11 million households fell behind on rent or mortgages in second quarter


In the second quarter of 2020 nearly 11 million households fell behind on their rent or mortgages – however nearly triple that number, approximately 30 million individuals, missed at least one student loan payment, according to a recent report from the Mortgage Bankers Association’s Research Institute for Housing America.

The data compiled from the Understanding America Study was the result of a panel survey tailored to study the impact of the pandemic specifically on mortgagors, renters and student loan borrowers.

According to the survey, evidence suggests that student debt is affecting housing-market behavior, in particular, how rising student debt burdens may have crowded out first-time-home purchases among Millennials.

Every additional $1,000 of student debt lowers the homeownership rate by approximately 2% – a sizeable effect, according to the report. This bolsters the findings of other studies, including a 2017 study by the National Association of Realtors where more than 75% of respondents with student loans said their educational debt impacted their decision to purchase a home.

Over the span of the second quarter, 5% of mortgagors missed one payment, 2.8% missed two payments, and 3% missed all three payments. Student loan borrowers, however, struggled to make payments more than mortgagors and renters – while 9.3% of student loan borrowers missed one payment over the quarter, 16.4% missed two payments, and 12.9% missed all three payments.

“In the pandemic, missed student loan payments or deferrals could adversely affect the ability in the future for younger households to enter the housing market or slow the climb of the housing ladder,” the release said.

Through the second quarter, 65% of borrowers reported receiving permission from their lender to delay or reduce their monthly payment – though only 57% took the offer. Nearly a third, 30.6%, of those who did receive permission missed a payment.

By race and ethnicity, the percentage of borrowers reporting missed student loan payments was on average over the quarter 54.5% for Blacks, 49.7% for Latinx, 45.0% of Asian/Hawaiian/Pacific Islanders, 44.4% for Whites, 42.3% for White Non-Latinx and 37.1% for Native Americans, the report said.



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Mortgage applications fall for the third week in a row


Mortgage applications fell 2% last week, according to a report from the Mortgage Bankers Association, marking the third week of declines.

The refinance index also fell 3% last week, however remained 40% higher than the same week one year ago. Despite 30-year fixed and 15-year fixed mortgage rates declining to near historical lows, both conventional and government refinancing activity fell last week, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

“Mortgage rates have remained below 3.5% for five months now, and it’s possible that refinance demand may be slowing and will not significantly increase again without another notable drop in rates,” Kan said.

Purchase applications remained essentially unchanged, falling .2% from one week earlier on a seasonally adjusted basis, and 28% higher than the same week one year ago – the 15th straight week of year-over-year gains.

According to Kan, lenders are reporting that the strong demand for home buying is coming from delayed activity from the spring, as well as households seeking more space in less densely populated areas.

The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.6% of total applications.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The FHA’s share of mortgage apps fell to 10.2% from 10.5%.
  • The VA share of applications fell to 11.4% from 11.8%.
  • The USDA share of total applications remained unchanged from 0.6% the week prior.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) fell to 3.08% from 3.11%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) remained unchanged from 3.41% the week prior.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.19% from 3.16%.
  • The average contract interest rate for 15-year fixed-rate mortgages fell to 2.67% from 2.7%.
  • The average contract interest rate for 5/1 ARMs fell to 3.08% from 3.14%.



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Refi fee is delayed, but what are lenders doing about already locked loans?


The Federal Housing Finance Agency announced on Tuesday it is delaying the implementation of its adverse market refinance fee to Dec. 1 – three months past its intended start date. But what about lenders whose refi loans were locked with closing dates after Sept. 1 and carrying the 50bps LLPA?

Phil Shoemaker, president of originations at Home Point Financial, said that for every Home Point borrower who had the adjustment added, the fee will be removed. However, with several thousand loans in the pipe, it does require staff to go in and manually touch every single loan to reverse the fee.

According to Home Point, the adjustment has been removed from the pricing for new locks as long as the term does not have a lock expiration date greater than Nov. 15, 2020.

