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Increase in HELOC Delinquencies Is Likely as Loans Come Due

12.06.2015
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There could be a new wave of delinquencies among home equity line of credit borrowers as a large percentage are moving into the repayment phase, a report from Experian said.

There are $265 billion in outstanding HELOC loans originated between 2005 and 2008 which are reaching the point where consumers can no longer borrow against them, according to Experian.

These outstanding HELOC loans could have significant implications for consumers, as well as the greater lending industry. The increased repayment burden could bring higher monthly payments for the consumer, making them more likely to go delinquent on the HELOC loan along with other types of debt.

HELOC delinquencies had gone back down to pre-recession levels. According to the Experian analysis, 0.5% of loans are in late-stage delinquency (90-180 days past due) compared to 2009, when they were 1.81%, their highest. However, between 2013 and 2014, borrowers […]

Five Headaches Facing Lenders as Mortgage Disclosure Deadline Nears

12.06.2015
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The 60-day countdown has begun.

Banks and mortgage lenders are in the final stretch of preparing to deliver new mortgage disclosures to borrowers starting Aug. 1, as required by the Consumer Financial Protection Bureau. The Dodd-Frank Act ordered the bureau to integrate the disclosures of the Truth in Lending Act and the Real Estate Settlement Procedures Act into one form, known as TRID, that is meant to help consumers more clearly understand the total costs of a home loan.

Despite much hand-wringing by the industry, many lenders are said to have well-developed plans to comply with theĀ 1,888-page integrated disclosure rule, which was years in the making.

Still, insecurities abound. The chances of a mistake are high with a rule so rigid that it requires fees to be listed in alphabetical order, and the costs for violators will be steeper than ever. Massive, and […]

CFPB, DOJ Hit Provident Brokers Over Pricing Discretion

11.06.2015
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Provident Funding Associates, a private mortgage lender, has agreed to pay $9 million to settle allegations its brokers charged minorities higher fees and interest rates, federal regulators said Thursday.

In a joint complaint from the Consumer Financial Protection Bureau and the Justice Department, regulators said Provident gave some pricing discretion to its brokers, resulting in them discriminating against 14,000 African American and Hispanic borrowers.

“Consumers should never be charged higher fees because of their race or national origin,” said CFPB Director Richard Cordray in a press release. “We will continue to root out illegal and discriminatory lending practices in the marketplace. I look forward to working closely with our partners at the Department of Justice to ensure consumers are treated fairly.”

California-based Provident was cited largely because of the pricing structure it uses with its brokers, which allowed them to raise the interest rate and broker fees beyond […]

Housing Growth Will Take Wage Growth: Economists

11.06.2015
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The labor market is the No. 1 driver of housing, and it will take a return to full employment and appreciable gains in wages to spur housing growth this year, mortgage industry economists said.

Even though employment and pay have strengthened, U.S. economic data is not there yet, said Leonard Kiefer, Freddie Mac’s deputy chief economist.

Speaking at the Mortgage Bankers Association’s Secondary Market Conference in New York, Kiefer predicted it would take some time before conditions are right for housing to expand. Furthermore, the timing will vary greatly by region, with areas such as Texas and California having an edge over other parts of the country.

Projections of 6 million home sales in 2015 are still well below what should be seen in a well-functioning housing market, Kiefer said.

That is the short-term outlook. For 2017 and beyond, household formations and other demographic factors […]

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