Reverse Mortgage Oversight Approved for CFPA
December 14, 2009, Washington News

To protect seniors for fraudulent reverse mortgage schemes, the House of Representatives approved an amendment for the proposed Consumer Financial Protection Agency to monitor and regulate the practices of reverse mortgage lenders. "Many seniors are turning to reverse mortgages," said Rep. Jan Schakowsky, D-Ill., in offering her reverse mortgage amendment during debate on the Wall Street Reform and Consumer Protection bill (H.R. 4173). "We must do everything in our power to ensure the fidelity of the system and shield our parents and grandparents from being cheated or misled," she said. As proposed, the CFPA would be an independent regulatory agency that sets mortgage lending standards for all residential originators and has the power to enforce those standards. Rep. Schakowsky's amendment gives the CFPA explicit authority to regulate reverse lending practices. The House passed her amendment by a 277-149 vote. During debate, the Illinois lawmaker noted that CFPA should work with the Federal Housing Administration, which insures a reverse mortgage product called Home Equity Conversion Mortgages, in developing its reverse mortgage regulations.

VA Average Interest Rates Lower than Gov't Loans,

A recent comparison of both VA and Gov't Loans 30 year fixed single family interest rates for the last 11 months as of August 31st, 2009 show that the average VA rate was 5.33% and the average Gov't Loans rate was 5.66%. While the average number of Gov't Loans insured during this period was 5 to 1 over VA loans, many veterans are realizing that the zero down benefits outweigh the 3.5% down payment requirement of Gov't Loans.

When Lender Says No, Turn to CU's
July 2, 2009, Boston Globe

The following information was released by the Credit Union National Association (CUNA):

Credit unions are a good alternative to traditional mortgage financing as credit markets overall have tightened up, the Boston Globe said in a Tuesday article. Credit unions were listed as the No. 1 alternative of five options mentioned by the newspaper. "Unlike banks and mortgage companies that sell their loans on the secondary market, many credit unions actually keep the loans they make in their own portfolio," the article said. "The secondary money market purchases bundles of loans from lenders. These loans must meet specific guidelines such as those set by [the Federal Housing Administration], Freddie Mac and/or Fannie Mae. Once the primary lender sells the loan, the lender is now in the position to make another loan to a new borrower," the article said. Credit unions that don't sell the loan on the secondary money market can set their own loan requirements, the article added.

Mortgage Rates Continue at Near-Record Lows, but for How Long?
Heather Anderson, May 27, 2009, Credit Union Times

The 30-year fixed mortgage rate has held fairly steady, maintaining near record lows since December and sending most credit union originations straight to Fannie Mae and Freddie Mac. The low rates in 2009 are unusual because the 10-year Treasury note yield has risen from a low of 2.05% in December to 3.12% as of May 14. For credit unions that make mortgages, they need to be extremely cautious in hedging what's in the pipeline and pricing mortgages, because they could get burned by a quick upturn in rates.

Congress and Administration Advocate Changes in Mortgage Rules
Claude R Marx, May 6, 2009, Credit Union Times

The Obama administration is giving financial institutions more incentives to modify second mortgages, while Congress is trying to make those institutions more accountable for home loans that they make. According to the Obama administration, 50% of at-risk homeowners have second mortgages, which were popular during the housing boom either to fund home improvements or to buy houses with a minimal down payment. The administration also changed the rules to the Hope for Homeowners program, unveiled by the Bush administration last year.