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The Mortgage Bankers Association (MBA)’s policy advocacy group, the Mortgage Action Alliance (MAA), is urging its members in the state of Massachusetts to support the continued use of remote telephone and video counseling for reverse mortgages in the state following the lapse of an exemption allowing for remote counseling.
“The provision in state law which permitted these forms of consumer counseling on reverse mortgage loans expired on March 31st via sunset,” the call explained. “Importantly, language has been introduced to emergency funding legislation that would restore these forms of counseling and make this flexibility permanent. Importantly, that language was only included in the House passed version of the emergency funding bill.”
Specifically, MAA is calling on its members to contact their representatives in the State House and Senate to urge their support of Sections 11 and 12 of H.4466, the reconciled version of the emergency budget bill.
These two sections modify existing state law to allow for counseling sessions to be conducted “by synchronous real-time video conference or by telephone,” according to the text of the bill.
The differences between the House and Senate versions of the bill are expected to be reconciled this week, according to the MAA notice. According to its most recent update on the website for the Massachusetts legislature, the committee conference implementing the reconciled version was appointed on Mar. 28.
The issue of a face-to-face reverse mortgage counseling provision has remained a specter over the state’s reverse mortgage business for years. Massachusetts is the only state in the country to require in-person reverse mortgage counseling, a requirement that caused issues and effectively halted its reverse mortgage business during the early days of the COVID-19 pandemic.
Since then, there have been multiple efforts to implement and renew time-limited exceptions that allow for phone or video counseling, with certain reverse mortgage professionals within the state working in concert with trade associations to advocate for a permanent solution. While one came close to becoming law in 2023, the necessary language was ultimately not included in a budget bill and another temporary exception was put into place.
That exception expired at the end of the day on Mar. 31, but reverse mortgage industry veteran George Downey of The Federal Savings Bank in Braintree, Mass. — who has been a critical figure in the advocacy for a permanent solution — said it could happen this time.
“We’ve done as much as I think reasonably could be done to get the information to the surface so that the conference committee members, when they were evaluating these various amendments, would have some sense of what this is about and how important it is,” Downey told RMD late last week. “So, I feel a measure of confidence in that regard. I’ll be optimistic and give us 50% odds.”
Last year, MBA President and CEO Bob Broeksmit signaled that the association would be more involved in the reverse mortgage industry in 2024.
“I think that given the demographics of this country and given the record levels of home equity, it makes perfect sense for our members to focus on that product, [and to] make it as strong and sustainable, both for lenders and servicers and of course for the homeowners and their families, as it can be,” Broeksmit said in December.
Source: housingwire.com
The Mortgage Bankers Association (MBA) has revealed the top commercial and multifamily real estate lenders for 2023. Topping the list of originators are well-known names in the industry, including JLL, CBRE, JPMorgan Chase & Company, Newmark, Meridian Capital Group, Eastdil Secured, Walker & Dunlop, Berkadia, KeyBank, and Wells Fargo. In government-backed lending, Berkadia and Walker … [Read more…]
Mortgage rates swung slightly lower last week, fueling a significant jump in mortgage demand for the second straight week. Total application volume rose 7.1%, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.84% from 7.02%, with points falling to 0.65 from 0.67 (including the origination fee) for loans with a 20% down payment.
“Mortgage rates dropped below 7% last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” said Mike Fratantoni, senior vice president and chief economist at the MBA.
As a result, applications to refinance a home loan, which are most sensitive to weekly rate moves, rose 12% for the week and were 5% higher than the same week one year ago.
“While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years,” added Fratantoni.
Applications for a mortgage to purchase a home rose 5% for the week but were still 11% lower than a year ago. Homebuyers are up against more than just high interest rates. They are looking at sky-high home prices and a still lean supply of houses for sale. While more inventory is coming onto the market with the spring season, it is not enough to meet the demand, especially for smaller, starter homes.
Mortgage rates rose slightly at the start of this week, after a government report on consumer prices came in higher than expected Tuesday. However, the increase was smaller than previous reactions to similar economic data.
