Editor’s Note: The Mortgage Mix is RISMedia’s biweekly highlight reel of need-to-know mortgage-industry happenings. Watch for it every other Friday afternoon.
– The Department of Justice (DOJ) filed a lawsuit against Rocket Mortgage and two separate appraisal firms in the U.S. District Court in Colorado, alleging that the firms participated in discriminatory practices that violate the federal Fair Housing Act, as reported by the Detroit Free Press. The specific complaint involves the cancellation of a Black homeowner’s mortgage refinance application by Rocket after the owner complained about a lowball appraisal she believed was a result of racism. Rocket Mortgage said in a statement that the lawsuit is a “massive overreach” by the DOJ, and that it looks forward to exposing this.
– Fannie Mae earned a net income of $4 billion in Q3 2024, and reached a net worth of $90.5 billion, according to the mortgage firm’s recent earnings report. This is a decrease of $440 million from Q2, which the company reported was “primarily driven by a decrease in fair value gains and a decrease in benefit for credit losses.” The company also reported it had $106 billion in liquidity provided in Q3, which allowed for the financing of approximately 383,000 home purchases, refinancings and rental units.
– Freddie Mac also reported their Q3 2024 earnings recently, earning a net income of $3.1 billion, as reported by National Mortgage Professional. This is up from $2.8 billion in Q2 and up $0.4 billion year-over-year. The firm’s net revenue came in at $5.8 billion, down slightly from $6 billion in Q2, but a 3% annual increase. This was “primarily driven by higher net interest income.” The company stated it helped 415,000 families buy, refinance or rent a home, which included 110,000 first-time homebuyers.
– The U.S. Department of Housing and Urban Development (HUD) has announced it is giving $12 million toward affordable housing initiatives through grants from its Self-Help Homeownership Opportunity Program (SHOP), as reported by National Mortgage Professional. Organizations receiving SHOP grant funds can use them to build new homes or renovate existing ones, and the funding covers land acquisition, infrastructure upgrades and necessary planning and administrative expenses. “These funds will help make dreams come true. Many families want to buy a home, but can’t find one they can afford,” said HUD Agency Head Adrianne Todman. “Working with our partners, HUD will support the creation of new homes to purchase, while also helping families navigate the homeownership process.”
– New research from Zillow found that almost half of recent homebuyers with a mortgage—specifically 45%—secured a rate below 5%. More than one-third (35%) of these recent buyers got a lower rate because of special financing from their seller or builder. About one-quarter either made their offer contingent on a rate buydown (26%), refinanced to a lower rate after buying (25%), or borrowed from a friend or family member (23%). “This surprising finding really underscores the creativity of both buyers and sellers navigating today’s dynamic real estate market,” said Zillow’s Home Trends Expert Amanda Pendleton. “Buyers are finding innovative ways to secure a lower mortgage rate, but sellers are also coming up with financing solutions to make their property more attractive to a potential buyer.”
– A recent Wallethub study has generated a new map demonstrating where mortgage rates have increased the most from Q1 to Q2 2024. The study reported that the average mortgage interest rate increased in 44 of the 50 states. The state with the highest change was Colorado, with a 5.71% mortgage rate in Q2 and a change of 4.88% over Q1 to Q2. The state with the highest mortgage rate was New Jersey, with a rate of 7.37% in Q2, but only a 0.30% rise from Q1 to Q2. “It’s a difficult time to buy a house, given that home prices have risen astronomically over the past few years and housing shortages make it hard to find the right place even if you have the money,” said WalletHub Analyst Chip Lupo. “Consumers’ home-buying struggles are exacerbated by the fact that the average mortgage interest rate increased in all but six states between Q1 2024 and Q2 2024.”
– Fannie Mae recently announced changes to the eligibility requirements for its appraisal alternatives Value Acceptance and Value Acceptance + Property Data starting in Q1 2025. For purchase loans for primary residences and second homes, the eligible loan-to-value (LTV) ratios for Value Acceptance will increase from 80% to 90% and Value Acceptance + Property Data will increase from 80% to the program limits. “Fannie Mae is on a journey of continuous improvement to make the home valuation process more effective, efficient, and impartial for lenders, appraisers, and secondary mortgage market participants while maintaining Fannie Mae’s safety and soundness,” said Jake Williamson, Fannie Mae’s senior vice president of Single-Family Collateral & Quality Risk Management. “Responsibly increasing the eligibility for valuation options that leverage data- and technology-driven approaches can also help reduce costs for borrowers.”
