, color, religion, sex, familial status, national origin, disability, or other factors, all of which are protected classes under the Fair Housing Act.

According to HUD’s complaint, Facebook’s advertising platform allowed advertisers to violate the Fair Housing Act in several ways, including displaying housing ads either only to men or women; not showing ads to users interested in an “assistance dog,” “mobility scooter,” “accessibility” or “deaf culture;” not showing ads to users whom Facebook categorizes as interested in “child care” or “parenting.”

After HUD filed its complaint against Facebook, the site announced that it was removing more than 5,000 ad target options to “help prevent misuse.”

But before Facebook announced those changes, several fair housing and civil rights groups including the American Civil Liberties Union filed a lawsuit against Facebook, claiming that the site still allowed ads to discriminate against protected groups, including women, veterans with disabilities and single mothers.

That lawsuit led to a settlement announced Tuesday. As part of that settlement, Facebook announced that it would be making significant changes to the way it handles ads for housing, lending, and employment.

One of the new policies prohibits advertisers from targeting housing, employment, or credit ads by age, gender or zip code.

Despite those changes, HUD is not giving up its pursuit of Facebook.

A HUD spokesperson told HousingWire Wednesday that the agency’s complaint against Facebook is still outstanding, adding that the agency is in discussion with Facebook about the issues at the core of the complaint.

HUD’s complaint is a “Secretary-Initiated Complaint,” which are fair housing complaints filed directly against those whom HUD believes may be in violation of the Fair Housing Act. HUD noted at the time that the complaint was not a determination of liability.    

According to HUD, a formal fact-finding investigation was to commence after the complaint was filed. From there, Facebook was to be given an opportunity to respond to the complaint, but HUD noted that it may still file a formal discrimination charge at a later date.

And as of now, that possibility still exists.

Article source: https://www.housingwire.com/articles/48484-hud-still-pursuing-facebook-for-allowing-housing-discrimination-despite-ad-changes

ComplianceEase shakes up its leadership team

ComplianceEase recently announced the promotion of former Senior Vice President of Sales and Client Success Dan Smith, as well as the appointment of Shelia Meagher to assume his position.

Dan SmithSmith has been promoted as senior vice president of government relations. In this new role, he will be responsible for expanding the adoption of ComplianceEase software and ancillary services at government agencies and regulators.

Since joining ComplianceEase in 2005, Smith has helped the company’s flagship technology, ComplianceAnalyzer, become one of the mortgage industry’s most adopted automated compliance solution.

 “Our long-term growth strategy demands a team of proven leaders who can collaborate with clients and prospects to better understand their evolving needs,” ComplianceEase Executive Chairman John Vong said. “Dan has played a pivotal role in ComplianceEase’s growth thus far. And I’m confident that his and Sheila’s combined experience will lead to the development and implementation of solutions that will help take our clients’ businesses, and ours, to the next level.”

As SVP of Sales and Client success, Meagher is expected to lead the company’s sales, on-boarding andShelia Meagher on-going client support teams.

Meagher is an industry veteran who has more than 20 years of sales and marketing experience. Prior to joining ComplianceEase’s team, she served as vice president of national sales at Pro Teck Valuations, and held senior-level sales and marketing positions at UHS America and LoanPerformance.

Need help getting hired or looking to hire? HousingWire wants to help. Our new service, HousingJobs, lists the latest gigs in the housing industry for loan officers, underwriters, processors, loan servicers, and tech and marketing pros.

Article source: https://www.housingwire.com/articles/48465-complianceease-shakes-up-its-leadership-team

Is Manafort-style mortgage fraud more common than we think?

Last week, Paul Manafort was slapped with charges by New York for a multimillion-dollar mortgage fraud scheme.

In the indictment, President Donald Trump’s former campaign manager is accused of falsifying business records to unlawfully obtain millions of dollars in loans in a year-long fraud scheme.

Allegedly, Manafort secured more than $20 million in loans by inflating his company’s income and failing to disclose his debts, and he falsely claimed his adult daughter would be living in a property he was attempting to secure a mortgage on. Instead, it was being rented through Airbnb.

