Another month has passed, and things are still cruising right along for WMBA. Our Statewide Annual Golf Outing is just days away on September 9th at The Grand Geneva Resort & Spa. Thank you to all who have already signed up to support us as a sponsor or a golfer. If you are still interested in participating, please visit the event webpage. It’s going to be a great day on the links!
The Executive Team was unable to meet in mid-August as originally planned for our annual strategic planning meeting. We will be holding this meeting later in September instead and will discuss ways to engage our members and improve WMBA. Therefore, there is still time for you, our members, to share your thoughts and ideas with myself or any of the members of the executive team. We take this input into consideration as we plan for the coming year and strategize for the future of WMBA.
Thank you to everyone who has renewed their membership for another year with WMBA. The continued support of our members is what makes our organization so great. Our administrators are busily working behind the scenes to process payments and update your organization’s member listings in the database. Questions about the renewal process, including dues and database info, can be directed to our association administrators at email@example.com.
Please consider joining us for some of these exciting in-person events this later this fall. The 7th Annual Best in Business Awards will be back live and in person on November 3rd, and the 2021 Real Estate & Finance Conference the next day on November 4th. These back-to-back events will be held at the Brookfield Conference Center in Brookfield, WI and are shaping up to be excellent experiences. Registration and sponsorship opportunities are available for both of these events now. Take a few minutes to check out the details on our website.
Joe Doyle, CMB, AMP
WMBA President 2021-2022
Account Manager, Wisconsin & Northern IL
Arch Mortgage Insurance Company
firstname.lastname@example.org | (414) 526-9510
Legislative Update - Buddy Julius
WI GOP congressman touring Fort McCoy refugee center.
All five of Wisconsin's GOP congressman are touring Fort McCoy on Friday for a briefing on the evacuation and housing of Afghan refugees in the wake of the American withdrawal. The Department of Defense selected Fort McCoy, near Tomah, as one of four centers in the US for housing afghan refugees once they've been processed at overseas locations.
Gov. Evers and US Senator Ron Johnson visited the fort earlier in the week.
Biden nominates Milwaukee Mayor Tom Barrett to be Ambassador to Luxembourg.
The mayor intends to continue serving until confirmed by the Senate, which could take several months. Once Barrett steps down, Common Council President Cavalier Johnson will become acting Mayor. A special election to fill the remainder of Barrett's term will follow.
Those indicating interest in running for Mayor include Johnson, State Rep. Daniel Riemer, Alderwoman Marina Dimitrijevic and former Alderman Bob Donovan, who lost to Barrett in 2016.
Senate Committee holds hearing on direct sales of electric vehicles.
Wisconsin is currently one of only 16 states that does not allow the direct sale of vehicles by manufacturers. Vehicles must instead by sold by independent third-party dealers. New manufacturers such as Tesla argue such laws are outdated, anti-competitive, and lead to higher prices for consumers.
Because of Wisconsin's current law, Tesla and other new manufacturers require Wisconsin buyers to purchase online and take delivery of their car in a neighboring state.
Senate committee holds hearing on legislation reducing barriers to practicing interior design.
Current Wisconsin law does not allow registered interior designers to sign and seal their own commercial drawings, requiring instead the review and approval of a licensed architect. Interior designers argue they are more than qualified to submit their own work and that current law leads to delays and cost increases for consumers.
Evers announces $250 million in new ARPA grant funding, including $50 million for health care infrastructure projects.
The other $200 million will go to the Neighborhood Investment Fund grant program, which will support local and tribal government projects such as workforce centers, entrepreneurship programs, affordable housing, transportation and child care.
Meanwhile, the Healthcare Infrastructure Capital Investment Grants will go to projects that "support increasing access to health care for low income, uninsured, and underserved communities," as well pandemic preparedness efforts. Local and tribal governments as well as health care nonprofits are eligible for these grants.
The grants are funded by the American Rescue Plan Act and will be administered by the state Department of Administration.
Campaigns & elections...
Speaker sets cap on 2020 election probe spending; declines to back legislative inquiry.
Assembly Speaker Robin Vos says the review being conducted by former State Supreme Court Justice Michael Gableman cannot spend more than $680,000.
