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Inside Mortgage Finance

September 15, 2011

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Home-Purchase Lending Jumped Sharply in 2nd Quarter, But Refinancing Still Dominates

Mortgage lending to finance home purchases increased a hefty 32.2 percent from the first quarter to the second quarter of 2011, helping to offset a huge drop in refinance activity. Housing sales jumped 43.6 percent during the second quarter, although the housing market in 2011 is still considerably slower than it was a year ago. Conditions looked better in the second quarter largely because the first quarter of 2011 was one of the worst on record for housing sales and home-purchase lending. Fewer than 1 million new and existing home sales were reported during the first quarter of 2011, yielding a record low of just... [Includes two data charts] Read More

Big Changes Required, Few Details Offered On Plan to Reduce Current HARP ‘Frictions’

Even as industry observers agree that the White House’s announced attempt to improve refinance efficiency through an expansion of the Home Affordable Refinance Program is worthwhile, there remain too many unknowns at the moment to judge how effective a HARP makeover will be. As part of his much anticipated speech before a joint session of Congress last week, President Obama noted his administration’s intent to help homeowners. “To help responsible homeowners, we’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent,” said Obama. “That’s a step that can... Read More

HUD Sees Good Points in GOP Draft FHA Bill But Says Some Provisions Still Need Rethinking

The Department of Housing and Urban Development said it would work with Congress to strengthen the FHA and Ginnie Mae in a way that protects taxpayers and facilitates the return of private capital despite its mixed views of a Republican draft bill to reform the two programs. Assistant Secretary for Housing and FHA Commissioner Carol Galante told members of the House Financial Services Subcommittee on Insurance, Housing and Economic Opportunity last week that HUD is willing to work with lawmakers to increase access to credit and strengthen risk management and lender enforcement. But while the GOP draft bill contained elements similar to... Read More

Latest Round of CFPB Integrated Disclosures Involves Same Form to Compare Different Loans

The Consumer Financial Protection Bureau is taking a different tack in its latest round of prototype integrated consumer mortgage disclosure forms, this time utilizing the same form to facilitate comparison shopping of two different types of loans. Under its Know Before You Owe project, the CFPB is trying to integrate the current Truth in Lending Disclosure Statement and the Good Faith Estimate under the Real Estate Settlement Procedures Act into a single disclosure document. “In the first three rounds of Know Before You Owe, we asked you to compare different draft versions of a simplified mortgage disclosure form,” said Patricia McCoy, who heads... Read More

Senate Panel Still Mulling Competing Theories On Role of Government in Mortgage Finance

The Senate Banking, Housing and Urban Affairs Committee may not be moving any closer to a decision on reforming the mortgage finance system, but lawmakers should be getting well versed in the various analytic perspectives on the role of the federal government. At a hearing this week, the committee heard testimony from researchers who support winding down Fannie Mae and Freddie Mac as soon as possible and others who say private capital won’t be drawn back into the system unless there is a government guarantee. “There’s absolutely no reason to believe that private capital would immediately step-up – even if it would eventually... Read More

Industry, Lawmaker Say Narrow QRM Rule Would Have Dire Results for FHA, Return of Private Capital

A Senate lawmaker and the Mortgage Bankers Association warned House lawmakers that a narrow “qualified residential mortgage” rule will result in overuse of the FHA program and make it more difficult for private capital to re-enter the housing finance market. Testifying before the House Financial Services Subcommittee on Insurance, Housing and Economic Opportunity last week, Sen. Johnny Isakson, R-GA, said the six federal agencies charged with crafting risk-retention requirements apparently failed to consider the impact of a narrow QRM rule on the FHA program. Isakson, who co-authored a Senate exception to... Read More

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