“It suggests the market is starting to see more convincing signs that inflation and the economy stand a better chance deliver rate-friendly news in the near future as opposed to news that would cause a big resurgence,” said Matthew Graham, chief operating officer at Mortgage News Daily.
Source: cnbc.com
Mortgage application activity drifted lower again last week, the third straight week of mostly fractional declines. The Mortgage Bankers Association’s Market Composite Index, a measure of application volume, decreased 0.6 percent on a seasonally adjusted basis from one week earlier and 0.1 percent before adjustment.
The Refinance Index declined by 2.0 percent from the previous week and was 5.0 percent lower than the same week one year ago. The refinance share of mortgage activity slipped to 30.3 percent from 30.8 percent the previous week.
The seasonally adjusted Purchase Index ticked down by 0.1 percent week over week but did move 1.0 percent higher on an unadjusted basis. Purchase activity was 13.0 percent lower than during the same week in 2023.
“Mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity. The 30-year fixed mortgage rate declined slightly to 6.91 percent, while the 15-year fixed-rate decreased to its lowest level in two months at 6.35 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Elevated mortgage rates continued to weigh down on home buying. Purchase applications were unchanged overall, although FHA purchases did pick up slightly over the week. Refinance applications decreased to fall 5 percent below last year’s pace.”
Other Highlights from MBA’s Weekly Mortgage Application Survey
Source: mortgagenewsdaily.com
Rising mortgage rates this week cast further doubt on meaningful rate cuts happening soon for homebuyers.
The average rate for a 30-year loan inched past 7% this week, settling at 7.07% on Wednesday, according to Mortgage News Daily.
A separate measurement tracking weekly average rates rose to 6.82% from 6.79%, Freddie Mac reported.
Homebuyers continued to pull back as affordability challenges worsened and consumer optimism diminished over how soon and how much interest rates could ease this year. Waiting for loan rates to decline is now the top reason buyers say they are not actively searching for a home.
“Elevated mortgage rates have been a persistent market challenge, holding back first-time homebuyers and repeat homebuyers alike, albeit for different reasons,” said Danielle Hale, chief economist at Freddie Mac. “In order for rates to decline meaningfully and sustainably, inflation needs to be convincingly on a path to the Fed’s 2% target.”
Read more: Mortgage rates remain around 7% — is this a good time to buy a house?
Homebuyer affordability continued to decline, with the US median mortgage payment increasing 2% monthly in February and 6% annually to nearly $2,200, according to the Mortgage Bankers Association (MBA).
Rising mortgage payments across the US — driven by either higher interest rates or higher home prices, or both — have considerably cooled buyers’ demand.
The volume of home-purchase applications stayed unchanged this week and dropped 13% compared to the same week one year ago, MBA data showed.
“Challenging affordability conditions and low housing supply are keeping some prospective homebuyers on the sidelines this spring,” Edward Seiler, MBA’s associate vice president, said. “The eventual, expected decline in rates in the coming months will hopefully spur new activity in the housing market.”
Expectations of a rate decline have been waning, though. Investors are now betting the Fed will cut rates by less than a percentage point instead of the 1.5% forecast at the beginning of 2024.
Despite the market shift, Fed Chair Jerome Powell recently assured the public that inflation is easing and the central bank is still expected to cut rates at “some point” this year.
Rebecca Chen is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).
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Source: finance.yahoo.com
Mortgage demand receded for the third consecutive week despite slightly lower mortgage rates. Mortgage applications decreased by 0.6% on a seasonally adjusted basis during the week ending March 29, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey.
“Mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Elevated mortgage rates continued to weigh down on home buying. Purchase applications were unchanged overall, although FHA purchases did pick up slightly over the week. Refinance applications decreased to fall 5% below last year’s pace.”
As of March 26, the 30-year fixed rate on HousingWire’s Mortgage Rates Center stood at 7.16%, up from 7.07% one week earlier. At the same time one year ago, the 30-year fixed rate averaged 6.53%. Meanwhile, the 15-year fixed rate averaged 6.51% on March 26, up from 6.5% one week earlier.
Both purchase and refinance activity decreased during the week. Purchase loan application volume dropped by 1% from one week earlier. Meanwhile, refinance volume fell by 2% from the prior week.
