How brokers are navigating changes in the wholesale mortgage space

The recent rate rise has challenged the mortgage market and highlighted the key role the wholesale channel can play in navigating rough conditions. The challenge in this situation tends to be whether lenders can operate profitably. Given the particularly heated, and often price-based competition between wholesalers seen recently, some have left the channel. We asked Ernest Jones Jr., president of the National Association of Mortgage Brokers, how third-party originators are navigating this market and what the trade group is doing to help push for policies that could reduce hurdles to financing homes as rates rise. Read on for his remarks.

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FHFA seeks input on loan pricing and g-fee links to capital framework

The Federal Housing Finance Agency's latest response to critics of its new price grids and plans for its Enterprise Capital Framework is to get some feedback on what others think it should be doing instead. The agency is seeking ideas on what the overall goals should be, and whether upfront guarantee fees lenders pay should continue to be linked to the framework, which is aimed at protecting the finances of government-related investors that lenders sell to. The FHFA has made a series of moves to better align its pricing and capital frameworks.

FHA, VA, USDA may soon stop taking COVID-19 forbearance requests

Some government agencies that back U.S. mortgages have set what look likely to be final expiration dates for new requests, with varying deadlines for how long forbearance periods can extend beyond that. In contrast, government-sponsored enterprises Fannie Mae and Freddie Mac and their regulator, the Federal Housing Finance Agency, so far appear to be continuing their forbearance programs. "Their guidance has been independent of the end of the national emergency," said Adam Saab, vice president and head of early stage default at Cenlar. "We've been instructed by them that we are to continue offering new forbearances as is until they give us a different direction."

Hill Democrats urge Supreme Court to preserve CFPB's funding structure

In a brief filed Monday with the U.S. Supreme Court, more than 140 current and former Democratic lawmakers defended the constitutionality of the Consumer Financial Protection Bureau's funding structure. The legislators, who include key architects of the 2010 law that established the CFPB, urged the Supreme Court to overturn a high-stakes ruling last year by the 5th U.S. Circuit Court of Appeals. The appeals court found that the bureau's funding, which comes from a portion of the Federal Reserve's earnings, violates the Constitution's separation of powers doctrine.

Homebuilder sentiment rises to 10-month high in surprise jump

U.S. homebuilder sentiment unexpectedly rose in May to the highest level in 10 months as limited supply continued to drive prospective buyers toward new construction. The National Association of Home Builders/Wells Fargo gauge jumped five points to 50, extending a streak of increases to five months, figures showed Tuesday. Even with the recent improvement, the gauge is well below levels seen at the end of 2021, when mortgage rates were much lower. "Lack of existing inventory continues to drive buyers to new construction," Robert Dietz, NAHB chief economist, said in a statement. 

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