The Mortgage Mix: Essential Updates on Rates, Policies, and Market Trends
Editor’s Note: The Mortgage Mix is RISMedia’s biweekly highlight reel of crucial mortgage industry happenings. Be sure to catch it every other Friday afternoon.
Current Mortgage Rates and Market Trends
This week has seen an increase in mortgage rates, with the average hovering between 6% and 7%. Despite this rise, home purchase applications have dipped. However, industry experts suggest that both buyers and sellers are adapting to this new normal in mortgage rates, which appears to be stabilizing. This consistency in rates is encouraging some potential buyers to re-enter the market.
Challenges for First-Time Buyers
While the stabilization of rates has had a positive effect on some buyers, first-time homeowners still face considerable hurdles, largely due to ongoing affordability issues. Various economic factors, including uncertainties surrounding tariffs and fluctuations in the 10-year Treasury yield, are also influencing rate activity. Looking ahead, analysts anticipate improved conditions as the spring housing market begins to gain momentum.
Policy Changes Affecting FHA Loans
In a significant policy shift, the U.S. Department of Housing and Urban Development (HUD) announced that non-permanent residents and non-U.S. citizens will no longer be eligible for FHA-insured mortgages. This change, which aligns with the Trump administration’s stricter immigration policies, raises concerns among housing advocates about its impact on immigrant communities already struggling with access to homeownership.
Changes in Special Purpose Credit Programs
Federal Housing Finance Agency (FHFA) Director Bill Pulte has ordered the termination of Special Purpose Credit Programs (SPCPs) that Fannie Mae and Freddie Mac have supported. These programs were designed to assist borrowers with down payments and closing costs. The FHFA justified this decision by stating that the current level of support is not suitable for regulated entities under conservatorship.
Industry observers are paying close attention to Pulte’s actions, particularly as they pertain to the potential privatization of Fannie Mae and Freddie Mac. The goal is to manage this transition carefully to maintain stability in the housing market and avoid undue pressure on mortgage rates.
Wells Fargo’s Progress with Consent Orders
Wells Fargo has successfully lifted another consent order, marking the fifth order resolved this year. After encountering numerous lawsuits and investigations related to various malpractices dating back to 2016, the bank’s leadership expressed confidence in its return to compliance, as stated by CEO Charlie Scharf.
Rescission of Advisory Bulletin by FHFA
The FHFA has removed an advisory requiring Government Sponsored Entities (GSEs) such as Fannie Mae and Freddie Mac to monitor and enforce compliance regarding unfair or deceptive acts or practices (UDAP) by lenders and third parties. This advisory covered aspects including loan origination and appraisal practices and emphasized potential liability for GSEs if they were aware of misconduct.
The Mortgage Bankers Association (MBA) has endorsed this rescission, with President and CEO Bob Broeksmit highlighting the importance of sensible regulation to ensure that GSEs can continue to support affordable housing opportunities for all Americans.
Conclusion
As the mortgage industry navigates these recent changes, stakeholders are keenly observing how new policies and market trends will shape the future of homeownership. With ongoing adaptations in response to economic factors, both buyers and lenders will need to stay informed in an evolving landscape.
