house-puzzle-300x300In this week’s Mortgage Market Update, we’ll examine the Consumer Financial Protection Bureau’s new appraisal requirements and how it will affect home closings. We’ll also take a look at how mortgage rates have been trending the past week and where they may be headed.

Mortgage Rates At-A-Glance

  • Currently Trending: NEUTRAL to HIGHER
  • 7 Day Mortgage Rate Forecast: NEUTRAL to HIGHER
  • 7 Day Rate Volatility: HIGH


CFPB Appraisal Requirements

New appraisal rules from the Consumer Financial Protection Bureau went into effect on January 18 of this year. The new rules were designed to educate and protect consumers; however, they’ve also created a few issues that people in the mortgage or real estate industry should be aware of.

The rule, called the ECOA Valuations Rule (Equal Credit Opportunity Act), requires lenders to provide the borrower with all copies of any valuation – not just appraisals. For example, if the lender does a desk review, or automated valuation model (AVM) review, or anything of the sort, copies of those reviews must be provided to the borrower. While many mortgage lenders use these types of valuation tools, it’s generally understood that they can sometimes be inaccurate. In those cases, lenders typically don’t include them in the paperwork given to the borrower. However, now that the new rules are in place, the borrower must still be given a copy. This could cause the borrower to become unnecessarily concerned if the values are way off.

Another specific requirement is that all valuations must be provided three days before closing, unless the borrower signs a waiver. In those situations, the lender is still required to provide copies to the borrower at or before closing.

For more information on the new rules, check out the CFPB’s guide on the subject.

Rates Forecast

This week the MBS (mortgage-backed securities) market is dealing with a lot of potentially market-moving news. The Ukraine crisis still has the ability to cause waves in global stock markets, and U.S. stock and bond markets. Also, the Chinese economy has caused some concerns recently, and that may also play a role in this week’s trading. On the domestic front, this week has strong economic news, especially Wednesday when the Fed will make their announcement following the conclusion of Tuesday and Wednesday’s FOMC meeting. Expect more tapering, and expect some trading volatility because of it. All of this is likely to create volatility day to day as well as intraday volatility in MBS and rates. However, barring any unexpected changes, next week’s rate could inch a bit higher.

Nevertheless, mortgage rates remain very close to historic lows. Home prices and real estate demand has gone up, but luckily economic factors have helped keep interest rates from skyrocketing. If you’re considering locking in a mortgage rate, it would probably be wise to do it sooner than later. Talk to your home loan professional today for more information.

Looking for a low mortgage rate for your Texas home purchase or refinance? The Decker Group is here to help you find the loan you need at a rate you can afford. Contact Kelly Decker and his team of professional Texas mortgage consultants for a free rate quote and more information. (972) 591-3097