House Introduces Bill to Ban ‘Abusive’ Trigger Leads, MBA Backs

A bipartisan effort in the U.S. House of Representatives has introduced the Homebuyers Privacy Protection Act, also known as House Resolution (H.R.) 7297, targeting the “abusive” use of mortgage trigger leads. Sponsored by Rep. John Rose (R-Tenn.) and co-sponsored by Rep. Ritchie Torres (D-N.Y.), the bill aims to amend the Fair Credit Reporting Act to prevent consumer reporting agencies from furnishing consumer reports in certain circumstances. Trigger leads exploit consumers’ financial inquiries, turning them into commodities sold without consent, noted Torres, emphasizing the need to safeguard consumer privacy and choice in the mortgage process.

Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit announced the organization’s support for the measure, aligning with the previously introduced Senate version. Broeksmit emphasized the importance of legislative reforms to halt the abusive use of mortgage trigger leads while preserving their value in appropriate circumstances. With bipartisan support in both chambers, there’s a call for swift reconciliation between the House and Senate versions and passage to allow President Biden to sign it into law, aiming to address concerns about abusive trigger leads that have garnered sympathy from lawmakers but require congressional intervention due to limitations in the Consumer Financial Protection Bureau’s authority.

Mortgage Applications Decline in MBA Weekly Survey

According to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending February 9, 2024, mortgage applications saw a 2.3% decrease compared to the previous week. The Market Composite Index, which measures mortgage loan application volume, also decreased by 2.3 percent on a seasonally adjusted basis. However, the index increased by 2% from the previous week on an unadjusted basis. The refinance index dropped by 2%, while the purchase index, seasonally adjusted, experienced a 3% decline from the prior week.

The share of refinancing activity decreased to 34.2% of total applications, down from 35.4% the previous week. Notably, the adjustable-rate mortgage share of activity increased to 7.0% of total applications. Additionally, while the FHA share of total applications slightly increased to 13.4%, the VA share decreased to 13.1% from 14.1% the week before, with the USDA share remaining unchanged at 0.4%.

Redfin: 89% of U.S. Homeowners Have Sub-6% Mortgage Rates

As mortgage rates continue to hover near the 6% threshold, the real estate market has seen a noticeable slowdown. However, a recent study by Redfin reveals that nearly 89% of homeowners still enjoy interest rates below 6%, offering some relief compared to the current high of 6.66%. Additionally, over 78% of borrowers have rates below 5%, with a fortunate 22.6% benefiting from rates below 3%. Despite the allure of low rates, many homeowners are hesitant to sell, contributing to a housing shortage. However, some are driven to sell due to personal circumstances such as divorces, job changes, or space constraints.

While rates drop, sellers’ reluctance to list their homes is expected to ease, potentially increasing available listings. However, concerns linger regarding finding a suitable replacement property amidst the ongoing housing shortage. Moreover, sellers are coming to terms with the unlikelihood of rates returning to historically low levels, fostering a sense of urgency among some to sell. Meanwhile, prospective buyers are advised to explore mortgage options carefully to secure favorable rates, with platforms like Credible facilitating comparisons and preapproval processes within minutes without affecting credit scores.