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Top Story Lending Related

08/02/2021

Freddie and Fannie extend REO eviction moratorium

On Friday morning, July 30, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac (the Enterprises) are extending the moratorium on single-family real estate owned evictions until September 30, 2021. The REO eviction moratorium applies to properties that have been acquired by an Enterprise through foreclosure or deed-in-lieu of foreclosure transactions. The current moratorium was set to expire on July 31, 2021.

07/30/2021

FTC settles auto group case

The Federal Trade Commission has announced it has an agreement with Richard Berry, the owner and manager of a group of bankrupt auto dealerships in Arizona and New Mexico, to resolve charges that he and the dealerships deceived consumers and falsified information on vehicle financing applications. Many of the affected consumers were members of the Navajo Nation.

A complaint filed by the FTC in 2018 alleged that the defendants falsified consumers’ income and down payment information to get vehicles financed and engaged in unlawful advertising. In an earlier ruling in the case, the judge found that the defendants violated the Truth in Lending Act (TILA) and Consumer Leasing Act (CLA) by failing to disclose legally required information in their advertisements.

If approved by the district court, the present settlement against Berry, would result in a $450,000 payment to the FTC and conclude the FTC’s case. It would also prohibit Berry from misrepresenting information in documents associated with a consumer’s purchase, financing, or leasing of a motor vehicle, and misrepresenting the costs or any other material fact related to vehicle financing. The proposed order also requires Berry to provide consumers sufficient time to review and obtain a copy of the relevant vehicle financing documents and prohibits him from violating the TILA and CLA.

07/30/2021

NSMO data updated

The FHFA and CFPB have published updated loan-level data for public use collected through the National Survey of Mortgage Originations (NSMO). The data provide insights into borrowers' experiences obtaining residential mortgages.

Key highlights of the data include:

  • The percent of survey respondents who reported not being concerned about qualifying for a mortgage during the application process increased somewhat from 2018 to 2019 (from 48 to 51 percent for home purchase mortgages and 57 to 66 percent for refinances.
  • The percent of survey respondents who reported a paperless online mortgage process being important in choosing the mortgage lender/broker remained relatively high and unchanged from 2018 to 2019 (40 percent for home purchase mortgages and 44 percent for refinances.
  • The percent of survey respondents who reported applying for a mortgage through a mortgage broker increased from 2018 to 2019 (from 42 to 46 percent for home purchase mortgages and 30 to 38 percent for refinances). On the other hand, the percent of survey respondents who applied directly through a bank or credit union decreased from 2018 to 2019 (from 54 to 49 for home purchase mortgages and 67 to 61 for refinances.

07/29/2021

Update on SBA PPP forgiveness application portal

The Small Business Administration formally announced the launch of its streamlined application portal to allow borrowers with Paycheck Protection Program loans $150,000 or less through participating lenders to apply for forgiveness directly through the SBA. This new change will help rush relief to over 6.5 million smallest of small businesses. The new forgiveness platform will begin accepting applications directly from borrowers August 4, 2021.

Lenders are required to opt in to this program. In addition to the technology platform, the SBA is setting up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications. Borrowers that need assistance or have questions should call (877) 552-2692, Monday – Friday, 8 a.m. – 8 p.m. (Eastern Time).

[Earlier story]

07/29/2021

FHFA announces multifamily tenant protections

The Federal Housing Finance Agency announced yesterday that tenants of multifamily properties with mortgages backed by Fannie Mae or Freddie Mac who are subject to eviction for nonpayment of rent must be given 30 days’ notice to vacate before the tenant can be required to leave the unit. This requirement applies to all Enterprise-backed multifamily properties, regardless of whether the loan is in forbearance.

FHFA is working closely with the Enterprises to communicate the 30-day notice requirement to landlords of and tenants living in Enterprise-backed properties.

FHFA also said that Emergency Rental Assistance funds made available by federal legislation are available to tenants who are behind on rent or continuing to experience hardship due to the COVID-19 pandemic, and tenants can learn more about Emergency Rental Assistance programs by visiting the Consumer Financial Protection Bureau’s online Rental Assistance Finder, described in another Top Story today.

