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The housing industry’s race to receive PPP loans May 07, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath discusses the Housing industry’s scramble to receive loans from the Payroll Protection Program.

For some background on the story, here’s what has happened in the industry so far:

From April 3 to April 13, about 14% of real estate companies in the U.S. – including sales, leasing and maintenance firms – got funding in the first round of the Payroll Protection Program created by Congress to rescue small businesses, according to loan data from the Small Business Administration.The loans are intended to help companies keep employees on their payrolls amid the worst public health crisis in more than a century. But the program was beset with complications from the beginning, with lenders unable to process initial requests to provide the loans, small businesses unable to properly request PPP funding, and some banks even reportedly favoring their own clients over non-clients.On April 9, Senate Majority Leader Mitch McConnell attempted to add $250 billion to the program using a legislative technique known as unanimous consent. In the end, the bill approved by the Senate on April 22 had $320 billion of additional funding for PPP, with $60 billion earmarked for community banks and small lenders. But because of the way the loan distributions were initially handled, the industry-share numbers could change and for many small businesses trying to get a loan, the experience has felt a bit like being in a mosh pit – those areas at heavy metal concerts where body slamming is the rule.

Following the main story, HousingWire Digital Producer Alcynna Lloyd covers a Fannie Mae forecast that projects U.S. refinance volume hitting a 7-year high, The Labor Department’s data that shows another 3 million Americans have now filed jobless claims, and Freddie Mac’s Primary Mortgage Market survey that indicates the average mortgage rate is 3 basis points away from another all-time low.

The Daily Download examines the most captivating articles reported from the HousingWire newsroom. Each afternoon, HousingWire provides its readers with a deeper look into the stories that are not only chronicling the biggest announcements within the housing finance industry but are also helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd.

HousingWire articles covered in this episode:

Where does Democratic Party presumptive nominee Joe Biden stand on homeownership? May 06, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath discusses former Vice President and current Democratic Party presumptive nominee Joe Biden’s plans to support black businesses and homeownership.

On Tuesday, Biden urged voters to support his plans to boost the economic prospects of black Americans, including an increase in homeownership.

Biden reiterated the proposal he made during the heat of the primary campaign to create a new public credit reporting agency within the Consumer Financial Protection Bureau that would replace for-profit credit reporting companies like Experian.

Biden also proposed establishing national standards for housing appraisals aimed at ending “the undervaluing of homes in African American neighborhoods,” without providing specifics.

Additionally, he urged Congress to reserve half of all new relief funds for small businesses with 50 or fewer employees, a category he said includes 98% of all minority- and women-owned businesses.

Following the main story, HousingWire Digital Producer Alcynna Lloyd covers a report from the Mortgage Bankers Association that indicates the nation’s banks now have the largest share of mortgages in forbearance, Zillow’s housing forecast that predicts home price declines throughout the rest of 2020, and the MBAs weekly applications survey, which reports an uptick in U.S. mortgage applications.

HousingWire articles covered in this episode:

Ed DeMarco on the mortgage industry’s tremendous uncertainty May 05, 2020

Show notes

In today’s Daily Download episode, HousingWire Digital Producer Alcynna Lloyd interviews Housing Policy Council President and former Federal Housing Finance Agency Acting Director Ed DeMarco on how COVID-19 has impacted the housing ecosystem, as well as what issues the housing industry will need to tackle once the pandemic passes.

For some background on the interview, here's what has happened in the industry so far.

In April, despite growing calls from the housing industry for a federally backed liquidity facility for servicers to address the increase in forbearance requests due to the coronavirus, Federal Housing Finance Agency Director Mark Calabria told HousingWire that no such facility was coming.This prompted David Stevens, the former head of the Federal Housing Administration and CEO of the Mortgage Bankers Association, to write that the mortgage industry was “standing on the precipice” of widespread havoc due to a potential deluge of forbearance requests from borrowers.Stevens’ sentiment differed greatly from Calabria, who told HousingWire that he did not believe the industry was facing the calamity that Stevens and others predicted, especially on the nonbank side. In fact, despite the industry’s concerns of growing forbearance requests, Calabria said he expected approximately 1 million GSE mortgages to be in forbearance by May.In response, more than 20 Republican members of the House of Representatives sent a letter to the Department of the Treasury, urging Treasury Secretary Steve Mnuchin to create a liquidity facility for servicers that might find themselves in financial distress due to advancing principal and interest payments to investors on loans that are in forbearance.They were later joined by two of the top Democrats in Congress and The Conference of State Bank Supervisors, in their plea to have the government step in and help servicers. However, their calls were unanswered and the nation’s forbearance request kept climbing.By late April, Fannie Mae revealed that they had approximately 1 million GSE mortgages in forbearance at the GSE alone and they didn’t expect the figure to stop growing any time soon.As a means of combating this uptick, the GSEs recently offered other solutions, such as allowing servicers who collect payments on mortgages backed by Fannie Mae and Freddie Mac to only have to cover four months of missed payments on loans in forbearance.However, the big question now is what happens when that four-month period is over? Well, as it turns out, the GSEs themselves are preparing to cover any remaining advances for as long as those loans remain in forbearance.