“There are loans that are locked on a 90-day or so lock, where the lock is actually long enough that by the time the loan delivers the fee will be in place. So, we’ve identified a cut off where if the lock expiration is past this point the fee will apply,” Shoemaker said.

Home Point will credit its wholesale and correspondent clients the 50-basis point adverse market fee for loans locked between Aug 13. And Aug 15., unless the loan has already been purchased.

United Wholesale Mortgage sent an internal letter to its community that stated in most cases, it will be able to return the money to borrowers. How it is able to make the 50bps adjustment depends on the current status of the loan.

For those not locked, the adjustment is off the rate sheet until further notice. For those that are locked and not yet approved with conditions (AWC) or locked and in AWC, UWM removed the 50bps adjustment. Loans cleared to close or those already in closing but desire to remove the 50bps were encouraged to contact the Lock Desk immediately. In those cases, borrowers will be made aware that docs will have to be redrawn and the closing will be delayed.

Brian Covey, vice president of regional production at loanDepot, said the lender removed the 50 bps LLPA on conventional refinances as soon as the extension was announced.

“It varies on the current pipeline as some refinance customers with conventional financing were not locked so we are obviously encouraging them to lock given this info and based on their situation,” Covey said.

While the adverse-market fee came off as a shock to some mortgage originators, and experienced push back from several in the industry, the GSEs’ responded that that the “modest fee” would help the enterprises assist families during the pandemic.

But with rates continuing to hover below 3% and demand refusing to slow down, some lenders were in agreement that the industry will have to brace itself for the fee sooner or later.



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Veterans United Home Loans to host virtual career showcase Sept. 2


Mortgage Research Center, which does business as Veterans United Home Loans, is holding a virtual career showcase Wednesday, September 2, for all interested job applicants.

According to Veterans United, the showcase will allow potential job candidates an opportunity to view the company’s culture, diversity and inclusion programs and available career opportunities in a more personal setting. It will also feature an overview of Veterans United’s different divisions and recruiters will be available to answer any questions potential applicants may have.

“We are in a moment of time that requires us to think innovatively,” said Loreli Wilson, director of inclusion and social impact. “Typical means of finding talent aren’t as easy to execute, and the availability of talent is broader than before.  Those two concepts are how we landed on a nation-wide virtual career fair. This format allows us to interact with diverse talent from across the country, and introduce ourselves in a real and genuine light.”

Wilson, along with Ian Franz, director of culture, Larissa Wollard, associate director of people services, and Erik Morse, associate director of people services will be featured speakers for the virtual showcase.

The Missouri-based company has opportunities available at all of its locations, including its headquarters in Columbia, its corporate offices in Irving, Texas, Lenexa, Kansas, and St. Louis, and its branch offices in about 25 states. Remote opportunities are available throughout as well.

The showcase will mainly focus on production and operations roles, however, it’s not limited to the two divisions, with positions ranging anywhere from entry-level to experienced professionals, said Veterans United. Opportunities that will be featured include operations coordinators, SAR underwriters, loan officers and loan specialists, to name a few.

“We are looking for candidates who are looking for a place to call home, not necessarily their next stop on the job train,” Wollard said. “Our hiring practices are not based on the refi interest rate wave, but are built on a model of stability for the long haul.”

According to Wollard, the now 3,700-person company hired nearly 1,000 people this year. With several hundred openings nationwide, Wollard said they plan to continue to hire at that pace for the foreseeable future.

Those interested in participating in the virtual career fair can tune in Sept. 2 at 3 p.m. CST here. Open jobs at Veterans United can be found here.

HousingJobs is a curation of housing companies that are hiring. If you are looking for a job in the industry, check out our hiring stories here. If you’re an executive at a housing company and you’re hiring, please send a note to our Chief Product Officer Diego Sanchez at dsanchez@housingwire.com.



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DataTrace launches market insight platform for title companies


DataTrace Information Services announced on Thursday its launch of MarketView – a platform that will provide title companies with accurate market insights including existing market share.

Title companies will have the ability to search market data nationwide by state, county, city and ZIP code as well as timeframe and transaction type, the release said. The platform includes automated report generation via email and allows users to instantly share those metrics with their organization.

