Mortgage – HousingWire

Interest in refis sinks even further
Forbearance rate decreases to 1.3%
Ocwen agrees to pay $1.5M to settle class action

Posted: 23 Feb 2022 04:00 AM PST

Mortgage applications decreased 13.1% for the week ending Feb. 18 to the lowest level since December 2019, as mortgage rates eclipsed the 4% mark.

The Mortgage Bankers Association's seasonally adjusted refi index fell 15.6% from the previous week, bringing its share of total applications to almost equal the purchases share at 50%. Meanwhile, the purchase index dropped 10.1%, falling again for the third straight week.

Compared to the same week one year ago, mortgage apps overall dropped 41%, with a sharp decline in refi (-56.4%) compared to purchase (-5.4%). The survey, conducted weekly since 1990, covers over 75% of all U.S. retail residential mortgage applications.

According to Joel Kan, MBA's associate vice president of economic and industry forecasting, the 30-year fixed rate increased almost a full percentage point in comparison to one year ago.

The trade group estimates that the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) increased to 4.06% from 4.05% the week prior. For jumbo mortgage loans (greater than $647,200), rates rose to 3.84% from 3.81% the week prior.

"Mortgage applications dropped to their lowest level since December 2019 last week, as mortgage rates continued to inch higher," Kan said. "Higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022."

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The survey showed that the refi share of mortgage activity decreased to 50.1% of total applications last week, from 52.8% the previous week. VA apps rose to 9.9% from 9.3% in the same period.

The FHA share of total applications increased to 8.7% from 8.3% the prior week. Meanwhile, the adjustable-rate mortgage share of activity increased from 5% to 5.1% and the USDA held steady at 0.4%.

Purchases applications, already constrained by elevated sales prices and tight inventory, have also been impacted by higher rates, Kan said. "While the average loan size did not increase this week, it remained close to the survey's record high." The average loan size was at $453,000.

Economists had predicted rates would rise in 2022 as the overall economy stabilized, reducing mortgage applications.

For the coming weeks, Kan told HousingWire that If conditions stay in the current state, we'll certainly see higher rates. However, rates could quickly head in the other direction, "if something abroad rocks the boat," such as an armed conflict with Russia and Ukraine, an emergent Covid variant, or a sudden change in certain commodity prices.

The post Interest in refis sinks even further appeared first on HousingWire.

Forbearance rate decreases to 1.3%

Posted: 22 Feb 2022 01:00 PM PST

Servicers' forbearance portfolio volume continued to drop in January, but some borrowers exiting plans are still facing financial challenges.

The total number of loans in forbearance decreased by 11 basis points, from 1.41% in December to 1.30% in January, according to the Mortgage Bankers Association (MBA).

In total, about 650,000 homeowners were in forbearance plans as of January 31.

The most notable decline was in the portfolio loans and private-label securities (PLS) category, dipping by 41 basis points to 3.02%. Ginnie Mae loans in forbearance decreased three basis points to 1.60% of servicers' portfolio volume. Meanwhile, Fannie Mae and Freddie Mac loans dropped by four basis points to 0.64%.

The survey included data on 36.4 million loans serviced as of January 31, 73% of the first-mortgage servicing market.

Marina Walsh, MBA's vice president of industry analysis, said in a statement that the pace of forbearance exits reached a low since June 2020, when MBA began tracking the data. Also, there was a pick-up in new requests and re-entries, mainly for Ginnie Mae loans.

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Total forbearance requests increased three basis points to 0.18% of servicing portfolio volume in January, while exits decreased 11 bps to 0.28% of the total. The survey also shows that 26.8% of total loans were in the initial stage last month, and 59.5% were in a forbearance extension. The remaining 13.7% were re-entries

"Even though the forbearance rate continued its downward trajectory, it was the smallest monthly decline since January 2021," Walsh said.

The survey also shows that loans serviced not delinquent or in foreclosure were 94.91% in January, up from 94.85% in December.

During the last 19 months, MBA's data revealed that 29.1% of exits resulted in a loan deferral or partial claim. Also, 19.3% represented borrowers who continued to pay during the forbearance period. However, 17% were borrowers who did not make their monthly payments and did not have a loss mitigation plan.

According to Walsh, there was some deterioration in the performance of borrowers with existing loan workouts, which are solutions for restructuring debt, such as repayments, deferrals, or partial claims. Total loan workouts from 2020 that were current declined one basis point to 82.3% of the total workouts in servicing portfolio in January.

"Borrowers in loan workouts may have experienced new life events unrelated to the pandemic, or alternatively, the Omicron variant may have triggered or re-triggered employment, health, or other stresses," Walsh said.

The post Forbearance rate decreases to 1.3% appeared first on HousingWire.

Ocwen agrees to pay $1.5M to settle class action

Posted: 22 Feb 2022 09:30 AM PST

Nonbank mortgage servicer Ocwen agreed to pay $1.5 million to settle a class action lawsuit regarding alleged phone conversations recorded without clients' consent.

Plaintiff Gregory Franklin filed the lawsuit in the United States District Court for the Northern District of California in 2018. He claimed that the company violated California's Invasion of Privacy Act by recording outgoing calls to his cell phone without authorization.

The class action affects all customers in California whose cellular calls with Ocwen Loan Servicing, LLC were recorded in November 2015. The company will deposit the money in a settlement fund to pay for the settlement relief, attorneys' fees, and other costs.

The class action lawsuit can reach 37,031 clients, represented by the law firm Kazerouni Law Group, APC. As the number of valid claims increases, each claimant's payment will decrease accordingly.

The settlement included that Ocwen agreed to the terms of the agreement without admitting any liability or wrongdoing. HousingWire sent a message to the company seeking comment but did not immediately receive an answer.

Franklin said he fell behind on his mortgage payments and, between 2011 and 2015, received numerous phone calls from Ocwen, who was servicing his mortgage, to collect the payments.

Loans And Mortgage

Wednesday, February 23, 2022