CBC Mortgage Agency Lauds Chairman Lacy Clay’s Questioning on Down Payment Assistance

Clay Questioned FHA Commissioner Brian Montgomery; Underscored Collecting Data on Individual Government Entities as Paramount to Extending DPA Assistance to Minority Communities

 

CBC Mortgage Agency (CBCMA) today applauded Chairman Lacy Clay (D-Mo.) of the House Financial Services Subcommittee on Housing, Community Development & Insurance for his supportive remarks regarding down payment assistance (DPA) programs. During the subcommittee hearing entitled, “An Examination of the Federal Housing Administration and its Impact on Homeownership in America,” Rep. Clay questioned Brian Montgomery, commissioner of the Federal Housing Authority, to elaborate on the importance of DPA programs.

 

Below is an excerpt of the exchange:

 

Congressman Clay: “It appears that HUD can’t determine which government programs are providing down payment assistance on any FHA loan, which is critical before attempting to issue new regulations of government down payment assistance programs. Will you commit to not moving forward on any rule making or other administrative changes related to down payment assistance provided by governmental entities until HUD is able to collect data on individual governmental entities and has analyzed a statistically significant amount of data on the performance and pricing of FHA loans with down payment assistance from each specific governmental entity?”

 

Commissioner Montgomery: “Thank you, Mr. Chairman. As you know payment assistance has a long history at FHA…I just want to make sure that any down payment assistance provider is doing so within what our rules permit. Whether it’s a jurisdictional, whether it’s whether or not they financially benefit off the transaction which HERA doesn’t permit. So, I will commit to any effort to undertake rule making will be deliberate, it will be based on research and facts as we know it.”

 

“It is crucial that HUD collect data on individual government programs before trying to regulate them,” said Michael Whipple, vice president of CBCMA, noting that HUD recently issued a Notice for Proposed Rule Making, indicating that the agency intends to move forward with rule making in January. “Only by accurately tracking the performance and pricing of loans originated by each government entity can HUD better manage their risk and protect taxpayers.”

 

CBCMA provides secondary financing to homebuyers receiving loans from the FHA. Earlier this year, HUD initiated a major policy change that would have effectively ended or significantly reduced many DPA programs run by government entities — but without doing anything to protect the FHA Mutual Mortgage Insurance Fund. HUD did this without any data to support its actions. Following a legal dispute, a federal judge stayed HUD’s ability to enforce its new policy, and ultimately the agency withdrew it.

 

“Had HUD gotten its way, groups like CBCMA would have been put out of business, and borrowers would have suffered,” continued Whipple. “We hope that Commissioner Montgomery’s response indicates he intends to collect data on individual government programs before HUD engages in its announced rulemaking.”

 

About CBC Mortgage Agency
CBCMA provides secondary financing to borrowers, who are receiving loans insured by the Federal Housing Administration (FHA). CBCMA takes great care to ensure that the FHA loans perform well, including providing education as well as 12 months of counseling to borrowers after the purchase of their home. In addition, CBCMA regularly reviews its credit standards to ensure that the borrowers it assists are credit worthy.  CBCMA is a wholly owned subsidiary of Cedar Band Corporation, a federally chartered tribal corporation wholly owned by the Cedar Band of Paiutes, a federally recognized American Indian band. For more information about CBCMA and its programs, visit chenoafund.org.

 

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New Mortgage Industry Report Seriously Challenges Down Payment Assistance Stigma of “High-Rates of Delinquency”

Over the last several years reports have surfaced stating that down-payment assistance exhibit “high rates of delinquency” as in the 2018 Department of Housing and Urban Development’s (HUD) report to Congress1,

 

“Mortgages with DPA generally exhibit higher rates of delinquency and default, and those with such assistance financed by self-identified governmental entities have higher rates of default than those with other forms of DPA.”

 

The Stigma of DPA, the “High Rates of Delinquency”

If you only look at that statement “High Rates of Delinquency,” you would clearly have the impression that ALL down payment assistance provides for “Unnecessary Risk.”

 

HUD is attempting to make the case that nationwide DPA programs generally are too risky because of their past experience with another type of nationwide DPA, which has been illegal since 2008.

 

HUD’s analysis has serious limitation because it fails to take account of other risk factors unrelated to down payment assistance, such as the borrower’s demographic attributes, including credit score, which could lead to poorly designed and racially punitive corrective action.

