As we head into a new year, a look back at 2017 shows us that it is incredibly difficult to predicate the housing market. The experts predicted that 2017 would see rising interest rates, moderate price growth, and an increase in new construction. What happened was nearly the opposite. We continued to struggle with a lack of inventory causing prices to increase, and mortgage rates stayed low through the year. With the impact of the new tax bill still being determined, predicting 2018 will be especially difficult.

The single security will be implemented in the 2^nd quarter of 2019, according to the Federal Housing Finance Authority (FHFA), but many are unaware of how this impacts them. Freddie Mac has released a document, Single Security: What Does It Mean for Freddie Mac Seller/Servicers, that assists with this need for additional information.  But first, let’s learn a little more about this initiative.

The MBA released a statement this week in response to the introduction of the SAFE Transitional License Act in the Senate. This bill would allow registered loan originators to be granted temporary authority for 120 days to originate mortgage loans when transitioning between federally insured institutions, as well as between states.

There has been quite a bit of talk lately regarding different credit score models and if the mortgage lending industry should allow more than just the traditional FICO.  In the past, many have questioned the accuracy of the FICO, partially due to the complexity of the calculation.  A bill has been introduced in the Senate to address these concerns, called the “Credit Score Competition Act”. 

The Federal Reserve has once again raised short-term interest rates another quarter of a percentage point, the fourth increase in a series that began in December 2015. One more increase is expected this year, with three additional increases expected in 2018. We are still well below the 2007 rate of 5.25 percent as we are now in the 1.0-to-1.25 percent range.

With only a stop in the Senate before reaching the desk of President Trump, the Financial CHOICE Act has gained some momentum. The House passed the bill by a vote of 233-186, but Democrats and Republicans seem to be split on their support.

Introduced by House Financial Services Committee Chairman Jeb Hensarling, R-Texas, the bill - short for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs - would abolish the Dodd-Frank Wall Street Reform and Consumer Protection Act with major ramifications to the Consumer Financial Protection Bureau (CFPB). The CFPB’s name would be changed to the Consumer Financial Opportunity Agency, an executive agency with a director that would be appointed and removed by the president.

Housing in the first quarter of 2017 was much better than expected, considering the tepid economic growth we experienced. This is partly due to the surprisingly low interest rates that have been around 4% for the 30-year fixed. Rates are expected to rise later this year but continue to hold steady. Economic growth is expected to pick back up this year, with an expected average of 2.3 percent.

The refinance report released by the FHFA shows that refinance volume was down in the first quarter compared with the fourth quarter of 2016. The possible culprit of the lower numbers is the higher mortgage rates. Mortgage rates are still a half-percent higher than the lowers we saw in 2016.

In today's mortgage industry, capturing the attention of consumers is partly about offering multiple channels in which they can conduct business. Bank of America (B of A) is working at adding yet another channel for consumers to conduct mortgage business, the mobile phone. Last year, B of A "mobile-optimized" their auto loan applications, allowing their customers to complete 85% to 90% of the process on their phone, according to an article in National Mortgage News. Now they are turning their sights on mortgage applications. Although much more tricky, their focus is to simplify the process to make it more mobile friendly. They are adding features like the ability to upload and e-sign documents, all while giving the consumer the ability to connect to a mortgage loan officer.

The mobile experience is expected to be much more conversational, compared with the online experience which is just filling out a form. B of A plans to pre-populate fields with information that is already known about the customer, cutting down on the number of questions required to be answered. Longtime customers could have much of their information pre-filled, allowing them to complete the process much more quickly.

The Consumer Financial Protection Bureau (CFPB) has released proposed changes to the updated Home Mortgage Disclosure Act (HMDA) rule. The rule requires lenders to report on data from mortgage applications received, or loans originated or purchased. The rule was updated in 2015 to improve the quality of the data reported, with the effective date for the changes January 2018. The proposal provides much needed clarification, technical changes, as well as minor changes to the rule.