Archives for 2012

Legislative Update

Arizona SB 1014/Chapter 36 was signed by Republican Gov. Jan Brewer on March 16. Effective 90 days after adjournment, it amends current law concerning application fees for financial institutions and enterprises, including licensing for consumer lenders, escrow agents, and loan originators. The bill is sponsored by Senator John McComish (R-Ahwatukee).

 

On March 22, the Arizona Senate voted unanimously to pass HB 2079, a bill modifying mortgage broker’s license application requirements. The bill is now awaiting concurrence in amendments by the House. As amended, the bill would require that, in order to qualify for a mortgage banker license or a renewal of a license, an applicant must at all times have and maintain a net worth of not less than $25,000 (instead of $250,000) and that negative equity in a person’s primary residence would not impact their net worth for these purposes.

AMLA Leadership Group Meets with AZDFI & ADRE

 On February 29th, the 2012 AMLA Leadership Group spent some time with the Commissioner of the Arizona Department of Real Estate; Judith Lowe, and the Assistant Superintendent for the Arizona Department of Financial Institutions; Robert Charlton. We also benefited with the participation of Chris Dunshee from licensing division at AZDFI.

AMLA is very pleased that for the past three years, our Leadership group has benefited from one on one sessions with the Leaders of these Departments. Commissioner Lowe kicked off the event with a recap of statistics for the Department of Real Estate and then shared the key topics of concern for ADRE.  As a group we discussed at great length how the Department of Real Estate, the Department of Financial Institutions and the Mortgage Task Fraud are diligently working together to end the latest versions of Mortgage Fraud. They are meeting on a regular basis to share information and determine areas that need investigation. Overall we were advised that Fraud continues to be prevalent in Arizona and the work continues.

Mr. Charlton and Mr. Dunshee participated in a lengthy discussion with the group regarding polices for transitioning from a registered loan officer position to licensed loan officer.  At this time AZDFI reminded us that policy does not allow a loan officer who is registered to move to licensed status without the requirements being met, and most important the fact that no temporary status exists.  It was confirmed that AZDFI expects no changees to their policies regarding this issue, or background checks and credit reports. As we concluded our discussion we had a review of pending legislation and the potential outcomes so that AMLA Leadership members would be better informed.

Once again, we had a very informative time and each year the topics change just like our industries.  Next up we will be meeting with Attorney General Horne and his staff.

Please consider joining the AMLA Leadership group in 2013.  It just seems to get better each and every year.

Posted:  Sherry Olsen AMLA VP Education-Leadership

Mortgage Forecast from MBA

From Mike Fratantoni –  MBA’s PHD Economist in  MBA’s Rsearch Department:

A few highlights from February’s forecast:

 We have increased our estimate of economic growth, and nudged down our expectations for the unemployment rate in 2012 given the stronger job reports the last two months.

  • Our expectations for mortgage rates are essentially unchanged.  With the Fed on hold, and a growing economy, we are anticipating that mortgage rates will slowly inch upwards through the year to end 2012 at about 4.5%.
  • Home construction has picked up a bit, and we reflect that.  Our outlook for home sales is little changed, with a just a bit more strength in new home sales. 
  • We still are anticipating that home prices will be modestly positive in 2012.  (There was a technical change that impacts our forecast with respect to home prices – the median home price series put out by Census and NAR were revised lower.  Even with the same HPA assumption, this means somewhat lower purchase origination volume for the year than we had previously estimated.)
  • For the origination forecast, the primary change is with respect to the Q1 2012 data.  Purchase applications have come in weaker than we had anticipated, while refinance applications have come in considerably stronger.  We reflect that in our Q1 originations estimates, but our view for the remainder of the year is little changed.  As a result, our total originations forecast for 2012 is now just over $1 trillion.  We were at $992 billion in January.  As we have reported, 10-20% of refi app volume has been for HARP loans in recent weeks.
  • Our estimate is for roughly $1 trillion in total origination volume in 2013, but with a significant shift towards purchase business as home sales increase, home price appreciation picks up closer to trend, the cash share of sales drops, and sales activity is focused in the better performing/higher cost markets.  We expect refinance volume to drop sharply as mortgage rates continue to increase.
  • We continue to see an escalation of the European sovereign debt crisis and/or the situation in Iran/Middle East as the principal downside risks to our forecast.  We do see some upside opportunity in terms of purchase volume if we get a stronger spring buying season as a result of the positive job market data. 

