Jonathan Burdick

Senior Loan Consultant, NMLS #1045837 – Fairway Independent Mortgage Corp.

Jonathan Burdick

CFPB proposes two-month delay in TRID implementation

CFPB proposes two-month delay in TRID implementation

The Consumer Financial Protection Bureau (CFPB) has proposed a two-month delay in implementing new consumer-disclosure rules under The Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), known as TILA-RESPA Integrated Disclosure, or TRID.

CFPB Director Richard Cordray said that the Bureau is now proposing an Oct. 1 start date for TRID, also known as the “Know Before You Owe” mortgage disclosure rules.

“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” Cordray said in a statement on the Bureau’s web page.

“We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

The decision comes after intense lobbying from the mortgage industry. Earlier this month, Cordray indicated that the agency would work with lenders that have shown a good-faith effort to comply with the new rules. Last week several industry trade groups pressed Congress to pass a bill that would force the CFPB to hold the industry harmless for any mistakes through the end of the year. Nearly 300 members of Congress also signed a letter in late May urging the Bureau to delay enforcement.

Mortgage industry welcomes delay

TRID mandates that the mortgage industry produce two rounds of streamlined forms for consumers that reveal mortgage costs within three days after the application and three days before the closing, making those costs easier for consumers to understand. Another major change is a mandatory waiting period of at least three days before closing. Changes to the loan within this window could also trigger another three-day waiting period.

Industry trade groups, including the Mortgage Bankers Association (MBA) and the American Bankers Association, issued statements praising the decision.

“The complexity of this rule, which impacts not just mortgage disclosures but also the business processes behind the entire real estate transaction, warrants the additional time to get it right and ensure that consumers are not adversely affected by the transition,” MBA President David Stevens said in a prepared statement. “MBA will be providing comments on this proposal to recommend the best way to implement the delay in a manner that protects consumers and mitigates disruptions for lenders in the middle of this complex conversion.”

Other industry players said that Aug. 1 deadline was particularly poorly timed because it comes at one of the busiest times for home purchases.

“I have met with many banks, and they haven’t even begun testing their software,” said Benjamin Niernberg, executive vice president of business development/operations for the Illinois-based Proper Title. “From a title side, we were ready to go, but there were still a lot of uncertainties on the lending side that were going to affect us.”]

Reference Scottsman Guide 6-19-15

Niernberg said that the two-month delay should be sufficient for the industry to adapt to the rule changes.

“It gives the CFPB a little extra time to iron out some of those details,” he said. “More importantly, the two months puts us at a time of year that it is easier to make a change.”

Foreclosure Activity Hits 19 Month High

Foreclosure Activity Hits 19 Month High

Jun 18 2015,

Completed foreclosures – or what RealtyTrac classifies as REO – drove foreclosure activity in May to a 19 month high.  The company’s U.S. Foreclosure Market Report said that there was a foreclosure filing – default notices, scheduled auction, and REO or completed foreclosures – on a total of 126,868 properties during the month, one in every 1,041 housing units.  The total was up 1 percent from April and 16 percent from April 2014.

Completed foreclosures affected 44,892 properties, 1 percent fewer than in April but up 58 percent compared to a year earlier.  Scheduled foreclosure auctions, which were up 5 percent year-over-year also contributed to the high level of activity.

RealtyTrac said it was the third month in a row that REOs increased on an annual basis and scheduled auctions have increased year-over-year for four of the last eight months.  May REOs were 56 percent below the peak of 102,134 REOs in September 2013 but still nearly twice the average monthly number of 23,119 in 2005 and 2006 before the housing bubble burst in August 2006.

“May foreclosure numbers are a classic good news-bad news scenario, with the number of homeowners starting the foreclosure process stabilizing at pre-housing crisis levels but the number of homeowners actually losing their homes to foreclosure still well above pre-crisis levels and on the rise,” said Daren Blomquist, vice president at RealtyTrac. “Lenders and courts are pushing through stubborn foreclosure cases that have been languishing in foreclosure limbo for years as options to prevent foreclosure are exhausted or left untapped.”

The increase in completed foreclosures was broad-based with 38 states and the District of Columbia posting higher year-over-year numbers.  The largest increases were in New Jersey (up 197 percent), New York (up 116 percent), Ohio (up 114 percent), Georgia (up 108 percent), and Pennsylvania (up 106 percent).  Florida, Michigan, and Maryland all saw increases of slightly more than 60 percent.

Foreclosure starts dipped 1 percent from April but were up 4 percent year-over-year, the first such uptick in four months.  Twenty-five states posted annual increases in foreclosure starts led by New Jersey (up 73 percent), Virginia (up 39 percent), Missouri (up 19 percent), Massachusetts (up 14 percent), and Washington (up 11 percent).

A total of 49,413 properties were scheduled for a future foreclosure auction (scheduled foreclosure auctions are foreclosure starts in some states), up 6 percent from the previous month and up 5 percent from a year ago. U.S. scheduled foreclosure auctions so far this year are running about 40 percent higher than their pre-crisis levels from 2005 and 2006.

Twenty-six states posted increases in scheduled foreclosure auctions from a year ago, including New York which was up 118 percent.  Increases in other states were much smaller with Illinois up 23 percent, New Jersey increasing by 22 percent, and Maryland up 11 percent.

Florida again led the nation in foreclosure activity with one in every 409 housing units with a foreclosure filing. Florida was followed by New Jersey (one in every 483 housing units), Maryland (one in every 531 housing units), Nevada (one in every 590 housing units), and Ohio (one in every 763 housing units).   