 

This view is likely the result of pre-crisis down payment assistance programs in which property sellers were allowed to pay the buyer’s down payment and raised the price of the property in order to cover the cost. Those seller-paid programs have been shut out of the market for years and are no longer an issue. Today’s programs must be economically viable without the help of a home seller. In recent years, loan performance on transactions in which the borrower received down payment assistance has been far better compared to loans under the former seller-paid programs.

 

DPA Loans Perform Equal to or Better than Other Mortgage Loans

According to the joint report from the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis, Center for Community Capital at the University of North Carolina and Harvard Joint Center for Housing Studies, 2 receipt of down payment assistance is not significantly associated with default risk.

 

The study3 sheds light on the relationship between different forms of DPA and default risk using multivariate methods applied to a well-documented national affordable lending data set from the Community Advantage Program (CAP). Despite HUD’s stated concerns, “my colleagues and I find that the receipt of down payment assistance is not significantly associated with default risk.”

 

In the 10-year study researchers looked at 3,000 loans that were made under the Community Advantage Program (CAP) originating between the years of 1999 and 2000, authors concluded, “Our multivariate analysis indicates that the receipt of DPA (down payment assistance) is not significantly associated with default risk. In particular, while grant assistance from a government or community organization is marginally significant as a predictor of default risk in one of our model specifications, this effect disappears altogether when racial controls are incorporated in the model. Thus, the receipt of DPA appears to be unrelated to default risk.”

 

DPA is Important Component of Mortgage Finance

 

Down payment assistance has become an important component of mortgage finance for a growing segment of first-time homebuyers. Approximately 43 percent 2 of FHA first-time homebuyers relied on some form of down payment assistance.

 

Down payment assistance can take many forms. In many situations, family members provide relatives with the necessary funds for a down payment. But in the minority community, especially among African American families which have 1/10th the household net worth compared to whites, family members often lack the capital to help relatives with a home purchase. This is where government down payment assistance programs help bridge the gap.

 

The differences in the performance of FHA loans that receive DPA from governmental entities versus FHA loans that receive DPA from relatives may have little to do with questionable practices by government DPA providers. It may not be programmatic at all, but rather the simple fact that government programs help an entirely different set of people. Those who are helped by relatives are the beneficiaries of intergenerational wealth, while those that are helped by governmental entities are typically underserved borrowers who come from disadvantaged backgrounds.

 

It is not a simple coincidence that approximately 54% of families that CBC Mortgage Agency assists are minorities, including about 20% that are African American and about 30% that are Hispanic. Families that CBCMA assists do not typically come from generations of homeowners. Some are the first homeowners in their families, and many are lower income.

 

Conclusion

The truth is, everyone deserves to own a home. Some may have issues to address before they are ready, like poor credit histories or the need to secure stable employment, but such barriers can be overcome. The worth of every individual is great, and each among us deserves to enjoy the peace and security that come from homeownership.

 

We admonish HUD to not make decisions about DPA that will harm minorities by limiting DPA, which will do nothing to improve performance, and only shut people out of becoming homeowners.

 

1HUD: Annual Report to Congress Regarding the Financial Status of the FHA Mutual Mortgage Insurance Fund…Fiscal Year 2019

2Harvard Joint Center for Housing Studies: A Cautionary Tale of How the Presence and Type of Down Payment Assistance Affects the Performance of Affordable Mortgage Loans

3CBC Mortgage Agency: 2019 State of Down Payment Assistance Report

The post New Mortgage Industry Report Seriously Challenges Down Payment Assistance Stigma of “High-Rates of Delinquency” appeared first on Chenoa Fund – Down Payment Assistance.

November 19, 2019: Chenoa Fund Correspondent Newsletter

Introduction to Newsletter

This is the first of what we are planning to be a weekly newsletter. In the newsletter we seek to provide you with important information about the Chenoa Fund in the form of:

  • Program changes and updates
  • Announcements
  • Training updates, webinars, and more
  • Marketing resources you can use with borrowers and realtors
  • Answers to questions
  • News About Chenoa Fund
  • And more….

 

Chenoa Fund Releases Revised Program Guidelines 8.0

Chenoa Fund released and posted to their website on November 15, 2019 under Program Guidelines the following:

All previous guidelines can be found under Archive: Program Guidelines.

 

The new CBC Mortgage Agency Correspondent Lending Guide (CLG) has been dramatically overhauled since the previous version, 6.5. This improved CLG should provide lenders and other interested partners with greater ease while navigating through the document. Changes include reordering information, improving overall clarity based on feedback, consistently applying formatting, and placing related policies closer together.

