Trending Thursday is a roundup of the stories shaping the week and what’s yet to come through the weekend — also taking into account social media reaction. Think of it as a midweek Monday Morning Cup of Coffee, but with extra caffeine.
Yesterday many in the industry welcomed news that the Consumer Financial Protection Bureau will offer a good-faith grace period on enforcement following the Aug. 1 deadline to implement the complex TILA-RESPA Integrated Disclosure requirements
The grace period, however, hasn’t been defined in terms of how long it will run, and it won’t shield lenders from legal liabilities. Both the mortgage industry and a bipartisan coalition in Congress asked for some relief on TRID requirement enforcement. The TRID rule, which was brought forth by the CFPB, has a sweeping impact on the real estate market through the implementation and compliance costs it requires.
The lack of a concrete timeline and broader protections concerns at least two trade organizations, the Community Mortgage Lenders Association and the Community Home Lenders Association.
“The community-based lenders we represent are making strenuous efforts to be fully prepared by August 1, but are concerned that TRID requires immediate implementation, with no transition period. A grace period, for lenders making a good faith effort to comply, should be explicitly provided by the CFPB. The statement issued by CFPB may satisfy the large bank lenders who can devote mammoth financial resources to this effort, but it falls far short of what community-based lenders need and expected from the CFPB given the strong Congressional support expressed by the more than 250 Representatives who wrote to Director Cordray urging a clear and explicit declaration of an enforcement grace period,” CMLA said in a statement.
Scott Olson, Executive Director of the CHLA, likewise said the assurances from the CFPB aren’t enough.
“The Community Home Lenders Association appreciates CFPB's sensitivity to companies that are making a good faith effort to comply with August 1 RESPA/TILA TRID changes,” Olson said. “However, we call on CFPB to provide more specific protections for market participants, including a reasonable hold harmless grace period, to ensure that they are not penalized for unintentional errors and so that borrowers can close on their loans in a smooth and timely manner.”
Looking at recent Bank of America analysis and Bureau of Labor Statistics data over at ZeroHedge, up pops a theory at why the U.S. economy has been stalling.
…according to just released final data by the BLS, in Q1 labor productivity barely rose, growing 0.3% in Q1, following a -0.1% drop in the fourth quarter. Worse, on a sequential basis, productivity dipped by a -0.8% in Q1 (a 3.1% SAAR), after a -0.5% drop (-1.9% SAAR) in Q4.
This is the first sequential drop in nonfarm productivity in 22 years, or since 1993!
That, in a nutshell, is also the real reason the US economy refuses to grow no matter how many billions in liquidity the Fed stuffs into it.
This tacks somewhat with what Anthony Sanders writes at his blog, Confounded Interest.
Compared to 2007, both average wage growth and real median household income are lower, corresponding to lower personal consumption growth rates.
And home prices are rising again, thanks in part to Fed policies.
The MBA wants Congress to know the only color its members are concerned with is green, as in mortgage lenders use a slate of race neutral tools in underwriting.
The MBA just sent a letter to Congress in support of Rep. Scott Garrett’s, R-N.J., amendment that the House passed to limit disparate impact prosecutions. On Wednesday, the House passed his amendment to H.R. 2578, the Fiscal Year 2016 Commerce, Justice, and Science Appropriations Act.
The amendment would bar the Department of Justice from using funds for litigation in which they seek to apply disparate impact theory.
More than a dozen trade and business associations signed onto the letter with the MBA, including the American Bankers Association, CHLA, Consumer Bankers Association, Consumer Mortgage Coalition, Council for Affordable and Rural Housing, Credit Union National Association, Independent Community Bankers of America, and U.S. Chamber of Commerce, among others.
“Almost 50 years after Congress enacted the Fair Housing Act, the Department of Housing and Urban Development (HUD) issued a final rule that is not supported by the text of the Act. HUD’s regulation would create liability for housing policies or practices that have a “disparate impact” on a protected class, even when there is no intent to discriminate. Under this rule, even when a mortgage lender, apartment owner, apartment manager or housing cooperative takes every step to prevent discrimination and treats all consumers fairly and equally, a neutral policy can serve as a basis for very serious and harmful claims in the absence of intentional discrimination,” the letter reads.
“Our member companies use facially neutral standards, such as loan-to-value ratios and debt-to-income ratios in mortgage underwriting and for resident screening purposes because they are neutral and nondiscriminatory. Under HUD’s rule, a lender, apartment owner, apartment manager or housing cooperative could be challenged if these practices yield different results for a protected class, and also face severe reputational harm and significant costs of defense,” it concludes.
Time to panic? Some mortgage brokers tell CNBC that.
The days of 3.5 percent on the popular 30-year fixed mortgage are over.
"Definitely in panic mode," said Matt Weaver, senior mortgage loan originator with PMAC Lending Services. "A lot of refinance clients are moving to locks immediately because the Fed talk is starting to be an eye opener for everyone."
This morning Freddie Mac put the latest mortgage rate sounding for a 30-year fixed-rate mortgage at an average 3.87% with an average 0.6 point for the week ending June 4, 2015.
Yes, it’s near the high for the year, but it’s not exactly usurious.
What do you think?