Daily Business News

Reviewing the qualified mortgage (QM) rule handed down by the Consumer Financial Protection Bureau (CFPB), the Dept. of Housing and Urban Development (HUD), in trying to broaden access to Federal Housing Administration (FHA)-insured loans, may modify the safe harbor provision, as nationalmortgagenews informs MHProNews. Any interest rate that exceeds the average prime rate plus 150 basis points falls outside the QM safe harbor line, which opens the door for possible litigation against the lender if the borrower defaults. FHA has announced it will issue its own QM rule as allowed under Dodd-Frank.

(Image credit: Federal Housing Administration)

NationalMortgageNews reports on a seasonally adjusted basis, purchase applications rose 13 percent over the week ending Jan. 4, but are up 47 percent on an unadjusted basis, their highest level since April 2011, according to the Mortgage Bankers Association (MBA). Noting home sales burgeoning in Calif. in Dec. because of concerns over the fiscal cliff, DataQuick says home sales in Southern Calif. are at their highest level in three years. As MHProNews understands, Calif. once had one of the higher foreclosure rates in the nation. The average contract interest rate for a 30-year fixed rate mortgage (FRM) with conforming loan balances stood at 3.61 percent, while the average for an FHA-insured loan of 30 years rose four basis points to 3.39 percent. The MBA also says a jumbo 30-year FRM rose ten basis points to 3.88 percent, while the 15-year jumbo remained steady at 2.88 percent.

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According to originationnews, the Mortgage Bankers Association (MBA) says despite the interest rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balances having increased nine basis points to 3.61%, mortgage apps rose 11.7 percent for the week ending Jan. 4. This interest rate is the highest in two months. The average contract rate for a 30-year FHA-insured loan moved up one basis point to 3.35 percent. MHProNews has been informed while the Refinance Index rose by 12 percent, the seasonally-adjusted Purchase Index increased ten percent.

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As originationnews reports, the Mortgage Bankers Association (MBA) says refinancings the last two weeks ending Dec. 28 were at their lowest point since April, as refis dropped 21.6 percent on a seasonally-adjusted basis. The average contract interest rate for a 30-year fixed rate mortgage (FRM) increased one basis point to 3.52 percent from the week ending Dec. 21 to the week ending Dec. 28. As MHProNews has learned, the 30-year FHA-insured interest rate dropped a point to 3.34 percent. For jumbo 30-year FRMs, the average contract rate fell two points to 3.75; for 15-year FRMs it rose two points to 2.86 percent.

(Image credit: moneycontrol)

According to Financial Advisor Magazine, 40 percent of the manufactured homes in the 100 cooperatively owned manufactured housing communities in New Hampshire are appreciating in value. Since 1984 the New Hampshire Community Loan Fund (NHCLF) has helped organize these 100 communities and began financing MH purchases in 2003, loaning $25 million over the last nine years for residents to purchase 600 homes in New Hampshire. Ranging from $10,000 to $100,000, the default rate on the loans is 1.6 percent. In 2008 NHCLF spun off ROC (resident-owned communities) USA to help organize co-ops nationwide. Studies have shown members of resident-owned communities plant more flowers and are more involved in community activities. NHCLF President Juliana Eades says the homes are appraised and not discriminated against because of age. Commenting on the 8.75 percent interest rate, Eades says, “It’s better than 14% or nothing, and it costs us to do this. We’re a lender and an organizer. Most lenders don’t want to organize, and most organizers don’t know anything about lending. The fact that we’re a lender helps pay for the organizing.” MHProNews learned that three months ago they began offering mortgages on homes sited on land owned by the borrower. Eades gets high praise from the Ford Foundation’s George McCarthy, director of metropolitan opportunity, who says, “Juliana Eades is creative, thoughtful, and willing to take risks and put the institution and the institution’s money on the line to make things happen.”

