Refinance

Lenders that offer streamlined refinances in the future shouldn't be required to consider the borrower's income or employment status, according to the Mortgage Bankers Association. The trade group's comments were part of its response to a request for information on mortgage products that would support the financial stability of households.

Wells Fargo, which approved fewer than half of mortgage refinancings sought by Black homeowners in 2020, prompting calls for regulatory investigations, greenlighted a larger share of applications from such borrowers last year.

Senate Banking Committee Chairman Sherrod Brown and other Democratic senators called on Thursday for regulators to investigate Wells Fargo’s treatment of Black homeowners seeking to refinance mortgages during the pandemic. 

Many banks reported sharp declines in income from home loans during the second quarter. The large gains they enjoyed last year thanks to a surge in refinancing activity are unlikely to return, according to bankers and analysts.

The agency’s new chief said eliminating the “adverse market fee” — in place since December — will make it easier for families to refinance while mortgage rates are still low.

Consumer advocates and mortgage industry officials are urging Sandra Thompson, the new acting director of the Federal Housing Finance Agency, to undo many policies that her predecessor, Mark Calabria, put in place over the past year.

It would be available to homeowners making 80% or less of their area’s median income who weren't eligible to tap into low rates last year.

Origination volume hit a record high in 2020 as more borrowers tapped the equity in their homes and investors and second-home purchasers flocked to the market at levels unseen since before the Great Recession.

While its net income declined annually for the second consecutive year, CEO Hugh Frater touted Fannie Mae’s resiliency in a record year for providing mortgage liquidity.

Demand for home purchases and car loans would need to increase substantially to make up for what's expected to be a sharp drop in refinancing revenue.

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The mortgage giants were criticized earlier this month for a plan to charge an "adverse market fee" to protect against losses resulting from the pandemic.

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Lenders initially won't be able to pass on the cost of the Federal Housing Finance Agency's "adverse market fee" to borrowers whose rates on GSE-backed mortgages and refinances are already locked in.

The higher charge on mortgages refinanced through Fannie Mae and Freddie Mac is supposed to cushion against a crisis but could contribute to one as the fees are passed on to struggling consumers.

Dana Wade, a former OMB official, says a strong capital footing will help the Federal Housing Administration weather an uptick in delinquencies and ensure the mortgage market is viable once the economy recovers.

Dana Wade, a former OMB official, says a strong capital footing will help the Federal Housing Administration weather an uptick in delinquencies and ensure the mortgage market is viable once the economy recovers.

The new “adverse market fee” for refinanced mortgages resembles steps the companies took to combat the 2008 mortgage crisis. But critics charge it isn’t necessary and will hurt borrowers’ ability to tap into low rates.

The Federal Housing Finance Agency will extend the same GSE benchmarks of the past three years into 2021.

However, those who aren't current bank customers need to have $1 million in a qualifying account.