Industry Briefs July 7, 2021

FHFA Issues Policy Statement on Fair Lending

The Federal Housing Finance Agency issued a Policy Statement on Fair Lending. The Policy Statement communicates FHFA’s commitment to comprehensive fair lending oversight of Fannie Mae, Freddie Mac  and the Federal Home Loan Banks and provides a foundation for building out FHFA’s fair lending program.

“Illegal discrimination has not and will not be tolerated by FHFA,” said FHFA Acting Director Sandra L. Thompson. “FHFA is committed to fair mortgage lending because it ensures that all Americans have equal access to safe, decent, and affordable housing. FHFA’s Policy Statement on Fair Lending clearly communicates the Agency’s fair lending expectations for the regulated entities and outlines the Agency’s fair lending oversight and enforcement to ensure compliance with the law.”

FHFA invites comments on the application of the Policy Statement within 60 days of its publication in the Federal Register.

JLL, Northwestern Capital Partners Launch Multifamily Workforce Housing Partnership

Northwestern Capital Partners LLC, a privately held advisory and consulting firm with offices in Los Angeles and Charlotte, N.C., and JLL, a Chicago-based global real estate firm, are leading an effort to raise $150 million in connection with an engagement between Northwestern Capital and the Urban Pacific Group of Companies for a new multifamily workforce housing real estate strategy in southern California.

Headquartered in Long Beach, Calif., Urban Pacific has completed $1 billion in multifamily projects in the western United States, with a specific focus on the Los Angeles and Orange County. Urban Pacific’s goal is to address underserved new construction rental housing market (build-to-rent) through development of a portfolio of projects exclusively focused on its 5-bed, 4-bath, 3-level new construction workforce housing product called Urban Town House. UTH serves multi-generational, multi-earner working class families and roommates.

Redfin: Black Americans Face Bigger Financial Barriers to Homeownership Than White Americans

A Redfin survey found 23% of white homeowners report making no financial sacrifices to buy their first home, versus 14% of Black homeowners.

The survey of more than 1,500 respondents also found 21% of Black homeowners earned $150,000 or more when they bought their first home, versus 11% of white homeowners. That suggests Black Americans need to earn more money than their white counterparts to become homeowners. White homeowners are more likely than Black homeowners to have parents and grandparents who are homeowners, which means they’re more likely to benefit from generational wealth when they’re purchasing a home.

“Homeownership is closely tied to the American ideal of freedom, and specifically financial freedom,” said Redfin Chief Economist Daryl Fairweather. “The fact that Black buyers report earning more money and making more financial sacrifices to enter the homeowner class is one example of how difficult it is for Black people in this country to achieve the American dream.”

The report can be found here.

FHA Revises Property, Appraisal Quality Control Review Requirements

The Federal Housing Administration published Mortgagee Letter (ML) 2021-17, Revisions to Property and Appraisal Quality Control Review Requirements. The ML updates FHA Single Family Quality Control requirements for appraisal field reviews and evaluation of property and appraisal documentation for all FHA Title II Single Family programs. It also announces expiration of the December 4, 2020, temporary waiver of Single Family QC requirements for appraisal field reviews. The temporary waiver remains in effect for QC reviews currently in process and for cases selected as part of a mortgagee’s QC review through June 30.

FHA initially issued the temporary waiver during the COVID-19 pandemic to provide mortgagees with flexibilities when conducting field reviews of appraisals on FHA-insured mortgages selected for monthly QC. The temporary waiver is no longer needed as the nation transitions out of the COVID-19 national emergency.

New American Funding Offers RefiNow Option for Borrowers with Lower Income

New American Funding, Tustin, Calif., is now offering Fannie Mae’s RefiNow program. The program requires that eligible borrowers receive a savings of at least $50 on their monthly mortgage payment and a reduction of their interest rate of at least 0.50%.

The program is for fixed-rate loans only, offer limited cash-out options, and feature loan limits up to the conforming limits.

FHA Catalyst Module Adds Enhanced Features for Claims Submissions

The Federal Housing Administration released enhancements to its FHA Catalyst: Claims Binder Module as part of its ongoing efforts to expand its technology capabilities. The platform enhancements provide mortgagees with additional options and flexibilities for claim submissions within FHA Catalyst.

Functionalities allow mortgagees to receive notification that prevents duplicate claim submissions; add documents and/or files to an existing claim submission; complete actions using an application programming interface.  

Black Knight: Active Forbearance Plans Fall by 6,000

Black Knight, Jacksonville, Fla., said active forbearance plans fell by 6,000 last week. As of June 29, 2.05 million (3.9%) homeowners remain in COVID-19 related forbearance plans including 2.2% of GSE, 6.8% of FHA/VA and 4.6% of Portfolio/PLS loans. Plan volumes are down 145,000 (-6.6%) from a month ago, with the rate of decline picking up slightly over the past week.

Weekly declines among GSE (-5,000) and FHA/VA (-2,000) forbearance plans were partially offset by a 1,000 rise among portfolio and privately held mortgages. Of the 146,000 plans reviewed for extension or removal over the past week, 44,000 homeowners left forbearance, while the plans of 102,000 were extended.

