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After two weeks of increases, loan application volumes retreated as rates surged to a five-month high, the Mortgage Bankers Association reported. The MBA's seasonally adjusted Market Composite Index, a weekly measure of application activity based on surveys of the trade group's members, declined 2.7% for the period ending April 19, with both purchases and refinances coming in lower. The fall largely reversed the 3.3% jump from seven days earlier, On a year-over-year basis, though, the index dropped 9.3%. The latest downturn came during the same week mortgage rates accelerated to its highest mark since November, leaving borrowers on the sidelines as a result, according to Joel Kan, MBA vice president and deputy chief economist. The average contract rate for the 30-year conforming mortgage with balances below $766,550 in most markets, clocked in at 7.24%, an 11 basis point increase from 7.13% in the prior survey. Points used to help buy down the rate averaged 0.66 compared to 0.65 seven days earlier for 80% loan-to-value ratio applications. The conforming rate increased for the third week in a row among MBA lenders, helping dissuade potential homeowners. "Purchase applications declined, as home buyers delayed their purchase decisions due to strained affordability and low supply," Kan said in a press release. The rising rates contributed to a seasonally adjusted 1% downward slide in the Purchase Index. Compared to the same survey period 12 months earlier, volumes were down 14.7%. Activity decreased last week even as the number of available listings shows ongoing gradual growth, but diminished affordability has squeezed out many in the purchase market, while lenders still struggle to attract customers. Many current trends creating challenged affordability are unlikely to recede in the near term, researchers across the housing market are now suggesting. With economic data from jobs to inflation all pointing to a healthy economy, financial markets rapidly repriced their interest rate expectations, according to Fannie Mae's April economic outlook. "While we still expect economic growth and inflation to moderate going forward — and, thus, for mortgage rates to drift downward — interest rates existing in a 'higher for longer' state seems to be an increasingly real possibility in the eyes of market participants, as well as some home buyers and sellers," said Hamilton Fout, Fannie Mae vice president, economic and strategic research, in a press release. "While we've recently seen evidence that some potential home sellers are becoming more acclimated to the higher mortgage rate environment and putting their homes on the market, the recent move upward in rates is yet another headwind to the recovery of home sales, and it intensifies long standing affordability challenges for consumers," Fout added.Falling in tandem with purchases last week, the MBA's Refinance Index also slowed by 5.6%, with most homeowners still hanging on to rates below current levels. In spite of the latest rise in interest rates, though, refinance volume managed to squeeze out a 3.3% gain from depressed lending activity of a year ago. The refinance share relative to total volume also fell week over week to 30.8% from 32.1%. Adjustable-rate mortgage applications saw an upturn, though, with the ARM Index up 2.1% thanks to conventional lending activity. "The ARM share of applications increased to 7.6%, consistent with the upward trend in rates, as buyers look to reduce their potential monthly payments," Kan said. The share of ARMs grew for the second week in a row after nabbing 7.3% of volume in the previous survey. The seasonally adjusted Government Index saw a greater pullback of 3.8% when compared to overall activity, even as federally backed purchases saw a slight uptick. The share of government-sponsored applications contracted as well, with Department of Veterans Affairs-guaranteed activity falling to 11.7% from 12.4% week over week. The drop was partially offset by the expansion of Federal Housing Administration-backed mortgages, which made up 12.8% compared to 12.3% in the prior survey. The portion of loans coming from U.S. Department of Agriculture programs equaled 0.4%, unchanged from the previous week. Alongside, the conforming average, interest rates finished higher across the board, with 30-year jumbo and FHA-sponsored mortgages both above 7%.The average contract rate of the 30-year jumbo increased to 7.45% from 7.4% one week prior. Points rose to 0.56 from 0.46 among 80% LTV-ratio loans. The 30-year FHA-backed home loan came in at an average rate of 7.01% compared to 6.9% seven days earlier. Borrowers typically used 0.94 worth of points, down from 0.99.Borrowers in 15-year contract mortgages saw an average rate of 6.75%, which represented an 11 basis point increase from 6.64% in the previous survey period. Points remained the same at 0.64 week over week. As with fixed averages, the 5/1 adjustable-rate mortgage increased to a mean of 6.64%, rising from 6.52%. Points used to buy down the rate, which starts on a fixed 60-month term, surged 27 basis points to 0.87 from 0.6.