According to the release, MarketView’s conception was a result of “increasing market fluctuations creating challenges for title companies that rely on property sale and mortgage origination reports” and to better “identify metrics that drive their business development.”

The platform will allow users to measure the performance of each branch against other branches and competitors as well as monitor new competitors in the market.

Other reports offered include trend, loan officer, and title/lender intersection reports that DataTrace said can be used to identify and compare relationships between title companies and lenders. The MarketView Loan Officer Share Report reviews the volume of loans processed by loan officers and mortgage brokers, as well as the transaction type and loan amount.

Market reporting can then be verified through the Nationwide Multistate Licensing System consumer access website that is available in reports.

As of right now, DataTrace Information Systems distributes title history information property tax assessment and payment data, document images and property profiles in 47 states and said its MarketView data covers 85% of the U.S.

“MarketView equips our clients with critical market intelligence necessary to drive strategic business decisions, adapt to changing conditions and ultimately grow their business,” said Robert Karraa, president of DataTrace.



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Are you overpromising real estate closing times?


For the past two weeks, HousingWire took a deep dive into the effects an accelerated market can have on appraisal turn times and the delta between appraisal ratings and market forecasts. This week, industry experts discuss how to navigate client and referral partner expectations and minimize closing times when factors like these begin to decelerate the buying process.

Across the board, experts were in agreement that proactivity is key to avoid overpromising and under delivering. With many lenders seeing closings pushed out past 30, 45 and even 120 days, setting the expectation early gives lenders the opportunity to foster relationships with their clients and prepare for possible file extensions, said Mark Canale, senior loan officer and producing branch manager at Movement Mortgage.

“As an LO, you have to understand every aspect of the transaction. I get it, the seller needs to move, but doing a quick closing to incentivize the seller to accept your offer is no longer a selling point. You can’t say to a them, ‘Hey, we can close faster pick our offer,’” Canale said. “You need to have the confidence to say no, don’t fall into a tendency to say yes.”

But slowdowns aren’t always avoidable, especially on difficult properties and complicated buyers. Courtney Poulos, owner and broker of ACME Real Estate, said hiccups can occur anywhere along the process – from long wait times for liquidation of funds, to drive-by appraisals that were never intended to be drive-by, and underwriting staff being stretched thin in the wake of COVID-19.

“You’ve got to realize that for companies, many of their workforces are working from home, and getting verification of employment or last minute employment confirmations can delay your process. Appraisals are of course going to be delayed, and then that can delay title orders, obviously. It’s a bundle, a domino effect, and it’s understandable that people can’t get it all done in the same timeframe that they used to,” said Tawn Kelley, executive vice president of Taylor Morrison Home Corporations.

To mitigate these problems, lenders have to be willing to leverage technology that helps with automation but doesn’t remove the humanistic element of lending, Kelley said.

Automation opportunities and leveraging lead data are a start, but experts said creating internal tech adoptions that are operational by everyone on a team is what creates consistency that borrowers will notices

Poulos warns though that while tech-like automation can leverage incredible opportunities, the relationship element of lending cannot fall to the wayside. Personal branding, excellent customer support and friendly check-ins help clients feel engaged and increase their willingness to be flexible in the process.

For all experts, communication across every step of the way was the key player to navigating closing times. Setting standards up front can fall flat farther down the line if agents, underwriters, appraisers and everyone in between isn’t on board with the goal.

“I’ll be brutally honest. The trickle-down effect is just too much, your processer is going to hate you, your system is going to hate you, your underwriter is going to hate you if you set everyone up for failure,” Canale said. “I want to make sure that if I need an extension, I have a laundry list of emails, text messages and phone calls to that borrower to say this weekend we tried to make it happen. Honesty doesn’t ruin relationships. Promising something you can’t deliver on will.”



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Mortgage applications are up 6.8%, with refinance activity leading the way


Mortgage applications were back up 6.8% last week, according to a report from the Mortgage Bankers Association, further evidence that, thanks to the pandemic, August is the new May for home-buying.

