Updated: May 30, 2018
By Matt Joy, Princeton Mortgage Wholesale
Yesterday, the leader of the free world did what he tends to so often… talk. However, what he said (meeting with North Korea probably won’t happen and that he’s not satisfied with the latest trade talks with China) helped the mortgage industry by driving investors to safer assets (U.S. Government Bonds) thus driving the 10-yr Treasury down 5 basis points from 3.125% to 3.012%. It’s not a significant drop, but it’s something… it’ll probably be all for not though, as the Fed will be releasing their minutes from their May 1st meeting around 2PM EST. All signs point to rate hikes… blah blah blah. Long story short… don’t plan on the 10-yr dropping below 3%.
Let’s talk legislation now (yippee!), yesterday the House passed S. 2155 (what the heck is that?!). S. 2155 can also be called the Economic Growth, Regulatory Relief and Consumer Protection Act (which is a mouth full). This bill rolls back the Dodd-Frank act and provides some regulatory relief for banks and lenders alike. The bill passed through the Senate back in March and after clearing through the House on Tuesday the final step (shout out to School House Rock for helping me understand this process) is for President Trump to sign the bill into law… which will more than likely happen. What does that mean for us? Well… it helps smaller and mid-sized banks by reducing the amount of capital they need to hold, puts in a bunch of safe guards for the VA Home Loan program, fixes to the TILA/RESPA Integrated Disclosures and much more. You can see the full list here.
What’s interesting though is that this bill was not passed without its fair share of criticisms. Some Dems believe that the passage of this bill will re-open the can of worms we saw pre-2008. Democratic House Rep, Maxine Waters said,
“One of the most harmful elements of the bill is its weakening of the Home Mortgage Disclosure Act (HMDA), which is a key tool to detect and prevent discriminatory practices in the mortgage market. S. 2155 would allow 85% of depository institutions to avoid reporting new HMDA data required by Dodd-Frank even though they are already collecting the data– badly undermining efforts to ensure fair lending.”
Yikes Maxine… tell us how you really feel. Oh wait… you want to? Maxine also went on to say,
“…the truth is the bill is packed with poisonous provisions that benefit megabanks like Wells Fargo and companies like Equifax. It also weakens critical mortgage protections to ensure borrowers can afford their loans and prevent discrimination and fraud.”
My oh my Maxine… you didn’t really hold back any punches. Could this new bill turn our industry back into the Wild, Wild West that it once was? Probably… but what the heck… let’s give it a shot!
Talk to you soon!
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.