 

New Mortgage Industry Report Seriously Challenges Down Payment Assistance Stigma of “High-Rates of Delinquency”

 

Over the last several years reports have surfaced stating that down-payment assistance exhibit “high rates of delinquency” as in the 2018 Department of Housing and Urban Development’s (HUD) report to Congress1,

 

“Mortgages with DPA generally exhibit higher rates of delinquency and default, and those with such assistance financed by self-identified governmental entities have higher rates of default than those with other forms of DPA.”

Continue reading…

 

As Seen in the Chrisman Report

Over the past month, Chenoa Fund has published a series of posts in the Chrisman Report. You can read the full series on the Chenoa Fund blog in the article: “As Seen in the Chrisman Report.” The most recent post is Monday, October 17.

 

DPA Does Not Contribute to Higher Defaults. A recent Harvard working paper prepared for the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis by Michael Stegman, et al., using extensive data from 46,000 loans originated principally between 1995-2005 with high LTV (median 97%), found that the receipt of DPA appears to be unrelated to default risk, when controlling for other risk factors, such as credit score, DTI, and even race. Referencing HUD’s descriptive use of data in its 2018 report to Congress, where HUD concluded that government DPA is associated with higher risk of default, the paper stated that, “In contrast to [HUD’s] descriptive analyses, our multivariate analysis indicates that the receipt of DPA is not significantly associated with default risk.” CBC Mortgage Agency agrees with the working paper’s admonition that in setting guidelines around DPA, policy makers should take care not to close off opportunities to aspiring minority home buyers. Continue….

 

Marketing Resource #1: Infographic and Blog Article

This week we are introducing a blog article and infographic that you can use in your communications with borrowers such as website, newsletter, email, blog, and social media. The PDF provides four versions to choose from. Each version provides you the ability to enter your personal information.

 

See posted article in Chenoa Blog

 

The title of the article and PDF are: Debunking Homebuyer Down-Payment Myths.

 

Go to Lenders webpage: Marketing Resources

Download from the following sections:

  1.  Infographic from: HOMEBUYER INFOGRAPHICS (LENDER)
  2. Article: ARTICLES FOR BLOGS AND NEWSLETTERS (LENDERS)

Marketing Resources Have Four Versions

Chenoa Fund has created a variety of high quality marketing materials you can use for creating interest in CBC Mortgage Agency (CBCMA) products/programs. The resources include:

  1. Program Flyers (Lenders)
  2. Program Flyers (Lenders/Realtors)
  3. DPA Postcards 11” X 6” (Lenders)
  4. DPA Postcards 11” X 6” (Lenders/Realtors)
  5. DPA Promotion Flyers (Lenders)
  6. DPA Promotion Flyers (Lenders/Realtors)
  7. DPA Door Hangers (Lenders)
  8. DPA Door Hangers (Lenders/Realtors)
  9. Homebuyer Infographics (Lenders)
  10. DPA Seminar and Lunch-n-Learn Flyers (Lenders)
  11. DPA Seminar and Lunch-N-Learn Doorhangers (Lenders)
  12. Chenoa Fund Homebuyer Videos (Lenders)
  13. Social Media Guidelines for Lenders
  14. Articles for Blogs and Newsletters (Lenders)

Each PDF for Lenders has four versions that provide you space for enter your contact information. Information includes:

  • Lending Partner
  • NMLS
  • Branch Location
  • Loan Officer
  • Phone
  • Email

 

Example 1

 

Example 2

Chenoa Fund Releases New Marketing Down Payment Assistance Report

Chenoa Fund Released a new marketing resource in the form of a report entitled: 2019 State of Down Payment Assistance Report. Click Here

 

The white paper includes five sections:

  •  Section One: The State of Down Payment Assistance Today
  • Section Two: National DPA Lender and Borrower Study
  • Section Three: Cost Benefit Analysis of DPA vs Renting
  • Section Four: Homeownership: Race and Risk
  • Section Five: Politics and Housing

 

 

Chenoa Fund News Releases

 

Chenoa Fund has released the following news releases in the past several weeks.

