The Consumer Financial Protection Bureau has pulled its previous guidance regarding whether marketing services agreements comply with anti-kickback rules.
In a frequently asked questions post, the CFPB stated that these agreements do not violate Section 8 of the Real Estate Settlement Procedures Act.
While the FAQ does not change much on a practical level, it represents a change in attitude by the bureau from when it was headed by Richard Cordray. His CFPB never declared MSAs to be illegal but had expressed some level of hostility towards them.
On Sept. 11, the Mortgage Bankers Association, along with the American Land Title Association, the National Association of Realtors, the National Association of Home Builders and the Real Estate Service Providers Council sent a letter to CFPB Director Kathy Kraninger asking that a 2015 Cordray bulletin on the topic be withdrawn and replaced "with a reassertion that the real estate industry should follow long established best practices under RESPA and associated case law."
The Consumer Financial Protection Bureau's proposed overhaul of its mortgage underwriting rule is alarming critics who say it will lead to another housing bubble. One commentator even claims the plan will violate fair-lending laws.
The agency in June proposed using a pricing threshold, instead of the current debt-to-income limit, to determine which loans are Qualified Mortgages and therefore safe from liability. Lenders have argued the current 43% DTI limit is too restrictive. The new plan would award QM status to loans capped at 150 basis points above the prime rate.
But free-market advocates and others worry the new QM standard will flood the market with unaffordable loans and boost defaults in a repeat of 2008.
“The use of the [average prime offer rate] margin may destabilize mortgage markets and lead to episodes of increased delinquency similar to the financial crisis,” said Susan Wachter, a professor of finance and real estate at the University of Pennsylvania’s Wharton School.
Ed Pinto, a resident fellow and director of the American Enterprise Institute’s Housing Center, who has long advocated for conservative housing policies, has gone a step further. He has urged the CFPB to refer its proposal to the Department of Housing and Urban Development, which can investigate potential violations of the Fair Housing Act.
The up-and-down pattern for mortgage application activity continued, as volume rose 4.6% from one week earlier led by refinancings, according to the Mortgage Bankers Association.
Since the start of September, the pattern has been a week of increased application volume followed by a down one, echoing trends in refi activity.
The MBA's Weekly Mortgage Applications Survey for the week ending Oct. 2 found that the refinance index increased 8% from the previous week and was 50% higher than the same week one year ago. The refinance share of mortgage activity increased to 65.4% of total applications from 63.3% the previous week.
The median sale price of existing homes in the Las Vegas area grew to record high $337,250 in September, according to a monthly report from Las Vegas Realtors.
That's an increase of 9% from September of last year, and a bump of about $2,000 from August.
The median price for September sets a new all-time for the region, though a shortage of inventory has led to an unbalanced market despite near all-time low mortgage rates.
The continued rise of home prices has come despite a global pandemic that has decimated the region's tourism-based economy.
"Local home prices keep setting records, which is remarkable when you think about the challenges we're facing," said Tom Blanchard, president of Las Vegas Realtors and a longtime area agent. "The pause during the beginning of the pandemic seems to have pushed the traditional summer sales season into the fall."
For townhomes and condominiums, the median sale price for a unit in September was $195,500, which represented a 14% increase from September 2019.
With Gov. Steve Sisolak's order that allowed open houses to resume earlier this month, Blanchard said he envisions the potential for market activity in the coming weeks and months.
"We'll see if we can sustain this momentum heading into next year," Blanchard said. "We're also dealing with a housing shortage, with no signs of that changing anytime soon."
The number of homes available for sale remains "well below" the six-month supply that's generally considered to represent a balanced market. At the end of last month, just under 4,800 homes — not including condos or townhomes — were listed for sale without an offer, down 35% from September 2019.
JPMorgan Chase committed billions of dollars to help advance racial equity, including a pledge to underwrite home loans for Black and Latinx borrowers and changes to how its own executives’ progress on diversity is evaluated.
Among the plans announced Thursday, the bank said it would spend $8 billion to originate 40,000 mortgages for Black and Latinx households over the next five years. It originated $4.2 billion of such loans last year, according to U.S. government data. The $8 billion is on top of its normal lending, a spokeswoman said.
“We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people,” CEO Jamie Dimon said in the statement. “It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”