In the current climate, where home prices are cooling off and the refi market is a fraction of what it used to be, are we likely to see more cases of mortgage fraud emerging?

That’s the question Jacob Passy ponders in a recent article for MarketWatch, in which he cites sources who label Manafort’s crime as a “very plain, vanilla fraud scheme” – one that is not hard to replicate.

While Manafort’s role in Special Counsel Robert Mueller’s investigation of President Trump brought his mortgage fraud to light, most cases of such fraud are only revealed when the property moves into foreclosure, the article notes.

Considering the rising rate of mortgage fraud, there’s a good chance that more cases exist than we know about.

CoreLogic data reveals that mortgage fraud has risen 12% from 2017 to 2018, and that fraud cases most commonly include misrepresentations of income and occupancy – a page right out of Manafort’s playbook.

The fact that the refi market has dried up is exacerbating the problem, MarketWatch points out, because refis are typically safer loans than purchase loans, therefore reducing the risk of fraud.

Now, a loosening of credit standards is giving rise to an increase in mortgage fraud, and it poses a real threat not only to lenders and investors, but to the homeowners in the fraudster’s neighborhood who may suffer the repercussions when a nearby home has an inflated value or is sent into foreclosure.

From the article:

Consumers… have struggled to purchase homes in recent years thanks to skyrocketing home prices and strict credit standards. Therefore, many lender[s] began to loosen their requirements of borrowers, opening a door for more fraudulent activity. Plus, borrowers were more likely to lie to lenders to get over hurdles preventing them from becoming home owners, and real-estate industry employees who work on commission have added incentive to falsify documents or persuade borrowers into lying to turn a profit.

Article source: https://www.housingwire.com/articles/48466-is-manafort-style-mortgage-fraud-more-common-than-we-think

MBA: Spring home buying season likely to be strong as mortgage applications heat up

Mortgage applications reversed course for the week ending March 13, 2019, according to the newest data from the Mortgage Bankers Association‘s weekly Mortgage Applications Survey.

On an unadjusted basis, the Market Composite index rose 3% from the previous week.

MBA Vice President of Economic and Industry Forecasting Joel Kan explained that purchase activity picked up last week, led by a 5.5% increase in FHA loan applications, and is almost 2% higher than a year ago.

“Purchase applications have now increased year-over-year for four weeks, which signals healthy demand entering the busy spring buying season,” Kan continued. “However, the pick-up in the average loan size continues, with the average balance reaching another record high.”

Overall, Kan said with more inventory in their price range compared to first-time buyers, move-up and higher-end buyers will continue to have strong success finding a home.

The Refinance Index slightly retreated 0.2% from the previous week and the unadjusted Purchase Index moved forward 6% from a week ago and is 2% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index also increased 4% from the week before.

Here’s a more detailed breakdown of this week’s mortgage application data:

  • The refinance share of mortgage activity decreased to 38.6% of total applications, retreating from 40% the previous week.
  • The adjustable-rate mortgage share of activity fell to 7.2% of total applications.
  • The Federal Housing Administration‘s share of mortgage apps increased from last week’s 10.3% to 10.4%.
  • The Veterans Affairs‘ share of applications moderately decreased from 10.4% the previous week to 10.2% this week.
  • The Department of Agriculture‘s share of total applications held steady from last week’s 0.6%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances fell from 4.67% to 4.64%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances slightly increased from last week’s 4.41% to 4.45%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA declined from last week’s 4.66% to 4.61% this week.
  • The average contract interest rate for 15-year fixed-rate mortgages moved backwards from 4.08% to 4.02%.
  • The average contract interest rate for 5/1 ARMs slightly rose to 4.09% from 4.08%.

Article source: https://www.housingwire.com/articles/48414-mba-spring-home-buying-season-likely-to-be-strong-as-mortgage-applications-heat-up

MBA: Spring home buying season likely to be strong as mortgage applications heat up

Mortgage applications reversed course for the week ending March 13, 2019, according to the newest data from the Mortgage Bankers Association‘s weekly Mortgage Applications Survey.

