EWSFLASH l DECEMBER 2013 l NMP NEWSFLASH l DECEMBER 2013 l NMP NE NAMB Affiliate Changes Name in Oregon
DECEMBER 2013 n Oregon Mortgage Professional Magazine n
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The Oregon Association of Mortgage Professionals, the Oregon state affiliate of NAMB—The Association of Mortgage Professionals, will become the Oregon Mortgage Association (OMA), expanding its mission to serve all facets of the mortgage origination process. “OAMP has proudly honored and supported the mortgage brokerage profession for years in Oregon,” said OMA President Matt Jolivette. “But as the mortgage world has evolved, the association needs to evolve with it.” Under the Oregon Mortgage Association name, the group will seek to expand its mission, reaching out to all professionals involved in making mortgages happen for consumers. “We see tremendous opportunities to connect the community of loan originators at brokerages, banks, credit unions and mortgage companies. And not just with each other, but also with consumers, Realtors, lending service companies and more,” said Jolivette. “At all levels, there’s a need for education, for networking, and for vigilance that the mortgage markets remain healthy and free to support our state’s housing industry.” Established in 1995, the Oregon Mortgage Association is the primary residential mortgage association covering the entire State of Oregon. The OMA represents hundreds of mortgage companies and thousands of mortgage professionals throughout the state, including every platform of residential mortgage banking and brokering available in the primary market. The association exists to represent, protect, and improve the quality of mortgage services in Oregon through awareness and communication. In a new initiative, the OMA will also be dedicating parts of its Web site to consumer education. “Buying or refinancing a home these days is a complex process, and consumers need unbiased guidance and help,” Jolivette said. “They’ll be
able to turn to our new Web site, www.ormortgages.org, for tools such as mortgage calculators, help with understanding how much total costs will be, how much home they can afford, and more. We’ll also have news and advice, along with reliable statistical reports. And when consumers want someone local that they can trust, they’ll be able to access our directory of mortgage leaders who’ve sworn to uphold the highest standards of integrity.”
GSEs Announce Loan Limits to Remain the Same for 2014 The Federal Housing Finance Agency (FHFA) has announced that the 2014 maximum conforming loan limits for mortgages acquired by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, will remain at $417,000 for one-unit properties in most areas of the country. The Housing and Economic Recovery Act of 2008 (HERA) establishes the maximum conforming loan limit that Fannie Mae and Freddie Mac are permitted to set for mortgage acquisitions. HERA also requires annual adjustments to these limits to reflect changes in the national average home price. Further information on potential future changes in the maximum size of loans that Fannie Mae and Freddie Mac guarantee will be forthcoming. “Realtors welcome today’s announcement from the Federal Housing Finance Agency that the current limits on conforming loans will remain in effect until further notice,” said National Association of Realtors (NAR) President Steve Brown. “As the leading voice for homeownership, NAR opposes lowering the ceiling on loans eligible for backing by the governmentsponsored enterprises. Lower loan limits would increase costs for consumers and reduce their access to conventional mortgages.”
In determining 2014 loan limits under the terms of the Housing and Economic Recovery Act (HERA), FHFA did not change the baseline maximum conforming loan limit for the United States. The baseline limit, $417,000 for one-unit properties in the contiguous U.S., was left unchanged based on historical index values for FHFA’s monthly and quarterly House Price Index (HPI). HERA requires that the baseline loan limit be adjusted each year to reflect changes in the national average home price. After a period of declining home prices, however, HERA requires that prior price declines be fully offset before a loan limit increase can occur. HERA provisions require that FHFA set loan limits as a function of localarea median home values. Where 115 percent of the local median home value exceeds the baseline loan limit ($417,000 in most of the U.S.), the local loan limit is set at 115 percent of the median home value. The local limit cannot, however, be more than 50 percent above the baseline limit. In the District of Columbia and all U.S. states except Alaska and Hawaii, the highest possible local area loan limit for a oneunit property is $625,500 (150 percent of $417,000). Consistent with FHFA’s prior practice in determining the 2014 HERA limits, FHFA used median home values estimated by the Federal Housing Administration (FHA) of the U.S. Department of Housing & Urban Development (HUD). FHA has calculated those median values for the purpose of determining its own lending limits. After the FHA loan limits are announced, FHA allows a 30-day appeals period for appellants to submit data suggesting a potentially higher median home value for a given area. If FHA changes its median price estimates as a result of any appeals, and if those changes would impact the FHFA conforming loan limits, FHFA may adjust the conforming loan limits and announce the resulting changes. In determining the 2014 HERA loan
limits in high-cost areas, FHFA continued its policy of not permitting declines relative to prior HERA limits. While HERA did not explicitly prohibit declines in high-cost area loan limits, that approach is consistent with the statutory procedure for responding to changes in prices on a national basis. Subject to this policy, the 2014 HERA limits reflect the higher of the limits directly calculated for 2014 and HERA loan limits determined for years 2009 through 2013.
HUD Unveils Its Definition of QM The U.S. Department of Housing & Urban Development (HUD) released its final rule which defines a “Qualified Mortgage (QM)” that is insured, guaranteed or administered by HUD. The final rule will be effective on Jan. 10, 2014 and will apply to mortgages with a case number assignment on or after that date. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that HUD to propose a QM definition that is aligned with the Abilityto-Repay criteria set out in the Truth-inLending Act (TILA) as well as the Department’s historic mission to promote affordable mortgage financing options for underserved borrowers. HUD’s rule builds off of the existing QM rule finalized by the Consumer Financial Protection Bureau (CFPB) earlier this year. In order to meet HUD’s QM definition, mortgage loans must: Require periodic payments without risky features; have terms not to exceed 30 years; limit upfront points and fees to no more than three percent with adjustments to facilitate smaller loans (except for Title I, Title II Manufactured Housing, Section 184,Section 184A loans and others as detailed below); and be insured or guaranteed by FHA or HUD. Currently, HUD does not insure,
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