Consumers responded to mortgage rates that fell to new low last week, with the refinance index jumping 9% from the previous week to its highest level since April, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Last week, refinance activity also boasted its twelfth straight week of year-over-year gains and rose to 65.7% share of total applications for mortgage activity, the highest level since May.

The unadjusted Purchase Index increased 1% compared with the previous week and was 22% higher than the same week one year ago.

“While this was still positive news for the purchase market, the gradual slowdown in the improvement in the job market and tight housing inventory remain a concern for the coming months, even as low mortgage rates continue to provide support.”

The adjustable-rate mortgage (ARM) share of activity fell last week to 2.7% of total applications from 3.1%.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The FHA’s share of mortgage apps increased from 9.6% to 10.4%
  • The VA share of applications increased from 11.2% to 11.4%.
  • The USDA share of total applications remained unchanged from 0.6% the week prior.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) fell to 3.06% from 3.14%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) fell to 3.40% from 3.51%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.23% from 3.27%.
  • The average contract interest rate for 15-year fixed-rate mortgages fell to 2.67% from 2.73%.
  • The average contract interest rate for 5/1 ARMs fell to 3% from 3.09%.



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HUD allocates $472 million of CARES Act funding for low-income households


U.S. Department of Housing and Urban Development Secretary Ben Carson announced Monday the allocation of $472 million to be used for low income families during the coronavirus pandemic. HUD made the funding available to Public Housing Authorities as part of the CARES Act to assist families utilizing Housing Choice Vouchers and Mainstream vouchers.

“This funding will provide additional resources to public housing authorities to make sure people have a decent, safe, and affordable place to call home,” Carson said. “HUD continues to work with our public housing authorities to protect American families from this invisible enemy, including vulnerable residents in the Housing Choice Voucher Program.”

Some of the eligible coronavirus-related activities covered under the funding are relocation of families to health units or other designated units for testing, hospitalization, or quarantine, or transportation to said locations for limited exposure. Funds can also be used for procuring cleaning supplies and services to maintain sanitary HCV units.

Aside from the families themselves, HUD also said funding could be used to retain or increase owner participation in the HCV program, such as incentive or retention costs and costs for providing childcare for the children of PHA staff that would not have otherwise been incurred.

“These new funds are important and will go a long way to help low-income residents secure and retain affordable housing during this unprecedented time,” said Hunter Kurtz, assistant secretary for Public and Indian Housing.

In early July, and prior to the expiration on eviction moratoriums, HUD released an “Eviction Prevention and Stability Toolkit” to encourage PHA and HCV landlords to keep families stably housed and help to mitigate economic hardships due to the coronavirus.

If the house-passed HEROES Act is approved by the senate, $1 billion will be allocated to first-year funding of 100,000 new emergency housing vouchers and $100 billion to assist low-income renters at risk of homelessness avoid eviction. 



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It’s harder to get “Outstanding” rating on CRA performance evaluation


A 10-year study by QuestSoft revealed that since 2019, the percentage of “Outstanding” ratings on Community Reinvestment Act performance evaluations dropped across the board for large, intermediate and small institutions.

However, the decline was greatest for large institutions, which saw a 10.4% drop, compared to a 2.32% drop for intermediate institutions and a 4.44% drop for small institutions.

The 2010 to 2020 study reviewed 14,765 CRA performance evaluations on large, intermediate and small institution exams from the Federal Reserve Bank, Federal Deposit Insurance Corporation, Office of the Thrift Supervision and Office of the Comptroller of the Currency with recently appointed acting head, Brian Brooks.

Even with their 10% drop, the report revealed large institutions were more than three times as likely to receive an “Outstanding” rating on CRA performance evaluations when compared to small institutions.

Large institutions were also more than twice as likely to receive an “Outstanding” rating compared to intermediate institutions, though nearly 79% of large institutions received a “Satisfactory” rating.

In 2020, small institutions bottomed out on the percentage of “Outstanding” ratings at 2.11% — the lowest percentage of “Outstanding” ratings in the 10-year study.

The number of small Institutions that had received an “Outstanding” rating in 2020 was more than three times lower than the prior year, and more than two times lower than the 10-year average. 