Jamie Dimon, chairman and chief executive officer of JPMorgan Chase, speaks Tuesday during an Economic Club of New York event.Victor J. Blue/Bloomberg JPMorgan Chase Chairman and CEO Jamie Dimon on Tuesday lambasted the bank regulatory environment while praising the American economy during an appearance at the Economic Club of New York.The longtime leader of the country's biggest bank said that he wished for better relations between business leaders and regulators, but he also took aim at the proposed Basel III endgame rules, hindrances to mergers and bureaucratic burdens. And he remained coy about whether he has interest in a future government post."I would love to have a more productive relationship with regulators, but I think it takes conversation," Dimon said. "I think we're kind of through the looking glass at this point."Dimon said that there are legitimate issues to fix in the banking system, but that not enough forethought is put into what regulators are trying to accomplish with various rules. He pointed to the migration of mortgages to nonbank lenders as an example, arguing that the trend has greatly diminished mortgages for low-income households.He also said that enhanced regulatory scrutiny has been making it harder for smaller banks. He contrasted their scarce resources with the $2 billion that JPMorgan spends annually on trading technology alone.Some of Dimon's qualms relate to what he sees as a dissonance between society's problems — such as the need for better education, upskilling the workforce and expanding access to homeownership — and the regulations being rolled out."I would like to see more collaboration between government and business regulators," Dimon said. "I think we're missing a lot of opportunities to help educate kids and get jobs and lift up parts of society. If you look at the government in America, less and less do you have practitioners at the table. That's true for regulators, it's true for cabinet members, it's true for people inside the government."Regarding last spring's turmoil, when Silicon Valley Bank, Signature Bank and First Republic Bank all collapsed, Dimon apportioned blame to both the banks and their regulators. JPMorgan acquired much of First Republic after the San Francisco-based bank was put into receivership last May."I don't know how that type of stuff happens, and I blame the banks," Dimon said. "I think the regulators also should blame themselves, but I blame the banks, CEOs for the most part, management teams."The "mini bank crisis" is likely over, as long as interest rates don't go up and trigger a recession, Dimon added. "Obviously if you're a bank with interest rate exposure, and you haven't protected yourself, you can be hurt in that," he said. "And obviously, it'll affect real estate, and so you can have this kind of double triple whammy affecting some banks."Dimon, who has recently been relatively downbeat about the U.S. economic outlook, said Tuesday that he is cautiously anticipating a soft economic landing. He added that even if there is a recession, the American consumer is wealthier and in better shape than before.When asked if holding a position in government is a real possibility for him, the 68-year-old chief executive quipped, "I've always said I'd love to be president, but you'd have to anoint me, folks."

Homebuilder NVR, Inc. saw profit growth slow to begin 2024, but results from both construction and mortgage segments point to sustained interest in newly built properties.The parent company of Ryan Homes, NVHomes and Heartland Homes reported net income of $394.3 million for the three months ending March 31, equivalent to $116.41 per diluted share. The number exceeded the consensus analyst expectation as reported by Yahoo Finance. Homebuilders have benefited from the ongoing shortage of existing single-family inventory over the past 12 months, much of it driven by current owners reluctant to sell and take on higher interest rates. While net income at Reston, Virginia-based NVR fell 3.8% from fourth-quarter profits of $410 million, the bottom line increased 14.5% from $344.4 million on a year-over-year basis. NVR's positive first-quarter earnings came out on the same day the U.S. government reported new-home sales also jumping up in March at their fastest pace since late summer. The new-home sales number showed a slightly different tale from other recently released March data, including for lending, which indicated signs of softness in the market later in the quarter. But any March slowing didn't prevent NVR from a $441.7 million quarterly boost in pre-tax income within the homebuilding division. The total dropped 2.8% from $454.3 million in late 2023, but rose 8.9% from $405.8 in the first quarter last year.While new-home lending may have slowed last month, NVR's mortgage banking unit still saw first-quarter income shoot up $29 million. The figure slipped down 2.4% from $29.7 million in the fourth quarter, but mortgage lending profits increased 3.4% from $28.1 million a year earlier.Mortgage income came off loan production of $1.38 billion between January and March, compared to $1.5 billion in fourth quarter 2023 and up from  $1.24 billion annually.Meanwhile, the mean price for new orders placed during the quarter sat at $454,300, rising a hair from $450,900 three months prior. Purchase transactions totaled 5,089 properties, down from 5,332 in the fourth quarter. Trends still signal a favorable environment for homebuilding in 2024, as existing housing for sale remains constrained. Market listings, though, are heading upward and outpacing the rate of sales, though, according to the latest housing forecast from Fannie Mae. Rising inventory should eventually moderate price growth overall, its researchers also suggested.  In its forecast, Fannie Mae revised sales expectations for newly built units downward through the middle of 2024 based on building trends in January and February, but said business would likely pick up in later months.Mortgage rates remain an ongoing challenge for consumers and lenders, with several housing organizations, including Fannie Mae, signaling they will linger at current levels and dash hopes of previously predicted pullbacks. 