 

There is more thorough data on our website, mbaa.org

Phoenix Housing Market Recovery is On Track

Posted in Phoenix – Tucson Market  |  Posted on 02-02-2012  |  Written by Metrostudy News

(Phoenix, AZ – February 2, 2012) Most local housing and economic indicators are trending in the right direction in the Phoenix housing market, according to Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

New home starts in the Phoenix area numbered 6,608 in 2011, which is the calendar-year low for this housing cycle and the lowest level of activity since 1967.  Starts, which are based on Metrostudy’s lot-by-lot survey of all new construction subdivisions in Maricopa and Pinal Counties, are down 8% from 2010.  “Starts in the second half of 2011 were up 30% from the same period the previous year, which suffered unduly from the hangover following the expiraiton of the homebuyer tax credits,” said Ben Sage, director of Metrostudy’s Phoenix division.

Regarding new-home supply, inventory figures are reasonably low, which indicates that builders are constructing homes only to meet current demand.  Total new home inventory (single family), which includes all homes that have been started but are yet to exhibit any evidence of occupancy, fell to only 4,519 units at the end of December. The number of new inventory units that are finished but empty, many of which are under contract, fell 28% from the end of 2010 and now number 1,847 units, which is the low point for this housing cycle.  This represents a 3.3-month supply, “which is manageable,” said Sage, “given the current state of real estate. The relatively low count of new homes in inventory is critical to an eventual recovery.  It illustrates that the problem is not with new-home supply as much as with demand.  When buyers return, builders will have to start more homes because they will not be able to satisfy the demand from their current inventory.”

“It’s been a long few years for homebuilding, but things are looking up.  Resale prices are starting to recover, which will help builders be more competitive.  In 2011 resale homes, particularly those appealing to investors and first-time buyers, were priced below replacement cost.  That type of inventory is quickly clearing out, so some demand can be expected to spill over to new homes. Employment is up, unemployment is down, retail sales are up, foreclosures are down, delinquencies are down, resale demand is strong, resale supply is low, home prices are rising, and new-home inventory is low. The recovery is on track, and I believe home starts will be up this year more than most people expect.”

For information contact:
Ben Sage @ 480.756.9300
email: bsage@metrostudy.com

New Director named for Consumer Financial Protection Bureau

Just hours ago, President Obama took the bold political step of using a recess appointment to name Richard Cordray as the Director of the Consumer Financial Protection Bureau (CFPB), effective through the end of the U.S. Senate’s next full session (i.e., year end 2013).  The official announcement was made this afternoon at a campaign-style event in Cleveland, Ohio, a key presidential battleground state.  Cordray’s appointment comes over significant objections from both House and Senate Republicans to the governance structure of the bureau.  While not objecting to Cordray’s qualifications per se, Republican leaders had been using procedural measures (pro forma sessions) to prevent a recess appointment absent structural changes.  Today’s action promises to further exacerbate the political tensions between Democrats and Republicans.

Unless Cordray’s appointment is ultimately found to be unlawful and an injunction issued against the CFPB’s exercise of its new powers, the Bureau will now be able to implement its full range of authority under the Dodd-Frank Act, including the ability to regulate non-bank financial institutions and to issue rules dealing with unfair, deceptive, and abusive acts and practices.  Without a Director, the CFPB was limited to using those powers inherited from existing banking regulators.  While MBA supports the goal of stronger consumer protection through a unified regulator, a fully empowered CFPB presents a number of new challenges for our industry.

You should be aware that, despite the politics involved, MBA has taken steps to establish a positive working relationship with the CFPB’s leadership, including my own personal outreach to Mr. Cordray.  We will continue our efforts – including direct MBA member engagement — to help ensure that the CFPB understands issues important to our industry and crafts appropriate policies.

At the same time, MBA continues to support the need for important structural changes to the CFPB, namely that the Director’s position be replaced by a five-person Commission, that the CFBP be subject to the normal congressional appropriations process, that CFPB rules be subject to review by the Office of Management and Budget (OMB), and that votes to overturn CFPB decisions by the Financial Stability Oversight Council (FSOC) take a simple majority rather than a 2/3 vote.  In short, the CFPB’s influence on the financial services sector will be unprecedented, and MBA will continue to urge that appropriate institutional checks and balances be in place to ensure that the CFPB’s authority is used wisely and judiciously.

More than ever, I believe it is critical that any new regulatory policies impacting mortgage finance are sound and well-reasoned.  MBA will be working with our members and other industry and consumer groups to make sure our voice continues to be heard in the coming CFPB policy debates.

This message, including any attachments, contains confidential information intended for a specific individual and purpose, and is protected by law.  If you are not the intended recipient, you should delete this message and you are hereby notified that any disclosure, copying, or distribution of this message, or the taking of any action based on it is strictly prohibited.
_____________________________________

Investing in communities
David H. Stevens
President and Chief Executive Officer
Mortgage Bankers Association
1717 Rhode Island Avenue, N.W., Suite 400
Washington, DC 20036
Phone: (202) 557-2701
Fax: (202) 289-3943
dstevens@mortgagebankers.org
www.mortgagebankers.org

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