FHA OKs modifying mortgages to 40-year terms

G.M. This is Mortgage Nuggets, the newsletter that tells you what’s happening in the mortgage industry in less than 5 minutes.

1. Goldman Sachs: No Fed rate hike in March

Analysts at Goldman Sachs on Sunday said they “no longer expect” the Federal Reserve to hike interest rates later this month after federal regulators moved to swiftly shield the U.S. banking system from the crisis triggered by the rapid collapse of Silicon Valley Bank.

In the analyst note, Goldman Sachs Chief Economist Jan Hatzius pointed to the “recent stress in the banking system” as the reason behind the no-rate hike forecast.

Last week, economists had signaled they were expecting a 50 basis points hike following the Fed’s meeting later this month.

The note added that there is now “considerable uncertainty about the path beyond March,” adding that it expects 25-point hikes in May, June, and July and a terminal rate of 5.25-5.50%.

2. Mortgage insurance tax deduction may be restored

A bipartisan bill called "The Middle Class Mortgage Insurance Premium Act of 2023" has been introduced in the House of Representatives to make the mortgage insurance tax deduction permanent.

The deduction, which became deductible in 2007, was not made permanent by Congress and had to be reapproved annually.

The new bill has broad support from the mortgage, banking, and housing industries. It aims to make it possible for middle-class homeowners to deduct both private and government MI premiums on their federal income tax returns on a permanent basis.

3. More Nuggets

⚖️ Congressional Republicans aim to completely revamp the CFPB structure and rulemaking process, proposing to have Congress fund the CFPB's budget, rename it to the Consumer Financial Empowerment Bureau, turn it into a commission, and require it to identify metrics, strengthen private sector participation, and publish justifications of its rules. (Memo)

🏦 Guild Mortgage saw increased profits in 2022 due to its focus on the purchase mortgage market, with 81% of closed loan origination volume coming from purchase business, and is now looking to acquire other lenders as the market consolidates (Guild)

💸 Typical monthly housing payments in the U.S. reached an all-time high of $2,563 this week, a 29% increase from a year ago, which is limiting the affordability for buyers and preventing many sellers from listing their homes; pending home sales declined 16.1% YoY, and new listings of homes for sale dropped 21.7%, the biggest decline in two months. (Redfin)

4. Fannie Mae approves six vendors for new valuation initiative

Fannie Mae has approved six firms to handle its new valuation initiative, which cuts traditional appraisers out of the process and potentially represents the biggest shift in the valuation space in years.

The participating firms, which will collect appraisal data and put it through Fannie Mae's API, include Solidifi, Class Valuation, Clear Capital, Mueller Services, Accurate Group, and Black Knight's Collateral Analytics LLC.

5. 1 good tweet

🙏 Thanks for reading! See you on Wednesday.

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