Your Source for April 2014 Industry News
Topics: GSE Reform Update, Assurant Acquires StreetLinks, Earnings Fall, Appraiser Feedback Sought, Coalition for Mortgage Security, Housing Finance Reform, Rural Appraisals, New AMC Rules, Borrowers Prioritize Mortgages
April 28, 2014
GSE Reform Update
Reform plans for government sponsored enterprises Fannie Mae and Freddie Mac continue to move forward. The Senate Banking Committee is scheduled to vote on the Johnson-Crapo bill on Tuesday, April 29, 2014, possibly moving it to the floor of the Senate. It won’t be an easy road though, as there are multiple interested groups that range from supporting the addition of certain measures to those who are against reform altogether. The House is expected to begin looking at housing reform with a bill that aims to privatize the market completely. Stay tuned to our blog for more updates.
Assurant Acquires StreetLinks
Assurant Inc, a company that insures foreclosed homes, announced the acquisition of national Appraisal Management Company StreetLinks LLC on April 22, 2014. Assurant will pay $60 million in cash for StreetLinks, which brings in over $140 million in annual fee income and is one of the largest appraisal management companies in the US. The payment may increase, based on future performance. StreetLinks will keep its name and won’t move from Indianapolis, where it is headquartered.
April 21, 2014
Earnings Fall at JPMorgan, Other Big Banks See Tough Times
JPMorgan Chase released first-quarter profits of $5.3 billion, down 18.5% from $6.5 billion a year ago. The slowdown is due to sluggish trading revenue and shrinking mortgage lending, which was down 68% from a year ago. While Well Fargo’s first quarter profits are up 14% to $5.9 billion, the amount of money the country’s largest mortgage lender lent for mortgages was $36 billion, down 67% from the same period last year’s $109 billion. Much of the slowdown is attributed to higher interest rates putting the brakes on home refinancing activity.
FHA Seeks Appraiser Feedback
On April 8, the Department of Housing and Urban Development requested feedback from appraisers, lenders and others involved on its new Single Family Housing Policy handbook. The comment period is open for 30 days. The goal of the handbook is to make it easier for appraisers and lenders to quickly find information and reduce the need for them to seek clarification and direction on policies. Use the links below to find a draft of the handbook as well as a link to which you can email feedback.
April 14, 2014
Coalition Launches to Protect GSE Shareholders
With calls for GSE reform heating up, a group calling itself the “Coalition for Mortgage Security” has come together to protect the interests of shareholders in Fannie Mae and Freddie Mac should they be wound down. The 501c(4) group says it is a bipartisan, grassroots organization with an interest in treating “current and future homeowners, taxpayers and investors” fairly with regards to housing finance reform. It is directed by Ken Blackwell, a Republican politician and former undersecretary at the Department of Housing and Urban Development (HUD).
April 7, 2014
Multiple GSE Reform Measures Put Forward
In recent months, multiple proposals have been put forward with ideas on reforming the housing industry and government-sponsored enterprises Fannie Mae and Freddie Mac. Rep. Maxine Waters (D-CA) introduced a proposal called HOME – Housing Opportunities Move the Economy – which would abolish Fannie and Freddie and create a lender-owned cooperative to issue government-backed loans. Another proposal by Rep. Jeb Hensarling (R-TX) called PATH – Protecting American Taxpayers and Homeowners Act – would end the bailout of the GSEs within five years and establish a National Mortgage Market Utility. The Senate has been no less busy with this topic, putting forth the Corker-Warner and Johnson-Crapo bills. The Corker-Warner proposal aims to end the GSE roles in the secondary mortgage market, expand private mortgage insurance and create a single government entity through the Federal Mortgage Insurance Corporation (FMIC). The Johnson-Crapo bill is based on the Coker-Warner proposal, adding a focus on monitoring consumer and market access to credit.
Fannie Mae Issues New Guidelines for Rural Appraisals
Fannie Mae recently released a new set of guidelines for the appraisal of rural properties. Fannie recognized the challenges inherent in valuing properties in rural areas, such as distance between properties, varied building types and large lots that sometimes include farms and other uses. Fannie confirmed that it will buy loans from rural areas as long as they have a primarily residential use.
April 1, 2014
Federal Regulators Propose New Rules for Appraisal Management Companies
Federal regulators from six agencies have issued a proposal that sets minimum requirements for state registration and oversight of appraisal management companies (AMCs). The minimum requirements would apply to states that choose to create appraiser certification and licensing agencies with the authority to register and supervise AMCs. The rule would not require that states regulate AMCs.
Borrowers Again Making Mortgage Payments a Priority
A recent TransUnion study that looked at nearly a decade of payment data has found that more borrowers are paying off home loans before credit card debts. Mortgage debt now ranks second only to auto loans, due to the need to get to and from work. Housing market gains and lower unemployment are helping to facilitate this shift.