Market Conditions | The Mortgage Outlet

Lenders Ready to Give Strategic Defaulters a Second Chance?

9.02.2016

Remember strategic defaulters, those homeowners who walked away from their underwater mortgages even though they could still afford their loans?

They’re back; this time, as prospective borrowers.

After seven years of bad credit and a tight leasing market that has sent rents soaring, consumers who abandoned homeownership during the downturn are now eager to return.

Strategic defaulters are arguably among the riskiest of these so-called boomerang buyers, consumers who lost their homes during the Great Recession and are now ready to become borrowers again.

But at a time of renewed focus on purchase lending — amid concerns of refinance burnout and a shrinking originations market — lenders in search of new business have to take a strong look at giving these former borrowers a second chance.

Because of all this, the mortgage industry is considering whether walking away from a home is a risk that could recur, and if so […]

Housing-Tax-Credit Fix Is Just a Drop in the Bucket

8.02.2016

Government, Market Conditions

Few folks, especially anyone connected with affordable housing, want to look a gift horse in the mouth.

For that reason, bankers have lauded the enactment last month of a federal tax law that, they say, could pave the way for an increase in the construction of affordable rental housing. But relative to the post-crisis boom in demand for apartments and soaring rents, the increase will be minor unless more reforms are enacted, according to bankers and others in the business.

“It helps, but there’s still so much more that needs to be done,” said Annette Billingsley, a managing director and group head of community development finance at Union Bank in San Francisco.

The change, a tiny provision tucked into the $1.1 trillion spending legislation that President Obama signed Dec. 18, is expected to provide more stability to banks and developers that use low-income housing tax credits […]

US home purchases rebound; 2015 had most sales in 9 years

22.01.2016

Market Conditions

WASHINGTON (AP) — U.S. home sales rebounded in December after new regulations had delayed the completion of purchases in November. And total sales in 2015 were the most in nine years.
The National Association of Realtors said Friday that sales of existing homes climbed 14.7 percent last month to a seasonally adjusted annual rate of 5.46 million. Sales had previously plummeted as the industry adapted to new mortgage disclosure rules — a temporary downturn before delayed sales were finalized in December.
Last month’s rebound capped a year that produced the highest annual sales total since 2006. Steady job growth and low mortgages drew more buyers into the market, causing both sales and prices to climb steadily.

Americans bought roughly 5.26 million homes in 2015, a 6.5 percent increase over 2014. The median sales price rose 6.8 percent to $222,400.

The Realtors forecast that sales […]

How TRID Will Affect Lenders’ Processes, Volume in 2016

18.01.2016

Market Conditions, Regulation

Mortgage originators will spend much of 2016 working their way through the hiccups caused by the October implementation of new mortgage disclosures, but those problems are unlikely to have a meaningful impact on loan origination volume next year.

“I expect origination volumes to be flat to slightly down because of some of the other things going on in the market today,” said Brian Benson, chief executive officer at closing cost data provider ClosingCorp. “I don’t know that the regulatory changes are appreciably going to change industry volume.”

While total mortgage volume may decline somewhat, purchase mortgage volume is expected to increase over 2016. Frank Nothaft, the chief economist of CoreLogic, predicted a 10% increase in purchase dollar volume, driven by improved home sales and higher prices. He said he expects the rate of price increases to flatten out as the year goes on.

Another driver of higher purchase volume […]