Vos also declined to back subpoenas issued by Assembly Campaigns and Elections Committee Chair Janel Brandtjen. Under Assembly rules, the Speaker must approve subpoenas for them to have effect. Vos said he's not backing Brandtjen's inquiry in order to focus on the Gableman investigation.
Vos said he hopes Gableman will complete his review by the end of October so the Legislature has time to consider additional election administration legislation.
Waukesha County Executive Paul Farrow elected state GOP Chair.
Farrow, a former state lawmaker, immediately takes over for Andrew Hitt, who announced last month he was stepping down to spend more time with his young family. Farrow will serve out the remainder of Hitt's term, which ends just after the 2022 election.
Farrow said he will continue to serve as county executive while working in the volunteer role as state chair, saying the new position won't affect his work leading Waukesha County.
Speaker Vos attends rally with former President Trump in Alabama.
Vos flew commercially last weekend to New Jersey where he met the former President and then flew via private plane with Trump to Alabama. While onboard, Vos says they discussed efforts to review the 2020 election in Wisconsin.
Trump has previously been critical of Vos believing he hasn't done enough to find election fraud.
Evers announces $100 incentive to get vaccinated.
Those who get their first dose between Aug. 20 and Sept. 6 can receive a $100 gift card. Evers acknowledged being a skeptic of such programs, but said he was won over by seeing the experience in other states.
Minnesota's incentive program resulted in 55,000 gift cards being given to newly vaccinated people between July 30 and Aug. 22.
The funds come from the federal Covid relief legislation passed earlier this year.
All state employees required to report COVID-19 vaccination status.
The new policy does not force staff to get vaccinated against COVID-19, but requires them to upload documents verifying whether or not they've gotten the shot. The deadline to do so is Sept. 9.
The requirement applies to all state employees, contractors and interns who have to be physically present in a state facility for their job, according to the Division of Personnel Management.
Milwaukee implements vaccine mandate for city workers.
The city's requirement goes into effect Sept. 1 and employees will have until Oct. 29 to provide proof of vaccination. The mandate affects only "general city" employees, meaning police and fire employees, who are represented by unions, are not currently included. Mayor Barrett said there would be exemptions for “specific medical or religious criteria.”
Employees who do not comply will first be suspended without pay for up to 30 days. If they do not then comply, they will be fired, according to the city.
UW System President refuses to submit Covid-19 guidelines to Legislature.
The Joint Committee for the Review of Administrative Rules (JCRAR) two weeks ago approved a resolution requiring UW System to submit all Covid-19 rules to the committee for approval. The resolution is binding on the University.
In an interview this week, System President Tommy Thompson said he will not submit the rules and questioned the Legislature's authority to require it. JCRAR Committee Chair Sen. Steve Nass encouraged the Legislature to sue UW System but Assembly Majority Leader Jim Steineke indicated he would not back such a suit.
State Senator still hospitalized with Covid-19 induced pneumonia.
Reports this week indicated Sen. Andre Jacque (R-DePere) was sedated and breathing through a ventilator. A spokesman from his office said he was in stable condition. Jacque has been hospitalized for over a week.
Have a great weekend,
Ryan, Buddy & Cynthia
The Firm Consulting
Upcoming Statewide Events
2021 WMBA Golf Outing
WMBA is excited to return to one of the premiere Golf destinations in Wisconsin and all the of the Midwest for the 2021 Golf Outing. Please join us at The Grand Geneva Resort and Spa at the Brute course on September 9, 2021. The deadline to register is September 1.
Date: Thursday, September 9, 2021
Location: Grand Geneva Resort & Spa
7th Annual Best in Business Awards +
2021 Real Estate & Finance Conference
This year, the Best in Business Awards and the Real Estate & Finance Conference will be held in conjunction with each other on November 3 - 4, 2021 at the Brookfield Conference Center in Brookfield, WI.
Our 47th Annual Conference is themed "Building Equity in Wisconsin" and is shaping up to be an exciting event with superb education. Agenda details, registration, and sponsorship information are now available.