On an unadjusted basis, the Market Composite index rose 3% from the previous week.

MBA Vice President of Economic and Industry Forecasting Joel Kan explained that purchase activity picked up last week, led by a 5.5% increase in FHA loan applications, and is almost 2% higher than a year ago.

“Purchase applications have now increased year-over-year for four weeks, which signals healthy demand entering the busy spring buying season,” Kan continued. “However, the pick-up in the average loan size continues, with the average balance reaching another record high.”

Overall, Kan said with more inventory in their price range compared to first-time buyers, move-up and higher-end buyers will continue to have strong success finding a home.

The Refinance Index slightly retreated 0.2% from the previous week and the unadjusted Purchase Index moved forward 6% from a week ago and is 2% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index also increased 4% from the week before.

Here’s a more detailed breakdown of this week’s mortgage application data:

  • The refinance share of mortgage activity decreased to 38.6% of total applications, retreating from 40% the previous week.
  • The adjustable-rate mortgage share of activity fell to 7.2% of total applications.
  • The Federal Housing Administration‘s share of mortgage apps increased from last week’s 10.3% to 10.4%.
  • The Veterans Affairs‘ share of applications moderately decreased from 10.4% the previous week to 10.2% this week.
  • The Department of Agriculture‘s share of total applications held steady from last week’s 0.6%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances fell from 4.67% to 4.64%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances slightly increased from last week’s 4.41% to 4.45%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA declined from last week’s 4.66% to 4.61% this week.
  • The average contract interest rate for 15-year fixed-rate mortgages moved backwards from 4.08% to 4.02%.
  • The average contract interest rate for 5/1 ARMs slightly rose to 4.09% from 4.08%.

Article source: https://www.housingwire.com/articles/48414-mba-spring-home-buying-season-likely-to-be-strong-as-mortgage-applications-heat-up

Freddie Mac: Mortgage rates decline amid economic uncertainty

Mortgage interest rates reversed course this week, falling across the board, according to the latest Freddie Mac Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage averaged 4.31% for the week ending March 14, 2019, according to the survey, retreating from last week’s rate of 4.41%.

Notably, this week’s rate is much lower than last year’s rate of 4.44%.

Freddie Mac Chief Economist Sam Khater said mortgage rates declined decisively this week amid various market reports, a strong bond auction and further uncertainty around the Brexit deal, which all contributed to driving bond yields lower.

“At 4.31%, the average 30-year fixed mortgage rate is at its lowest since February of last year,” Khater continued. “While these low rates will certainly get the attention of prospective homebuyers, the supply of homes for sale remains stubbornly low.”

The 15-year FRM averaged 3.76% this week, falling backward from last week’s 3.83%. This time last year, the 15-year FRM was much higher sitting at 3.90%.

Lastly, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.84%, sliding from last week’s rate of 3.87%. However, this rate remains moderately higher than the same time period in 2018, when it averaged 3.67%.

 (Click to enlarge)

Freddie Mac: Mortgage rates March 14

Article source: https://www.housingwire.com/articles/48427-freddie-mac-mortgage-rates-decline-amid-economic-uncertainty

FHA eliminates two "unnecessary and outdated" lending roadblocks

The Federal Housing Administration has taken steps to reduce some of the regulatory burdens that belabor the lending process, releasing two mortgagee letters Tuesday with updated guidelines on home warranty and inspection requirements for single-family FHA loans.

Mortgagee Letter 2019-04 eliminates the FHA Inspector Roster in order to expand the pool of inspectors for lenders.

The FHA said industry standards and local regulations are sufficient enough to ensure inspector qualifications, making FHA’s standards redundant.

“There is no longer a need for HUD to maintain and administer its own standardization process for inspectors,” the mortgagee letter stated.

Mortgagee Letter 2019-05 streamlines guidelines for home warranties by eliminating the requirement that borrowers purchase 10-year protection plans for new construction homes, reducing expenses for the borrower.

The FHA said homebuyer and builder’s one-year Warranty of Completion of Construction provides enough assurance that the home was built properly and the borrower is protected.