November 11, 2019-Press Release: Studies Find that Down Payment Assistance Programs Don’t Affect Loan Performance
November 7, 2019-News Release: Cedar Band of Paiutes Applauds New Resolution Passed by National Congress of American Indians
October 22, 2019-News Release: CBC Mortgage Agency Releases National Down Payment Assistance Study

 

 

Chenoa Fund in the News

The following articles have mentioned Chenoa Fund and/or CBC in the past several weeks.

 

November 13, 2019-National Mortgage Professional: Reports Conclude: Downpayment Assistance Programs Have No Impact on Loan Performance
November 11, 2019-DSnews: Down Payment Assistance Program’s Impact on Loan Performance
November 11, 2019-Mreport: Top Tech Providers, Women/Minority-Owned Businesses
November 5, 2019-Mreport: MReport’s 2019 Top 25 Companies in Mortgage and Servicing
October 28, 2019-Realtor Magazine: Study: Down Payment Assistance Grows Homeownership
October 24, 2019-Mortgage Professional America: Millions of Americans would fail to get a mortgage without DPA

 

Links to Lender Resources

Who We Are
2019 State of Down Payment Assistance Report
Become Approved as a Correspondent Lender
Daily Rate Sheet and Pricing
Program Guidelines

Training Material
Marketing Resources
Homebuyer Programs

Income Guidelines
Lender FAQs

Documentation

What People Are Saying
Blog
Newsletter

 

The post November 19, 2019: Chenoa Fund Correspondent Newsletter appeared first on Chenoa Fund – Down Payment Assistance.

Studies Find that Down Payment Assistance Programs Don’t Affect Loan Performance

CBC Mortgage Agency President Richard Ferguson seeks to dispel misconceptions that negatively impact thousands of borrowers

 

A groundbreaking report released by the Harvard Joint Center for Housing Studies found that down payment assistance programs had little impact on loan performance. The center’s Working Paper, “A Cautionary Tale of How the Presence and Type of Down Payment Assistance Affects the Performance of Affordable Mortgage Loans,” found, among other things, that the performance of home loans was not significantly impacted when down payment assistance was used.

 

According to the study’s authors, “Our multivariate analysis indicates that the receipt of DPA (down payment assistance) is not significantly associated with default risk. In particular, while grant assistance from a government or community organization is marginally significant as a predictor of default risk in one of our model specifications, this effect disappears altogether when racial controls are incorporated in the model. Thus, the receipt of DPA appears to be unrelated to default risk.”

 

Down payment assistance can take many forms. In many situations, family members provide relatives with the necessary funds for a down payment. But in the minority community, especially among African American families, family members often lack the capital to help relatives with a home purchase. “This is where government down payment assistance programs help bridge the gap,” said Richard Ferguson, president of CBC Mortgage Agency, a nationally chartered housing finance agency and a leading source of down payment assistance.

 

A recent white paper published by CBC Mortgage Agency, found that more than 90 percent of down payment assistance recipients would not have been able to purchase a home without down payment assistance. More than half of buyers helped by CBC Mortgage Agency are racial or ethnic minorities.

 

“Down payment assistance programs have come under attack lately, with some arguing that all down payment assistance is bad,” stated Ferguson. “This view is likely the result of pre-crisis down payment assistance programs in which property sellers were allowed to pay the buyer’s down payment and raised the price of the property in order to cover the cost. Those seller-paid programs have been shut out of the market for years and are no longer an issue. Today’s programs must be economically viable without the help of a home seller. In recent years, loan performance on transactions in which the borrower received down payment assistance has been far better compared to loans under the former seller-paid programs.”

 

“Many individuals are unaware that they can achieve homeownership even though they are unable to save for a down payment,” Ferguson added. “This includes many who diligently make large student loan payments each month which leave them with little money to save towards a down payment for a home. Down payment assistance is the solution for these individuals.”

 

Reporters who would like to arrange an interview with Ferguson about down payment assistance or the reports mentioned in this announcement can reach out to Strategic Vantage Marketing and Public Relations.

 

About CBC Mortgage Agency
Founded in 2013, CBC Mortgage Agency is a nationally chartered housing finance agency. As a leading source of down payment assistance, the company helps low-income consumers, often in minority neighborhoods, achieve the dream of homeownership. CBC is a subsidiary of the Cedar Band Corp., a federally chartered tribal corporation founded by the Utah-based Cedar Band of Paiutes. More information can be found at chenoafund

The post Studies Find that Down Payment Assistance Programs Don’t Affect Loan Performance appeared first on Chenoa Fund – Down Payment Assistance.

