Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Housing Affordability Best in Four Years, Purchase Rate Locks Surge. This week we’re bringing you:
Biggest Jump in 2 Months For Mortgage Rates*
With most lenders still easily able to quote a 30yr fixed under 3%, mortgage rates are very low in outright terms. But relative to the recent trend and the general level of volatility, today was a bit rough. Rates rose as fast as they’ve risen since early June, ultimately hitting the highest levels in more than 2 weeks.
Some prospective borrowers will now be looking at an eighth of a point (0.125%) increase versus yesterday’s rates. That comes out to roughly $20/month on a $300k mortgage. Others will experience the shift in the form of higher upfront costs (or a lower lender credit). Either way, today is noticeably more expensive than yesterday. Read more in-depth here.
Pandemic Reveals Flaws in Loan Reporting*
New research by dv01, a loan data agent (LDA) providing securitization reporting and analytics on consumer unsecured, mortgage, small business, and student loans, says the pandemic has revealed serious weaknesses in the reporting structure for mortgages. The company found significant numbers of unreported loan modifications and says it was these types of reporting errors during the global financial crisis (GFC) which led to an increase in price volatility when those errors were later corrected.
A new white paper says that, in stark contrast to the GFC, consumer loan performance across asset classes has remained relatively strong. Dv01 has released bi-weekly reports of both loan performance and the relief efforts by issuers and servicers to aid borrowers but has found significant irregularities and inconsistencies across the multiple parties involved in the mortgage process. Even four months into the pandemic there are numerous cases of underreported or entirely omitted modification behavior. Data report quality varies across deals and even between reporting parties within a single deal and there appear to be significant differences between online lending and that of the mortgage industry. Read more in-depth here.
Here’s why we won’t see a housing crisis after COVID-19*
Recent job gains should reduce some forbearance loans
August is upon us, and the growth in the rate of new infections appears to be slowing. Vaccine development is progressing with some promising early results. The time has come to start thinking about what life will be like on the other side of this crisis. What can we expect post COVID-19?
Some things will not have changed. I already hear murmurs from the fear-mongering housing bears that once the forbearance plans expire, we can expect to see a collapse of the housing market in America like we haven’t seen since the bubble years. This is the same sorry song the bubble boys have been singing for the last eight years, with just a new verse.
But there are several economic conditions today that were not present before the previous housing collapse that almost ensure that a catastrophic failure will not happen. Read more in-depth here.
How a cloud-based tax platform benefits mortgage servicers*
CoreLogic works with over 22,000 taxing authorities in the U.S.
HousingWire President and CEO Clayton Collins recently sat down with Eric Christensen, product management executive at CoreLogic, to discuss recent updates to the company’s DigitalTax Platform.
CoreLogic has invested more than $35 million into its DigitalTax Platform over the last three years, providing customers with a unified and consistent view of property tax data across the mortgage ecosystem. Features of the DigitalTax Platform include near-real-time data as well as on-demand portfolio analytics and reporting, which gives customers timely and actionable insights.
The DigitalTax Platform is engineered on a cloud platform for both tax information and making tax payments, allowing customers to transition from a static to a dynamic environment using things like real-time tax collector data and portfolio analytics. The platform is fully integrated with the top loan servicing systems through tested and developed IP technology. Read more in-depth here.
Homes Flying Off Market at Record Pace—46% Accept an Offer Within 2 Weeks*
Key takeaways for the 4-week period ending August 2:
- A record-high share of homes are selling fast: 46% of homes sold within the first two weeks on the market, the highest level since at least 2012 (as far back as our data on this measure goes).
- Home sale prices were up 9% year over year to another new all-time high of over $311,000. “The combination of ultra low inventory, very high buyer demand, and super duper low interest rates is a very successful formula for sellers, not so great for buyers,” said Brian Morales, a Redfin agent in Orange County, California.
- Pending home sales were up 10% year over year and have plateaued over the last month, up just 0.2% from the four-week period ending July 5. Sales declined an average of 1.4% over the same period the last two years.
- The supply of homes for sale continued to fall; year over year, new listings were down 2.7% and active inventory of homes for sale was down 28%.
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