Many legal experts think the Supreme Court will rule in favor of the Consumer Financial Protection Bureau in a case challenging its funding. Such a ruling would unleash a flurry of litigation that has been on hold pending the outcome of the constitutional challenge. Bloomberg Creative The Supreme Court is expected to rule by the end of June on whether the funding structure for the Consumer Financial Protection Bureau is constitutional. If the court sides with payday lenders that sued the CFPB claiming its funding is unconstitutional, there would be massive fallout for other agencies, including the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. But many legal experts think the high court is more likely to rule in favor of the CFPB based on oral arguments heard in October when only one justice — Associate Justice Sonia Sotomayor — questioned what remedy there should be if the agency's funding through the Federal Reserve System is found to be unconstitutional. Because the justices failed to devote much time to a remedy — and instead were highly skeptical that Congress improperly funded the bureau — many financial services industry lawyers are now gaming out what will happen to several rules and lawsuits that have been on hold pending the outcome of the case, Consumer Financial Protection Bureau v. Community Financial Services Association of America."I expect the CFPB to win," said Alan Kaplinsky, senior counsel at Ballard Spahr, who expects the ruling has taken so long to decide due to split decisions by the justices. "There will be multiple opinions and dissenting opinions and probably concurring opinions, and it takes time to get all that done."  Several lawyers who filed amicus briefs on behalf of CFSA, the lead trade group for payday lenders that sued the CFPB in 2018, do not think the payday lenders will win, Kaplinsky said. The general view has been that Solicitor General Elizabeth Prologar, representing the CFPB, presented a stronger case than her counterpart, Noel J. Francisco, a former solicitor general representing the payday groups, who struggled during oral arguments to convince a majority of the justices that Congress had inappropriately delegated its authority to the CFPB. "They didn't ask the bureau or either party, how do we solve this? What's the solution?" said AJ Dhaliwal, a partner at the law firm Sheppard Mullin. "Because they didn't get into that, they can't blow [the CFPB] up."Michael Benoit, chairman of the law firm Hudson Cook LLP, said that if the Supreme Court sided with payday lenders, the impact on federal financial regulators would be enormous. "I've never felt the funding argument was very strong," Benoit said, adding that while the Supreme Court is not supposed to be political, "a decision that invalidates decades-long funding mechanisms would be a political earthquake in an election year — especially this election year."Many legal experts initially thought all of the CFPB's past rules and actions would be threatened when a three-judge panel of the U.S. Court of Appeals for the 5th Circuit vacated the payday lending rule in 2022 and found that the CFPB's funding outside the congressional appropriations process violates the Constitution's separation of powers. Since then, challenges to the CFPB's funding have been part of nearly every legal brief in litigation filed against the agency in some way, shape or form, lawyers said. But since the oral arguments were held in October, there has been a reversal. Legal experts think a flood of litigation will be unleashed after the Supreme Court rules in the CFPB's favor. "It will be a flurry of activity," Kaplinsky said. Last year the CFPB embarked on a hiring spree in one of the largest recruitment drives at the agency in anticipation of litigation going forward. Three major rules currently on hold will move forward, including the payday lending rule, the small business data collection rule and a contentious anti-discrimination policy."There's a lull right now before the decision," Dhaliwal said. "The fall was extremely busy and since the New Year, it's gotten real quiet in part because of the Supreme Court decision that's going to come out."Meanwhile, nine enforcement actions and five petitions to enforce civil investigative demands have been stayed pending the outcome of the CFSA case, according to the CFPB."The CFPB is looking forward to the Court's decision, and in the meantime, we have continued to carry out the vital consumer protection work that Congress has charged us to perform," a CFPB spokesperson said.Among the rules that are on hold, the payday rule is the best example of how an agency rule can be locked in litigation for years. First developed and finalized in 2017 by former CFPB Director Richard Cordray, the payday rule was stripped of a provision requiring that lenders determine a borrowers' ability to repay a loan, and its original 2018 compliance date was postponed by a Texas judge after trade groups sued the bureau. What remains, if the rule gets enacted after the Supreme Court case, is a restriction that bars payday lenders from making more than two unsuccessful attempts to debit payment for a payday