As Seen in the Chrisman Report

November 5, 2019

DPA Does Not Contribute to Higher Defaults. A recent Harvard working paper prepared for the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis by Michael Stegman, et al., using extensive data from 46,000 loans originated principally between 1995-2005 with high LTV (median 97%), found that the receipt of DPA appears to be unrelated to default risk, when controlling for other risk factors, such as credit score, DTI, and even race. Referencing HUD’s descriptive use of data in its 2018 report to Congress, where HUD concluded that government DPA is associated with higher risk of default, the paper stated that, “In contrast to [HUD’s] descriptive analyses, our multivariate analysis indicates that the receipt of DPA is not significantly associated with default risk.” CBC Mortgage Agency agrees with the working paper’s admonition that in setting guidelines around DPA, policy makers should take care not to close off opportunities to aspiring minority home buyers.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/11072019-mortgage-lawsuits.aspx

 

 

November 5, 2019

Chenoa Fund: Investing in Communities – It’s no secret that gentrification is bringing a complicated web of changes to many urban communities. For homeowners, gentrification can mean rising home values. But for lower-income families struggling to hang on to an affordable rental close to work, gentrification can be a nightmare. More than 11 million Americans now use more than half their monthly salaries for rent, and renters need to earn at least $20.30 per hour to afford a modest, two-bedroom apartment. In six states and the District of Columbia, affording such an apartment requires an hourly wage of at least $25. To help counter the trend, CBC Mortgage Agency is investing in the Workforce Housing Opportunity Fund, which rehabilitates and develops affordable and workforce housing in communities with soaring rents. It’s not the whole answer to our nation’s affordable housing crisis, but it’s a good start.

 

Read on the Chrisman Report:

https://www.robchrisman.com/nov-5-recruiting-training-marketing-products-primer-on-employment-labor-participation/

 

 

November 1, 2019

Chenoa Fund: Helping Minorities Break Into Homeownership Historically, the homeownership rate for racial minorities has been well below that for whites. This is especially true for African Americans. After creeping upward over 30 years and peaking at 50% in 2004, the black homeownership rate began to fall, dropping to 40.6% in 2019 and erasing all the gains made since passage of the Fair Housing Act in 1968. One reason: the racial wealth gap. For many reasons, it has been harder for African Americans and other minorities to accumulate funds for down payments and buy homes. At the Chenoa Fund, more than half of our borrowers are minority families, and many lack relatives who can gift them funds for a down payment. We’re proud to serve as their bridge to homeownership, which experts agree is a critical factor in economic stability and advancement.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/11012019-nonfarm-payroll.aspx

 

October 29, 2019

Chenoa Fund, following up for success. Many homebuyers obtaining a mortgage find that aside from a monthly bill, communications with their lender pretty much stop after they sign on the dotted line. At the Chenoa Fund, we take a different approach. Through regular outreach, we stay in touch with our borrowers to provide support, reminders and, if needed, advice. Customers appreciate it. ‘The post-purchase calls, emails/texts are encouraging and serve as a regular reminder that we were able to accomplish this feat,’ says Gabrielle B. ‘It feels great knowing they are on your side and want you to be a successful homeowner,’ adds Danielle M. We love hearing these reviews, because they validate our philosophy: when our borrowers succeed, we all succeed. We want our homebuyers to know that we value them and believe in them. Staying in touch is a small gesture that can mean a lot.”

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/10292019-banks-and-fha-loans.aspx

 

 

October 25, 2019

Chenoa Fund: Help for Single Moms. “Morgan A. is a single mother who works two jobs to provide for her young daughter. It’s a tough life, and her dream of enhancing her family’s stability by buying a home was just out of reach, year after year. But through the Chenoa Fund, Morgan finally received the boost she needed to obtain a loan. Her words of appreciation are powerful: ‘The Chenoa Fund has made the impossible possible. My daughter will now have a home to grow up in, a place to drive by and point [at] and say, ‘That is where I grew up.’’ Meredith B. had trouble obtaining a loan because of a bankruptcy years earlier. The Chenoa Fund helped. Now, ‘my son can feel secure knowing we don’t have to move anymore.’ At the Chenoa Fund, we’re proud to help deserving moms make life better for their kids.”

