• The Consumer Financial Protection Bureau (CFPB) filed a Consent Order on Tuesday against Lighthouse Title, a title insurer based in Holland, Michigan.  The order was, the Bureau said, sending "a clear and simple message" that it intends to pursue legal action against financial institutions that pay in any manner for referrals.  The administrative proceeding carried a civil money penalty of $200,000.

    The Bureau said that Lighthouse Title had violated the Section 8(a) of the Real Estate Settlement Procedures Act, (RESPA) and its implementing regulation, Regulation X.  The relevant section of RESPA states, "No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person."

     

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  • The Consumer Financial Protection Bureau (CFPB) came down hard on Michigan-based Flagstar Bank both legally and verbally as it issued the first enforcement action under its new mortgage servicing rules which went into effect in January 2014.  The action claims that Flagstar had "failed borrowers" at every step in the foreclosure process by illegally blocking those borrowers' attempts to save their homes. 

    "Because of Flagstar's illegal actions and unacceptable delays, struggling homeowners lost the opportunity to save their homes," said CFPB Director Richard Cordray. "The Bureau has been clear that mortgage servicers must follow our new servicing rules and treat homeowners fairly. Today's action signals a new era of enforcement to protect consumers against the cost of servicer runarounds."

     

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  • There was what the S&P/Case-Shiller Home Price Indices called "a significant slowdown in price increases in July S&P Dow Jones Indices said today.  Nineteen of the 20 cities in the survey saw a lower year-over-year gain in July than they had registered in the previous month and only three cities still showed increases in the double digits.   

    The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.6 percent annual gain in July 2014 compared to a 6.2 percent annual increase in June.  The 10- and 20-City Composites showed year-over-year increases of 6.7 percent, a substantial decline from the 8.1 percent gain for each during the 12 months ended in June.   Las Vegas, Miami and San Francisco were the only cities to report double-digit annual gains. Cleveland's rate remained unchanged at +0.9 percent for the 12 months ending July 2014.

     

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  • Pending home sales declined slightly in August, mirroring a similar pull-back in existing home sales announced last week.  The National Association of Realtors® (NAR) said today that its Pending Home Sale Index (PHSI) for August was 104.7, a decline of 1.0 percent from July's level of 105.8.  Existing home sales, also according to NAR, slipped 1.8 percent in August.  The month however remained the second best of 2014for both performance measures.

    The PHSI is a forward-looking indicator based on contract signingsfor home purchases.  Despite the slight decline in August the index is above 100, considered an average level of contract activity for the fourth consecutive month. The August index was 2.2 percent below the PHSI in August 2013.

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  • Study after study has shown that Millennials - that generation of Americans currently between the ages of 18 and 34 - are becoming homeowners at rates way below that of earlier generations at the same age.  Now Zillow has released a survey showing that, while they might not be buying, Millennials would definitely like to do so.

    This was one finding of the most recent U.S. Housing Confidence Survey conducted by Pulsenomics LLC.  The most recent survey was conducted in July and the resulting Zillow Housing Confidence Index (ZHCI) rose to 64.2, from 63.7 in the prior survey in January. Housing confidence increased among residents of 11 of the 20 major metro areas surveyed.

    The ZCHI is composed of three sub-indices:

     

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  • Bank of America/Merrill Lynch says its official outlook for the economy is neither that of a Bull forecasting a cyclical surge or a Bear's view of secular stagnation.  Rather, the company says it is looking for a low growth recovery.

    Chris Flanagan, head of the company's U.S. Mortgage and Structured Finance Research has written a paper titled Mortgages:  the big picture in which he lays out a lot of theories and a lot of projections. 

    Looking ahead to the end of 2015 Flanagan first sees only minimal growth in Real GDP.  From its 3.1 percent level in the fourth quarter of 2013 he sees it dipping to 2.1 percent this year and ending 2015 at 3.2 percent.  From the end of 2012 to the end of 2015 the Core PCE (personal consumption expenditures price index excluding food and energy) will have risen only a net 0.1 percent, from 1.6 to 1.7 percent.  The Federal Funds rate may as much as quadruple in the next year but still will not cross above 1 percent and he projects that the 10 Year Treasury Note rate, currently at 3.10 percent we rise to 3.75 percent.  The only real indication of an improving economy will be unemployment which, from 8.1 percent at the end of 2012 he forecasts at 5.5 percent by the end of next year, falling even further after that.

     

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  • U.S. homeowners gained or regained more than $1 trillion in equity over the year that ended on June 30, 2014.  According to Core-Logic's 2nd quarter 2014 analysis, 44 million homes in the country now have positive equity, a gain of 950,000 homes during the quarter. 

