DOJ fines Fairway $10M for alleged racial discrimination

Plus: Metros where home prices are up and down the most

October 16, 2024

☀️ It's Wednesday. Thanks for joining us. Today's newsletter is 797 words, a 3-minute read.

Disclaimer: Average mortgage rates as of Oct 15, 2024. © MND Daily Rate Index.

1. Refinance applications dive 26% as mortgage rates climb

Mortgage rates surged last week, driving a significant decline in home loan applications. The average interest rate for a 30-year fixed-rate mortgage rose to 6.52%, up 16 basis points.

Refinance applications fell by 26%, while purchase applications fell by 7% for the week ending Oct. 11. Despite the recent drop, purchase activity remains 7% higher than a year ago, and refinance applications are still up 111% year-over-year. Overall, the applications index dropped 17%.

The average loan size, considering all mortgage types, also fell to $389,000, after hitting an MBA applications survey-record of $413,100 on Sept. 20.

2. DOJ fines Fairway $10M for alleged racial discrimination

The Justice Department and CFPB announced yesterday that Fairway Independent Mortgage Corporation (Fairway) has agreed to pay $8 million and a $1.9 million civil money penalty to resolve allegations that it engaged in a pattern of lending discrimination by redlining predominantly Black neighborhoods in and around Birmingham, Alabama.

Fairway determined that a settlement with the bureau would be the most appropriate solution, the company said in a statement.

U.S. Attorney General Merrick Garland said the case was a "reminder that redlining is not a relic of the past and the Justice Department will continue to work urgently to combat lending discrimination wherever it arises."

A MESSAGE FROM MAXWELL

New Survey Data: Introducing Maxwell’s Sidelined Home Buyer Report

As rate cuts materialize and inventory recovers, sidelined home buyers will begin to take action. Maxwell surveyed 1,000 would-be buyers to dig into their plans as they look to enter the market.

The data sheds new light on this segment: Many say they’ll look to buy when rates hit 5.5%, and nearly 80% say they’re “somewhat” or “very” prepared to purchase once rates fall. Nearly 40% haven’t yet connected with a lender.

Click here to get your free copy of Maxwell’s Sidelined Home Buyer Report and gain exclusive insight into a group of home buyers who will drive loan activity in 2025.

3. More Nuggets

💸 Citadel agrees to pay $6.5M to settle DOJ’s redlining claims. (DOJ)

⚖️ Side claims Alexanders, Official breached contract, defaulted on loan. (TRD)

🏡 Amazon is selling $30,000 tiny homes, following in the footsteps of Sears, which sold over 70,000 mail-order homes between 1908 and 1942. (Amazon)

📺 Trump says he would be a better Fed chairman than Powell. (Forbes)

🏢 Wells Fargo CEO says commercial real estate is 'getting worse'. (BizJournals)

4. Top 10 metros where home prices are up and down the most

Although buyers have the advantage in many metros, with asking prices dropping in more than half of the 50 largest markets, sellers still have the advantage in many cities because there are significant list price increases in these metros.

Here are the top 10 metros where listing home prices are up the most in terms of YOY price growth, according to Realtor.com.

  1. Rochester, NY: +13%

  2. Milwaukee, WI: +11.4%

  3. Cleveland, OH: +9.3%

  4. Memphis, TN: +8.5%

  5. Philadelphia, PA: +8.4%

  1. St. Louis, MO: +7.1%

  2. Buffalo, NY: +6.8%

  3. New York, NY: +6.3%

  4. Detroit, MI: +5.7%

  5. Virginia Beach, VA: +2.8%

Here are the top 10 metros where listing home prices are down the most in terms of YOY price growth:

  1. Miami, FL: -12.4%

  2. Cincinnati, OH: -9.5%

  3. San Francisco, CA: -8.9%

  4. Kansas City, MO: -8.4%

  5. Austin, TX: -6.6%

  1. Jacksonville, FL: -6.1%

  2. Denver, CO: -6%

  3. Orlando, FL: -5.6%

  4. Tampa, FL: -5.5%

  5. Nashville, TN: -5.4%

5. Local realtor association won’t enforce NAR Clear Cooperation

In an email sent to members on Oct. 3, the Utah-based Park City Board of Realtors announced that it would no longer be enforcing the clear cooperation rule, as reported by Inman. The Utah MLS had 1,789 subscribers at the end of 2023.

In her email, CEO Jamie Johnson told members that the MLS and Park City Board of Realtors board had written a letter to NAR in August that notified the national trade group of their decision.

NAR’s Clear Cooperation Policy was established in 2020. Under the policy, listing brokers must submit listings to their local MLS within one business day of publicly marketing a home.

“We informed NAR that until their Policy Committee met and decided on potential changes to the policy that we would not be adhering to the policy requirements”

CEO Jamie Johnson

☀️ You’re all caught up. See you on Friday!

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