Thank you to our 2021 Event Sponsors:
Statewide Peer Chat
A new feature on the member website page is a discussion forum where you can add your comments to a posted topic or suggest another topic. There are currently three topics posted including:
- eClosings - Remote Online Notarization
- Closings at your bank or company
- How are you effectively managing your remote staff?
You can find the Peer Chat at: https://wmba.wildapricot.org/MemberChat/
Online Event Calendar
Check out the new Online Event Calendar on the WMBA website that will include Statewide events, Board Meetings, Chapter Events and Educational Events. If you have an event to add, use the Suggest Event feature to give us the details to add to the calendar.
The calendar can be found at: http://wimba.org/Events
Save the Date
Milwaukee Chapter Events
Christmas in July? Not quite, but we are happy to announce we will be meeting in person this year for a holiday gathering. Save the date for the Milwaukee Chapter Christmas Party on Thursday, December 16th at Albanese's Roadhouse. Stay tuned for more details!
Visit the Milwaukee Chapter Webpage for new events + chapter updates.
We are looking forward to our Fall Kickoff on September 23rd at the Hop Haus Brewery in Fitchburg. We will be presenting Mike Odden with the 2021 “Pistol Pete Stebbins Distinguished Service Award” and introduce our 2021-22 Board of Directors.
Madison Chapter Update
2021 Annual Fall Kick Off
Please join us for drinks, appetizers, and networking, as we kick off another year of the Madison Chapter of the WMBA! We will be introducing the 2021-2022 Board of Directors and honoring our Past President and 2021 “Pistol Pete Stebbins Distinguished Award Recipient” MIKE ODDEN!!!
Date: Thursday, September 23, 2021
Please register by Friday, September 17, 2021 to avoid the late registration fee.
Time: 4:00 - 7:00pm
Location: Hop Haus Brewery Fitchburg, 2975 Sub-Zero Parkway, Fitchburg, WI 53719
Cost: $25, includes 2 drink tickets, appetizers, and 1 raffle ticket for prize drawings.
Late registration fee (after 9/17) - $30
House Clears First Hurdle to Advance $3.5 Trillion Budget Resolution
August 30, 2021
On Tuesday, the House voted along party lines to adopt a $3.5 trillion budget resolution framework for Fiscal Year 2022, clearing a procedural hurdle to advancing key Biden administration tax priorities. The budget resolution passed within a House rule that also allows for a floor vote on the Senate-passed bipartisan infrastructure bill by September 27. House and Senate committees are now preparing to finalize legislation within their respective policy jurisdictions to include as part of a reconciliation package.
- Why it matters: The budget resolution framework sets the stage for large potential investments in public, green/sustainable, and affordable housing to be offset by a series of proposed tax changes, including several that would directly impact the residential real estate industry. Democrats only need a simple majority in both chambers of Congress to pass a final bill via the reconciliation process.
- What’s next: House and Senate committees will begin finalizing legislation in earnest in the coming days and weeks, with congressional leaders giving committees a Sept. 15 target deadline to develop their portions of the reconciliation bill. Mortgage Action Alliance members need to take action TODAY to urge Congress to preserve industry tax priorities that support real estate investment.
For more information, please contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.
MBA Responds to HUD's Proposed Disparate Impact Rule
August 30, 2021
On Tuesday, MBA filed a joint comment letter in response to HUD’s proposed disparate impact rule. MBA was joined in its response by a group of financial trade associations, including the American Bankers Association, Consumer Bankers Association, and the Independent Community Bankers Association. The associations’ comment letter urges HUD to ensure that revisions to the disparate impact rule maintain consistency with the Supreme Court’s decision in Texas Department of Housing and Community Affairs vs. Inclusive Communities Project, Inc.
- Why it matters: If finalized, the proposed rule would reinstate the disparate impact standard previously promulgated by HUD in 2013.
For more information, please contact Justin Wiseman at (202) 557-2854, Lucia Jacangelo at (202) 557-2941, or Blake Chavis at (202) 557-2930.
Climate Change? For Many Homebuyers, 'Who Cares?'
