IMA Prime Times: August 2019 Iowa Mortgage Association

August 2019

What Does Affordable Housing Mean for Iowa?
With all this national talk of affordable housing needs and a reduction in inventory, I often wonder what does it really mean for the state of Iowa? According to, the median income for Iowa households in 2017 was $58,570. If we use the average housing ratio of 28%, this means that an affordable home in Iowa needs to have a payment of $1,366. Using an interest rate of 4% and $350 monthly for taxes and insurance, that means that the mortgage on this affordable housing payment would be around $200,000. So how many $200,000 homes are available? According to the July 19, 2019 report issued on the Iowa Realtors website, the median sales price was $180,000. This was up from $175,000 in June of 2018. There was a total of 4,513 homes sold in June of 2019 in the state. 

So, is inventory down or are the homes for sale not meeting the standards that Iowa buyers are seeking? According to the June report from Iowa Realtors, there are 4.3 months of inventory available to the Iowa market versus 4.1 in June of last year. The whole market shows us that the average time from listing to sale is at 59 days. While we hear the stories throughout the state of homes flying off the shelves as soon as they are listed, the average is up from 57 days in June of 2018. 

So how do we stack up against other states? According to U.S. News & World Report, Iowa ranks No. 1 for housing affordability and 13th in total cost of living. Iowa is not only a great place to live but also very strong in its affordable housing offerings. Together we do great things to offer affordable financing options and diverse options for homebuyers to make the dream of homeownership possible. While other states struggle to recruit new buyers to their market, Iowa has many reasons to market itself as a great place to live.

Laura Kay Sheely
Arch Mortgage Insurance

Register Now for the 2019 IMA Fall Conference
The 2019 Iowa Mortgage Association (IMA) Fall Conference will be Oct.7-9, at the Meadows Event Center in Altoona. With low rates, growing competition and new technology, it is more important than ever to keep with mortgage industry changes and today’s top issues. The IMA Fall Conference is designed to help you be a successful mortgage professional with sessions on mastering the sales process, mortgage compliance, building successful sales relationships and more. The conference will kick off with a golf outing at Copper Creek Golf Course in Pleasant Hill. Register for the conference.

Invite New Mortgage Pros to Crash the Conference
Do you know someone who is new to the mortgage industry? Invite them to crash the IMA Fall Conference Oct. 8-9 in Altoona. The IMA will be inviting 10 to 15 “young” mortgage professionals to the IMA Fall Convention. The IMA Conference Crasher will receive free admission to the conference, as well as have special meetings to enhance exposure to the IMA network. Anyone who has been in the mortgage business less than three years and has not previously attended an IMA conference in the past is welcome to apply. Managers can nominate staff members who are rising stars in the mortgage industry. All IMA Conference Crashers will be recognized throughout the conference with special name badge ribbons, t-shirts and an opportunity to connect with other IMA professionals. Applications can be completed online and are due by Aug. 30. Email Darcy Burnett or call her at 800-987-7365 with questions. 

HMDA Comment Periods Extended
The Consumer Financial Protection Bureau has extended the comment period on two separate requests for comments. 

  • On May 8, 2019, the CFPB published an Advance Notice of Proposed Rulemaking soliciting comments relating to the HMDA data points added by the 2015 HMDA rule. The ANPR requested feedback on which, if any, of the new or revised data points need additional clarification or fail to serve HMDA’s purpose as well as whether or not reporting certain business- or commercial-purpose transactions serves HMDA’s purpose. The original ANPR provided a 60-day comment period that ended on July 8, 2019. To allow interested persons more time to consider and submit their responses, the CFPB extended the comment period to Oct. 15, 2019.
  • On Aug. 1, 2019, the CFPB announced that it was reopening the comment period for certain aspects of the May 2019 Proposed Rule related to HMDA’s coverage thresholds. Specifically, the CFPB is requesting additional comments on the proposed changes to the permanent coverage threshold for closed-end mortgage loans and the proposed changes to the permanent coverage threshold for open-end lines of credit, taking into consideration the 2018 HMDA data, scheduled to be released to the public shortly. The CFPB also indicated in its Aug. 1 announcement that any final rule changes would not be finalized in time for an effective date of Jan. 1, 2020, and therefore is also requesting comments on the appropriate effective date for any change to the closed-end coverage threshold. Comments must be submitted by Oct. 15, 2019. 

