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Lending

Lenders make a comeback in 2013

Rising rates, QM, tapering dominate HW headlines

December 27, 2013

Government housing agencies continued to play an integral role in the 2013 lending market, and I don't expect that to change anytime soon.

Afterall, without the Federal Housing Administration, HUD and the Federal Housing Finance Agency, most of the major lending stories of 2013 would never have come into existence.

As for what HousingWire readers deemed the most important lending stories of the year, we have no survey data, but our list of most viewed lending stories suggests that the following 'originations related articles' captured most of the attention:

The "QM rule released with two legal liability standards" ranked as the seventh most read article. The story unveiled the industry’s first look into the specific guidelines for the anticipated Qualified Mortgage rule release.  While this is the oldest article on our list, it set the pace for the rest of the year, and now almost one year later, we are about to see the rule come into fruition on Jan. 10.

But our list doesn't stop there.

Mortgage rates hit a turning point this year, beginning a long-term upward trend. But amid the steady rise, rates did experience a few lulls, which is where the sixth most read article comes in: "Mortgage rates reverse direction, dip back down again." On July 3, Freddie Mac released its Primary Mortgage Market Survey, with the 30-year, fixed-rate mortgage averaging 4.39%. This is compared to just one week earlier when the 30-year, fixed-rate mortgage skyrocketed to 4.46% from 3.93% — the steepest week-over-week increase on record since 1987.

Meanwhile, a little over four months later, Frank Nothaft, Freddie Mac's chief economist and vice president, announced that he predicts mortgage rates will near 5% by the end of 2014—making 4.39% look not so bad. "2014: The year of purchase mortgages, rising rates" came in as the fifth most read lending article. "With the close of 2013 will also come a major transition in the housing finance industry," said Nothaft. "For the first time since 2000, we're going to see the mortgage market dominated by purchase activity as the refinance share drops below 50%."

The imminent threat of tapering kept mortgage rates fluctuating all year, as the industry attempted to predict and adjust to when they thought the Federal Reserve would start scaling back its bond purchases. Due to the government shutdown and a weak jobs report, mortgage rates dropped to a four-month low on Oct. 24, with the 30-year, FRM hitting 4.13%, according to Freddie Mac’s Primary Mortgage Market Survey. As a result, it bumped "Mortgage rates fall to hour-month lows" to the fourth most read article.

Coming in as the third most read article,"HARP 3.0 chatter sparks private-label loan debate" caught media attention during the spring of 2014, as mortgage experts toyed with the idea of the Obama Administration pushing for a HARP 3.0 program. While the idea gained steamed early in the year, it might go further in 2014, with Rep. Mel Watt, D-N.C., taking the helm of the FHFA.

For being the second most read article,"HUD: New FHA loan limit takes effect Jan. 1" was written less than a month ago. HUD said at the time it would implement a rule passed a few years back that moves the agency’s standard loan limit for high-cost areas down to $625,5000 for all FHA loans. The rule impacts all mortgage assignments issued on or after Jan. 1, 2014.

This leads us up to HousingWire’s most read lending article for 2013. While the year was filled with regulatory changes and rising rates, "FHA raises mortgage insurance, for life of loan," came in as the most read lending article of 2013.

The article was penned on Jan. 30, and announced a series of changes that will allow the FHA to better manage risk and further strengthen the health of the Mutual Mortgage Insurance Fund. "These are essential and appropriate measures to manage and protect FHA’s single-family insurance programs," FHA Commissioner Carol Galante said.

The year’s lending headlines hit every corner of the industry and paint the picture of where housing finance went in 2013, giving us a solid map of where the market is coming from when heading into 2014.

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