[LISTEN: Commissioner Brian Montgomery discusses modernizing the FHA]

Under the one-year warranty, the FHA said “the warrantor agrees to fix and pay for the defect and restore any component of the home damaged in fulfilling the terms and conditions of the warranty.”

FHA Commissioner Brian Montgomery said in a LinkedIn post on Wednesday that the moves were part of an overall effort to enhance procedures to lenders.

“Shortly after arriving back at FHA in June 2018, I indicated one of our goals was to streamline and update our program guidelines and procedures,” Montgomery wrote. “In parallel with the Administration’s objectives of reducing regulatory barriers, late yesterday we released two Single Family Mortgagee Letters (2019-04 and 2019-05) where we’ve eliminated two unnecessary and outdated regulations that have been barriers for lenders.”

Screenshot of Brian Montgomery FHA Linkedin Post

Article source: https://www.housingwire.com/articles/48433-fha-eliminates-two-unnecessary-and-outdated-lending-roadblocks

Javelin Strategy & Research tap former HousingWire editor as head of digital lending

Javelin Strategy Research, a financial services company, recently appointed Austin Kilgore as head of its digital lending practice.

“Javelin has built its reputation around objective and independent data, analysis and insights,” The company’s SVP of Research and Head of Fraud Security Al Pascual said. “Austin’s breadth of knowledge and unique perspective on the intersection of lending, automation and innovation will enable clients to better navigate the nuances of these highly complex industries.”

Austin KilgoreAs head of digital lending practices, Kilgore is responsible for advising the company’s clients on emerging technologies and strategies for underwriting and portfolio management decisions for the auto, mortgage, personal and student loan industries.

“As lenders and fintech firms grapple with compliance risk, shrinking margins and greater demand for a seamless experience, the technology table stakes have never been higher,” Kilgore said. “Javelin’s mission aligns with my own personal passion for financial services innovation and it’s a privilege to take on this new role.”

Prior to joining Javelin’s team, Kilgore worked as a journalist for several financial services publications, most recently serving as the editor-in-chief at National Mortgage News.

Notably, he was also an editor and reporter at HousingWire and a contributing editor at American Banker.

 

Need help getting hired or looking to hire? HousingWire wants to help. Our new service, HousingJobs, lists the latest gigs in the housing industry for loan officers, underwriters, processors, loan servicers, and tech and marketing pros.

Article source: https://www.housingwire.com/articles/48434-javelin-strategy-research-tap-former-housingwire-editor-as-head-of-digital-lending

Javelin Strategy & Research tap former HousingWire editor as head of digital lending

Javelin Strategy Research, a financial services company, recently appointed Austin Kilgore as head of its digital lending practice.

“Javelin has built its reputation around objective and independent data, analysis and insights,” The company’s SVP of Research and Head of Fraud Security Al Pascual said. “Austin’s breadth of knowledge and unique perspective on the intersection of lending, automation and innovation will enable clients to better navigate the nuances of these highly complex industries.”

Austin KilgoreAs head of digital lending practices, Kilgore is responsible for advising the company’s clients on emerging technologies and strategies for underwriting and portfolio management decisions for the auto, mortgage, personal and student loan industries.

“As lenders and fintech firms grapple with compliance risk, shrinking margins and greater demand for a seamless experience, the technology table stakes have never been higher,” Kilgore said. “Javelin’s mission aligns with my own personal passion for financial services innovation and it’s a privilege to take on this new role.”

Prior to joining Javelin’s team, Kilgore worked as a journalist for several financial services publications, most recently serving as the editor-in-chief at National Mortgage News.

Notably, he was also an editor and reporter at HousingWire and a contributing editor at American Banker.

 

Need help getting hired or looking to hire? HousingWire wants to help. Our new service, HousingJobs, lists the latest gigs in the housing industry for loan officers, underwriters, processors, loan servicers, and tech and marketing pros.

Article source: https://www.housingwire.com/articles/48434-javelin-strategy-research-tap-former-housingwire-editor-as-head-of-digital-lending

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