Five New Questions Added to TRID FAQ
The Consumer Financial Protection Bureau added five new frequently asked questions to their series of FAQ related to the TILA-RESPA Disclosure rule. The new FAQ focus on providing Loan Estimates to consumers. Specifically, the FAQs address:
  • When the creditor is required to provide the LE.
  • If creditors can require consumers to provide additional information to obtain an LE.
  • If creditors can require consumers to provide verification documents in order to obtain an LE.
  • The LE requirements when a creditor receives a prequalification or preapproval request.
  • Requesting additional information or verification documents with preapproval or prequalification requests.
2020 Reg. Z Annual Adjustments Announced
The Consumer Financial Protection Bureau issued a final rule amending the regulation and official staff commentary to Regulation Z to adjust the annual threshold amounts for several provisions in Regulation Z. The revisions are based, where appropriate, on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2019. As of Jan. 1, 2020, the following threshold amounts will become effective:
  • For purposes of determining under § 1026.32(a)(1)(ii) the points-and-fees coverage test under HOEPA, if the total loan amount for a transaction is $21,980 or more, and the points-and-fees amount exceeds 5% of the total loan amount, the transaction is a high-cost mortgage. If the total loan amount for a transaction is less than $21,980, and the points-and-fees amount exceeds the lesser of the adjusted points-and-fees dollar trigger of $1,099 or 8% of the total loan amount, the transaction is a high-cost mortgage.
  • In order for a covered transaction to be deemed a qualified mortgage per § 1026.43(e)(3), the transaction's total points and fees cannot exceed 3% of the total loan amount for a loan amount greater than or equal to $109,898; $3,297 for a loan amount greater than or equal to $65,939 but less than $109,898; 5% of the total loan amount for loans greater than or equal to $21,980 but less than $65,939; $1,099 for a loan amount greater than or equal to $13,737 but less than $21,980; or cannot exceed 8% of the total loan amount for loans less than $13,737.
The final rule adjusting these thresholds can be found in the Aug. 1, 2019 Federal Register

CFPB Seeks Comments on Agency QMs
The Consumer Financial Protection Bureau issued an Advance Notice of Proposed Rulemaking seeking feedback on the upcoming expiration of the temporary “GSE patch,” which grants Qualified Mortgage status to loans eligible to be purchased or guaranteed by Fannie Mae or Freddie Mac. The CFPB noted that it is currently planning to allow the GSE patch to expire as scheduled in January 2021, “or after a short extension.” Accordingly, the CFPB is seeking comments on possible changes to the ability-to-repay rule, including whether to revise the definition of a Qualified Mortgage. Specifically, the CFPB asked for input on the current debt-to-income ratio, as well as potential alternatives for determining borrowers’ ability to repay. Comments are due by Sept. 16, 2019. 

2019 HousingIowa Conference Wil Be Sept. 4-6 in Cedar Rapids
The Iowa Finance Authority will host Bring it Home — the 2019 HousingIowa Conference Sept. 4-6 at the Cedar Rapids DoubleTree. The three-day event will feature a message of resiliency from legendary Notre Dame football player and the inspiration behind the RUDY blockbuster Rudy Ruettiger. The event will also feature the HousingIowa Awards honoring the best in Iowa housing innovation and leadership as well as sessions featuring a wealth of national and state leaders addressing timely topics related to housing in Iowa. Learn more or register.

New Income Limits Established for USDA Rural Development Home Loan Programs
New income limits for USDA Rural Development’s guaranteed home loan and direct home loan programs were recently published. The typical income limits for a one-to-four-person household applying for USDA’s guaranteed home loan program is $86,850. The limit increases to $114,650 for households with five to eight people. USDA Rural Development’s direct home loan program now bands household limits in the same one-to-four and five-to-eight sizes. While each county in Iowa has their own income limits, a typical direct home loan limit for a one-to-four-person household is $55,500 and five-to-eight-person household is $73,250. USDA’s Guaranteed Underwriting System and income eligibility calculator have been updated to the new income limits. This information can be found on the eligibility website.

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