loan from a consumer's checking account. The restrictions were designed to protect borrowers from having their funds garnished by lenders and from incurring repeat overdraft charges.Meanwhile, the small-business data collection rule — known as 1071 for its section in the Dodd-Frank Act — would require that banks, credit unions and small-business lenders collect and report data on applications for credit, primarily to determine whether small-business loans are being made to women-owned and minority-owned small businesses. Last year, the U.S. District Court for the Southern District of Texas ruled that the CFPB had exceeded its statutory authority by expanding the data collected from lenders to 81 data points, far beyond the 13 mandated by the Dodd-Frank Act, and set aside the rule. Republicans in Congress, joined by a handful of Democrats, have sought unsuccessfully to nullify the rule.Another legal challenge involves a sweeping anti-discrimination policy that CFPB Director Rohit Chopra adopted in 2022 by making a change to the bureau's exam manual. The updated manual on the federal prohibition against "unfair, deceptive or abusive acts or practices," known as UDAAP, claimed discrimination in any financial product is an "unfair" practice that can trigger liability."The case is significant because the court issued the injunction based not only on the constitutional issue, but also on the CFPB exceeding its statutory authority," said Kaplinsky, adding that "there was no inkling at all that [UDAAP] intended to cover discrimination."Last year, a federal judge in Texas granted summary judgment and vacated the policy after finding that the CFPB exceeded statutory authority. If the CFPB prevails in the Supreme Court case, the district court's ruling would stand."Once the Supreme Court decision comes out, the CFPB will issue enforcement actions or proceed with litigation after-the-fact," Dhaliwal said. "They will be ready to pull the switch."

Through the final rule for flood-risk management, released on Monday, the Department of Housing and Urban Development will add new prerequisites for certain mortgages.The rule will hold maps and collateral for some loans the Federal Housing Administration insures to new standards. It affects new-construction residences in certain at-risk flood zones. The lowest floors in these homes now must be at least 2 feet above the base flood elevation.HUD estimated that the change in its floodplain management and property standards will affect around 10% of new homes built each year. That will protect them against future climate risks."This rule will ensure HUD supported properties have the best chance of being undisturbed when flooding occurs," said Marion McFadden, a principal deputy assistant secretary at HUD. "It is the responsibility of the federal government to ensure that taxpayer investments are built to withstand foreseeable risk," she added. Lessons learned from past flooding have proved valuable in demonstrating the value of structural improvements, according to the department.In drawing up its new rule, HUD looked at the effectiveness of past public flood-proofing. Initiatives implemented after Hurricane Katrina, for example, were successful in making local housing more resilient, it found.The minimum requirements for FHA loans are effective May 23 but certain compliance requirements won't kick in until Jan. 1 of next year. Building permits must meet the new standards starting on that date.The Mortgage Bankers Association thanked HUD for giving the industry several months to implement the requirements. However, it also expressed concerns about the upfront costs."Implementing new elevation requirements for some new single-family and multifamily homes, and requiring higher levels of flood insurance will make FHA financing more expensive and less competitive," said Bob Broeksmit, president and CEO of the association.But HUD said that the investment in elevation improvements is a cost saver in the long-term.Overall, the rule could save homeowners roughly $56.4 million to $324.3 million over 40 years, according to the department. Elevated homes in particular avoid $6 in damages for every $1 invested, according to the department's analysis of National Institute of Building Sciences data. Around 80% of states and more than 600 local jurisdictions already have elevation requirements for at-risk homes.The MBA also posed questions about references to the use of climate-informed science tools used in mapping.Maps associated with CISA tools "are not yet available nationwide, creating inconsistencies and confusion in complying with the final rule," Broeksmit said.In response to that concern, the department has noted that it chose to focus on those tools because they account for forward-looking risks. Many alternatives are based on retrospective analyses. Outdated flood maps have been a challenge for the industry"We will continue to work with the Biden administration on policies and solutions that address climate risks and extreme weather impacts, stressing the need for common sense approaches that do not curtail housing construction and negatively impact borrowers," Broeksmit said.