The MBA survey shows that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) decreased to 6.91%, down from 6.93% last week. Meanwhile, rates on jumbo loans (balances greater than $766,550) decreased week over week to 7.06%, down from 7.14%.
The Federal Housing Administration (FHA) share of total applications decreased to 11.7% last week, down from 12% the week before. The U.S. Department of Veterans Affairs (VA) share climbed to 12.1%, up from 12% the week before. And the U.S. Department of Agriculture (USDA) share remained unchanged at 0.5%.
The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.
Source: housingwire.com
Although fourth quarter mortgage originations were flat year-over-year, nonbank lenders that could provide products through multiple means were able to grow their business during that tough period, a Morningstar DBRS recap found.
“In addition to affordability challenges, seasonality and competition also impacted volumes and pricing,” the report from Shaima Ahmadi, assistant vice president, North American financial institution ratings, said. “However, on an individual company basis, those with omnichannel organization models continued to grow originations in [the fourth quarter] as they were able to capture a higher share of the market versus those with less diverse channels and refi heavy models.”
The top mortgage lenders benefited by undertaking business restructuring and making strategic shifts in order to capture more purchase business, Ahmadi said.
A shift underway that might not be going well is taking place at Finance of America, which had been at one point a multi-channel forward lender. After several previous strategy shifts, the company elected to focus on reverse mortgages. As part of that strategy, it bought American Advisors Group, which helped to drive FOA to a 40% market share in that segment.
“Despite market share gains, when excluding forward organizations in 4Q22, FOA’s reverse mortgage origination volume was down a significant 56% YoY in 4Q23,” Ahmadi pointed out.
“Meanwhile, Rithm Capital Corp. has made a number of acquisitions of mortgage servicing and alternative asset management businesses over recent years as part of the company’s strategic shift to become a real estate asset manager. Companies also continue to diversify their basket of mortgage loan offerings with added complementary services.”
The Mortgage Bankers Association’s fourth quarter industry profitability survey found that independent mortgage bankers and bank mortgage subsidiaries, both public and privately held, lost an average of $2,109 on every loan produced.
Furthermore, servicing was a net financial loss for the group of $24 per loan, while operating income for this function, which excludes amortization, gains/loss in the valuation of servicing rights net of hedging gains/losses, and gains/losses on bulk sales, was $108 per loan.
Mortgage servicing rights proved to be a double-edge sword in the fourth quarter. Companies reported fair-value losses on their MSR portfolios — a requirement of mark-to-market accounting that is tied to potential prepayments — but servicing fee income was up.
The publicly traded nonbank lenders tracked in the Morningstar DBRS report had a 6% increase year-over-year in their portfolios. But that ranged from a 14% gain at Mr. Cooper, which was active in the bulk purchase market, to declines of 5% at Rocket and 4% at United Wholesale Mortgage; UWM has been a strategic seller of servicing rights as part of its risk management strategy, executives noted on its fourth quarter earnings call.
FOA actually had a larger percentage increase at 38%, but that was primarily reverse servicing picked up in the AAG deal, and among the nine companies listed, it has by far the smallest portfolio.
Even though its portfolio is now smaller, Rocket bought MSRs originated with high rates for the potential refinancing opportunity.
“Given where mortgage rates currently are, borrowers have little incentive to refinance,” Ahmadi said. “However, some companies indicated that they expect a meaningful rebound in refinance activity when rates fall below 6%.” While the MBA thinks rates will sink under that mark, Fannie Mae’s latest forecast calls for them to just get to that level by the end of next year.
For the group losses narrowed as improved gain on sales margins were partially offset by lower origination volume.
Gross gain on sales margins, inclusive of fee income, net secondary marketing income and warehouse spread, was 334 basis points in the fourth quarter, up from 329 basis points three months prior, the MBA survey reported.
“We would expect margins to remain under pressure in 1Q given the negative impact seasonality typically has on both 4Q and 1Q,” Bose George, an analyst with Keefe, Bruyette & Woods said in an April 1 note on the survey. “Industry profitability is likely to be flat to down in 1Q as volumes should once again be low due to the seasonality associated with the quarter and the elevated average mortgage rate.”
