Last month involved several regulatory compliance updates and hot topics in the Mortgage industry. We’ve rounded up some key updates and how they will affect you and your financial institution going forward.
Skid of Declining Existing-Home Sales Finally Snaps in June
With the supply shortage seeing slight progress, June snapped a four-month streak of declining existing-home sales, according to new data from the National Association of Realtors (NAR).
Total existing-home sales reached a seasonally adjusted annual rate of 5.86 million, growing 1.4% month over month and 22.9% year over year. Both single-family and condo sales grew 1.4% monthly. Reversing a troubling trend over the spring, none of the four major U.S. regions saw a sales decline, with sales in the Midwest, Northeast and West rising and sales in the South staying level from May.
Why Is This Important to Me and My Financial Institution?
Homes continue to fly off the market quickly, remaining on the market for an average of 17 days. First-time buyers who need mortgage financing are being challenged by the low inventory of existing homes.
Non-QM Lenders, It’s Time to Embrace Automated Underwriting Systems
Despite 2020’s pause in originations and securitizations, the 2021 outlook for non-QM lending is promising. In fact, a recent report from S&P Global estimates that “non-QM issuance volumes will return to 2019 levels this year, reaching an estimated $25 billion” as agency refinance activity slows down and the purchase market remains strong.
Even with 2020’s liquidity problems and subsequent pause, the non-QM sector closed out the year strong, with $18.9 billion in total securitizations – only a 33% decrease from its 2019 high. Investors are returning to the space with more confidence, and new investors like private equities and insurance companies are showing interest.
Why Is This Important to Me and My Financial Institution?
Given the changing rules and wave of new entrants coming back into the non-QM market, it is an ideal time for lenders to evaluate their tech stack and consider adding an automated underwriting system (AUS).
FHFA Eliminates Adverse Market Fee
The Federal Housing Finance Agency (FHFA) is officially axing Freddie Mac and Fannie Mae’s controversial adverse market refinance fee. Starting in August, lenders will no longer be required to pay the government sponsored enterprises (GSEs) a fee of 50 basis points when they deliver refinanced mortgages.
FHFA Acting Director Sandra Thompson said the elimination of the fee will help families take advantage of the current low-rate environment.
Why Is This Important to Me and My Financial Institution?
This move by the Federal Housing Finance Agency makes home financing more affordable for both lenders and families.
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