Current Mortgage Rate Trends

This week saw an uptick in mortgage rates, which now consistently range between 6% and 7%. As home purchase applications decrease, market experts suggest that both buyers and sellers are gradually adjusting to this new rate environment. Importantly, this stability may encourage some individuals to finally make their housing decisions.

However, ongoing affordability challenges continue to create significant hurdles for first-time buyers. External economic factors, including trade tariffs and a decline in the 10-year Treasury yield, also influence the overall mortgage rate activity. Analysts remain optimistic, anticipating that positive shifts in the housing market will become evident as the spring buying season approaches.

Policy Changes Affecting Mortgage Access

In a notable policy shift, the U.S. Department of Housing and Urban Development (HUD) announced that non-permanent residents and non-U.S. citizens will no longer be eligible for FHA-insured mortgages. This decision aligns with prior administration efforts to tighten immigration policies and raises concerns among housing advocates about further limiting homeownership access for immigrant communities already facing challenges.

Special Purpose Credit Programs Terminated

On Tuesday, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to end support for Special Purpose Credit Programs (SPCPs). These programs were designed to assist buyers with down payments and closing costs. According to FHFA Director Bill Pulte, the continued support for SPCPs was deemed inappropriate for entities currently in conservatorship.

The decision has drawn attention from industry stakeholders, especially given Pulte’s significant role in any future moves toward the privatization of Fannie Mae and Freddie Mac. The Mortgage Bankers Association (MBA), which has traditionally endorsed SPCPs, has yet to comment on the directive as of this report.

Wells Fargo’s Progress with Compliance Orders

Wells Fargo has successfully closed its fifth consent order this year, signaling the company’s commitment to compliance amid numerous legal challenges and investigations since 2016. CEO Charlie Scharf stated that this development confirms the bank’s progress in meeting regulatory requirements, reinforcing its intention to return to full compliance.

Rescission of UDAP Advisory Bulletin

In another regulatory update, the FHFA retracted an advisory that would have required Government Sponsored Entities (GSEs) such as Fannie Mae and Freddie Mac to oversee and act against unfair or deceptive practices (UDAP) by mortgage lenders and servicers. This advisory would have held GSEs accountable for violations committed by third parties if they were aware, or should have been aware, of such misconduct.

The MBA has expressed support for the rescission of this advisory, with President and CEO Bob Broeksmit emphasizing the importance of balanced regulation that ensures GSE operations remain stable and continue to facilitate affordable housing for Americans.