Beyond the Headlines

CFPB Offers Additional Guidance on Mortgage Servicing Rules
In order to ensure a smooth transition and provide certainty to the market under mortgage servicing rules
that take effect January 2014, the Consumer Financial Protection Bureau (CFPB) has issued some
guidance about three specific servicing issues in light of public requests for further explanation. The
additional guidance addresses contact with delinquent borrowers, communications with family members
after a borrower dies, and treatment of consumers who have filed for bankruptcy or invoked certain
protections under the Fair Debt Collection Practices Act (FDCPA).
Making sense of the story
 The new rules are meant to establish stronger protections for struggling homeowners and protect
them from “costly surprises and runarounds by their servicers,” according to the CFPB.
 Borrowers still face serious problems seeking loan modifications or other alternatives to avoid
foreclosure, which the rules are intended to address.
 Since servicers must attempt to contact borrowers each time they miss a payment under the new
rules, the method of contact can vary depending on the number of days delinquent or whether the
borrower has responded to earlier communication attempts by the servicer.
 If a borrower dies, servicers still must have policies and procedures in place to promptly identify
and communicate with family members, heirs, or other parties who have a legal interest in the
 Even if a borrower seeks to restrict communication with servicers under the FDCPA, servicers
still must communicate with the borrower when it comes to requests for loss mitigation,
information requests, error resolution, force-placed insurance, initial rate adjustments on
adjustable-rate mortgages (ARMs), and periodic statements.
 The CFPB said further assessment is needed regarding how bankruptcy protections intersect with
its requirements for early intervention contact and providing periodic account statements.
Read the full story
In other news …
NAHB: Builder Confidence declines in October
Source: Calculated Risk
The National Association of Home Builders/Wells Fargo Housing Market Index reveals that builder
optimism has fallen in October, which can likely be attributed to the government impasse in Washington,
D.C. The shutdown has caused builders and consumers to take pause, according to NAHB Chief
Economist David Crowe.
Read the full story
Homebuilders lure buyers with extra incentives
Source: HousingWire
In order to stay competitive, homebuilders are turning to a variety of incentives to entice buyers amid
rising home prices and higher mortgage rates. Incentives include free appliances, blinds, premium
flooring, garage-door openers, and covering closing costs.
Read the full story
Growing Divide Between Young People Able to Go It Alone and Those
Who Live at Home
Source: The Wall Street Journal
Growing income stratification is particularly apparent among Millennials when it comes to housing, as
there is a strong divide between those who have the means to become the head of a household – whether
as an owner or renter – and those who are forced to reside at home for economic reasons.
Read the full story
Clustering of Richer Americans Grows
Source: The Wall Street Journal
Income segregation is growing across America as wealthier people flock to more expensive and affluent
neighborhoods. According to analysis of Census data by researchers Kendra Bischoff of Cornell
University and Sean Reardon at Stanford University, such clustering has doubled over the last four
decades from 15 percent to 33 percent.
Read the full story
Senate’s housing finance overhaul could be slowed by government
Source: The Hill
Among the long list of items affected by the government shutdown is the overhaul of the housing finance
system. Legislative attempts to enact reform by the end of the year may be delayed since the shutdown
has slowed down progress and momentum from this summer. A broad bipartisan deal may be all the more
elusive since political paralysis has been exacerbated by the shutdown.
Read the full story
Housing Affordability Hits Four-Year Low
Source: The Wall Street Journal
According to data compiled by the NATIONAL ASSOCIATION OF REALTORS® (NAR), the average
mortgage payment on the median priced home in August as a share of the median income was 16 percent.
Despite the fact that housing affordability hit a four-year low in August, NAR reports that homes are still
more affordable than any time between 1989 and late 2008.
Read the full story
Housing boom in hardest-hit markets slows
Source: HousingWire
As investors leave the market, the sharp increase in home prices in some of the hardest-hit housing
markets is likely to fade over the next few months. Over the past 18 to 24 months, Phoenix, Las Vegas,
and Sacramento, Calif., are three markets that have witnessed surprisingly strong home-price inflation.
Read the full story
What you should know …
 The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the
week ending October 11, 2013, indicates the seasonally adjusted Purchase Index decreased 5
percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared
with the previous week and was 1 percent lower than the same week one year ago.
 The impact of the government shutdown is apparent in the results of the MBA survey, as
Purchase applications for government programs dropped by more than 7 percent over the week to
their lowest level since December 2007.
 The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($417,000 or less) increased to 4.46 percent from 4.42 percent.