By CARLY PEROUTKA
Amidst an economy that is placing increased financial pressure on many consumers, responsible lenders are seeking ways to manage risk and avoid financial loss.
In addition to everyday economic factors, a number of emerging influences are testing consumer durability. For example, according to the January 2024 Global Economic Intelligence report from McKinsey, while inflation is slowly dropping, the consumer price index continues increasing, raising debt levels across the board.
Similarly, many consumers feel a financial pinch from the recommencement of student loan payments. Some forecasters predict that 90 percent of the funds borrowers allocated toward repayment will come from reducing consumption.
To add even more pressure for some consumers, the end of federal funds for childcare will…
By PATRICK LAVERY
Predicted by both the experts and projection tools alike, the Federal Open Market Committee on Wednesday decided to maintain its target range for the federal funds rate at 5.25% to 5.5%, the sixth consecutive meeting at which the key rate has gone unchanged following a year and a half’s worth of increases.
In prepared remarks, Federal Reserve Chair Jerome Powell echoed previous statements over the past eight months in which he indicated that inflation continues to move too slowly, at least for the Fed’s liking, toward its ultimate goal of 2% to warrant any shift – although according to the data Powell provided, that may be more within reach than previously thought.
Total Personal Consumption Expenditures prices…
By ERIN FLYNN JAY
As the Biden administration’s war on “junk fees” continues, mortgage industry leaders are saying closing costs are not the source of home affordability challenges.
In March, leaders at the Consumer Financial Protection Bureau asked for input in a blog post aimed at challenging these costs.
“Families who manage to save up for a down payment and get approved for a mortgage often get an unwelcome surprise: closing costs that all too often are full of junk fees,” the post by Julie Margetta Morgan said.
Closing costs are paid on the day a buyer finalizes the purchase of their home. They include title insurance, credit report costs, appraisal fees, origination fees, and more.
According to the CFPB,…
By PATRICK LAVERY
After a swift acceleration of more than five percentage points in about a year and a half, starting in early 2022, could the Federal Reserve Board keep its policy interest rate in a holding pattern for close to a year?
That appears likely, as with no change since last summer, most experts feel the Fed is poised to keep the key rate steady – at a range of 5.25% to 5.5% – when the Federal Open Market Committee emerges from its next two-day summit on Wednesday.
CME Group’s FedWatch tool has been a valuable resource for Fed meeting predictions in recent months, and once again, its degree of confidence that the Fed will stand pat this week…
By ERIN FLYNN JAY
The Dutch offer home mortgages with interest rates that go down automatically as the loan gets paid off. The premise is that as the loan amount reduces and the property’s value increases, the risk associated with the loan decreases.
Dutch-style mortgages recently arrived in the United Kingdom and have been making headlines here in the United States as people ask whether these types of mortgages could be a solution to the housing market’s woes.
Nathan Hartseil, branch manager for Main Street Home Loans in Hingham, Mass., doesn’t think so due to the fact our mortgages are based on a secondary market.
“Most of our loans are transferred or sold to a secondary market, and that’s what…
The Department of Housing and Urban Development announced a final rule aimed at boosting homeownership for Native American families.
The final rule “clarifies the rules governing Tribal participation in the program” while establishing underwriting requirements, rules on the closing and endorsement process, stronger and clearer servicing requirements, as well as other updated standards. It is designed to increase lender participation in the Section 184 Indian Housing Loan Guarantee program and strengthen regulations to align with its current needs.
HUD says it worked closely with Tribal leaders to create a program that would genuinely boost homeownership in their communities. The new regulations increase borrower protections and “encourage new lender participation.”
“Homeownership is key to building generational wealth. By enhancing the Section…
The U.S. Department of Housing and Urban Development named Andrew Lofton as Regional Administrator for the Northwest, according to a press release.
Lofton will oversee HUD operations in Alaska, Idaho, Oregon, and Washington, representing the department while working with state and local officials on housing issues.
“It is an honor to serve the Biden Harris Administration and the people in the great Northwest, where I am blessed to call home,” said Lofton.
Lofton lives in Washinton, where he was born. He will be responsible for overseeing the delivery of HUD programs and services to these states while evaluating their efficiency and effectiveness.
“We are excited to welcome Andrew Lofton as the Regional Administrator for HUD’s Northwest Region,” said Acting Secretary…
By ERIN FLYNN JAY
The concept of mortgage porting, or transferring the terms of an existing loan over to a new property, has gained popularity as Americans locked into low interest rates try to figure out ways to navigate the current housing market.
It is estimated that trading up to a 25% more expensive home would more than double the average mortgage holder’s monthly payment at current interest rates. Even moving to a similarly-priced home in the same neighborhood would increase principal and interest payments by 40%.
Advocates for portable mortgages say if homeowners could keep their current interest rates, they would be more likely to sell their homes and buy a new one. That, in turn, would help unfreeze…
The Biden administration’s move to cap rent increases for affordable housing units has split support in the industry.
Officials announced last week that the administration will impose a 10% cap on YOY rent increases for property owners who are part of the Low-Income Housing Tax Credit program.
Currently, LIHTC allows increases of 5% or double the percentage change in national median income, whichever is higher. The proposal would limit rent increases on these properties to no more than 10% annually, doing away with the income change option.
Proponents say the plan would help stabilize housing for low-income Americans reliant on subsidized housing.
“The decision to prevent egregious rent increases is an important win for the millions of renters living in…
By KIMBERLEY HAAS
In a move that was not surprising, members of the Federal Open Market Committee held the target range for the federal funds rate steady at 5.25% to 5.5% at their meeting this week.
Inflation has eased over the past year but committee members do not believe it will be appropriate to reduce rates until they have gained more confidence inflation is moving sustainably toward 2%, which has been their goal.
Federal Reserve Chair Jerome Powell said during a press conference on Wednesday afternoon that inflation may not reach 2% until 2026 but it is likely rates have hit their peak and the committee plans to start dialing them back at some point this year.
Powell did not…
