Mortech Blog


Lori Rezac

Recent Posts

Lenders Optimistic but Concerned with Profit Margins

Posted by Lori Rezac on Apr 12, 2017 2:31:35 PM

Mortgage rate increases, along with the additional rate increases expected later this year, are impacting expectations for purchase mortgage demand. According to Fannie Mae’s first quarter 2017 Mortgage Lender Sentiment Survey®, lenders are optimistic about the direction of the economy and home prices, but are showing concern over profit margins compared with previous years.

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Can Raising the Fed Funds Rate be Good for the Housing Market?

Posted by Lori Rezac on Mar 28, 2017 12:30:01 PM

As many know by now, the Federal Reserve recently raised the Fed Funds rate by 25 basis points. Although this is not directly linked to increasing mortgage rates, many fear this will lead to just that. Higher mortgage rates typically leads to a negative impact on home affordability with fears of it derailing the housing recovery entirely. One person disagrees. Rick Sharga has written a commentary in HousingWire, Why rising Federal Funds rates might be good for the housing market, detailing out his reasons why the increase in the Federal Funds rate may be good for the housing industry.


First, there are two more rate increases expected this year. This may drive many off the fence early in the year and into the housing market before rates increase more, stimulating the economy.


Second, increasing rates forces lenders to loosen lending standards to get more borrowers approved. There are fewer refinances available in this type of rate environment so lenders will try and bring in more purchases. The higher mortgage rates will allow lenders a bit more cushion to take on more risk.


Finally, the 25 basis point increase is much less than the 75 to 100 basis point increase that analysts were expecting. This will most likely cause the rate increase to have a less significant impact on mortgage rates. With these predictions, we could see the strongest spring-selling season in years.


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An Argument for the eMortgage

Posted by Lori Rezac on Mar 15, 2017 12:31:35 PM

In an article written by Rick Triola and posted on MReport, Endorsing the eMortgage takes a look at why companies have not embraced the eMortgage process. Many have been waiting for the industry to update their out-of-date processes, but there seems to be something holding them back. This article gives a response as to why many of the concerns mentioned by those in the industry are unfounded and only seem to be blocking them from moving into the future of mortgage lending.

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Spotlight on Monthly Complaint Snapshot from CFPB

Posted by Lori Rezac on Feb 23, 2017 12:39:17 PM

Mortgages had the spotlight in the Consumer Financial Protection Bureau's (CFPB) monthly compliant snapshot. Many are experiencing problems with mortgage servicing, escrow accounts, and resolving loan problems.

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MBA Recommends GSE Reform

Posted by Lori Rezac on Feb 10, 2017 2:40:48 PM

The Mortgage Bankers Association (MBA) has released a paper, GSE Reform Principles and Guardrails, with their recommendations on Fannie Mae and Freddie Mac (the GSEs) reform. The reform of the GSEs being one of the last items left over from the financial crisis, the MBA has put together a Task Force to determine the best course of action. The Task Force itself was created using MBA member companies of various sizes and models, representing a broad range of real estate entities.

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HUD Officially Suspends Premium Reduction

Posted by Lori Rezac on Jan 25, 2017 12:05:00 PM

Hours after Donald Trump was sworn in as the 45th President of the United States, HUD released Mortgagee Letter 2017-07 suspending the FHA annual premium reduction indefinitely. All changes have been halted until it can be determined if the premium reduction is warranted. An additional mortgagee letter will be issued if this policy will move forward.


The premium cut would have offered savings of approximately $500 a year for the average borrower. This would have impacted their monthly payment by roughly $42, which could mean the difference between affordable and just out of reach. Additionally, with an increase in mortgage rates expected for 2017, this could have softened the financial blow for low to moderate-income borrowers.

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FHA Reduces Annual Premiums on Most Mortgage Loans

Posted by Lori Rezac on Jan 17, 2017 1:11:19 PM

In an announcement made by U.S. Housing and Urban Development Secretary Julian Castro, FHA is reducing its annual mortgage insurance premium (MIP) by 25 basis points. This reduction applies to most new mortgages with closing/disbursement dates on or after January 27, 2017.

The action is in response to the current risk environment. The Mutual Mortgage Insurance Fund (MMIF) has increased in health for four straight years and mortgage rates are increasing forcing mortgage credit costs to go up.

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Interest in Mobile Mortgage Resources Increasing

Posted by Lori Rezac on Dec 20, 2016 12:55:29 PM

Consumers and lenders have been slow to adopt the end-to-end mobile experience. But expectations are shifting for a more robust mobile experience, including for financial and mortgage activities. Fannie Mae conducted a survey with approximately 1,200 low-and moderate-income homebuyers in Q1 of 2016 of the consumer mortgage shopping and origination experience for purchase mortgages. What they found was a doubling of current and future interest for mobile mortgages from the previous year. This number is expected to be even higher for higher-income consumers.

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Loan Limit Increase for 2017

Posted by Lori Rezac on Dec 5, 2016 12:30:50 PM

The Federal Housing Finance Agency has announced an increase in the loan limits for loans acquired by Fannie Mae and Freddie Mac in 2017. The loan limit for a 1-unit in most of the country will be upped from $417,000 to $424,100.  This is the first baseline increase since 2006. Any increase in the loan limit was put on hold until the average U.S. home price returned to its pre-decline levels. This is the first year home prices have not been below the third quarter 2007 levels.

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FHA Releases Annual Report Showing Healthy Growth

Posted by Lori Rezac on Nov 28, 2016 12:28:29 PM

The U.S. Department of Housing and Urban Development has released its annual report showing healthy growth over this last year. For the second year in a row, the Mutual Mortgage Insurance (MMI) Fund is over the benchmark 2 percent. The capital ratio grew by $3.8 billion and is now at 2.32 percent. This is the fourth consecutive year of growth for the MMI Fund, according to the press release.

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