CFPB Warns Landlords, Consumer Reporting Agencies to Report Rental Information Accurately

The Consumer Financial Protection Bureau released an Enforcement compliance bulletin reminding landlords, consumer reporting agencies and others of their critical obligations to accurately report rental and eviction information as the federal eviction moratorium and other pandemic rental protections come to an end.

“Errors in your tenant screening report shouldn’t hold you back from having a place to call home,” said CFPB Acting Director Dave Uejio. “For families already struggling to make ends meet, an inaccurate report can be the difference between homelessness or settling into a safe and affordable home. Landlords and consumer reporting agencies have clear obligations under federal law, regarding the accuracy of information reported about tenants, and to conduct timely investigations when consumers dispute information. They need to get this right. The CFPB will closely monitor their compliance, and we will use all the tools at our disposal including enforcement, to protect consumers during this critical time.”

The CFPB intends to look carefully at whether landlords, property management companies and debt collectors are furnishing accurate information to CRAs and complying with their dispute-handling obligations under the Fair Credit Reporting Act.

Redfin: iBuyer Home Purchases Inch Back Toward Pre-Pandemic Levels

The nation’s top iBuying companies purchased 4,383 homes in the first quarter, according to a new report from Redfin, Seattle. While that’s down 6.1% from a year earlier, it’s up 20.6% from the prior quarter—a sign that iBuyers are continuing to ramp up after pausing business at the beginning of the pandemic.

Still, the report said, iBuyers make up a tiny portion of the overall housing market, purchasing just 0.5% of homes that sold across the 418 U.S. metropolitan areas tracked by Redfin in the first quarter. That’s down from a peak of 0.8% in the second half of 2019 but up from 0.3% a year ago.

“Business really started ramping up in January and February. Since then, we’ve just had a constant barrage of deals,” said Allister Booth, an acquisitions specialist at RedfinNow in Los Angeles. “We’re back to full speed and are buying more homes than we were last year. After we buy and renovate those homes, we know we’ll be able to sell them because there are so many more buyers in the market right now than there are homes available.”

FHFA Announces New, Expanded Statistical Products from National Mortgage Database

The Federal Housing Finance Agency (released a set of new and expanded statistical products from the National Mortgage Database.

FHFA expanded national statistics for new residential mortgage originations to include monthly, quarterly and annual series for home purchase and refinance mortgages in all major market segments. FHFA also added a new series of national and state level statistics for outstanding residential mortgages and an expanded series of national mortgage performance statistics for different market segments.

Verus Commercial Real Estate Finance Adds Intermediate Bridge Loan

Verus Commercial Real Estate Finance, New York, expanded its available loan products to now include a 5-year Intermediate Bridge Loan product that consists of a 3-year term plus up to two one-year extensions. 

Features of VCREF’s Intermediate Bridge Loan include loans of %5 million to $50 million; up to 80% as-is LTV for multifamily and up to 75% LTV for other asset types; non-recourse with standard carve outs; interest only; and property types that include multifamily, industrial, office, retail, mixed-use, parking, self-storage, manufactured housing and hospitality.

Financial Regulators Update Examiner Guidance on Financial Institutions’ Information Technology Architecture, Infrastructure and Operations

The Federal Financial Institutions Examination Council issued a new booklet in the FFIEC Information Technology Examination Handbook series, “Architecture, Infrastructure and Operations.”

The booklet provides expanded guidance to help financial institution examiners assess the risk profile and adequacy of an entity’s information technology architecture, infrastructure and operations.

Updates to the booklet reflect the changing technological environment and increasing need for security and resilience, including architectural design, infrastructure implementation, and operation of information technology systems. The updated booklet also highlights the importance of providing current information to examiners reviewing an entity’s information management practices pertaining to safety and soundness, consumer protection, and provision of secure and resilient business services to customers.

The complete FFIEC Information Technology Examination Handbook is available at  

FHFA Expands Use of Interest Rate Reduction to Help Borrowers with COVID-19 Hardship

The Federal Housing Finance Agency announced changes to loan modification terms for COVID-19 impacted borrowers with mortgages backed by Fannie Mae or Freddie Mac needing payment reduction for successful home retention. The updated terms are specifically for borrowers with permanent COVID-19 hardships and respond to the unprecedented nature of the pandemic.

FHFA said Flex Modification terms will be adjusted for COVID-19 hardships making interest rate reduction possible for eligible borrowers, regardless of the borrower’s loan-to-value ratio. Previously, only borrowers with mark-to-market loan-to-value ratios greater than or equal to 80 percent were eligible for a possible interest rate reduction.

Redfin: More Than 1/3 of Utah Homes Face High Fire Risk

Two of every five homes (39.4%) in Utah face high fire risk, according to a new report from Redfin, Seattle, a larger share than any other western state.

Colorado and Idaho came in second and third place, with 19% and 14.4% of properties at high risk, respectively. Less than 10% of homes in the following states have high risk: Oregon, Nevada, California, Washington and Arizona.

While Utah doesn’t rank at the top of the list in terms of number of fires or acreage burned, it has a relatively high share of properties at risk—likely because the state’s most populous cities overlap with its most at-risk areas. Much of the state’s high fire risk lies in and around Salt Lake City, West Valley City and Provo—Utah’s three largest cities. By comparison, only one of Washington’s three most populous cities—Spokane—overlaps with substantial fire risk.