According to the Consumer Financial Protection Bureau’s (CFPB) Qualified Mortgage (QM) rule, all the mortgages that can be eligibly bought by Fannie Mae or Freddie Mac are exempt from the 43% debt-to-income cap. This exemption is referred to as the GSE patch (GSE stands for government-sponsored enterprises). The GSE patch is slated to expire on 10th January 2021. Convinced that both Freddie Mac and Fannie Mae benefit from a competitive advantage in underwriting, CFPB now proposes to extend the GSE patch and also make changes to the definition of QM. Loans that have…
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Mortgage News
Inventory Shortage May Obstruct Corona-rebound Sales
Aspiring homeowners are likely to come hard once the Coronavirus scare recedes but real estate marketplace Zillow feels that housing inventory shortage may obstruct any possible sales rebound. Its Weekly Market Report reveals a drop of 17.1% in inventory compared to the same time last year. Over the week, it has fallen by 0.4%. Houses which are on for-sale supply also took a beating in many of the top 35 metros. The figures show a 35% dip in Cleveland, 36% in Seattle, and 34.4% in Philadelphia. To paraphrase Skylar Olsen, Zillow’s senior principal…
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Purchase Mortgage Applications at a Level Untouched Since 2009
The Mortgage Bankers Association informs that aspiring homeowners are putting behind the Coronavirus scare and filing purchase mortgage applications at a level not seen over the previous decade. It comes as a bonus that the 30-year fixed loan rates are at their lowest since the MBA’s Weekly Mortgage Applications Survey began. Purchase mortgage applications have risen for the 9th week straight. It is partly the result of soaring consumer confidence and partly due to the demand kept in leash since spring, believes Joel Kan, the Associate VP of Economic and Industry Forecasting, MBA. …
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As Lending Standards Tighten, Mortgage Credit Availability Index Drops to a 5-year Low
Mortgage Bankers Association (MBA) after analyzing data from Ellie Mae's AllRegs® Market Clarity® business information tool reported that the Mortgage Credit Availability Index (MCAI) in April dropped to the lowest level since December 2014. The decline is MCAI shows the tightening of lending standards showing decreased availability of mortgages for potential borrowers. The MCAI index fell by 12.2% to an index of 133.5. The rate of decline in the last 2 months is the sharpest in over a decade. As evidenced by the chart below, the MCAI fell for every product category. The…
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Getting a Mortgage has suddenly become Hard (and about to get even Harder)
Mortgage credit supply decreased 16 percent in March to the lowest level since June 2015, with declines in availability across all loan types. There was a reduction in the availability of loans with lower credit scores and higher LTV ratios, and the largest pullback came from the jumbo and non-QM space. With the mortgage market shaken badly by the Coronavirus pandemic, both purchasing and refinance loans have become harder to get. JP Morgan believes that at 10% unemployment, we may be looking at 2 million new mortgage delinquencies. The number could go up…
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How does the Mortgage Payment Forbearance Plan work?
The CARES Act is a law now. In place of a series of whack-a-mole moves, the administration has come up with the Mjolnir this soon in the battle. Instant aggression! Good approach! To prevent the Coronavirus pandemic genie from coming out of the bottle, the $2 trillion stimulus bill from the government sounds like a plan. The big headline for the home mortgage industry is the loan forbearance plan made available to the borrowers on all the government-backed mortgages. By uttering nearly as little as I CAN’T PAY, borrowers can forgo mortgage payments…
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Mortgage Rate Recap and Outlook for the Week Ending February 21, 2020
The speed of residential construction has shot up over the past few months and is well in line to reach its best figures in over a decade. For a market that has been short on inventory for some time now, this is great news, especially with the spring season already calling on us. Mortgage Rates: rates increase all around This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals an increase across the board. According to the MBA Weekly Survey: “The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.77 percent…
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Mortgage Rate Recap and Outlook for the Week Ending January 31, 2020
The mortgage market had reacted favorably to the Coronavirus threat. Now that the trend is reversing, we may see a partial correction in the mortgage market. It is nothing new. Global threats that loom suddenly bring about economic movements with it and just as soon as the threats disappear, the money movement returns to its initial levels. The refinancing activity and demand for homes are on a move in the meantime, buoyed by near-record interest rate levels. Mortgage Rates: rates decrease all around This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals a decrease across the board.…
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Mortgage Rate Recap and Outlook for the Week Ending January 24, 2020
Consumer sentiment may rally from here based on multiple positive indices, near all-time-low rates, and the general good feeling that a new year brings. House constructions as well as number of homes sold are expected to pick up. While Americans are aware that the expansionary phase can't last eternally, they are no more wary of the recession pundits and this is no small news. Mortgage Rates: rates decrease all around This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals a decrease across the board with the exception of 30-year Fixed jumbo balances. According to the MBA Weekly Survey: “The…
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Mortgage Rate Recap and Outlook for the Week Ending January 17, 2020
Phase One of the Trade deal isn't expected to deliver a panacea. It, however, augurs well for the economy under pressure as the positive spin to the Trade War, augmented by stable inflation and decent job growth, is likely to keep nerves in check. January is a calm month. Everyone is willing to be in the first gear till the time all the numbers of the last year pour in. The excitement, though, may begin soon as many indicators, otherwise unnoticeable, may have a distinct shine given that this is the election year.…
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