HousingWire articles covered in this episode:

Will the FHFA kill the mortgage industry? May 04, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath covers a PULSE article from former Mortgage Bankers Association President David Stevens on his thoughts on how the Federal Housing Finance Agency’s actions have resulted in significant credit contraction for the mortgage industry.

In his HousingWire PULSE article, Stevens says:

It is now over one month since the CARES Act was passed, creating a blanket forbearance option for all borrowers in a GSE, FHFA, VA, or USDA loan to skip six to 12 months of payments. Legislation established by Congress with the intent of calming concerns of homeowners across the country has thrust an entirely new credit availability contraction over the entire nation.Because of the rush to pass legislation, the unforeseen adverse impacts could not have been fully vetted in advance. As a result, we found a multitude of challenges, but it really came down to these two:

How would mortgage servicers come up with the tens of billions in needed advances to bond holders of loans in forbearance?
What about borrowers who went into forbearance after settlement and before the loans were sold to the GSEs or into GNMA securities?

Unfortunately, the FHFA director made some unwelcome judgmental comments and policy decisions that have resulted in an unprecedented tightening of credit across the entire mortgage industry, threatening to impair a key sector of the economy that some economists were expecting would help lead us back to recovery.

Following the main story, HousingWire Digital Producer Alcynna Lloyd covers Fannie Mae’s announcement that more than 1 million of its borrowers are already in forbearance, plans by the nation’s top GSEs to make payments directly to investors for loans that stay in forbearance longer than four months, and a report from OJO Labs that details how COVID-19 has changed the mindset of U.S. potential homebuyers.

HousingWire articles covered in this episode:

Can the housing market recover from COVID-19? May 01, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath discusses whether or not COVID-19 will derail the U.S. housing market.

In an HW+ PULSE article, contributor Rick Sharga says:

Like most of the news surrounding the COVID-19 global pandemic, reports about the U.S. housing market have been discouraging. Year-over-year listings of homes for sale have plummeted – in the worst-hit markets like New York City, listings are down 80% compared to April 2019. Home sales began to slow down dramatically in the last half of March, and are expected to drop even more drastically in April and May, which are usually two of the months with the highest volume of home sales. Pending home sales are off over 30%. And over 3 million homeowners have applied for mortgage payment forbearance, causing at least some concern about a large number of potential defaults at the end of the forbearance period. None of this should be surprising, under the circumstances. With almost every state in the country implementing some form of shelter-in-place order and shutting down most non-essential businesses, more than 25 million citizens filed for first-time unemployment benefits over the past four weeks. Given all of this, anything other than bad news in the housing market would be a huge surprise. The question isn’t whether housing numbers will continue to suffer until the pandemic recedes and the economy has a chance to begin its recovery. It’s what happens after that.

Following the main story, HousingWire Digital Producer Alcynna Lloyd spotlights Michigan’s resilient housing ecosystem, the Department of Housing and Urban Development’s Office of the Inspector General’s report that indicates some of the nation’s largest mortgage servicers are providing borrowers with inadequate forbearance information, and Wells Fargo’s announcement that they will no longer accept applications for new HELOCs.

HousingWire articles covered in this episode:

Does the rental market need its own Paycheck Protection Program? Apr 30, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath discusses why some believe the housing sector needs its own version of the Paycheck Protection Program for businesses that own and operate multifamily housing.

In a HousingWire PULSE article, contributors Carol Galante and Barry Zigas say:

The one-third of American households who rent their homes are facing unprecedented pressure from the economic fallout of the coronavirus pandemic. Without immediate help, families will face either eviction or crippling unpaid rent bills. The owners of rental properties will increasingly find themselves without the money needed to pay regular expenses including for health and safety measures, utilities, property taxes and payroll. If ignored, the problems will get worse. Without federal support, the country will suffer cascading negative impacts throughout the economy.There is a solution. We propose a program like the Small Business Administration’s Paycheck Protection Program (PPP), but directed specifically at the businesses that own and operate rental housing. It would be structured to provide funds, on an ongoing monthly basis, to substitute for lost rental income for as long as it is needed.

Following the main story, HousingWire Digital Producer Alcynna Lloyd covers Freddie Mac's Primary Mortgage Market Survey data that reveals U.S. mortgage rates have now fallen to a new all-time low, the Labor Department’s report that indicates the nation’s jobless claims have spiked to 30 million during the COVID-19 pandemic, and the Federal Reserve’s decision to slow the pace of mortgage purchases.

HousingWire articles covered in this episode:

COVID-19 accelerates home-buying migration trends Apr 29, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath discusses whether or not the COVID-19 pandemic will spur home-buying migration from dense U.S. cities.

