Mortgage lending is, for better or worse, highly subject to policy changes at the federal level. Here are a couple from this week that are worth highlighting.
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Mortgage lending is, for better or worse, highly subject to policy changes at the federal level. Here are a couple from this week that are worth highlighting.
Freddie Mac joins in positive rental payment push
But its approach is quite different from Fannie Mae's. Rather than change its underwriting process to include positive rental payments, Freddie Mac will offer landlords closing cost credits if they report rental payments to the credit bureaus. Because the service provider, Esusu Financial, can report up to two years of positive rental history, it could make a big difference for renters looking to improve their credit to qualify for a mortgage.
Tapering!
The Federal Reserveannounced Wednesday that the days of unbridled monthly asset purchases — well, $120 billion in asset-backed securities — are coming to an end. But the drop-off will happen slowly, as the central bank incrementally decreases its asset purchases each month.
The tapering of asset purchases did not meaningfully change the forecast of mortgage rates, which have been creeping up. Fannie Mae and the Mortgage Bankers Association have both predicted rates will continue to rise next year. The MBA expects rates for the 30-year fixed-rate mortgage will reach 4% by the end of 2022.
What's in infrastructure for housing?
If you're like me, you may be growing a little weary of the horse-trading and infighting happening in Washington, D.C. right now. But while many are focused on changes to parental leave, Medicare or climate provisions, I'm keeping an eye on the important housing provisions that have — so far — made it into the bill.
One housing item that is pretty much a done deal is a down payment assistance program — but it will be a $10 billion program to give first-time, first-generation homebuyers up to $25,000 toward a down payment, rather than the $100 billion program that was also floated.
As for tackling the huge gap in housing supply versus demand for housing, the Neighborhood Homes Investment Act, which would create a federal tax credit to rehab and build homes in underserved communities, may have been resurrected. NHIA is now in the bill, sources tell me — although as recently as Halloween, its proponents were urging Congress to bring it back.
Separate to all that, in the coming weeks I'll be reporting on how far companies will go to recruit top LO talent. Please reach out to gkromrei@housingwire.com to share your experience, anonymously of course.
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If you're planning on staying in the mortgage business in 2022, you're probably already shifting your strategy to better enable you to originate purchase money loans next year. That means you need to be thinking about real estate agents...a lot.
Freddie Mac wants to encourage multifamily landlords to report positive rental payments to the credit bureaus to give renters a better shot at qualifying for a mortgage.
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