The CFPB is planning to remove the QM Patch that allows loans guaranteed by Fannie Mae and Freddie Mac an exemption from meeting some of the underwriting requirements set forth in the Ability to Repay/Qualified Mortgage rule.  The expiration date is set for January 2021, but many think this is not enough time to adjust.

The most notable impact to the GSEs is the 43 debt-to-income (DITI) requirement.  The patch allows the GSEs to exceed the 43 DTI requirement but still qualify for safe harbor.  For instance, Fannie Mae currently allows up to 50% DTI for many of their products.

Lower interest rates have historically given homeowners the green light to refinance their homes in order to lower theirmonthly payments. Even if you think you have a great rate already and won't benefit from refinancing your mortgage, you may be mistaken. There are a multitude of reasons for refinancing your mortgage. Here are just a few:

Cash out your home equity

Are you scared to move because of the hassle of getting another home? Are you not in a city where Zillow Offers can alleviate much of the stress experienced when changing homes? You can cash out your home equity and renovate the home you have. Build an addition, modernize your kitchen, or give your walls a fresh coat of paint. With the right amount of equity in your home, you may even have payments that are comparable to what you had before with a home that feels like new.

The direction of mortgage rates in 2019 seems to be stumping economists. Predictions from MBA, Fannie Mae, Freddie Mac and NAR all had mortgage rates either remaining flat or moving higher in 2019. Up until this last week, economists were right. Now rates are on the downswing and economists are looking to possibly adjust their forecasts.

The Primary Mortgage Market Survey® released by Freddie Mac’s Economic and Housing Research group, places the average 30-year fixed rate mortgage at 4.14 percent for the week of May 2, 2019, down 0.06 percent from one week earlier. The 15-year fixed rate mortgage and the 5-year adjustable rate mortgage is at 3.6 percent and 3.68 percent, respectively. The drops are being attributed to slightly weaker inflation and labor economic data.

Lower mortgage rates are proving to be helpful in kickstarting the spring home-buying season, in addition to their expected positive impact on refinance mortgages. This is a much-needed boost after a rough couple of years for mortgage lenders, who have experienced severely low housing inventory, rising mortgage rates, and tightened lending standards. All of which driving some lenders to rethink whether the mortgage business is good for their bottom line.

Mortgage rates have been steadily decreasing since the beginning of 2019.  Freddie Mac’s Primary Mortgage Market Survey® placed the 30-year fixed mortgage rate at 4.51 percent at the beginning of the year, but this last week reported it at 4.08 percent. Although this is up 2 basis points from the previous week, it is down significantly from one-year ago.

Fannie Mae and Freddie Mac shareholders have brought suit against the Federal Housing Finance Agency (FHFA) claiming the agreement made in 2012 to bail out the agencies is rendering their shares valueless. The suit also claims the structure of the FHFA is unconstitutional because of the single Director removable only for cause by the President.

Fannie Mae is piloting a new type of mortgage insurance, however response to the new program hasn’t been entirely optimistic.

The mortgage insurance option is called Enterprise-Paid Mortgage Insurance (EPMI) and allows a lender to deliver an over 80% loan-to-value (LTV) mortgage to Fannie Mae without acquiring mortgage insurance prior to loan delivery. Instead Fannie Mae charges an additional loan-level price adjustment. Then, they secure coverage under a forward insurance arrangement from a Fannie Mae approved qualified insurer, or an approved traditional mortgage insurer.

A new conventional product option has been announced by Freddie Mac and will be available starting July 29, 2018. The HomeOne mortgage is similar to the Home Possible Advantage option currently offered by Freddie Mac, but will be focused on first time homebuyers. This is a low down payment option with a down payment requirement of only 3 percent and requires no geographic or income restrictions.

The Federal Open Market Committee (FOMC) recently announced an increase to the target range of the federal funds rate to 1.5 to 1.75 percent. Fed Chairman Jerome Powell in his first meeting as the Chairman of the Federal Reserve approved the increase. This is in response to the strong economic outlook in recent months. The FOMC expects this to continue with gradual adjustments to monetary policy.

Changes to Dodd-Frank are one step closer to being realized this week with modifications passing the Senate with a vote of 67-31. The bill, sponsored by Senate Banking Committee Chairman Mike Crapo (R-Idaho), is being presented as a way to diminish the negative impact the law has had on small banks and credit unions, according to The Hill. Those in opposition of the changes such as Sen. Sherrod Brown (Ohio) believe the bill favors "special interests and Wall Street."

In the Desktop Underwriter/Desktop Originator Release Notes for version 10.2, Fannie Mae has announced an enhancement to the HomeStyle Renovation Mortgage. The maximum LTV on 1-unit, primary residence properties will increase from 95 percent to 97 percent with the implementation of the updates the weekend of March 17, 2018. This applies to purchase and limited cashout refinance transactions. For LTVs over 95 percent on purchase transactions, at least one borrower must be a first-time homebuyer. Refinance transactions will require the existing loan be Fannie Mae-owned, similar to the requirements of the HomeReady product.