    The number homes which are still "upside-down" or "underwater," that is the owner owes more on the mortgage than the market value of the home, is now 5.3 million or 10 percent of all homes with a mortgage.  In the preceding quarter (Q1) there was a negative equity share of 12.7 percent or 6.3 million homes and in the second quarter of 2013 there were 7.2 million homes or 14.9 percent that were underwater.  This is a year-over-year decline of 1,962,435 or 4.2 percent.

     

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  • Mortgage delinquencies jumped in August, a 5 percent increase which sent the rate to its highest level since February.   At the same time, foreclosure starts declined for the first time in five months, dropping 10 percent from July and 24 percent from August 2013.  There were 81,600 foreclosures initiated during the month.

    These were two of the headlined findings contained in the preview released today from Black Knight Financial Services' Mortgage Monitor report.  The complete report will be released during the first week of October.

     

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  • At its second annual summit for stakeholders on Monday the Government National Mortgage Association (Ginnie Mae) issued a policy paper detailing how it intends to meet the challenges it currently confronts in the aftermath of the housing crisis.  The central challenge according to An Era of Transformation is "The retreat of commercial banks from mortgage lending and servicing and the replacement of this capacity by non-depository institutions with more complex financial and operational structures."  This change, the paper says, represents a significantly different operating environment than that for which the program was originally designed, but "There has never been doubt that the [financial crisis] aftermath would transform the way mortgage lending operates in the United States."

     

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  • RealtyTrac estimated on Thursday that sales of residential property including single family homes, condominiums, and townhomes set an annual pace of 4.51 million units in August.  This is down .05 percent from July and is 16 percent below the pace one year earlier.  The California company said it was the fourthconsecutive month when annualized sales were lower than the same month the previous year.

    There are many more estimates of home price trends each month than of home sales but the handful of private companies and public agencies that provide sale data all use different data sets and criteria.  The National Association of Realtors (NAR) reports on sales of existing homes while the Census Bureau covers sales of newly constructed homes.  The Mortgage Bankers Association (MBA) also estimates new home sales based on the applications its members receive for mortgages to finance such purchases.  It is thus difficult to draw any conclusions about the accuracy of any of the estimates.

     

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  • There was a significant jump in new home sales in August as the seasonally adjusted rate broke through the half million mark for the first time since May 2008.  The Census Bureau and the Department of Housing and Urban Development said this morning that sales of newly constructed single-family homes were at a seasonally adjusted rate of 504,000 units, an 18 percent increase from sales in July. Economists surveyed by Reuters expected only 430k units.

    The August rate of sales is 33.0 percent higher than the estimate of 379,000 homes reported for August 2013. The July rate of sales was revised from 412,000 units to 427,000 units which would have made the July rate an 8,000 unit increase over June rather than a decrease as previously noted.

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  • Last week's rally in mortgage application activity was just that, last week's.  The Mortgage Bankers Association (MBS) said today that the number of applications for both refinancing and purchase mortgages fell during the week ended September 19, erasing many of the gains made during the week ended September 12.

    The MBA's Market Composite Index, a measure of mortgage application volume, was down 4.1 percent on a seasonally adjusted basis compared to the previous week.  On an unadjusted basis the decrease was 5.0 percent.

    The RefinanceIndex fell 7 percent from the previous week.  Fifty-six percent of all mortgage applications made during the week were for refinancing.  The previous week the share was 57 percent.  

     

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  • Fannie Mae's economists are painting a much improved picture for the economyin the coming months with encouraging news in the area of business investment, manufacturing, and business spending on structures.  Despite the unexpected drop in consumer spending in July the company's economists, Doug Duncan, Orawin T. Velz, and Brian Hughes-Cromwick, expect growth "to moderate from the above-par pace of the second half of this year and average 2.5 percent for all of 2015, an acceleration from a projected 2.0 percent in 2014. However, given the strength expected going into next year, the 2.5 percent pace may be more of a lower bound on growth expectations."

     

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  • Home prices as measured by the Federal Housing Finance Agency (FHFA) eked out another small increase in July, but monthly figures show a definite slowing in the rate of price increases.  FHFA's Home Price Index (HPI) rose 0.1 percent compared to June, the eighth consecutive monthly increase.  At the same time the agency revised downward its estimate of the June increase from the 0.4 percent originally reported to 0.3 percent.  Home prices rose an estimated 4.4 percent from July 2013 through the end of July 2014.

    FHFA's index is calculated using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac.  The index is roughly the same as in July 2005 and is 6.4 percent below the home price peak reached in April 2007.

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  • The second annual Ginnie Mae Summit opened today in Washington with a keynote speech from the new Secretary of Housing and Urban Development Julian Castro and proceeded with several important announcement from Ginnie Mae President Ted Tozer.

    Castro called on the housing industry including, he said, lenders that "We need to work together to see a robust, healthy housing market where those who are ready can buy a home. Our nation is making progress across the board, and HUD is focused on ensuring these opportunities reach every American."

     

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