Lender and servicer Mr. Cooper announced Tuesday that it is beefing up its ranks with two senior executives.Ranjit Bhattacharjee, a capital markets veteran, will join the company as an executive vice president and chief investment officer. In his new role, Bhattacharjee will oversee capital markets and correspondent lending.Bhattacharjee comes to Mr. Cooper from Wells Fargo where he served as head of capital markets and correspondent lending from May 2022 to April 2024. He previously served as executive vice president of capital markets at Caliber Home Loans and spent nearly 15 years at Citi Mortgage. The mortgage executive is slated to start his job on May 6, 2024.Additionally, financial analyst Kevin Barker assumed the role of senior vice president of corporate finance Monday. Barker will lead Mr.Cooper's business finance teams and report to Kurt Johnson, the company's chief financial officer.Prior to his career shift, Barker worked for nine years as an analyst for Piper Sandler, his LinkedIn shows. The executive also previously worked at Freddie Mac and at Compass Point Research & Trading."Ranjit's deep knowledge of capital markets and correspondent lending and Kevin's extensive understanding of the mortgage industry will undoubtedly bring new ideas and insights to Mr. Cooper," said Jay Bray, Chairman and CEO of the company. "We are excited to welcome these two new leaders to our team as we continue to grow and scale our business."In January, Mike Weinbach was announced as the next president of the company. He will take over the roll following current leader Chris Marshall's retirement at the end of this year. Weinbach worked at JPMorgan Chase from 2003 through 2020, heading mortgage operations in his final five years there.Mr. Cooper reported better than expected earnings in the fourth quarter, posting a net income of $46 million. The mortgage lender and servicer also revealed the company's total servicing portfolio, which rose to $992 million in the fourth quarter, is likely to finally surpass its longstanding $1 trillion goal in the first quarter.

Here’s some Q&A with regard to the home loan approval process: “What do underwriters do?”Once you actually apply for a home loan, your mortgage application will be organized by a loan processor and then sent along to a loan underwriter, who will determine if you qualify for a mortgage.The underwriter can be your best friend or your worst enemy, so it’s important to put your best foot forward.The expression, “you’ve only got one chance to make a first impression” comes to mind here.Trust me, you’ll want to get it right the first time to avoid going down the bureaucratic rabbit hole.The Underwriter Will Approve, Suspend, or Decline Your Mortgage ApplicationAfter you formally apply for a home loan your file will be submitted to the underwriting departmentA human underwriter will then review your loan application and decision itTheir job is to approve, suspend, or decline your application based on its contentsIt’s paramount to submit a clean file to boost your chances of loan approvalSimply put, the loan underwriter’s job is to approve, suspend, or decline your mortgage application.If the loan is approved, you’ll receive a list of “conditions” which must be met before you receive your loan documents.  So in essence, it’s really a conditional loan approval.If the loan is suspended, you’ll need to supply additional information or loan documentation to move it to approved conditional status.If the loan is declined, you’ll more than likely need to apply elsewhere with another bank or mortgage lender, or take steps to fix whatever went wrong. The Three C’s of Mortgage UnderwritingCredit – payment behavior over time (your credit report)Capacity – ability to repay the home loan (your income and assets)Collateral – value of the underlying asset (the property)Now you may be wondering how underwriters determine the outcome of your mortgage application?Well, there are the “three C’s of underwriting,” otherwise known as credit reputation, capacity, and collateral.Credit reputation has to do with your credit history, including past foreclosures, bankruptcies, judgments, and basically measures your willingness to pay your debts.[What credit score do I need to get a mortgage?]If you’ve had previous mortgage delinquencies or even non-housing related delinquencies, these will need to be taken into account.Typically these items will be reflected in your three-digit credit score, which can actually eliminate you without any further underwriting necessary if you fall below a certain threshold.Your history supporting significant amounts of debt is also important; if the most you’ve ever financed has been a plasma TV, the underwriter may think twice about approving your six-figure loan application.Capacity deals with a borrower’s actual ability to repay a loan, using things like debt-to-income ratio, salary, cash reserves, loan program and more.This covers whether the loan is interest-only, an adjustable-rate mortgage or a fixed-rate mortgage, cash-out refinance or simply rate and term.The underwriter wants to know that you can repay the mortgage you’re applying for before granting approval.