Editor’s Note: The Mortgage Mix is RISMedia’s weekly highlight reel of need-to-know mortgage-industry happenings. Watch for it each Friday afternoon.
– A Federal Reserve interest rate cut is looking more and more imminent with this month’s Personal Consumption Expenditures (PCE) price index data. The PCE index increased 0.2% from the previous month, and core-inflation rose by the same amount, up 2.6% from a year ago. This is close to the 2% goal that the Central Bank set in order to start cutting rates, which confirms the talk amongst economists as of late that rate cuts will begin in September.
– The Consumer Financial Protection Bureau (CFPB) has ordered New Day Financial (NewDay USA) to pay a $2.25 million civil penalty for illegally luring veterans and military families into cash-out refinance loans. CFPB stated that the company gave “misleading and incomplete cost comparisons to borrowers refinancing in North Carolina, Maine and Minnesota, which made the company’s loans appear less expensive relative to their existing mortgages.”
– “NewDay USA baited veterans and military families into cash-out refinance mortgages by hiding the true costs of these loans,” said CFPB Director Rohit Chopra. “NewDay USA’s misconduct has no place in the VA home loan program.”
– A press release from NewDay USA states that “the agency’s inquiry focused on a single type of disclosure that was accurately provided to these consumers on a half-dozen other federally mandated disclosures and closing documents.” The organization also pointed out that the CFPB itself acknowledged in the consent agreement that consumers received “several other federally mandated disclosure documents with accurate cost information.”
– Mortgage rates also continue to decrease ahead of the potential rate cut, falling to their lowest level since May 2023, according to recent Freddie Mac data. The 30-year FRM averaged 6.35%, down from last week when it averaged 6.46%, and the 15-year FRM averaged 5.51%, down from last week when it averaged 5.62%.
– “Rates are expected to continue their decline, and while potential homebuyers are watching closely, a rebound in purchase activity remains elusive until we see further declines,” said Sam Khater, Freddie Mac’s chief economist.
– Mortgage applications saw a small increase of 0.5% this week, according to the latest MBA data. This is a slight reverse from last week’s 10.1% drop, as experts feel homeowners remain on the fence waiting for more mortgage rate changes.
– “Prospective homebuyers are staying patient now that rates are moving lower and for-sale inventory has started to increase,” said Joel Kan, MBA’s vice president and deputy chief economist.
