Mortgage delinquencies hit record low in March

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1. MBA: LLPA changes problematic

In a blog post published Thursday, the MBA has called for the Federal Housing Finance Agency (FHFA) to scrap its proposed loan level price adjustments (LLPA) related to a borrower's debt-to-income (DTI) ratio.

MBA President and CEO Bob Broeksmit, argues that the changes are unworkable and should be eliminated.

• The FHFA argues that the changes to the upfront fees for borrowers with a DTI at or above 40% would improve the GSEs' stability and support equitable homeownership access.

However, the MBA contends that tying an LLPA to a DTI ratio would create operational, compliance, and customer experience challenges, as well as costly post-origination disputes between lenders and the GSEs.

Despite industry concerns, the FHFA has not yet indicated a willingness to abandon the DTI-related upfront fee.

2. Fannie Mae boosts housing outlook

Fannie Mae has revised its mortgage origination forecast for 2023 and 2024, reflecting a slightly more optimistic outlook for home sales and prices, though declines are still expected.

The 2023 loan production forecast has increased to $1.66 trillion from 1.55 trillion, while the 2024 prediction rose to $2.02T from 1.89T.

Home prices are now expected to fall by 1.2% during the year; Fannie Mae previously expected a 4.2% decline. For 2024, it revised its projection to a 2.2% drop, slightly lower than the previous 2.3% estimate.

The home sales forecast for this year increased to 4.84 million units from 4.63 million units.

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3. More Nuggets

💰 $34 to $1. The housing market recession hit so hard and fast that a Fortune 500 firm that was riding high at $34 per share has crashed to $1 (Fortune)

📉 Delinquencies hit a record low in March, falling below 3% (Black Knight)

👨‍⚖️ Judge allows suit alleging insider trading by some Rocket officials to proceed (DNews)

4. Tighter credit curbs inflation

According to the latest Bloomberg monthly survey of economists conducted April 14-19, U.S. inflation is now expected to come down faster than originally projected, thanks to tighter credit conditions in the aftermath of several bank failures.

Since the bank failures, consumers and businesses say it's much harder to get a loan. This is having a similar effect as the Federal Reserve raising interest rates, leaving less work for policymakers to do to ultimately bring inflation down.

"Banking stresses mean much tighter lending conditions, which in an environment of rising borrowing costs, soft business sentiment, and a rapidly weakening housing market, makes a hard landing for the economy look all the more likely," said James Knightley, chief international economist at ING.

"Inflation will slow even more quickly in this environment, opening the door to interest-rate cuts later this year," he said.

5. Charted: U.S. existing home sales

☀️ See you on Wednesday!

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