[How much house can I afford?]Finally, collateral deals with the borrower’s down payment, loan-to-value ratio, property type, and property use, as the lender will be stuck with the home if the borrower fails to make timely mortgage payments.Mortgage Underwriters Consider Layered RiskThey don’t look at one aspect of your borrower profile in a vacuumThey consider all factors together to make a sound decisionThose with risk in one area who are able to compensate for it may be approvedWhile those with risk in all areas might be denied due to layered riskNow it’s important to understand that the three C’s are not independent of one another.All three must be considered simultaneously to understand the level of layered risk that could be present in said loan application.For example, if the borrower has a less-than-stellar credit score, limited asset reserves, and a minimal down payment, the risk layering could be deemed excessive, leading to denial.This is the underwriter’s discretion, and can certainly be subjective based on other factors such as occupation, how long the borrower has been in the line of work, why the credit score is less than perfect, and so on.The underwriter must decide, based on all the criteria, if the borrower is an acceptable risk for the mortgage lender, and if the end product can be resold without difficulty to investors.Layered risk is a major reason why the mortgage crisis got so out of hand. Scores of borrowers applied for mortgages with stated income and zero down financing, which is certainly very high risk, and were easily approved.Rising home prices covered up the mess for a while, but it didn’t take long for everything to unravel. This is why sound mortgage underwriting is so critical to a healthy housing market.What Shouldn’t You Do During Underwriting?One last thing. When the underwriter is working to decision your loan file, you as the borrower should do your part as well.This means NOT applying for new lines of credit, such as a credit card or a new auto loan. And not making large purchases.If you do, they could show up on the credit report or be reflected in your credit scores. The last thing you want is a lower credit score to jeopardize your loan application.The same goes for moving assets around from one bank account to another, or switching jobs. It might sound crazy, but just about anything you can think of has happened.Long story short, you want to remain in a holding pattern while your loan goes through underwriting and ideally gets funded.Once the loan is funded and recorded, you can go on about your business, whether it’s buying new furniture or applying for a new credit card.But until that time, you can make life easier for everyone (including yourself) by doing nothing!Mortgage Underwriter FAQDo underwriters work for the bank/lender?Yes, underwriters are employees of banks, lenders, and mortgage bankers. They work on the operational side of things, making loan decisions after the sales team brings the loan in the door. This means they work in the same building as the sales team.How long does underwriting take?It might only take an underwriter a few hours to comb through a loan file and approve, suspend, or deny it. However, mortgage lenders only have so many underwriters available, and surely the number of loans in the pipeline will exceed the number of staff. As such, much of the time might be waiting in the queue until a pair of eyeballs actually look over your loan.So if you’re wondering how quickly can underwriting be done, it may depend on how busy the company is and if there’s any backlog. Once your file does get in front of an underwriter, the average time for underwriting is pretty quick, often 24 hours or less.Why do underwriters take so long?Hmm…I don’t know, because they’re approving a six-figure loan amount, or seven, to a complete stranger. As noted, the actual underwriting might not take that long, but the amount of available underwriters (humans) might be low. So you could just be in the queue. A clean loan file will get approved faster and with fewer conditions so get it right before the underwriter even sees it.Do underwriters verify employment?While employment is generally verified nowadays when you take out a mortgage, it might not be the underwriter verifying it. Instead, the loan processor may obtain the verification of employment (VOE). Many use the “The Work Number,” an independent third-party employment verification