Borrowers have a record $11 trillion in tappable equity

Escalating home prices delivered a record gain of $1.2 trillion in tappable equity to borrowers in the first quarter of the year, Black Knight reports. Mortgage holders are enjoying a total of $11 trillion in tappable equity, or $207K per borrower, also the highest on record, according to the company’s Mortgage Monitor report for April. Home prices were up 19.9% in April, a slight decrease from March’s 20.4% annual gain.

READ: Borrowers have a record $11 trillion in tappable equity

Free tool: 5 things you should know about the next generation of home buyers

In other news:

Wildfire threat hasn’t deterred purchases in higher-risk areas

Prices for homes in fire-prone areas have grown more than those in lower-risk areas over the last two years, according to an analysis by Redfin. Scarce housing supply helped drive the price of homes in fire-prone areas in April up by 52% in the past two years since coronavirus first emerged, to a median of $550,500. In that same time frame, the median price of homes in areas with low risk rose by only 41% to $431,300.

Ginnie Mae may allow commingling of electronic and paper notes

Ginnie Mae is exploring the possibility of commingling paper and electronic promissory notes in securitized mortgage pools it insures, something issuers have been eager to see since the government agency first announced it would be piloting digital capabilities. “I think we’re going to see that first leg of being able to offer commingling come into place,” said Lynn Chandler, director of digital collateral at Ginnie Mae, in a webinar on government agency’s e-note initiative hosted by Falcon Advisors late last week.?

Will regulators’ warnings chill lenders’ use of AI?

The Consumer Financial Protection Bureau recently issued a fresh warning to lenders that use artificial intelligence in lending decisions, saying they must be able to explain how their models decide which borrowers to approve and provide clear reasons to consumers who are declined. None of this is new: Fair-lending laws and credit reporting laws have been on the books for 50 years, and there was no reason to think they wouldn’t apply to newer lending software. But in the way that the CFPB and all the national bank regulators have been repeatedly issuing such warnings, they seem to be signaling closer scrutiny of the way banks and fintechs use such software.

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