August 25, 2021
The real estate industry is long-known for stories and anecdotes that seemingly defy logic—take, for example, the burnt-out home in San Francisco that last week drew a bidding war that pushed the final price above $1 million. Now, two separate reports show despite dire warnings about climate change, properties in some of the most vulnerable spots in the nation are actually attracting more interest—and higher prices.
Redfin, Seattle, reported this week that U.S. counties with the largest share of homes facing climate change risks—high heat, drought, fire, flood, storms—saw their populations grow between 2016 and 2020.
MBA Weekly Applications Survey Aug. 25, 2021: Purchases at Highest Level Since July
Mortgage applications increased from one week earlier as interest rates slid back toward 3 percent, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending August 20.
The Market Composite Index increased by 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 1 percent from the previous week.
The unadjusted Refinance Index increased by 1 percent from the previous week and was 3 percent higher than the same week one year ago. The refinance share of mortgage activity remained unchanged from the previous week at 67.3 percent of total applications.
The seasonally adjusted Purchase Index increased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 1 percent from the previous week but was 16 percent lower than the same week one year ago.
“Treasury yields fell last week, as investors continue to anxiously monitor if the rise in COVID-19 cases in several states starts to dampen economic activity,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Mortgage rates slightly declined as a result, with the 30-year fixed rate decreasing for the first time in three weeks. Lower rates led to an increase in refinance applications, with government loan applications jumping 10 percent to the highest level since May 2021.”
Kan added purchase applications for both conventional and government loans also increased. “The purchase index was at its highest level since early July, despite still continuing to lag 2020’s pace,” he said. “There was also some easing in average loan sizes, which is potentially a sign that more first-time buyers looking for lower-priced homes are being helped by the recent uptick in for-sale inventory for both newly built homes and existing homes.”
The FHA share of total applications increased to 11 percent from 9.4 percent the week prior. The VA share of total applications decreased to 10 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent.
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.03 percent from 3.06 percent, with points decreasing to 0.29 from 0.34 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.13 percent from 3.19 percent, with points increasing to 0.26 from 0.26 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 3.10 percent from 3.15 percent, with points decreasing to 0.29 from 0.31 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.38 percent from 2.41 percent, with points increasing to 0.29 from 0.28 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 2.68 percent from 2.90 percent, with points increasing to 0.24 from 0.23 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The ARM share of activity decreased to 3.1 percent of total applications.
The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
MBA Statement Regarding The Markup's Flawed Analysis of Mortgage Lending
WASHINGTON, D.C. (August 25, 2021) – The Mortgage Bankers Association (MBA) today released the following statement regarding The Markup's flawed analysis of mortgage lending:
“The issue of fair lending is an important one, and MBA has and will continue to advocate for policies and practices that ensure lenders responsibly offer credit to all qualified borrowers regardless of the color of their skin. The issues around the lack of affordable housing and the Black homeownership gap are real, and our members are committed to doing all we can to address them.
“From the beginning, we explained to The Markup that its analysis of HMDA data, and its pre-determined conclusions regarding mortgage lending, fail to take into consideration several key components that form the backbone of lending decisions, including a borrower's credit score and credit history. As we told the authors, the Federal Reserve, the CFPB, and other regulators have been clear that denial disparities in the HMDA data alone cannot be used to assess fair lending. True fair lending examinations include a much richer set of information regarding loans and borrowers.
“We also informed the authors upfront that by limiting their analysis to only “conventional" loans, they would be painting an incomplete picture of the lending environment by purposely excluding mortgages guaranteed by government agencies like the Federal Housing Administration (FHA) that are designed to help borrowers with lower credit scores and small down payments.
“Reporting such as this, which is not only deeply flawed but clearly biased in its premise, harms the matter at hand because it misrepresents the problems and solutions needed to solve the very serious issues that result in unequal outcomes related to Black homeownership and wealth-building.”
