Mortgage credit availability increased in April
Mortgage credit availability was higher in April according the Mortgage Bankers Association. Its index showed a 0.5 per cent increase, meaning that lending standards were looser than the month earlier. Of the four component indices, the Government MCAI saw the greatest easing (up 1.1 per cent over the month), followed by the Jumbo
MCAI (up 0.8 per cent), and the Conforming MCAI (up 0.2 per cent). The Conventional MCAI decreased over the month (down 0.6 per cent). Mike Fratantoni, MBA's chief economist noted: "The increase was driven by new offerings of FHA
's 203K home improvement program, new VA
offerings, and new jumbo products. The increase was partially offset by some investors tightening underwriting criteria on conventional cash out offerings."
Easier credit may not mean more buyers say experts
Experts do not believe that easier availability of mortgages will convert to more home sales. A survey by Zillow found that most experts say that mortgages will be easier to get in the coming years however 44 per cent felt that with low wage growth and large debt levels many renters would not be able to make the move to homeownership. Asked about current lending restrictions just 7 per cent felt they were too lax, 47 per cent thought they were too restrictive and 46 per cent said they are about right. The 111 panelists say home prices will level off in the next few years with a 4.5 per cent increase this year falling to 3.6 per cent through 2019.
Realtors and mortgage brokers should prepare now for CFPB rules
New rules being implemented by the Consumer Financial Protection Bureau later this year will mean extra disclosure requirements from real estate agents and mortgage brokers and now is the time to prepare. At the 2015 Realtors Legislative Meetings & Trade Expo a forum discussed best practice in ensuring compliance with the new rules which will be effective from August 1 2015. President of the National Association of Realtors Chris Polychron told the conference: “The regulatory issues we're facing are extremely complicated, and because they play such a big role in the real estate transaction, it's important that we embrace them and move forward.”
CFPB director Richard Cordray said that it was important to maintain reliability in the mortgage market and ensure that consumers have all the information they need before making the most important purchase of their lives: “Consumers taking out a loan to buy a home should be ensured they aren't set up to fail.” He said that the new forms - the Loan Estimate and Closing Disclosure – improve consumer understanding of the mortgage process sooner, aid in comparison shopping and help to prevent unexpected issues at the time of closing. The forms will need to be filed within three business days and Cordray noted that this was a concern in the industry: “We continue to receive input and are listening close to any additional concerns out there as we move closer to the implementation date.”