CFPB Urges Lenders to Help Homeowners Avoid Foreclosure – Industry Outlook

By March 28, 2022Industry Outlook

Mortgage Rates Continue to Climb – According to Freddie Mac, as mortgage rates rise, the most popular 30-year fixed-rate mortgage are likely to remain in the rearview mirror. The 30-year fixed-rate mortgage averaged 4.16% recently. “The 30-year fixed-rate mortgage exceeded 4% for the first time since May of 2019,” says Sam Khater, Freddie Mac’s chief economist. “The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year. While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season.” Higher mortgage rates are likely to affect many aspiring home buyers, especially first-timers, says Nadia Evangelou, NAR’s senior economist and director of forecasting, on the association’s blog. Since the beginning of this year, nearly 6.3 million households have been priced out of the housing market, 2 million of whom are millennials.

Source and link to the full article: Freddie Mac and “Instant Reaction: Mortgage Rates, March 17, 2022,” National Association of REALTORS® Economists’ Outlook blog

More Hispanics Are Buying Their First Home – Based on a new survey conducted by® and the National Association for Hispanic Real Estate Professionals, fifty-eight percent of Hispanic home shoppers are first-time buyers, significantly higher than the rest of the U.S. population (34%). If predictions hold true, longstanding homeownership gaps may be closing. There is an increasing presence of Hispanics in the housing market, and the organizations predict that number will continue to grow. Latinos are predicted to account for 70% of new homeowners over the next 20 years, the study shows. “Insights into Latino home buying will be critical to understanding how to sustain growth in the housing market,” says Gary Acosta, co-founder and CEO of NAHREP.

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CFPB Urges Lenders to Help Homeowners Avoid Foreclosure – According to the Consumer Financial Protection Bureau, many borrowers continue to emerge from forbearance due to pandemic-related aid and is encouraging lenders to help them avoid a potential foreclosure wave. The CFPB says that as of March 1, more than 768,000 mortgage borrowers remain in active forbearance. Many of these consumers are at risk of foreclosure unless they receive loss mitigation assistance from their mortgage servicers, the CFPB says. With that in mind, the CFPB is urging greater distribution of the Homeowner Assistance Fund to help homeowners avoid foreclosure. Lenders must work with state housing finance agencies and HUD-approved housing counselors to receive the funding. States have access to $9.961 billion in federal funding as part of the fund, which is intended to help homeowners recover from the impact of the pandemic. Funding is available through the program until September 30, 2025.

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What Fed’s Rate Hike Means for Mortgage Borrowers – Based on the Federal Reserve’s announcement that it would raise its short-term benchmark rate for the first time in three years, predicts that consumers can expect higher borrowing costs across the board, financial analysts say. The Fed increased its target federal funds rate by a quarter of a percentage point recently after it had been near zero. The central bank is expected to increase its rate six more times by the end of the year as it tries to tame the highest inflation in 40 years. The Fed’s rate, which is the interest rate at which banks lend to one another, often indirectly influences mortgage rates. The rates on long-term fixed-rate mortgages are expected to move higher, and the average 30-year fixed-rate mortgage, which is above 4%, likely will continue to increase, Jacob Channel, senior analyst at Lending Tree, told CNBC. CNBC offered an example of how that could impact borrowers: On a $300,000 30-year mortgage with a 4% rate, borrowers may pay about $1,432 a month. If that rate rose to 4.5%, that same mortgage would cost $1,572 a month. Financial experts recommend that borrowers with an adjustable-rate mortgage refinance into a fixed rate before any further increases.

Source and link to the full article: “Here’s What the Fed’s Rate Hike Means for Borrowers, Savers and Homeowners,” CNBC (March 16, 2022) and “Sharpest Rate Spike in More Than a Decade. Here’s How the Fed Is (and Isn’t) Involved,” Mortgage News Daily (March 16, 2022)

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