Beyond the headlines

Eased Mortgage-Risk Rule to Be Proposed by U.S. Agencies

Source: Bloomberg

As a way to simplify the mortgage market, six federal agencies have proposed revised regulations that oversee how banks finance mortgages. By easing requirements on lenders under the softened qualified residential mortgage rule, banks won’t have to retain a stake in mortgages with down payments of less than 20 percent when they bundle mortgages into securities. The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Federal Housing Finance Agency and the Department of Housing and Urban Development are the regulators behind the proposal.

Making sense of the story

The first draft of the qualified residential mortgage rule faced opposition from housing industry

participants and consumer groups. The rule was intended to prevent the type of risky loans that

contributed to the subprime credit crisis, but opponents said it would impede home lending.



Under the new draft, the qualified residential mortgage rule would be aligned with the qualified

mortgage, or QM, rule. The QM stems from the Consumer Financial Protection Bureau and

contains no down payment requirement. Such alignment provides a clearer roadmap to banks.



Before regulators vote to finalize the rule, they are requesting public feedback on the full proposal

by Oct. 30. Feedback is also encouraged for an alternative arrangement that would require lenders

to keep a stake in any loan with a down payment of less than 30 percent.



Commenting on the revision, NATIONAL ASSOCIATION OF REALTORS® President Gary

Thomas stated the following: “The new standards, which align with those applied to Qualified

Mortgages, are stringent enough to protect consumers from unscrupulous lending practices while

also creating new opportunities for private capital to reestablish itself as part of a robust and

competitive mortgage market.”



Under the revisions, borrowers who spend less than 43 percent of their income on debts will have

an easier time getting a loan.

Read the full story

http://www.bloomberg.com/news/2013-08-28/eased-mortgage-risk-rule-to-be-proposed-by-u-s-agenciestoday.

html

In other news …

What should home buyers ask themselves before entering the market?

Source: Marketplace

Existing home sales topped an almost four-year high in July, and mortgage rates remain historically low,

so plenty of interested buyers are thinking about jumping into the market. When considering the costs,

one expert advises first-time buyers to ask the current homeowner for his or her utility bills, his or her

property tax bills, and also to factor in the price of one major repair a year.

Read the full story

http://www.marketplace.org/topics/economy/what-should-homebuyers-ask-themselves-entering-market

Developers Tailor New Housing Stock toWell-Heeled Buyers

Source: The Wall Street Journal

With larger, more expensive homes on the rise again, trade-up buyers appear to have more weight in the

new-home market as credit rules squeeze first-time buyers. Older, more affluent buyers are being catered

to with the average size of a new home reaching a record 2,642 square feet in the second quarter. This

surpasses the record of 2,561 square feet set in the first quarter of 2009.

Read the full story

http://online.wsj.com/article/SB10001424127887323980604579031350928407682.html

Home construction adds 500,000 jobs a year

Source: HousingWire

Construction of new homes is a major driver of economic growth, as for every new house constructed,

between four and five jobs are created. Single-family home construction contributed approximately

500,000 jobs to the economy year-over-year, and approximately 2 million jobs were added to the

economy from July 2012 to July 2013.

Read the full story

http://www.housingwire.com/articles/26387-home-construction-adds-500000-jobs-a-year

Home prices continue climb, but boost shows signs of slowing

Source: The Hill

The latest report from the S&P/Case-Shiller home price index indicates that prices for homes in the

nation's 20 largest cities in June rose 12.1% over the last year. From May to June, home prices were up

0.9 percent. However, gains in several cities came at a slower pace, perhaps due to an increase in home

mortgage rates.

Read the full story

http://thehill.com/blogs/on-the-money/1091-housing/318905-home-prices-continue-climb-but-boostshows-

signs-of-slowing

The Suburbs Are Dead, Long Live the Suburbs

Source: The Atlantic

The thesis of a new book on America’s housing says the future will be characterized by "urban burbs,"

which are urban-style suburban developments that will have a walkable downtown and proximity to

everyday needs. Based on an analysis of trends, the author says the American Dream is moving away

from the great American suburban experiment in a way that won’t bring the end of the suburbs but just

suburbs as we know them.

Read the full story

http://www.theatlanticcities.com/housing/2013/08/suburbs-are-dead-long-live-suburbs/6680/

Delinquency Rate Back on Downward Course After Seasonal Increase

Source: DSNews.com

Continuing its downward trend, the national mortgage delinquency rate fell to 6.41 percent in July,

according to Lender Processing Services, Inc. (LPS). The rate did experience a seasonal uptick in June,

when it increased to 6.7 percent, but there has been a yearly decline of 8.76 percent.

Read the full story

http://www.dsnews.com/articles/delinquency-rate-back-on-downward-course-after-seasonal-increase-

2013-08-26

States Ranked for ‘Healthiest’ Borrowers

Source: Mortgage Servicing News

Washington, D.C., New Jersey, Hawaii, Massachusetts and California are ranked as the top five states

with the most financially healthy would-be mortgage borrowers. A new LendingTree report considered

average of credit score, loan-to-value ratio “and overall lendability of mortgage-seekers” for the rankings.

Read the full story

http://www.nationalmortgagenews.com/dailybriefing/LendingTree-Ranks-States-Healthiest-Borrowers-

1038326-1.html?site=default_msn

What you should know …



The share of equity sales – or non-distressed property sales – has risen on a month-to-month basis

for 17 of the last 18 months and now makes up more than four in five sales, the highest share

since December 2007, according to the CALIFORNIA ASSOCIATION OF REALTORS®

(C.A.R.). In addition, distressed sales plunged by half compared to a year ago.



C.A.R. reported that the available supply of homes was essentially flat from June but remained

tight. The July Unsold Inventory Index for equity sales edged down from 3.1 months in June to 3

months in July. The supply of REOs inched up from 1.8 months in June to 2.1 months in July,

and the supply of short sales ticked upward from 2.4 months in June to 2.5 months in July.



Of the distressed properties, the share of short sales fell to the lowest point since April 2009 at

11.6 percent. July’s figure was down from 12.9 percent in June and was about half of what it was

a year ago, when short sales made up 22.7 percent of all sales. The continuing decline in short

sales indicates more previously underwater homes are moving into positive equity as home prices

remain on an upward trend.