Among the nation’s 20 largest metropolitan statistical areas, 13 posted an annual increase in foreclosure activity in May, including Dallas (up 64 percent), St. Louis (up 56 percent), Baltimore (up 35 percent), New York (up 34 percent), Philadelphia (up 28 percent), and Atlanta and Detroit which were both up 27 percent.

Of metro areas with a population of over 200,000, those with the highest foreclosure rates were Atlantic City, New Jersey (a filing on one in every 230 housing units), Lakeland, Florida (one in every 331 housing units), Ocala, Florida (one in every 335 housing units), Miami, Florida (one in every 347 housing units) and Jacksonville, Florida (one in every 348 housing units).

 Reference Jann Swanson

FHA, VA loan programs post stronger quarter

FHA, VA loan programs post stronger quarter

A mini-boom in refinances drove year-over-year loan count and volume increases for Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, but United States Department of Agriculture (USDA) loan activity fell off, according to figures provided by the three agencies.

Loan counts and volumes for the second quarter of fiscal year 2015 (January to March) generally ran above those in fiscal year 2014, but remained well behind the 2013 totals.

loan counts

At the halfway point in the fiscal year, loan counts for all government-backed loan types totaled 766,432, up more than 22 percent compared to the first two quarters of fiscal 2014. Volumes were up 34 percent to $153.4 billion.

loan volume2

FHA loans, a program popular with first-time homebuyers, didn’t get a huge boost from its move to cut the annual insurance rate, the agency said in its quarterly report to Congress. In January, the Obama administration reduced premiums from 1.35 percent to 0.85 percent to attract more first-time homebuyers. Quarter over quarter, loan counts declined marginally, but volumes rose.

In the report, the agency noted that refinance activity jumped significantly and “endorsement volume may rise” through the year. Compared to a year ago, FHA did have a strong quarter.

In the second quarter of fiscal year 2015, FHA loan counts increased 22 percent to 199,962 loans compared to the same quarter a year ago. Overall volumes jumped 31 percent to $37.1 billion.

FHA reported that FHA-to-FHA refinance counts were up 67 percent year over year to 52,099, and overall refinance numbers were up 11 percent.

VA loan numbers rise, USDA falls

VA loans, a low-interest, zero downpayment program available to eligible veterans, also drew more interest. The numbers increased 65 percent year over year to 149,289 loans, up from a count of 90,590 from a poor second quarter in fiscal year 2014, the agency reported. Volumes were up 82 percent to $36.5 billion from just $20 billion in the quarterly figure a year before.

“Volume is up overall, and largely driven by the sharp increase in interest rate refinance loans,” VA Spokesman Terry Jemison said.

“We typically see upswings in [refinances] when rates take a dip,” he said.

The story was the opposite with USDA loans, however.

The year-over-year counts for the guarantee program declined by nearly 8 percent to 27,394 loans, and volumes dropped nearly 5 percent to $3.8 billion. The USDA’s direct origination program, however, drew more interest than last year. Direct loan counts rose 15 percent to 1,383 loans, whereas volumes were up almost 20 percent to nearly $170 million.

The agency said refinances have dropped sharply in the guarantee program since 2013, and “remain at low levels.”

“The housing industry as a whole has not been as strong as analysts projected because of a variety of reasons,” USDA said in a provided report.

The FHA share of total mortgage applications accounted for just over 14 percent, whereas the VA represented a 11.5 percent share and USDA just over 1 percent, the Mortgage Bankers Association reported in its latest weekly survey.

Reference..Scottsman Guide

Demand spike, strained supply push prices higher in Phoenix housing market

Demand spike, strained supply push prices higher in Phoenix housing market
Phoenix home prices have increased this year as supply decreases coinciding with a spike in demand, according to new data released from Arizona State University.

Median home prices rose 5.1 percent from last year as home buyers who have repaired their credit from foreclosure and short sale re-enter the market, the data found.

The 5.1 percent price increase may not sound like much, but with inflation close to zero it is significant, said Michael Orr, who released the report on Wednesday.
Supply for entry to mid level homes in the $200,000 range has decreased with “boomerang” buyers beginning to re-enter the market, Orr said, who serves as director of ASU’s Center for Real Estate Theory and Practice.
Boomerang buyers are folks who foreclosed on or short sold their homes several years ago, but have since repaired their credit enough to qualify to buy again.
The second quarter of this year has seen more demand than the same period last year, Orr said. That’s because boomerang buyers were still reeling from poor credit conditions a year ago.

In the third quarter, demand may taper off as less luxury homes are sold in the hotter months, Orr said.
The market should see some significant bumps into 2017 and 2018 thanks to buyers re-entering the market, Orr said.
Demand has been up across all levels of homes, but supply is very weak in the $200,000 price range where homes on the market receive multiple offers, Orr said.

“It’s really tricky right now and that’s trickling towards the $300,000 range,” Orr said. “But once you hit the $500,000 range you’ll find a home easy.”
Overall listings to date have fallen 3 percent in 2015 compared to last year.
Weak supply may be because home builders aren’t building cheaper homes, Orr said. They are focusing on building homes in the $300,000 price range and up, he said.

Lower priced homes are being built on the edges of the Valley, Orr said, but home buyers may not want to live there because of longer commutes and expenses that follow.
Much of the existing stock of entry level homes that are closer to the valley are still being occupied by renters too, Orr said, and those homes just aren’t reaching the market.

Reference Jesse A. Millard
Phoenix Business Journal