The ranking minority member of the Senate Committee on Banking, Housing, and Urban Affairs, Sen. Sherrod Brown, D-OH, has criticized the Consumer Financial Protection Bureau’s failure to monitor financial services institutions for violations of the Military Lending Act.

The MLA was passed in 2006 with broad bipartisan support and prevents predatory lenders from taking advantage of active-duty service members through a number of protections including interest rate cap on loans to service members and their families.

[caption id="attachment_9328" align="alignright" width="237"] Sen. Sherrod Brown[/caption]

“The CFPB is neglecting its duty to protect the women and men who serve and protect our country. The CFPB has broad authorities. Congress does not need to take action, the CFPB Director does,” said Brown.

The senator’s criticism of the CFPB, however, occurred on January 18. That was one day after Kathleen Kraninger, director of the CFPB, had asked Congress to grant the CFPB clear authority to supervise financial institutions for compliance with the Military Lending Act.

“The bureau is committed to the financial well-being of America’s service members. This commitment includes ensuring that lenders subject to our jurisdiction comply with the Military Lending Act so our service members and their families are provided with the protections of that law,” said Kraninger. “That’s why I have asked Congress to explicitly grant the bureau authority to conduct examinations specifically intended to review compliance with the MLA. That authority would complement the work the bureau currently does to enforce the MLA."

Kraninger thought legislation proposed in the House of Representatives, H.R. 442, that grants the bureau such authority was a good first step, though she would like to see bipartisan legislation advances as quickly as possible in the 116th Congress.

The CFPB transmitted a legislative proposal to the speaker of the House of Representatives and the vice president in his capacity as president of the Senate, and shared copies with the chairs and ranking members of the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services. 

During former Director Richard Cordray’s tenure, the CFPB used its supervisory authority to proactively examine banks and non-bank lenders for violations of protections under the MLA, according to a statement from Brown.

Under Mick Mulvaney, the CFPB ended those examinations without the cooperation of the Department of Defense and said it would reconsider whether the CFPB has the authority to examine lenders for compliance with the MLA. Kraninger affirmed that plan, meaning the CFPB will only enforce for violations of the MLA if some other action brings the matter to the Bureau’s attention, according to the statement.

Despite rising seasonally in recent months, only 3.9 percent of mortgages were delinquent as of December month-end, the lowest year-end total since Black Knight began reporting the figure in 2000.

The national foreclosure rate, while also edging seasonally upward in December, posted the lowest year-end figure since 2005, with just 0.52 percent of mortgages in active foreclosure, according to “The First Look Report” from Black Knight.

However, foreclosure starts edged slightly upward with 46,300 starts reported for the month, a 2.4 percent uptick compared with the previous month.

Foreclosure starts were up 4 percent in December 2018 compared to the same period a year earlier, because of a hurricane-related moratorium on foreclosure starts in late 2017. Prepayments remained nearly unchanged in December, holding near the 10-year low set in November

Additional takeaways from the report are as follows:

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 3.88%
Month-over-month change: 4.71%
Year-over-year change: -17.55%

Total U.S. foreclosure pre-sale inventory rate: 0.52%
Month-over-month change: 1.19%
Year-over-year change: -19.23%

Total U.S. foreclosure starts: 46,300
Month-over-month change: 2.43%
Year-over-year change: 4.04%

Monthly prepayment rate (SMM): 0.66%
Month-over-month change: 0.03%
Year-over-year change: -29.02%

Foreclosure sales as % of 90+: 1.38%
Month-over-month change: -22.47%
Year-over-year change: 12.29%

Number of properties that are 30 or more days past due, but not in foreclosure: 2,013,000
Month-over-month change: 88,000
Year-over-year change: -399,000

Number of properties that are 90 or more days past due, but not in foreclosure: 511,000
Month-over-month change: 1,000
Year-over-year change: -215,000

Number of properties in foreclosure pre-sale inventory: 271,000
Month-over-month change: 3,000
Year-over-year change: -60,000

Number of properties that are 30 or more days past due or in foreclosure: 2,283,000
Month-over-month change: 90,000
Year-over-year change: -460,000

Existing-home sales declined in the month of December, after two consecutive months of increases. None of the four major U.S. regions saw a gain in sales activity last month.

Total existing-home sales, or completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.4 percent from November to a seasonally adjusted rate of 4.99 million in December, according to the National Association of Realtors. Sales are now down 10.3 percent compared with December 2017, 5.56 million.

"The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today,” said Lawrence Yun, chief economist at the National Association of Realtors. “Now, with mortgage rates lower, some revival in home sales is expected going into spring."   

[caption id="attachment_9286" align="alignright" width="214"] Lawrence Yun[/caption]

The median existing-home price for all housing types in December was $253,600, up 2.9 percent from December 2017, $246,500. December's price increase marks the 82^nd straight month of year-over-year gains.

Total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but it represents an increase from 1.46 million a year ago. Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months compared to a year ago.

Properties typically stayed on the market for 46 days in December, up from 42 days in November and 40 days a year ago. Thirty-nine percent of homes sold last month were on the market for less than a month.

"Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home-price appreciation," says Yun. "But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points."

First-time buyers were responsible for 32 percent of sales in December, down from last month 33 percent, but the same as a year ago. NAR's 2018 Profile of Home Buyers and Sellers, released late last year, revealed that the annual share of first-time buyers was 33 percent.  

All-cash sales accounted for 22 percent of transactions in December, up from November 21 percent and a year ago, 20 percent. Individual investors, who account for many cash sales, purchased 13 percent of homes in December, the same as November but down from a year ago, 16 percent.

Distressed sales^, foreclosures and short sales, represented 2 percent of sales in December, unchanged from 2 percent last month and down from 5 percent a year ago.

Single-family and Condo/Co-op Sales
Single-family home sales sit at a seasonally adjusted annual rate of 4.45 million in December, down from 4.71 million in November, but is 10.1 percent below the 4.95 million sales pace of a year ago. The median existing single-family home price was $255,200 in December, up 2.9 percent from December 2017.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 540,000 units in December, down 12.9 percent from last month and down 11.5 percent from a year ago. The median existing condo price was $240,600 in December, which is up 2.3 percent from a year ago.

Regional Breakdown 
December existing-home sales in the Northeast decreased 6.8 percent to an annual rate of 690,000, 6.8 percent below a year ago. The median price in the Northeast was $283,400, which is up 8.2 percent from December 2017.

In the Midwest, existing-home sales fell 11.2 percent from last month to an annual rate of 1.19 million in December, down 10.5 percent overall from a year ago. The median price in the Midwest was $191,300, unchanged from last year.

Existing-home sales in the South dropped 5.4 percent to an annual rate of 2.09 million in December, down 8.7 percent from last year. The median price in the South was $224,300, up 2.5 percent from a year ago.

Existing-home sales in the West dipped 1.9 percent to an annual rate of 1.02 million in December, 15 percent below a year ago. The median price in the West was $374,400, up 0.2 percent from December 2017.