Key Senator Introduces New Housing Affordability Legislation
August 24, 2021
Senate Finance Committee Chairman Ron Wyden (D-OR) introduced a new bill that expands access to housing for first-time homebuyers and low-income individuals by investing in existing programs and establishing new tax credits geared toward renters and middle-income homeowners. The Decent, Affordable, Safe Housing for All (DASH) Act, which includes both tax and spending measures, would increase the production of affordable housing, invest in homeownership in underserved communities, and incentivize jurisdictions to modify zoning and land-use practices to encourage affordable housing. Specifically, the bill would expand the Low-Income Housing Tax Credit (LIHTC), establish a Renter's Tax Credit and Middle-Income Housing Tax Credit (MIHTC), and create a new down payment tax credit for first-time homebuyers. Additionally, it would establish the Neighborhood Homes Investment Act (NHIA), an MBA-supported proposed federal tax credit targeted to the new construction or substantial rehabilitation of affordable, owner-occupied housing located in distressed urban, suburban, and rural neighborhoods. This was a key issue during MBA's virtual National Advocacy Conference earlier this year. As Chairman of the congressional tax-writing committee, Senator Wyden is well-positioned to push to include some version of this and other tax proposals in the Senate reconciliation package this fall. The reconciliation process could begin in earnest as early as next week, following House action on the Senate-passed budget resolution. Though MBA will continue its direct lobbying efforts, Mortgage Action Alliance (MAA) members need to take action TODAY to urge Congress to support our industry tax priorities.
Low Investory, High Prices Making Homebuyers 'Anxious, Sad'
National Mortgage Professional – Aug. 23, 2021 – David Krechevsky
“The economy is bouncing back, and interest rates are near all-time lows, but homebuyers are finding that low inventories and high prices are leaving them with few choices,” said Jeff Taylor, co-founder & managing director of Mphasis Digital Risk and a board member of the Mortgage Bankers Association. “That takes a toll on people, and 16 months after the start of the pandemic, people are emotionally drained.”
Share of Mortgage Loans in Forbearance Decreases to 3.25%
WASHINGTON, D.C. (August 23, 2021) - The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 1 basis point from 3.26% of servicers’ portfolio volume in the prior week to 3.25% as of August 15, 2021. According to MBA’s estimate, 1.6 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 1.66%. Ginnie Mae loans in forbearance decreased 3 basis points to 3.92%, while the forbearance share for portfolio loans and private-label securities (PLS) increased 10 basis points to 7.15%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers increased 2 basis points to 3.48%, and the percentage of loans in forbearance for depository servicers decreased 1 basis point to 3.35%.
“The share of loans in forbearance was little changed, as both new requests and exits were at a slower pace compared to the prior week. In fact, exits were at their slowest pace in over a year,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “There were more new forbearance requests and re-entries for portfolio and PLS loans, leading to a 10-basis-point increase in their share. Portfolio and PLS loans now account for almost 50% of all depository servicer loans in forbearance and almost 40% of IMB servicer loans in forbearance, which highlights the importance of this investor category.”
Key findings of MBA's Forbearance and Call Volume Survey – August 9 to August 15, 2021
MBA’s latest Forbearance and Call Volume Survey covers the period from August 9 through August 15, 2021 and represents 74% of the first-mortgage servicing market (36.9 million loans). To subscribe to the full report, go to www.mba.org/fbsurvey. If you are a mortgage servicer interested in participating in the survey, email email@example.com.
- Total loans in forbearance decreased by 1 basis point relative to the prior week: from 3.26% to 3.25%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 3.95% to 3.92%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.69% to 1.66%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 7.05% to 7.15%.
- By stage, 10.0% of total loans in forbearance are in the initial forbearance plan stage, while 82.3% are in a forbearance extension. The remaining 7.7% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.06% to 0.05%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through August 15, 2021, at the time of forbearance exit:
- 28.3% resulted in a loan deferral/partial claim.
- 22.6% represented borrowers who continued to make their monthly payments during their forbearance period.
- 16.1% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 13.1% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 11.1% resulted in a loan modification or trial loan modification.
- 7.4% resulted in loans paid off through either a refinance or by selling the home.
- The remaining 1.4% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
- Weekly servicer call center volume:
- As a percent of servicing portfolio volume (#), calls decreased relative to the prior week: from 7.5% to 7.3%.
- Average speed to answer remained the same at 1.5 minutes.
- Abandonment rates decreased from 5.0% to 4.6%.
