Category Archives: Lending

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)

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.”

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

JPMorgan Chase to add 90 branches this year

A new report from The Wall Street Journal says that JPMorgan Chase is expecting to open 90 branches by the end of this year.

WSJ’s Allison Prang reports (paywall) that the bank is looking to add as many as 700 employees and open locations in cities such as Charlotte, Minneapolis and Nashville as part of its larger plan to enter new markets.

From the article:

The banking giant said it is aiming to open new branches starting this summer in the following areas: Charlotte and Raleigh, N.C.; St. Louis; Nashville; Providence, R.I.; Pittsburgh; Greenville, S.C.; Minneapolis; and Kansas City, Kan.

While it is expanding into new areas, JPMorgan’s branch count has fallen in past years. JPMorgan had 5,036 branches at the end of 2018, 10% fewer than it had at the end of 2014. Over that same time, the head count in the company’s consumer and community banking division fell 5.6%.

Prang’s report says the bank is continuing to open new offices on the East Coast, in Philadelphia, Boston and the Washington, D.C., area. Additionally, a spokeswoman for Chase declined to expand to the paper on any planned branch closures for 2019.

Article source: https://www.housingwire.com/articles/48435-jpmorgan-chase-to-add-90-branches-this-year

Mortgage lender optimism grows as borrower demand heightens

In the first quarter of 2019, Fannie Mae‘s Mortgage Lender Sentiment Survey revealed the net profit margin outlook for mortgage lenders retreated 8% from the previous quarter.

Although this percentage marks the 10th consecutive quarter of declines, it’s still as significant improvement from last year’s Q4 survey low of -34%.

The image below (click to enlarge) highlights mortgage lenders’ outlook:

“Lenders appear less pessimistic regarding mortgage demand expectations; thus their profit margin outlook over the next three months is also slightly improved,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said. “While the results seem to portray the gloomiest picture of purchase mortgage demand during the prior three months in the survey’s five-year history, the net share of lenders expecting rising demand over the next three months exceeded the level recorded in the same quarter last year.”

So, what’s driving mortgage lender optimism?  Well, Fannie says it is the rising borrower demand for both purchase and refinance mortgages.

In fact, Duncan notes lenders’ view of the refinance market has become somewhat rosier, as both recent and expected demand improved to the best showing in two years.

“For refinance mortgages, while more lenders continued to report weaker refinance demand than those seeing rising demand, the net share of lenders reporting demand growth over the prior three months increased significantly to the highest level in two years across all loan types” Fannie Mae writes. “Similarly, the net share expecting demand growth remains negative but also improved to the highest level in two years.”

That being said, for the ninth consecutive quarter, mortgage lenders still cited “competition from other lenders” as the top reason for decreased profit margin outlook.

Furthermore, when it came to purchase mortgages, across all loan types, the net share of lenders reporting demand growth over the prior three months fell to a new survey low, according to Fannie Mae.

“While more lenders anticipate declining rather than rising profit margins, continuing the trend that started in the fourth quarter of 2016, the net share expecting falling profit margins decreased from a survey high in the prior quarter to the lowest share in nearly two years,” Duncan continued. “Lenders’ improved demand outlook going into the spring selling season bodes well for our forecast of relatively flat mortgage volume this year following the double-digit drop in 2018.”

Article source: https://www.housingwire.com/articles/48422-mortgage-lender-optimism-grows-as-borrower-demand-heightens

Mortgage lender optimism grows as borrower demand heightens

In the first quarter of 2019, Fannie Mae‘s Mortgage Lender Sentiment Survey revealed the net profit margin outlook for mortgage lenders retreated 8% from the previous quarter.

Although this percentage marks the 10th consecutive quarter of declines, it’s still as significant improvement from last year’s Q4 survey low of -34%.

The image below (click to enlarge) highlights mortgage lenders’ outlook:

“Lenders appear less pessimistic regarding mortgage demand expectations; thus their profit margin outlook over the next three months is also slightly improved,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said. “While the results seem to portray the gloomiest picture of purchase mortgage demand during the prior three months in the survey’s five-year history, the net share of lenders expecting rising demand over the next three months exceeded the level recorded in the same quarter last year.”

So, what’s driving mortgage lender optimism?  Well, Fannie says it is the rising borrower demand for both purchase and refinance mortgages.

In fact, Duncan notes lenders’ view of the refinance market has become somewhat rosier, as both recent and expected demand improved to the best showing in two years.

“For refinance mortgages, while more lenders continued to report weaker refinance demand than those seeing rising demand, the net share of lenders reporting demand growth over the prior three months increased significantly to the highest level in two years across all loan types” Fannie Mae writes. “Similarly, the net share expecting demand growth remains negative but also improved to the highest level in two years.”

That being said, for the ninth consecutive quarter, mortgage lenders still cited “competition from other lenders” as the top reason for decreased profit margin outlook.

Furthermore, when it came to purchase mortgages, across all loan types, the net share of lenders reporting demand growth over the prior three months fell to a new survey low, according to Fannie Mae.

“While more lenders anticipate declining rather than rising profit margins, continuing the trend that started in the fourth quarter of 2016, the net share expecting falling profit margins decreased from a survey high in the prior quarter to the lowest share in nearly two years,” Duncan continued. “Lenders’ improved demand outlook going into the spring selling season bodes well for our forecast of relatively flat mortgage volume this year following the double-digit drop in 2018.”

Article source: https://www.housingwire.com/articles/48422-mortgage-lender-optimism-grows-as-borrower-demand-heightens

LendingTree: Borrowers with stronger credit scores saved big in February

In February, the best mortgage offers for borrowers with the “best profiles” had an average APR of 4.09% for conforming 30-year, fixed-rate purchase loans, according to LendingTree’s latest Mortgage Offers Report.

LendingTree considers best credit profiles to be those within the 95th percentile of borrowers who received the best mortgage offers through its marketplace.

According to the company’s report, February’s rate moderately fell from January’s 4.19%.

Notably, the APR on refinance loan offers also retreated, falling to 4.04% from 4.14% in January.

“For the average borrower, the purchase APR for conforming 30-year, fixed-rate purchase loans offered on LendingTree’s platform was 4.87% in February, down 11 basis points from January,” the report states. “The loan note rate of 4.75% was also down 11 basis points from January.”

Interestingly, LendingTree highlights borrowers with stronger credit scores received even more savings than their counterparts.

In fact, borrowers with excellent credit scores received an average APR of 4.68%, versus 5.02% for consumers with scores of 680 to 719.

However, the APR spread of 34 basis points between these score ranges fell from 37 in January, according to LendingTree’s analysis.

Furthermore, for the average borrower, the APR for conforming 30-year, fixed-rate refinance loans plummeted 13 basis points to 4.81%.

So overall, for the average purchase loan amount of $229,615, the spread represents a little over $17,000 in additional costs for borrowers with lower credit scores.

“At 4.62% and 4.95%, respectively, the spread between credit score brackets was 33 basis points,” LendingTree writes. “That amounts to about $17,600 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $245,323.”

Article source: https://www.housingwire.com/articles/48423-lendingtree

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