Army Cutbacks Add Pressure to Military Housing Bonds, Communities

Local communities that enjoyed stability from nearby military installations after the 2008 recession are facing the reality that those bases are not immune from Congressional austerity measures designed to shrink federal government.

With the U.S. Army’s announcement of plans to reduce the ranks by 40,000 soldiers, or about 8% of the active force, local leaders last week began to assess the impact on individual posts. About 17,000 civilian jobs will also be eliminated over the next three years.

For the bond industry, the most immediate concern is likely to focus on taxable bonds used to finance privatized military housing since 1997. Today there are 205,000 privatized military housing units, mostly apartments and townhouses but also single-family homes.

Ratings analysts said they are studying the issue, with reports on the credit impact possible later in the week. Generally, however, ratings have held up through the […]

Premium Reduction Continues to Bolster FHA Loan Production

The Federal Housing Administration endorsed 102,800 loans in May, the second month in a row that endorsements passed 100,000.

The elevated FHA activity suggests continued interest in the government-backed market since the federal mortgage insurer reduced its annual mortgage insurance premium by 50 basis points in late January.

By contrast, the FHA endorsed just 66,300 single-family loans in January and 67,700 loans in December.

The latest FHA Production Report released earlier this month also shows that the agency received a total of 686,800 loan applications in February through May compared to 346,600 in the same period last year. (It generally takes 60 days from application to process and endorse an FHA loan.)

However, application activity dropped off toward the end of that four-month period, indicating the rush to refinance loans has waned. Applications in May decreased 10.5% from the previous […]

What Gay Marriage Ruling Means for Mortgages

The Supreme Court decision making same-sex marriage legal nationwide could boost mortgage demand as it provides gay and lesbian couples with more financing opportunities and stronger joint property rights.
“In the short run, it will increase demand for loans because more couples are going to get married,” said Shoshana Grossbard, an economics professor at San Diego State University who has authored research on gay and lesbian couples.
Married couples find mortgage credit more accessible than single people, she said. “It’s much easier for a married couple to buy property and get a mortgage than two singles,” Grossbard said.
In a survey of lesbian, gay, bisexual and transgender consumers published in May by the National Association of Gay and Lesbian Real Estate Professionals, 81% of respondents said a Supreme Court ruling for marriage equality would make them feel “more fiscally protected and confident,” which the trade group identifies as […]

Delayed TRID Deadline Was a Close Call for Lenders


Were it not for a slip-up at the Consumer Financial Protection Bureau, employees in the mortgage business might have had to forfeit their summer vacations.

New mortgage disclosure rules from the CFPB were set to take effect Aug. 1 and many lenders were far from being ready. Luckily for them, the CFPB was forced to extend the deadline by two months after the agency missed its own deadline for filing paperwork with Congress.

As of two months before the deadline, nearly 80% of banks were still awaiting technology upgrades from their vendors, according to the American Bankers Association. Even if the upgrades are made quickly, banks still need time to test and learn the new systems, says Bob Davis, an executive vice president at the ABA.

“Full confidence in the new systems may not come until months after the effective date,” he says.

The change the CFPB is making […]