- Average call length increased from 7.5 minutes to 7.9 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of August 15, 2021:
- Total: 3.25% (previous week: 3.26%)
- IMBs: 3.48% (previous week: 3.46%)
- Depositories: 3.35% (previous week: 3.36%)
FHFA Proposed Rule Increases Benchmarks for GWE Affordable Housing Goals
On Wednesday, August 18th, the Federal Housing Finance Agency (FHFA) announced a proposed rule for the 2022-2024 housing goals for Fannie Mae and Freddie Mac (the GSEs). The goals, required by law, specify benchmark percentages of GSE purchases of single-family mortgages serving low- and very-low-income borrowers, as well as benchmarks on the number of multifamily unit purchases for those same populations based on U.S. Census tracts. This year, FHFA also is announcing new single-family goals for subgroups based on minority Census tracts.
- Why it matters: The housing goals help drive the GSEs’ efforts to achieve their mission of supporting liquidity for affordable homeownership. The proposed single-family goals are significantly higher, but appear achievable based on FHFA’s projections of the market opportunity and prior GSE performance.
- What’s next: The public is invited to submit comments on the proposed rule, and MBA will be reviewing the data supporting the proposed rule and collecting feedback from its members on the increased housing goal benchmarks.
For more information, please contact Hanna Pitz at (202) 557-2796.
Participate in the New Diversity, Equity and Includion (DEI) Study
Sign up today to participate in a new offering to MBA members, the Diversity, Equity and Inclusion (DEI) Study. The study is separately designed and compiled for both the residential and commercial/multifamily sides of the real estate finance industry, and is administered by world-class human resources advisory firm McLagan, part of Aon plc. All participating companies are encouraged to complete as many sections of the study template as possible on the following topics: Policy and Initiatives; Headcount by Mortgage Job Function; Headcount by EEO-1 Categories; and Headcount by Movement.
- Why it matters: Over the past year, racial and gender inequalities have shaped our nation’s conversation, and MBA remains committed to supporting our member companies by forming solutions. Participating will give our industry a baseline from which to improve and to see how member companies compare to the industry as a whole.
- What’s next: Individual company data will be kept confidential in accordance with McLagan’s high standards. As a bonus, MBA members save $1,000 off the regular survey pricing. The general timeline is provided in the registration form, with data due back to McLagan in mid-September and results released in October 2021.
For specific information about the DEI study, please email Dave Rosenthal at McLagan or call (203) 326-4349. For general questions, please contact MBA Research members Marina Walsh at (202) 557-2817 or Jamie Woodwell at (202) 557-2936.
Mortgage Delinquincies Decrease in the Second Quarter of 2021
WASHINGTON, D.C. (August 19, 2021) – The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.47 percent of all loans outstanding at the end of the second quarter of 2021, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage. The delinquency rate was down 91 basis points from the first quarter of 2021 and down 275 basis points from one year ago.
“Mortgage delinquencies across all loan types – conventional, FHA, and VA – reached their lowest levels since the first quarter of 2020,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The drop in the delinquency rate for FHA loans and VA loans was the largest quarterly decline for both in the history of MBA’s survey dating back to 1979.”
Walsh added, “Much of the second-quarter improvement can be traced to later-stage delinquent loans – those 90 days or past due, but not in foreclosure. In fact, the 90-day delinquency rate dropped by 72 basis points, which is another record decline in the survey. It appears that borrowers in later stages of delinquency are recovering due to several factors, including improved employment and other economic conditions, the availability of home retention workout options after forbearance, and a strong housing market that is bringing additional alternatives to distressed homeowners.”
Walsh noted that foreclosure moratoria were still in place through the second quarter, resulting in the lowest foreclosure inventory recorded since 1981.
“Once the foreclosure moratoria lift, and forbearance plans expire over the course of the next several months, we expect many homeowners to take advantage of available workout options to avoid the foreclosure process,” said Walsh.
Key findings of MBA's Second Quarter of 2021 National Delinquency Survey:
- Compared to the first quarter of 2021, the seasonally adjusted mortgage delinquency rate decreased for all loans outstanding. By stage, the 30-day delinquency rate decreased 5 basis points to 1.41 percent and the 60-day delinquency rate decreased 15 basis points to 0.52 percent, both at their lowest levels in the history of the survey. The 90-day delinquency bucket decreased 72 basis points to 3.53 percent.
