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Judge Nancy G. Edmunds of Federal District Court in Detroit has ruled that one of the nation’s largest providers of seller-financed homes must comply with a demand for documents and other information from the Consumer Financial Protection Bureau (CFPB), the <em>New York Times</em> reported today. The CFPB has been looking into whether the terms of some of these sales violated federal truth-in-lending laws. The agency filed a lawsuit in November after one such provider, Harbour Portfolio Advisors of Dallas, refused to comply with an administrative subpoena. Harbour Portfolio had argued that the agency had no authority to investigate its sale of formerly foreclosed homes to poor people through high-interest installment payment contracts — often referred to as contracts for deed.

CoreLogic released data yesterday showing that the number of foreclosures completed in December fell 40 percent from a year earlier, NationalMortgageNews.com reported. There were a total of 21,000 completed foreclosures in December, down from 36,000 the year before, according to CoreLogic. The national foreclosure inventory was 329,000 in December, representing a 30 percent drop from 467,000 homes in 2015. Overall, 0.8 percent of all homes with a mortgage were in foreclosure in December, down from 1.2 percent the previous year. The number of mortgages in serious delinquency, which CoreLogic defines as 90 days or more past due including loans in foreclosure or REO, fell by 19.4 percent year over year to 1 million mortgages, which equates to 2.6 percent of all mortgaged properties. This is the lowest number of homes in serious delinquency since August 2007, but some parts of the country were experiencing more defaults than others. "While the decline in serious delinquency has been geographically broad, some oil-producing markets have shown the effects of low oil prices on the housing market," Frank Nothaft, chief economist for CoreLogic, said in a news release. "Serious delinquency rates rose in Louisiana, Wyoming and North Dakota, reflecting the weakness in oil production."

In September 2008 during the height of the financial crisis, the government put the Fannie Mae and Freddie Mac into receivership and provided a $187.5 billion bailout. Fast-forward almost nine years, and the unfortunate reality is that the government-sponsored entities (GSEs) are still the largest suppliers of mortgages today, according to a New York Times DealBook commentary yesterday. In 2016, Fannie and Freddie issued mortgage-backed securities worth $974 billion, up 18 percent from 2015. Fannie Mae recently guaranteed $1 billion of debt backed by Invitation Homes, the single-family rental business owned by the giant private equity firm Blackstone. In making the guarantee, Fannie is taking a big leap into the growing home rental market, in which Blackstone is the biggest player. The guarantee was disclosed with Blackstone’s sale of 25 percent of Invitation Homes in an initial public offering last week. Fannie is making the guarantee on collateral of about 50,000 rented single-family homes that Blackstone bought in foreclosure in the last few years. Never mind that the deal is a big subsidy for Blackstone and Invitation Homes. The downside — the government being liable for at least part $1 billion if there is a default — is real, according to the commentary.

American consumer credit climbed less than forecast in December, closing out the smallest annual increase in household borrowing since 2013, Bloomberg News reported yesterday. The $14.2 billion advance last month followed a revised $25.2 billion jump in the prior month, Federal Reserve figures showed Tuesday. For all of 2016, borrowing increased 6.4 percent. While consumer debt was restrained in December by a smaller advance in credit-card balances, revolving debt last year increased by the most since 2007. Non-revolving credit, which includes loans for cars and education, continued to climb on a monthly basis although it cooled in 2016. Revolving debt, which includes credit cards, rose by $2.4 billion following an $11.8 billion increase, the Fed’s report showed. Non-revolving debt, such as that for college tuition and the purchase of vehicles and mobile homes, climbed $11.8 billion after a $13.4 billion increase.

Despite Fitch Ratings’ analysts suggesting recently that reforming Fannie Mae and Freddie Mac may be slowed by the Trump administration’s other legislative efforts, one of President Trump’s top economic advisors said on Friday that Fannie and Freddie reform will be high on Steve Mnuchin’s agenda once he is confirmed as Secretary of the Department of the Treasury, HousingWire.com reported. Gary Cohn, the White House National Economic Council Director and a former top executive at Goldman Sachs, said that government-sponsored enterprise reform is “definitely on our agenda.” According to Cohn, while Mnuchin awaits confirmation amid a fight in the Senate, he has been focusing on GSE reform. Cohn said that the Trump administration “definitely” has plans to work on GSE reform, adding that he hopes Mnuchin is approved by the Senate as soon as possible.

A powerful housing trade group is wasting no time in pushing the Trump administration and Republican-led Congress to address one of the last unresolved issues from the financial crisis, outlining a proposal yesterday to overhaul mortgage-finance giants Fannie Mae and Freddie Mac, Bloomberg News reported. The Mortgage Bankers Association plan would make Fannie and Freddie privately-owned utilities and cap their returns on capital. It would also turn the government’s implicit backstop of the companies into an explicit guarantee of the mortgage-backed securities they sell to investors.