(Photo credit: ROC USA)

Reuters reports  Universal Forest Products, Inc. (UFPI:NASDAQ) is borrowing $75 million from Prudential Investment Management, Inc. to reduce debt associated with the recent purchase of Wash.-based Nepa Pallet and Container Corp. and acquire Custom Caseworks, Inc. of Sauk Center, Minn. The $35 million notes are unsecured ten-year at 3.89 percent interest; the $40 million 12-year unsecured notes have an interest rate of 3.98 percent. Custom Caseworks manufactures commercial casework and store fixtures, as well as office furniture and laminated panels. The company, with nearly $7 million in sales, recently expanded its facility to accommodate growth. The transaction is expected to be finalized before Dec. 31, 2012. As MHProNews knows, Universal manufactures structural lumber products for the manufactured housing industry.

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On the heels of a strong 2012, nationalmortgagenews reports Freddie Mac’s chief economist Frank Nothaft predicts single-family loans will decline about 15 percent in 2013 as refinancings recede and home purchases decrease. Noting many borrowers have already taken advantage of low rates this year, Freddie forecasts refinancings will account for 60 percent of originations in 2013, as opposed to 75 percent this year. Nothaft says single-family fundings will hit close to $2 trillion in 2012, but drop to $1.7 trillion in 2013 as the interest rate rises but continues below four percent. Meanwhile, a Nov. Fannie Mae survey has revealed 23 percent of home owners believe now is a good time to sell, an increase of five points from Oct. 2012. Plus, as MHProNews has learned, 51 percent said a mortgage is within their grasp, up from 41 percent a year ago.

(Image credit: Joshua Scott/CNNMoney)

NationalMortgageNews tells MHProNews according to the Bankers Mortgage Association applications fell 12 percent for the week ending Oct. 19, 2012. Mortgage apps fell 4.2 percent the previous week, according to the trade group’s market composite index, which covers some 75 percent of residential retail lenders. Refinancings as a total of new business fell one percent from the previous week to 81 percent. Interest rate for a 30-year fixed-rate mortgage (FRM) rose to 3.63 percent from 3.57 percent. The rate for 30-year jumbo FRMs increased from 3.81 percent to 3.85 percent.

(Image credit: texaslendingtoday)

CNNMoney reports the $25 billion settlement between the country’s five largest banks and the state attorneys general and federal government has led to JPMorgan Chase offering mortgage relief for thousands of its customers. The settlement gives banks the most credit for loan modifications completed in the first year, so Chase begin working in April to identify suitable borrowers who met the guidelines to take advantage of its $4.2 billion mortgage relief pledge. Guidelines included loans held directly by Chase, and borrowers had to be delinquent or underwater. Terms of the loan with the new payment spelled out were included in the letter to borrowers. One couple, 20 months behind on their mortgage due to job layoff, and in danger of losing their home, saw their 6.5% interest rate reduced to 2.8% for five years, and then fixed at 3.9% for the remainder of the 18-year loan. Their house payments dropped $229 a month. MHProNews learned they had previously tried to obtain a loan modification but were denied because of low income.

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As follow-up to a story we published Aug. 17, 2012 about loan originator compensation, the Consumer Financial Protection Bureau (CFPB) has issued a new proposal which gives management more control of pricing, and prohibits loan originators from leading borrowers into higher cost or higher risk loans as a means to increase their compensation. The CFPB wants lenders to offer a “zero-zero option” which allows potential borrowers to see the full interest rate and total closing costs of a mortgage so they can more easily compare it to other options. As nationalmortgagenews noted, CFPB Director Richard Cordray said, “Consumers have a hard time comparing loans when they are dealing with a bewildering array of points and fees. We want to provide consumers with clearer options and enable them to choose the loan that they believe is right for them.” In addition, under the revised proposal, senior managers would not be considered loan originators if they originated five or fewer loans in the last 12 months. The public comment period is open until Oct. 16. MHProNews has learned the CFPB intends to finalize the proposal after the first of the year.

(Image credit: moneycontrol)