Lending heats up on fading rates, rising Fed expectations

Consumers jumped on lower mortgage rates last week as expectations for a Federal Reserve interest rate cut percolate. Home loan applications shot up 14.2% for the week ending Sept. 13 compared to the week prior, according to the Mortgage Bankers Association's Weekly Applications Survey. A Refinance Index also rose 24% week-over-week and was 127% greater than it was the same time a year ago. That spike was apparent over the past two weeks at Pennsylvania State Employees Credit Union, said Jose Pascual, head of mortgage and consumer banking. The Harrisburg, Pennsylvania-based lender normally sees refinances account for 10% to 12% of activity, but that share jumped to around 24% early this month.?

READ MORE: Lending heats up on fading rates, rising Fed expectations

CFPB says minority borrowers lack the chance to refinance

Slightly less than one quarter of current mortgage borrowers have a loan at an interest rate at 5% or higher, the group most likely to benefit from a refinancing. However, based on historic patterns, a Consumer Financial Protection Bureau post said, minority borrowers do not have that opportunity to reduce their mortgage rate. The CFPB cited an FDIC study that claimed "suggestive evidence" indicated that marginal borrowers are crowded out from supply constrained markets before they can apply for a refi. The lenders instead targeted borrowers with high loan balances, high incomes, and high credit scores.

HUD Code revisions should ease affordability of manufactured homes

The changes to the Department of Housing and Urban Development's Manufactured Home Construction and Safety Standards — known as the HUD Code — should help with affordability and availability of the more affordable housing type. The changes end an over two-year process in revising the HUD Code, with the initial proposal unveiled in July 2022. While the new regulation itself doesn't cover financing, which has always been a hot button topic because of the differences from site-built homes, the changes should improve the cost to consumers.

Cambridge Wilkinson closes on equity for MSR vehicle

Cambridge Wilkinson Investment Bank has closed on a multimillion-dollar vehicle accommodating co-investment in rights associated with mortgage servicing for a private client. A $25 million equity investment funds the vehicle, according to Cambridge Wilkinson, which noted that the unnamed client behind it has required licensing and government-sponsored enterprise approval. The investment suggests there may be continuity in a MSR co-investment trend seen in recent years at private and public companies as interest rates shift.?

Fannie Mae sues multifamily landlord for over $60 million

In a federal lawsuit filed in Pennsylvania last week, the government-sponsored enterprise alleged realty companies associated with Philip Pulley failed to make payments on seven properties in Philadelphia and nearby Delaware County. Fannie Mae is suing Pulley, who served as the loans' guarantor, for $60.5 million, which includes the full principal and $1.2 million in accrued interest. The enterprise also is seeking foreclosure and sale on the apartment complexes in dispute.?

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