Freddie Mac reports mortgage rate increase for fourth straight week

Freddie Mac reported that the 30-year fixed-rate mortgage (FRM) increased to 4.65 percent and 15-year FRM averaged 4.11 percent last week. While interest rates are still at historic lows, they are nearly 100 basis points (1.00 percent) higher than they were a year ago. A 100 basis point increase in interest rates raises the monthly payment on a $250,000, 30-year FRM by $116 per month, a significant increase for working families.

Sen. Warren introduces major housing legislation

Sen. Elizabeth Warren (D-Mass.) has proposed a major new housing bill that could create more than 3 million new units of affordable housing at a cost of nearly a half-trillion dollars. Most of the money would be directed to the Housing Trust Fund, which is currently funded by a user fee on new business by Fannie Mae and Freddie Mac. Other programs funded by the bill include the Capital Magnet Fund ($25 billion) and a new “Middle-Class Housing Emergency Fund” for the construction of homes in areas where supply is limited and housing prices have increased faster than incomes. According to an analysis by Moody’s Analytics, the legislation would increase affordable housing construction by close to 200,000 units in 2019, to almost 250,000 units in 2020, and to 300,000 units in 2021. Over the full 10 years, affordable housing production increases by about 300,000 units per annum, according to the analysis. The analysis also predicted that increased housing construction would lift employment by 730,000 jobs in the first year, and by as much 1.5 million jobs at the peak of the impact in the mid-2020s.

Report: Four key issues for housing market recovery

In a recent article published by Brookings, Michael Calhoun, president of the Center for Responsible Lending, noted that four key issues “provide major opportunities to advance a sustainable and affordable housing market that supports families, communities and the overall economy.” Calhoun noted that as the Trump administration continues its efforts to roll back regulatory restrictions on mortgage lending, the ability to repay provisions and fair lending rules enacted in the Wall Street Reform and Consumer Protection Act, known as Dodd-Frank, are “fundamental in making the housing market safer and more equitable and should not be repealed.” Other key factors include the shortage of affordable homes for sale, False Claims Act liability and the federal support for the secondary home mortgage market, including government sponsored enterprises Fannie Mae and Freddie Mac

CDFI Fund awards $202.2 million to 203 organizations

The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) awarded 302 CDFIs $202.2 million in awards last week. The awards, through the FY 2018 round of CDFI Program and the Native American CDFI Assistance Program, will enable CDFIs to increase lending and investment activity in low-income and economically distressed communities across the nation. One-third of the awardees have committed to specifically serving Persistent Poverty Counties. The CDFI Program invests in and builds the capacity of CDFIs to serve low-income people and communities lacking adequate access to affordable financial products and services. Congratulations to all the NHC members who received awards, including Century Housing Corporation, Cinnaire Lending Corporation, Community Investment Corporation, Enterprise Community Loan Fund, Local Initiatives Support Corporation, Low Income Investment Fund, Network for Oregon Affordable Housing and Opportunity Finance Network. 

House expected to fix veterans loan error this week

Due to ambiguous language previously enacted into law, about 2,500 Veterans Affairs (VA) home loans taken out in May and June of this year are not eligible to be pooled through the Government National Mortgage Association (Ginnie Mae). The Protecting Affordable Mortgages for Veterans Act (H.R. 6737) clarifies the ambiguous language and restores lenders’ ability to pool VA home loans. The original legislation included language intended to curb mortgage refinance “churning” that could harm veterans. One provision — known as a loan “seasoning” requirement — barred Ginnie Mae from guaranteeing securities backed by refinanced VA loans until 210 days after the first monthly payment is made on the original loan or when six full monthly payments have been made, whichever is later. Because the ban took effect immediately, about 2,500 pending loans for veterans no longer qualified for a Ginnie Mae guarantee, creating higher costs for both lenders and borrowers. The Financial Services Committee approved the new law by a 49-0 vote on Sept. 13. House floor action is expected this week before the bill is sent to the Senate. 

Seattle’s homeless population doubles over four years, driven by evictions

A recent study of homelessness in King County found that the population of unsheltered individuals has more than doubled since 2014, from 3,123 in 2014 to 6,320 in 2018. About half of Seattle’s homeless population live in vehicles while the remainder live on the street and in tent cities. The study by the King County Bar Association and the Seattle Women’s Commission found that nearly three quarters of all evictions were for late rent payments of less than 15 days, and one in 10 evictions was for an amount of less than $500. Women experienced over 80 percent of evictions for less than $100. The study also found that 37.5 percent of those evicted joined the growing homeless population on Seattle’s streets. While African-Americans represent only 7 percent of Seattle’s population, they make up nearly one-third of those evicted. 

Student debt continues to grow as more millennials delay homeownership

People saddled with student loan debt are delaying purchasing a home and many worry about their college debt most or all of the time, according to the sixth annual NeighborWorks® America at Home survey. The survey reveals that people with the most debt—millennials and women—are underrepresented among homeowners, and large numbers are unaware of resources and counseling that can improve their prospects of owning their own home. Nationally, student loan debt now surpasses $1.5 trillion and comprises 42 percent of all consumer debt. Millennials are shouldering most of this ballooning student loan debt, which has risen 130 percent since 2008. Women carry nearly two-thirds of the total, or almost $900 billion. 

HUD adds $1.5 billion for those impacted by Hurricane Irma and Maria

One year after being devastated by Hurricanes Irma and Maria, Puerto Rico will receive $1.5 billion in federal funds targeted for rebuilding housing. The Department of Housing and Urban Development announced that the agency signed a grant agreement for Puerto Rico to rebuild its infrastructure. The funds were allocated earlier this year, with the agreement that an action plan would be drafted to ensure use of resources in areas with the greatest need. The funds come from the CDBG Disaster Recovery Program, which will direct $1 billion of the funds towards rebuilding homes on the island. HUD Sec. Ben Carson noted that the HUD money “paves the way for a speedy, long-term recovery,” but he cautioned that the “path forward is challenging, and will be measured not in months, but rather in years.”

With 41 days remaining before election day, control of Congress is shaping up to be a photo finish. Senate Democrats must defend 26 seats, compared to the nine Republican seats being defended, and control of the Senate might come down to nontraditional battleground states. This is because one third of the Senate’s six-year terms are up for reelection every two years and this year features a disproportionate number of Democratic incumbents who must defend their seats. In Texas, El Paso Democratic Congressman Beto O’Rourke is challenging Republican Senator Ted Cruz in a race that has become unexpectedly competitive. Democratic control of the House is widely anticipated by both seasoned election observers like Charlie Cook and Nate Silver , as well as many Republican members of Congress. Silver currently gives the Democrats an 80.4 percent chance of taking control of the House. The Cook Political Report’s Jennifer Duffy notes that while the Senate map continues to favor Democrats, who are defending 10 seats in states that were won by Pres. Trump, the momentum continues to move in their direction. Recent polls show seats in Arizona and Tennessee in play, in addition to the race in Texas.