Several public companies also reported major one-off expenses, including Pennymac Financial Services, which recorded $158.4 million in expenses from an arbitration ruling in favor of Black Knight (now part of Intercontinental Exchange) over mortgage servicing technology including allegations of breach of contract and misappropriation of trade secrets.
Meanwhile, Mr. Cooper’s November 2023 cybersecurity incident hit its results to the tune of $27 million.
Ahmadi also noted that the nonbanks had higher leverage ratios year-over-year for the fourth quarter, as debt levels increased slightly but was primarily caused by financial losses eroding company equity.
“During [the fourth quarter], nonbank mortgage companies were active in the high yield market, raising unsecured funding, which was partially used to pay down upcoming maturities in 2025, which we view positively for their credit profiles,” Ahmadi said. “Indeed, unsecured debt issuances increase nonbank mortgage companies’ financial flexibility by decreasing balance sheet encumbrance.”
Both Rocket and Pennymac Mortgage Trust were able to reduce their leverage ratios. But FOA’s debt-to-equity ratio increased to 97.8x compared with 49.7x one year prior, while Ocwen’s was at 27.2x, versus 22.9x over the same period.
Source: nationalmortgagenews.com
By Aarthi Swaminathan
The U.S. 15-year mortgage rate is at the lowest level in two months, industry group says
The numbers: The U.S. housing market is feeling a chill once again as home buyers pull back on applying for mortgages with rates staying near 7%.
Yet some buyers are finding rates in the low 6% range by turning to 15-year fixed-rate mortgages instead of the traditional 30-year loan.
Nevertheless, weakening demand overall pushed the market composite index – a measure of mortgage application volume – down in the last week, according to the Mortgage Bankers Association (MBA) on Wednesday.
The market index fell 0.6% to 195.6 for the week ending March 29 from a week ago. A year ago, the index stood at 217.9.
Key details: The purchase index – which measures mortgage applications for the purchase of a home – fell 0.1% from a week ago.
The refinance index fell 1.6%.
The average contract rate for the 30-year mortgage for homes sold for $766,550 or less was 6.91% for the week ending March 29. That’s down from 6.93% from the week before.
The rate for jumbo loans, or the 30-year mortgage for homes sold for over $766,550, was 7.06%, down from 7.14% a week ago.
The average rate for a 30-year mortgage backed by the Federal Housing Administration was 6.74%, down from 6.75% a week ago.
The 15-year fell to 6.35% from 6.46% from the previous week. The 15-year fixed was at the lowest level in two months, the MBA said.
The rate for adjustable-rate mortgages was up to 6.37%, from 6.27% last week.
The big picture: Home buyers are putting off buying a home due to elevated mortgage rates straining how much they can afford.
Even though for-sale inventory has shown signs of rising in recent weeks, demand isn’t picking up, which means that sales activity will not pick up as quickly.
To be sure, the data does not fully capture buyer demand as some are buying homes without mortgages. A third of home buyers paid for their home purchases with cash in February, as real-estate brokerage Redfin notes.
What the MBA said: “Elevated mortgage rates continued to weigh down on home buying,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement. “Purchase applications were unchanged overall, although [Federal Housing Administration] purchases did pick up slightly over the week.”
-Aarthi Swaminathan
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Source: morningstar.com
Mortgage loans refinancing declined for the week ending March 22, contributing to a drop in home loans applications even as interest rates decelerated, data from the Mortgage Bankers Association (MBA) showed on Wednesday.
The Refinance Index fell 2 percent from the prior week and was 9 percent lower compared to a year ago. Overall, mortgage applications dropped by 0.7 percent at a time when the 30-year fixed rate mortgage ticked down to 6.93 percent from the prior week’s 6.97 percent.
“Mortgage application activity was muted last week despite slightly lower mortgage rates. The 30-year fixed rate edged lower to 6.93 percent, but that was not enough to stimulate borrower demand,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement shared with Newsweek.
Read more: What is Mortgage Refinancing and How Does It Work?
