Daily Dose

As home prices continue to rise—albeit slower than last year—many commentators insist that fears of a new bubble in the making are overblown. However, a new survey released Tuesday suggests lenders aren't buying it. In a survey of U.S. and Canadian mortgage lenders, FICO found 56 percent of respondents directly involved in the industry are concerned that "an unsustainable real estate bubble is inflating."

Activity in the secondary mortgage market picked up modestly in June, but FBR Capital Markets warns lenders against celebrating just yet. Based on the total issuance of $211 billion in the second quarter, the investment firm estimates total originations were $264 billion for the quarter, just above the $263 billion estimate.

The Mortgage Bankers Association (MBA) reported Tuesday a 0.6 percent increase in its Mortgage Credit Availability Index (MCAI) from May to June, putting the index at 115.8. The group links the increase in the headline index to "a slight net loosening in lender criteria regarding Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans with respect to minimum credit scores and maximum loan-to-value (LTV) ratios."

In the post-crisis era, lenders face the challenge of striking a delicate balance between judicious lending practices and access to financing for creditworthy consumers. The deluge of mortgage defaults and foreclosures that has plagued the industry over the past half decade was set into motion by a subprime mortgage crisis characterized by lax lending standards, easy credit, and higher-risk mortgage products.

SunTrust Banks, Inc., announced that it would pay up to $320 million to halt a criminal investigation into whether it had dealt inappropriately with homeowners who were looking to take advantage of the Home Affordable Modification Program (HAMP). "Resolving this legacy matter enhances our ability to focus on the future and support the continued housing recovery," said Jerome Lienhard, SunTrust Mortgage, Inc., president and CEO.

In a survey of nearly 15,000 U.S. adults, Gallup found the daily amount spent by Americans was an average $91, down from a six-year high of $98 the month prior and about level with last year. The June record for average daily spending is $104, achieved in 2008. Gallup writer Rebecca Riffkin said June's average "suggests a mixed bag for the economy."

In its newest monthly prime jumbo trends report, Fitch Ratings finds weighted average combined loan-to-value ratios for residential mortgage-backed securities (RMBS) deals made in the last few have fallen substantially, fueled by ongoing gains in house prices. Together, the improvement in equity positions combined with stronger borrower credit profiles has helped keep delinquency down, Fitch reports.

Looking ahead to the next 12 months, 46 percent of Americans polled expect home prices to rise, Fannie Mae reported in its latest National Housing Survey. That share is down from 48 percent in May and 50 percent in April. On average, respondents anticipate a home price change of 2.4 percent, down half a percentage point from the previous two surveys and the lowest forecast since January, when news of a slowdown in price gains affected attitudes.

GFS Capital Holdings, formerly Greenlight Financial Services, settled a claim with HUD regarding discrimination of women on maternity leave. The company agreed to pay a total of $48,000 to individuals against which it allegedly discriminated. HUD investigated Greenlight after a family complained the company denied their refinance loan application because the wife was on maternity leave at the time.

A report released last week by the Office of the Inspector General (OIG) for the Federal Housing Finance Agency (FHFA) outlined the possible risks that nonbank servicers could pose to the greater housing market. To illustrate a point, the OIG pointed to a specific instance where a nonbank servicer had fallen below the minimum threshold capital requirement required by Fannie Mae. The servicer was then prevented from acquiring the right to service Fannie Mae mortgages. Though the OIG did not name names, people familiar with the matter revealed to the Wall Street Journal that the servicer in question was Nationstar.