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/10252019-loandepot-news.aspx

 

 

October 21, 2019

Chenoa Fund: Helping Homebuyers Overcome Obstacles – Homeownership may be the cornerstone of the American Dream, but achieving it isn’t easy. Even couples with steady jobs and solid incomes sometimes struggle to secure a mortgage, perhaps because of past medical or financial difficulties or high rents that prevent them from accumulating a down payment. State housing programs are intended to support such borrowers with down payment help or other assistance, but many carry restrictions that lock out qualified buyers. Some limit assistance to lower incomes, while others help only first-time buyers. Many frustrated borrowers have found an ally in the Chenoa Fund. With reasonable credit controls and borrower education through a HUD-approved provider, Chenoa Fund programs are helping thousands of buyers escape the renters’ trap and buy homes. The Chenoa Fund is administered by CBC Mortgage Agency, whose mission is to increase affordable, sustainable homeownership across the U.S.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/10212019-boris-johnson.aspx

October 17, 2019

Chenoa Fund: A Safe and Happy Home: Through the years, Chenoa Fund’s programs have helped more than 17,000 low- and moderate-income borrowers obtain loans and realize long-held dreams of owning a home. When asked what they value most about the experience, most buyers provide a common response: the chance to live in a safe and happy home. Darlene T. recalled the joy she felt at leaving behind her “overpriced, poorly maintained rental” in an “undesirable part of town” and moving into her own house: “The neighborhood is beautiful, safer and has many conveniences close by.” Brittnie S. also was grateful to have a “safe place to come home to” after long shifts as a nurse. For these and other former renters, homeownership provides a sense of security that has a decisive impact on their quality of life. That’s an outcome worth celebrating,

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/10172019-warehouse-facilities.aspx

 

October 15, 2019

Chenoa Fund: Helping Homebuyers Overcome Obstacles – Homeownership may be the cornerstone of the American Dream, but achieving it isn’t easy. Even couples with steady jobs and solid incomes sometimes struggle to secure a mortgage, perhaps because of past medical or financial difficulties or high rents that prevent them from accumulating a down payment. State housing programs are intended to support such borrowers with down payment help or other assistance, but many carry restrictions that lock out qualified buyers. Some limit assistance to lower incomes, while others help only first-time buyers. Many frustrated borrowers have found an ally in the Chenoa Fund. With reasonable credit controls and borrower education through a HUD-approved provider, Chenoa Fund programs are helping thousands of buyers escape the renters’ trap and buy homes. The Chenoa Fund is administered by CBC Mortgage Agency, whose mission is to increase affordable, sustainable homeownership across the U.S.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/10152019-non-qm-loans.aspx

 

 

October 11, 2019

In Tuesday October 2’s Chrisman Report, a national lender referenced guidelines for down payment assistance (DPA) programs requiring a legal opinion per Mortgagee Letter 2019-06. CBC Mortgage Agency reminds the industry that FHA withdrew that letter in response to ligation. NONE of its provisions are in effect. As part of the litigation, FHA acknowledged that there are no jurisdictional limitations on government DPA providers (click here). Relatedly, industry rumors indicate that HUD plans to limit national government DPA programs by redefining what it means to improperly “financially benefit” from a transaction. Any new restrictions or definitions imposed by FHA on government DPA must be done through notice-and-comment rulemaking, which requires public participation and typically takes 12-24 months to complete. To support any new rule, HUD must first collect loan performance data on individual programs. Since such a rule would significantly impact tribes, HUD must also conduct meaningful tribal consultation.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/10112019-mortgage-pricing.aspx

 

October 10, 2019

Chenoa Fund: Thumbs Up from Lenders, Part Two: One of our goals is to serve as an augmentation to state-based homebuyer assistance programs, which have restrictions that tend to limit eligibility. Our recent survey of 735 lenders suggests we’ve found an important niche, and that loan officers appreciate our efforts to keep paperwork and fees minimal and rates and credit score requirements reasonable. As one lender told us, “Local and state DPA programs should not have a monopoly on down payment assistance programs. The market benefits when borrowers have many choices.” Lenders also appreciate that our service and products are consistent nationwide, allowing them to learn and follow just one set of rules: “The availability of this program in all 50 states is a huge advantage. State-specific programs require learning separate guidelines or certification, which is a barrier for many originators’ ability to offer down payment assistance.”

