Rocket fires back, UWM boycotts, mortgage’s 7th-inning stretch and all the week's top news

March 12, 2021 11:45 AM

JPMorgan Chase resolves appraisal bias charges with HUD

The Department of Housing and Urban Development approved a conciliation agreement between JPMorgan Chase and a consumer over alleged undervaluing of her property based on race.

The settlement calls for the bank to pay $50,000 to an unnamed Chicago woman and require its staff to undergo training in fair lending practices as they relate to appraisals.

Read the full story here.

New loan type unveiled: retirement mortgages

Finance of America Reverse developed a new product that combines features of a reverse mortgage with a forward refinance loan.

This new product — named EquityAvail — funds at closing and the borrower has to make payments for 10 years but at a reduced amount from their current loan. And like on a forward mortgage, an escrow for taxes and insurance is established.

Read the full story here.

Home purchase sentiment slips despite positive economic outlook

Continuing optimism about the direction of the economy and the job market belies the downward movement in overall consumer sentiment about the housing market for February, Fannie Mae said.

Its Home Purchase Sentiment Index declined for the third time in the last fourth months, falling to 76.5 from 77.7

in January.

Among the drivers was that the gap between those that consider it a good time or a bad time to buy a home narrowed by 10 percentage points.

Read the full story here.

Record share of lenders expect shrinking profits in 2021

After a booming 2020, a growing share of mortgage lenders expect lower profits in the coming months as climbing interest rates set up heightened competition.

In the first quarter, 52% of industry executives predicted their upcoming margins will shrink, compared to 48% the quarter before and just 4% a year earlier, according to Fannie Mae’s Mortgage Lender Sentiment Survey.

Read the full story here.

AFR adds new loans for singlewides as manufactured home options grow

American Financial Resources announced it added conventional financing for a particularly small and affordable type of manufactured home that could be used to help address inventory shortages in the market.

AFR is offering Fannie Mae and Freddie Mac loans that finance singlewide units. These have an average sales price of $57,000 compared to $110,000 for larger double- or multi-wide manufactured homes, or more than $300,000 for traditional homes.

Read the full story here.

Mortgage credit offerings shift entering spring buying season

Mortgage credit availability overall remained tight in February compared with prepandemic standards, as the real estate industry prepared for the traditional spring home purchase season with slightly more government financing.

The Mortgage Bankers Association's Mortgage Credit Availability Index for February was unchanged from January at 124.6.

Read the full story here.

REO firms look out for new ‘mission’ metrics after GAO recommendation

Companies that sell vacant foreclosure properties are wary of a new Government Accountability Office recommendation that could lead federal agencies to measure the work they do in new ways.

Already one agency, the Department of Veterans Affairs, has committed to the recommendations of the report published last Friday. The report calls for the collection of new data that reflects if sales outcomes are in line with an agency's particular mission. In the VA’s case that means measuring veteran purchases of REO properties in its regular monthly performance reports.

Read the full story here.

Millennials entering home market are the oldest ever

Even as more borrowers between 21 and 40 leveraged the historically low mortgage rates in January, the average age rose to a report high, a sign that they are delaying homeownership, according to ICE Mortgage Technology.

The average age for millennial borrowers swelled to 33 years from 31.3 in January 2020 and 31.9 in December. The next highest average age came in April 2020 at 32.3 years.

Read the full story here.

Rising rates drive down refi apps but no impact on purchases

Rising mortgage rates continued to discourage refinance application activity but purchase volume still runs ahead of 2020's activity so far, the Mortgage Bankers Association said.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3% from

one week earlier

on a seasonally adjusted basis, led by a 5% decline in refis.

Read the full story here.

Home Point reports rise in loan broker inquiries as competitors battle

Home Point Capital touted its growth in the wholesale origination channel during 2020, and put in its two cents on the battle between its area rivals Rocket Cos. and United Wholesale Mortgage in an earnings call Thursday.

When asked what Home Point was hearing from mortgage brokers following UWM’s call on brokers to boycott Rocket during its earnings call, President and CEO Willie Newman largely declined comment, saying he’d rather focus on his firm’s strategy, but he did make one note.

The war of words seems to be accelerating Homepoint's growth in the wholesale channel.

Read the full story here.

Retention rates fade to record lows for mortgage servicers

Servicers struggled to bring back their borrowers as the overall retention rate crept down to its nadir in the fourth quarter, according to Black Knight.

The retention rate fell to 18% compared to 20% a year ago, while holding steady from the third quarter, according to the Mortgage Monitor report. This represents only the third instance in which it fell below 20% since the fourth quarter of 2006.

Read the full story here.

Fannie Mae’s early start on limiting certain loans surprises lenders

Lenders knew the government-sponsored enterprises needed to cap purchases of single-family loans backed by investor properties and second homes but didn’t necessarily think either of them would start this soon.

Fannie Mae announced April 1 eligibility criteria to fulfill a change to the GSEs’ preferred stock purchase agreements made by former Treasury Secretary Steve Mnuchin will help limit purchases to 7% over the course of a 52 week period.

This worries mortgage companies because alternate investors’ prices might not be as favorable as Fannie’s.

Read the full story here.

It's the seventh-inning stretch in mortgage-land

As we enter the second year of the Great COVID mortgage boom of the early 2020s, there are already telltale signs that the positive effect of low interest rates care of the Federal Open Market Committee is ebbing.

This is not to say that 2021 will not be another extremely good year for the mortgage industry, but the wind that promoted record loan originations is clearly shifting.

Read the full story here.

UWM boycott motivated by market share loss, Rocket exec claims

The head of Rocket Cos.' third party business fired back at United Wholesale Mortgage on Tuesday, saying UWM's call for a broker boycott was motivated by a loss of market share to its crosstown rival.

That's what really motivated UWM's announcement to cut off mortgage brokers that did business with Rocket Pro TPO and Fairway Independent Mortgage, Executive Vice President Austin Niemiec said in an email to mortgage brokers.

Read the full story here.