- By loan type, the total delinquency rate for conventional loans decreased 68 basis points to 3.89 percent over the previous quarter. The FHA delinquency rate decreased 190 basis points to 12.77 percent, and the VA delinquency rate decreased by 115 basis points to 6.47 percent. For each of these three loan types, the delinquency rate reached the lowest level since the first quarter of 2020.
- On a year-over-year basis, total mortgage delinquencies decreased for all loans outstanding. The delinquency rate decreased by 279 basis points for conventional loans, decreased 288 basis points for FHA loans, and decreased 158 basis points for VA loans from the previous year.
- The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 0.51 percent, down 3 basis points from the first quarter of 2021 and 17 basis points lower than one year ago. This is the lowest foreclosure inventory rate since the fourth quarter of 1981. The percentage of loans on which foreclosure actions were started in the second quarter remained unchanged from last quarter at 0.04 percent.
- The non-seasonally adjusted seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was at 4.03 percent. It decreased by 67 basis points from last quarter and decreased by 23 basis points from last year. The seriously delinquent rate decreased 47 basis points for conventional loans, decreased 152 basis points for FHA loans, and decreased 57 basis points for VA loans from the previous quarter. Compared to a year ago, the seriously delinquent rate decreased by 61 basis points for conventional loans, increased 152 basis points for FHA loans, and increased 104 basis points for VA loans.
- The five states with the largest decreases in their overall delinquency rate from last quarter were: Hawaii (81 basis points), New Jersey (85 basis points), Florida (94 basis points), Nevada (105 basis points), and Idaho (152 basis points).
- Note: An estimated 1.6 million homeowners were on forbearance plans as of August 8, 2021. As previously stated, for the purposes of this survey, MBA asks servicers to report the loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.
July Housing Starts Fall 7%
August 18, 2021
July housing starts fell by 7 percent, the Census Bureau reported yesterday, a disappointing result as home builders continue to be hamstrung by pipeline and labor shortages.
One sign of optimism, however: building permits jumped by a 3 percent, signaling an uptick in starts later this year.
The report said privately owned housing starts in July fell to a seasonally adjusted annual rate of 1,534,000, 7 percent below the revised June estimate of 1,650,000, but 2.5 percent higher than a year ago (1,497,000). Single‐family housing starts in July fell to 1,111,000, 4.5 percent below the revised June figure of 1,163,000. The July rate for units in buildings with five units or more fell to 412,000, down by 13.6 percent from June and by 16.3 percent from a year ago.
Upcoming Educational Webinars
The New American Homebuyer
Even with the massive gains of the last year, mortgage industry experts say that any plateau for the residential real estate market is nowhere in sight.
Due to a persistent short supply of homes, low interest rates, and readily available credit, single-family homes are commanding multiple offers replete with various sweeteners, such as inspection waivers, offers to cover any appraisal shortfall, etc.
However, homeowners who get too greedy and list their homes at too high a price can still run up against issues of appraisals coming in too low and buyers recognizing the house is overpriced to start with. That’s according to Brian Koss, EVP, Mortgage Network.
Housing affordability declined in May (the latest figures available as of this writing) compared to a year ago, according to National Association of Realtors (NAR) Housing Affordability Index. Median family incomes rose modestly by 1.2%, while the monthly mortgage payment increased 20%. The effective 30-year fixed mortgage rate was 3.01% this May compared to 3.29% one year ago, but the median existing home sales price rose 24.4% year over year.
Compared to the prior month, affordability also worsened as the monthly mortgage payment rose by 1.7% while the median family income declined by 1%.
With all these factors in play, what does the face of the modern American homebuyer look like in 2021? MReport spoke to the experts for insights into the qualities, priorities, and needs of those on the road to the American Dream.
The State of the Market
The adage about the critical importance of location still applies to this current market, said Yvette Clermont, Branch Manager, Inlanta Mortgage. Where homes are available, buyers want to be in good school districts, near shopping, and so forth.
“It’s a little bit of getting whatever you can get your hands on right now,” Clermont said.