07/28/2021

Credit apps recover from pre-COVID levels

The CFPB yesterday reported it has published an issue brief showing that consumer applications for auto loans, new mortgages and revolving credit cards had mostly returned to pre-pandemic levels by May 2021.

Prime and near-prime consumers are driving this recovery as applications remain down from borrowers with subprime and deep subprime for all types of credit and, for borrowers with superprime credit scores, applications are down for all types of credit but mortgages. The report also provides a state-by-state analysis of the change in credit applications for auto loans, new mortgages, and revolving credit cards and shows wide geographic variability in the demand for auto loans. Key findings in the brief include:

  • Auto loan inquiries saw a drop of 52 percent by the end of March 2020 and returned to their usual pre-pandemic trend by January 2021.
  • New mortgage credit inquiries saw a smaller drop in March 2020 compared to other types of inquiries and then surged. Subsequently, inquiries have exceeded their usual, seasonally adjusted volume by 10 to 30 percent, reflecting the unusually high activity in the mortgage market throughout the pandemic.
  • Revolving credit card inquiries took the longest to recover from the initial March 2020 decline, until March 2021, when the level of these inquiries reached back to their usual levels.
  • Consumers with deep subprime credit scores showed the largest decline in auto loan inquiries compared to prior years, followed by inquiries from consumers with subprime credit scores. These consumers also showed declines in new mortgage and revolving credit card inquiries.
  • Changes in auto loan and new mortgage applications were quite varied across the states while changes in credit card applications were generally uniform.

07/28/2021

House prices up 18 percent from May 2020

House prices rose nationwide in May, up 1.7 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index. House prices rose 18.0 percent from May 2020 to May 2021. The previously reported 1.8 percent price change for April 2021 was unrevised.

For the nine census divisions, seasonally adjusted monthly house price changes from April 2021 to May 2021 ranged from +1.0 percent in the Middle Atlantic division to +2.4 percent in the Pacific division. The 12-month changes ranged from +15.4 percent in the West South Central division to +23.2 percent in the Mountain division.

07/28/2021

SBA to offer direct PPP forgiveness applications

Politico News reports the Small Business Administration, in an effort to wind down the popular Paycheck Protection Program that has suffered bureaucratic snags and notorious fraud cases, will announce today a new initiative aimed at encouraging borrowers with loans of $150,000 or less (more than 90 percent of the program) to apply for loan forgiveness. The SBA, reports Politico, has notified banks that the agency is setting up its own online, direct-access forgiveness platform.

Applications will be accepted from small borrowers directly via an easy-to-use portal. While lenders will still be involved in deciding whether individual PPP loans should be forgiven, the SBA will take on much of the time and effort that banks currently have to invest in the process. SBA Associate Administrator Patrick Kelley, in a webinar on Tuesday about the agency's plan, urged lenders to opt in to the new platform, saying "give it over to the government and get your life back."

The SBA reportedly plans to launch the program as a pilot today and have it go live in about a week.

07/27/2021

Bureau flowchart on MLA applicability

In observance of Military Consumer Month, the CFPB's Office of Servicemember Affairs has released an updated Military Lending Act—Applicability flow chart to help servicemembers better understand their rights under the MLA.

07/27/2021

Bureau advisory on SCRA rights

The CFPB has posted a Consumer Advisory, "Know Your Rights Under the Servicemember Civil Relief Act (SCRA)," with an explanation of the protections afforded servicemembers under the Act. The Advisory notes that the SCRA was amended this year to allow qualified individuals the ability to terminate residential and vehicle lease agreements electronically by sending a notice of termination along with a copy of their orders – or a letter from their commanding officer via email or through a communications portal designated by the lender or agent.

The Advisory advises servicemembers to check with a military legal assistance attorney or private legal counsel before signing any waiver of SCRA rights, and suggests options available to servicemembers who believe their SCRA rights have been violated. There are also links to several resources that can help servicemembers better understand the full range of legal protections available under the SCRA.

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