When state governments ordered residents to stay at home more than a month ago, it triggered a wave of temporary migration. While some in the Northeast flocked to Florida, others, wary of germs easily spreading in high-rise building elevators and through dense city life, rented homes in the suburbs. Still others, particularly young single adults, packed bags and moved back in with their parents.

As states plan to reopen their economies, what changes COVID-19 will have on the housing market remain to be seen. Demographers and Realtors alike predict this is a tipping point for people who’ve already been dreaming of backyards, private pools, and more space. It will accelerate trends that were already happening, they said, and bring a new level of consideration – whether people upgrade their apartments and condos for larger units or move out of dense cities altogether.

Following the main story, HousingWire Digital Producer Alcynna Lloyd covers the Commerce Department’s report that indicates coronavirus has ended America’s longest economic expansion, the Mortgage Bankers Association’s weekly mortgage applications survey that reveals the nation’s home purchase applications are on the rise and the National Association of Realtors’ pending home sales report, which highlights U.S. pending home sales declined 20.8% in March.

HousingWire articles covered in this episode:

Why is the Fed's unlimited support essential to the mortgage industry? Apr 28, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath interviews HousingWire’s Kathleen Howley on how Federal Reserve Chairman Jerome Powell rescued the mortgage market, initially announcing plans on March 15 to buy bonds in the form of $500 billion in Treasury bills and $200 billion of mortgage-backed securities.

On a Sunday night call with journalists in mid-March, four days after the World Health Organization had labeled COVID-19 an “alarming” global pandemic, Federal Reserve Chairman Jerome Powell laid out his plans to rescue the U.S. economy.

Powell started by expressing concern for the victims of the coronavirus and for the harm caused by the economic shutdowns, describing the “stay at home” orders being issued by state governors as “essential for containing the outbreak.”

He also announced more than half a dozen new measures the Fed would employ to buffer the economic blow of the shutdowns, including the Fed’s biggest foray into the bond market in over a decade.

The bond-buying would take the form of $500 billion in Treasury bills and $200 billion of mortgage-backed securities, Powell said on that March 15 call.

Both would support the mortgage market because the investors who decide what yield they’re willing to take for MBS – and thus what interest rate borrowers pay for home loans – benchmark their decisions off the yield for long-term Treasuries, especially the 10-year bill. Yields shrink when competition for bonds goes up.

HousingWire articles covered in this episode:

How Fed Chairman Powell rescued the mortgage market

Mortgage servicers face an uphill battle Apr 27, 2020

Show notes

In today’s Daily Download episode, HW+ Managing Editor Brena Nath discusses some of the biggest challenges facing U.S. mortgage servicers during the Covid-19 pandemic.

To get a reading on how people in the mortgage industry are handling the ever-changing impact of coronavirus, HousingWire surveyed its own LendingLife readers and received dozens of replies on how they’re handling the current lending environment. The answers from these lenders vary drastically from person to person, showing there is no one-size-fits-all solution for getting through this crisis.

One Texas-based sales manager stated his company has taken multiple steps during the coronavirus pandemic, including temporarily raising minimum FICOs on all government loans to 640 and suspending non-traditional credit and all bond and DPA programs. Echoing similar challenges, another respondent working at a Denver-based brokerage said he now operates with a limited range of available offerings and overlays that threaten to terminate a borrower who would otherwise be qualified.

Following the main story, HousingWire Digital Producer Alcynna Lloyd covers what three prominent industry leaders theorize the housing market could behave like after the Coronavirus pandemic, RentCafé’s report that indicates an upturn in U.S. multifamily apartment searches, and Fannie Mae and Freddie Mac’s declaration that borrowers in forbearance living in homes owned by the GSEs will never be required to make up missed payments in a lump sum.

HousingWire articles covered in this episode:

Stevens: There is an outrageous amount of liquidity pressure on nonbanks Apr 24, 2020

Show notes

In today’s Daily Download episode, HousingWire Digital Producer Alcynna Lloyd interviews Mountain Lake Consulting CEO David Stevens, who is also the former head of the Federal Housing Administration and former Mortgage Bankers Association president, on the growing liquidity pressure that nonbanks are facing.

Stevens comments on whether or not the Federal Housing Finance Agency is doing enough to address the nation’s uptick in forbearance requests from financially strained borrowers, stating, “There's still an outrageous amount of liquidity being advanced for servicing that Freddie and Fannie own that these services are servicing for them on their behalf.”

He added that it’s putting an “outrageous amount of liquidity pressure onto the nonbank community in particular, but also for servicers across the board.”

But before jumping into the interview, HousingWire’s HW+ Managing Editor Brena Nath touches on today’s top stories ranging from the coronavirus’ impact on California’s real estate market and Movement Mortgage’s decision to lower its minimum FICO credit scores on Federal Housing Administration and Department of Veterans Affairs loans.

HousingWire articles covered in this episode:

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