The drop in refinancing applications comes as the housing market has been in flux nationwide.
Borrowing costs for home loans jumped to their highest since the turn of the century last year, peaking at about 8 percent in the fall. That jump in mortgage rates was sparked by the Federal Reserve hiking rates to their highest in more than two decades as policymakers moved to tighten financial conditions to battle soaring inflation. Expectations that the central bank will start lowering those rates has helped bring mortgage rates down.
Recent data suggests that buyers are still looking for lower borrowing costs. New home sales declined in February, amid high mortgage rates that economists say depressed activity as the housing market enters its busy Spring season.
Kan said on Wednesday that still elevated mortgage rates are still keeping buyers on the sidelines.
“Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market,” he noted.
Kan suggest limited housing inventory is also proving to be a hindrance to the market.
“Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6-percent by the end of the year,” he said. “Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances.”
Read more: Best Mortgage Lenders
The lock-in effect was particularly acute in the existing homes market. Most homeowners have low mortgage rates which has discouraged them from putting their properties in the market if that means they may have to acquire a new home with borrowing costs closer to 7 percent. About 90 percent of homeowners own mortgages that are under 6 percent, according to real estate platform Redfin.
There have been some signs recently that the existing homes market is recovering after struggling mightily last year.
In February, sales of previously owned homes rose by nearly 10 percent.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
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Mortgage rates have gone down in recent days. This week, 30-year mortgage rates averaged 6.37%, according to Zillow data. This is 24 basis points down from the previous week’s average. But they could tick back up in the next couple of weeks depending on how some major economic reports turn out.
Most major forecasters expect mortgage rates to decline in 2024, but so far we haven’t seen any signs of a sustained drop. As we get more data showing that inflation is cooling, mortgage rates should start trending down more definitively. But if inflation remains sticky for longer than expected, rates will likely stay near their current levels.
On Friday, the Commerce Department released the latest Personal Consumption Expenditures price index data. The PCE price index is the Federal Reserve’s preferred measure of inflation. The latest data showed that prices rose 2.5% year over year in February. This is a slight uptick from the previous month.
Fed officials have indicated that they expect the path to lower inflation to be bumpy, and that they’re waiting for more data before they’ll consider lowering the federal funds rate.
The sooner the Fed can start cutting rates, the sooner mortgage rates will start to fall. At the moment, investors are anticipating that first cut to come at the Fed’s June meeting, according to the CME FedWatch Tool. But hotter-than-expected economic data could push that timeline back.
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Real Estate on Zillow
Mortgage type | Average rate today |
Real Estate on Zillow
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Mortgage rates started ticking up from historic lows in the second half of 2021 and increased dramatically in 2022 and throughout most of 2023.
Many forecasts expect rates to fall this year now that inflation has been coming down. In the last 12 months, the Consumer Price Index rose by 3.2%, a significant slowdown compared when it peaked at 9.1% in 2022. But we’ll likely need to see more slowing before rates can drop substantially.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
We aren’t likely to see home prices drop this year. In fact, they’ll probably rise.
Fannie Mae researchers expect prices to increase 3.20% in 2024 and 0.30% in 2025, while the Mortgage Bankers Association expects a 4.10% increase in 2024 and a 3.30% increase in 2024.
Sky high mortgage rates have pushed many hopeful buyers out of the market, slowing homebuying demand and putting downward pressure on home prices. But rates have since eased, removing some of that pressure. The current supply of homes is also historically low, which will likely push prices up.
House prices usually drop during a recession, but not always. When it does happen, it’s generally because fewer people can afford to purchase homes, and the low demand forces sellers to lower their prices.
A mortgage calculator can help you determine how much house you can afford. Play around with different home prices and down payment amounts to see how much your monthly payment could be, and think about how that fits in with your overall budget.
Typically, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means your entire monthly mortgage payment, including taxes and insurance, shouldn’t exceed 28% of your pre-tax monthly income.
The lower your rate, the more you’ll be able to borrow, so shop around and get preapproved with multiple mortgage lenders to see who can offer you the best rate. But remember not to borrow more than what your budget can comfortably handle.
Source: businessinsider.com