More disclosure on Fannie Mae, Freddie Mac fees needed: House hearing
National Mortgage News
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The latest revision to the Federal Housing Finance Agency's recent pricing changes has addressed some concerns around them but they still bear scrutiny, some speakers told a House Financial Services subcommittee hearing on Wednesday. "To be fair, we've … seen the FHFA reverse course on some components of the…changes, while also issuing a request for input on its method for determining [loan-level price adjustments]. These are positive but small steps in the right direction," said Rep. Warren Davidson, R.-Ohio, who chairs the subcommittee on housing and insurance. "While we welcome these changes, they are insufficient.”
Lenders reported a net loss of $1,972 per loan originated, or 68 basis points, in the first quarter, according to Thursday's Mortgage Bankers Association's Quarterly Mortgage Bankers Performance Report. That was an improvement from the $2,812 loss per loan in the fourth quarter of 2022, but far from the much smaller losses companies began to post last fall. The average pre-tax net production loss per loan hit a record 99 basis points in the fourth quarter. At the beginning of 2022, lenders were gaining 5 basis points per transaction.
Mortgage rates reversed this week, rising by the same four basis points it lost seven days prior, Freddie Mac said. That was a much smaller increase than seen in the 10-year Treasury yield, which rose 20 basis points between closing time on May 11 at 3.4% and opening on Thursday morning when it was 3.6%. The Mortgage Bankers Association's Weekly Application Survey released yesterday noted an abnormally large spread of 310 basis points between its own rate gauge as of May 12 for the conforming 30-year fixed rate mortgage and the 10-year Treasury. Spreads are normally between 150 and 200 basis points.
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Sales of previously owned U.S. homes fell to a three-month low in April, restrained by limited inventory and ongoing affordability concerns. Contract closings decreased 3.4% last month to an annualized pace of 4.28 million, according to data released Thursday by the National Association of Realtors. The figure was in line with the median estimate in a Bloomberg survey of economists. While inventory picked up amid the spring selling season, elevated borrowing costs paired with limited listings are restraining sales.
On Tuesday, in a Congressional hearing on regulating artificial intelligence that featured the CEO of the company behind ChatGPT, lawmakers and AI experts provided hints at the kind of regulatory regime they would like to see govern the rapidly evolving space. Some of the testimony touched on what a regulatory regime with oversight over AI might look like and whether existing agencies are sufficient for the job, which would impact the compliance burdens financial institutions face when they leverage AI for consumer-facing purposes like credit underwriting.
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Realtor Associate @ Next Trend Realty LLC | HAR REALTOR, IRS Tax Preparer
1yThanks for the updates on, The NMN.