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/10102019-book-for-loan-officers.aspx

 

 

October 4, 2019

“Chenoa Fund: Thumbs Up from Lenders, Part One: Earlier this year, we surveyed 735 lenders about our program. The goal: to find out what we’re doing right and what we can do better. To say we’ve been touched by the results would be a major understatement. The most heartening finding? Three out of four lenders said their customers could not have purchased homes without our DPA help. Here’s how two lenders summed it up: ‘Most of the people I have been able to help with the Chenoa program are minority buyers who don’t have a family member who can gift them funds for a down payment. This program has been a huge blessing.’ And this: ‘There are many good people [who] … pay their bills on time but just have a hard time setting aside savings … These people deserve a chance too.’ We couldn’t agree more.”

 

Read on the Chrisman Report:

https://www.robchrisman.com/oct-4-lo-jobs-valuation-dpa-correspondent-products-bid-tape-primer-economic-news-moving-rates/

August 30, 2019

“DPA – Where do we go from here? Part 9 in Series: Of all the barriers keeping people from becoming homeowners, one seems most daunting of all: the down payment. A report by The Urban Institute notes that 2/3rds of renters cite “down payment” as a key obstacle. We must decide if supporting DPA is in the best interests of our industry and nation. Will DPA lead to riskier lending, as critics warn? Can it be provided responsibly? Can assistance be used to lift minorities out of intergenerational poverty, providing them the best chance possible of creating a better future? CBC Mortgage Agency is aware of concerns surrounding DPA. We take extraordinary steps – from underwriting restrictions to pre/post-purchase borrower education and loan performance monitoring – to ensure sound lending practices and acceptable performance. DPA, done responsibly, helps families escape the financial trap of perpetual renting and build stable, prosperous futures. That’s an outcome we should get behind.”

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08302019-new-lenders.aspx

 

August 27, 2019

“We have clarity on DPA, for now. Here is the 8th in a Series on DPA. HUD has provided clarity to the industry: Last Friday, HUD filed a motion to resolve the litigation bought against it because of ML 2019-06. HUD’s motion included a sworn declaration from a HUD official, Julie Shaffer, stating ‘HUD does not have a basis to enforce jurisdictional limitations on governmental entities providing down payment assistance…HUD will not issue any policies with respect to jurisdictional limitations with respect to the provision of DPA other than through rulemaking.’ CBCMA continues to provide DPA responsibly, in a manner that protects the MMIF, taking great care to ensure that FHA loans perform well. We’ve helped more than 16,000 creditworthy borrowers achieve homeownership, and we’re proud of our record. DPA, done responsibly, helps families escape the financial trap of perpetual renting and build stable and prosperous futures. That’s an outcome we should all get behind.”

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08272019-politics-and-mortgage-rates.aspx

 

August 23, 2019

Support for/against HUD Mortgagee Letter 2019-06 (7th in series on DPA). “At CBC Mortgage Agency, we watched reaction to HUD’s new rules with interest, and dismay. Eight states came out in favor of the proposed policy, choosing to stifle consumer choice rather than face competition. The losers? Americans needing help moving up the housing ladder. We joined NCSHA in an effort to collaborate with state HFAs to establish markets for DPA paper through efforts like the CRA Note Exchange. But some states prefer regulatory monopolies. They’ve even sued organizations seeking to provide DPA in their domains. The Chenoa Fund offers one set of guidelines and funding processes nationwide. Multiple internal pricing surveys show our pricing to consumers is better by one-eighth percent, and our process is simpler for lenders. Several states have improved pricing to compete with the Chenoa Fund program. Bravo. That’s vivid evidence that marketplace competition is benefiting consumers.”

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08232019-liar-loans.aspx

 

August 20, 2019

Background on Lawsuit against HUD over Mortgagee Letter 2019-06: Part 6 in Series on DPA. As explained in the original press release, CBC Mortgage Agency sued HUD on grounds that the agency failed to follow rulemaking processes required by federal law. HUD also failed to follow an executive order and its own policy, which requires federal agencies consult with tribes before making policy or rule changes which affect Native Americans. Additionally, HUD didn’t notify Congress before issuing its new rules, nor weigh the social costs of its discriminatory new policy. Regardless of one’s position on the merits of down payment assistance, it’s clear that HUD erred in issuing Mortgagee Letter 2019-06. Secretary Ben Carson admitted before the House Committee on Financial Services that HUD should collect data before moving forward with new policy. (See video at 2:21:30). We welcome rescission of ML 2019-06, and seek a constructive dialogue on DPA.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08202019-mortgage-webinars.aspx