company now owned by credit bureau Equifax.How much do loan underwriters make?They can make pretty good money. Salaries may be in the high five figures to low six figures if they’re seasoned and skilled in underwriting all types of loans, including FHA, VA, and so on. If you start as a junior underwriter the salary could be less than $50,000. But once you become a senior loan underwriter, the pay can jump up tremendously. It may also be possible to earn overtime.Do underwriters make commission?They shouldn’t because that would be a conflict of interest. They should approve/deny loans based on the characteristics of the loan file, not because they need to hit a certain number. Compensating them for loan quality might be a different story, but again could lead to discrimination if they cherrypick only the best loans.Do underwriters work weekends?I’ve heard of some that have. I don’t know if they do on a regular basis, but if loan volume picks up in a short period of time it’s possible to come in on a Saturday or Sunday. The mortgage world is all about highs and lows, so sometimes it might be slow and other times it’s impossible to keep up.Are underwriters warm and friendly?They can be if you don’t rub them the wrong way. I look at mortgages kind of like the DMV. Show up with the right paperwork and a good attitude and you’ll get in and out before you know it. Do the opposite at your peril!(photo: Joelk75)

Sales of new homes in the U.S. bounced back in March in a broad advance as prospective buyers toughed out high mortgage rates.New single-family home sales increased 8.8% to a 693,000 annual pace last month, the fastest since September, government data showed Tuesday. Economists surveyed by Bloomberg gave a median estimate of 668,000.The figures indicate that sales have somewhat stabilized in recent months, though the data are volatile. Underlying demand remains strong, but buyers are still constrained by high mortgage rates and prices, which are limiting the extent to which the housing market can gain momentum.READ ALSO: RE/MAX's new president defines the new commissions landscapeInflation has proved stubborn in recent months, calling into question not only when the Federal Reserve will cut interest rates in 2024, but if it will at all. Mortgage rates above 7% continue to plague existing-home sales, which are "stuck," National Association of Realtors Chief Economist Lawrence Yun said last week.While the resale market is struggling with a lack of inventory, builders are stepping in to fill the void. The supply of new homes for purchase rose to 477,000 in the month, the highest since 2008.The report from the Commerce Department on Tuesday also showed the median sales price of a new house decreased 1.9% from a year ago to $430,700 in March.

Nearly 8% of homes sold nationwide last year were subject to a federal capital gains tax, approximately double the level prior to the pandemic, because of rising home prices, a CoreLogic report noted.These taxes, based on the profits earned after a home sale, could be just one more reason why some current owners are reluctant to list their property."I do think for some potential sellers having to pay capital gains taxes is a disincentive to sell, particularly in markets where equity gains are significant and home wealth is their main source of wealth," Selma Hepp, CoreLogic's chief economist, said in an emailed comment.The Taxpayer Relief Act of 1997 created an exemption for married sellers who jointly file a federal tax return of $500,000 on the sale of their primary residence. If a person files as single, the exemption is just $250,000.Between 2000 and 2003, after the Act became law, annually just 38,100 home sales, or 1.3% of the total, were above the exemption amount, CoreLogic estimated using gross housing capital gains.The actual numbers might be lower, because homeowners can deduct eligible costs, along with expenses from taxable gains when they are buying, selling and improving properties, an online posting from Yanling Mayer an economist at CoreLogic said. On the other hand, 12 states have non-disclosure rules that also affected the analysis.But in 2017, 119,200 or 3.1% of the total sales did not qualify for the exemption. The next two years, 3.3% of sales had gains over the exemption amount.The first year of the pandemic, 2020, that share grew to 4%, before spiking up to 6.5% in 2021 and 8.1% for 2022.Last year, 229,000 sales or 7.9% of transactions ended up with gains so high the seller could not claim the exemption when they filed their taxes during the period that just ended on April 15."At the state level, long-term homeowners in high-cost areas are expected to carry the lion's share of homes that owe significant capital gains payments," Mayer said. "That is because in dollar terms, high prices equal higher