“While some lawmakers have criticized CRA for being too easy on institutions, the data shows earning an ‘Outstanding’ rating is an exceptional accomplishment,” a release from QuestSoft said.

According to the report, the percentage of institutions that had received an “Outstanding” rating is lower than the prior four years and “Needs to Improve” ratings have increased for intermediate institutions. As a result, the data suggests current examination benchmarks and examiner focus may be shifting, the report said.

In August 2018, the OCC sought feedback on its announcement that it was looking to “modernize” the CRA. By May of 2020, it announced its final rule on CRA changes without the backing of the FDIC and Federal Reserve – with agencies calling it “untimely” given the state of the pandemic.

Several companies within the industry, including the American Banking Association, the National Community Reinvestment Coalition and the National Housing Conference, expressed concern about data collection challenges and the effect they would have on lower-income communities.

Concurrent with the announcement of the CRA’s final rule, then-Comptroller of Currency Joseph Otting stepped down to be succeeded by then-COO Brian Brooks.

“With the Office of the Comptroller of the Currency (OCC) going at it alone on CRA reform, it is evident that there will be a change in approach across agencies. It is more important than ever to be focused on regulatory examination outcomes,” the report said.



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Congressional hearing witnesses claim servicers lacked forbearance clarity


The House Financial Services Subcommittee on oversight and investigations held a hearing on Thursday examining how servicers provided clarity and information on the CARES Act and forbearance options for borrowers.

The discussion, titled “Protecting Homeowners During the Pandemic: Oversight of Mortgage Servicers Implementation of the CARES Act” also investigated disproportionately affected lower income households and communities of color.

Witnesses Alys Cohen, staff attorney for the National Consumer Law Center, Marcia Griffin, founder and president of HomeFree-USA and Donnell Williams, president of the National Association of Real Estate Brokers, were in agreement that a gap consisting of “incomplete and inconsistent” information regarding forbearance was occurring between servicers and American borrowers.

“Federal regulators must increase oversight and ensure mortgage assistance meets the needs of diverse communities of homeowners, improve regulations, including recent CFPB rules that leave homeowners at risk, and consider future reforms in the mortgage servicing industry,” said Cohen.

Several witnesses and representatives such as Rashida Tlaib of Michigan and Nydia Velaquez of New York said it was the responsibility of the servicer and the government to provide proper information and assistance – saying many borrowers in forbearance within their districts weren’t aware of the 180-day initial forbearance period or the up to one-year extension.

Andy Barr, ranking member for the subcommittee, and witness Ed DeMarco, president of the Housing Policy Council, were in agreement that servicers pivoted in a timely manner and were “better prepared and more nimble today than they were in past crises.” They supported the idea that it was more the responsibility of the borrower to maintain communication with servicers during periods of possible forbearance.

DeMarco said HPC members and other mortgage servicers extended forbearance to homeowners who do not have federally backed loans and began offering forbearance options before the passage of the CARES Act.

“From the outset of this emergency, HPC members have been committed to keeping individual borrowers and families in their homes,” said DeMarco. “We have been doing this in partnership with many others, including government agencies and federal regulators, Congress, nonprofit and community organizations, as well as other stakeholders, including those testifying with me today.”

All witnesses were in agreement that a history of systemic discrimination is being maintained in the housing industry. Williams said there is a 13% gap between Black homeowners and white homeowners receiving forbearance and urged Congress to allocate specific funds targeted to the preservation of Black homeownership.

“It is well documented the COVID-19 pandemic has had a crushing and devastating effect on Black homeowners, putting a deep economic strain on many Black borrowers who have worked hard to achieve the ‘American Dream’ of homeownership,” Williams said. “As of mid-June 2020, roughly 24% of Black homeowners reported some difficulty making their mortgage payments compared to white homeowners.”

Al Green, chairman of the subcommittee, proposed a department of reconciliation with the responsibility of dealing with racism in not only the industry but within the country that would report to the president and maintain a secretary of reconciliation. All members in attendance, except DeMarco, agreed the position should exist.



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