August 16, 2019

Part 5 in a series on DPA: Earlier this year, HUD issued Mortgagee Letter 2019-06 that restricted the use of DPA by governmental entities like states, cities, or tribal governments. The letter purported to make several changes to existing law, and the upshot was trouble. As the NCSHA rightly pointed out, the HUD decree caused several state HFAs to suspend their programs. Issued without notice and comment, HUD’s letter also stranded many would-be borrowers right in the middle of the home buying process. Convinced the letter had been issued in violation of proper procedure, CBC Mortgage Agency sued in federal court, securing a preliminary injunction while the case is heard. On August 13, 2019, Mortgagee Letter 2019-12 was issued, rescinding HUD’s prior letter. CBC Mortgage Agency welcomes this latest HUD notice and hopes this signals the beginning of a constructive dialogue on the merits of responsible DPA.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08162019-yield-curve-and-mortgage-rates.aspx

August 13, 2019

Chenoa Fund: Creating a Legacy of Responsible Borrowers: Part 4 in a series on DPA The Chenoa Fund strives to create successful borrowers over the long term to ensure that underlying FHA mortgages perform well. What’s our approach? One key is creating incentives to ensure homebuyers make payments on time. A large proportion of the second mortgages provided in connection with the Chenoa Fund program are forgivable, and carry no interest or payment obligations. To ensure borrowers feel they have “skin in the game,” these seconds are only forgiven after borrowers make 36 consecutive on-time payments on their first mortgage. This structure encourages homeowners to prioritize payment of their loan and stay on track. A second key is our 12 month post-purchase program for borrower success, in which we stay in regular touch with the borrower to help them transition to homeownership.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08132019-mortgage-rates.aspx

August 9, 2019

Day 3 – Responsible DPA: Part 3 in a Series on DPA. CBC Mortgage Agency is committed to ensuring proper loan performance for homebuyers we help with DPA. With reasonable credit controls and borrower education through a HUD-approved provider, we help buyers realize the dream of responsible homeownership. Borrowers appreciate the effort, giving us high marks for staying in touch through phone calls, emails, and texts for 12 months after closing. See feedback we’ve received from borrowers and lenders. Perhaps that’s one reason our loan performance scorecard is better than national averages. CBCMA provides DPA under rules that are stricter than standard FHA underwriting requirements. When managed properly, DPA has an important place in the real estate ecosystem, especially when it’s provided along with stellar borrower resources to ensure the greatest possible success, such as is offered through the Chenoa Fund Program.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08092019-loan-application.aspx

 

August 7, 2019

Day 2 – Chenoa Fund Builds Communities: Part 2 in a Series on DPA. Offered by CBC Mortgage Agency, the Chenoa Fund has enabled thousands of borrowers to realize the dream of homeownership. Our broader goal is to use innovation to help America resolve its affordable housing crisis. How? CBCMA created the CRA Note Exchange as an online marketplace allowing purpose-driven entities to gain liquidity for their paper and receive cash to further their missions. Already, over 4,000 loans have traded on the platform, helping groups such as Habitat for Humanity. CBCMA also has partnered with minority faith-based churches to hold seminars on homeownership, and co-founded a workforce housing opportunity zone fund to address affordable housing needs in gentrifying areas such as Baltimore. In addition, CBCMA partnered with CityVision Homes to promote neighborhood revitalization by renovating blighted properties. Revenues from these and other initiatives fund critical economic development projects for the Cedar Band of Paiutes in Southern Utah.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08072019-second-mortgages.aspx

August 1, 2019

Day 1 – In defense of Down Payment Assistance, rapidly increasing home prices coupled with student debt and rising rents are making it increasingly tough for minorities and millennials to save up for a down payment. Should these groups be allowed to receive DPA? Absolutely, if the assistance is provided responsibly. A recent study by the Urban Institute found that minorities have 1/10 the household net worth as white Americans, a gap that makes them less able to help their children purchase a home. Not surprisingly, recent Census data showed African-American homeownership at a decades low rate – 40.6%. “Chenoa Fund provides DPA responsibly, with careful screening and pre-purchase homebuyer counseling. We’re proud that over half of our assistance helps minorities. This is the first in a multi-part series examining issues surrounding the proper role of DPA.” Click hereto learn about Chenoa Fund’s innovative programs designed to help minorities and millennials.

 

Read on the Chrisman Report:

http://www.mortgagenewsdaily.com/channels/pipelinepress/08012019-mortgage-training.aspx

 

 

 


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