amounts of capital gains if given the same rate of home price growth, not to mention that many high-priced areas are frequently among the fastest-appreciating markets."This starts with California, where the high priced markets meant that between 2017 and 2023, 37% of all home sales in the state had capital gains above the exemption. During that period, the Golden State was just 10% of residential property sales nationwide.For California homeowners, "it means owing capital gains taxes upon selling homes has become more common than it was when The Taxpayer Relief Act became effective," Mayer said. "Nearly 30 years later, even modest homes for average-income families in many high-cost markets routinely sell for more than $1 million."For the fourth quarter of last year alone, California was responsible for 28.8% of the sales with gains above the exemption limit, followed by Hawaii at 23.8% and the District of Columbia at 22.1%; eight additional states were also over that national average in transaction volume."With high mortgage rates and housing costs challenging housing affordability for millions of households, owing capital gains taxes can be an unexpected (and unwelcome) surprise for long-term owners who are in the process of selling their home while trying to purchase another," Mayer said.

Ginnie Mae filed an answer to Texas Capital Bank's partially dismissed complaint in federal district court last week, arguing against TCB's allegations that it violated the Administrative Procedure Act.Ginnie pushed back against assertions that its seizure of collateral allegedly promised to the bank in return for providing tens of millions of dollars in financing was "in excess of statutory authority" in a filing in Texas' Northern District.The government agency argued that the act "does not authorize the award of monetary damages" and said that an APA claim should be barred because of the bank's "failure to exhaust its administrative remedies."Ginnie reiterated requests for a dismissal of the case filed in Texas' Northern District, noting that it "acknowledges that the plaintiff requests the relief" but "denies that it is entitled to it."The agency also doubled down on repudiating claims it made certain promises to TCB in its latest response to the bank's complaint from last October.In that complaint, the bank alleged "senior Ginnie Mae representatives, including [retiring] President [Alanna] McCargo explicitly assured TCB that it would be repaid" and that the rights to certain reverse mortgage assets were part of that agreement.TCB provided the financing in conjunction with Reverse Mortgage Funding's bankruptcy and Ginnie seized RMF's servicing rights in late 2022.Specifically at issue in the case are rights associated with "tails," or the cash-flows from draws older adults make on home-equity withdrawal loans after the initial disbursement gets securitized. Texas Capital said it would not have agreed to provide financing without these rights.While Ginnie has a history of working with the industry to a degree on policy, it's under a lot of pressure to protect the limited funding it uses to protect a multi-trillion-dollar global securitization market from risk when one of the mortgage companies it works with fails, particularly now.Currently, the Department of Housing and Urban Development's Inspector General is investigating Ginnie's handling of RMF's bankruptcy, and has noted that "extinguishing issuers and seizing their portfolios places significant stress on Ginnie Mae's operations."Ginnie is part of HUD, and reverse mortgages are a small but influential subset of the securitizations Ginnie guarantees and other agencies back at the loan level. The version of these loans found in Ginnie Mae securitizations are known as Home Equity Conversion Mortgages. Another arm of HUD, the Federal Housing Administration, insures HECMs as loans.A limited number of players are involved in the reverse mortgage market, which can complicate Ginnie's work when a failure occurs, particularly when rates are volatile. The agency typically relies on outside mortgage companies to ensure securitized loan cash-flows get to investors.There has been some broader tension between Ginnie and the industry over collateral rights in financial arrangements.Industry advocates have repeatedly asked that Ginnie adjust contractual rights in these arrangements more in their favor, even after some of its leaders like former President Ted Tozer have made attempts to make the agreements more equivocal.TCB and Ginnie do not appear to have utilized a typical agreement but rather had negotiated the terms of the emergency financing.A decisive ruling in the Texas Capital Bank lawsuit may not unfold after the federal election this fall, with the timeline for factual discovery set to continue into next year.