Mortgages

Home prices dropped again on a monthly basis in October, exacerbating the loss in home equity among recent buyers, but the size of the falloff was the smallest since June.

Lenders that offer streamlined refinances in the future shouldn't be required to consider the borrower's income or employment status, according to the Mortgage Bankers Association. The trade group's comments were part of its response to a request for information on mortgage products that would support the financial stability of households.

However, a tiered pricing system will limit an inflation-driven increase to under 10% for a small group of originators.

"This is Han Solo in carbonite: This is a market that could stay frozen for quite some time," said Benjamin Keys, a real estate professor at the University of Pennsylvania's Wharton School.

Nonbanks will probably see the least change, while securitization lenders, depositories and REITs are likely to experience the most, an Urban Land Institute survey suggests.

The change, effective Dec. 21, is being put into place two years after it was first proposed.

The decline in loan activity and softening prices also helped drive down builder sentiment for the 11th month in a row.

The government mortgage-bond insurer's requirements that restrict investor involvement are likely the greatest challenge to finding more purchasers of MSRs, experts said at a servicing conference Monday.

The company was profitable on a net basis but took a comprehensive loss linked to market volatility's effect on mortgage bonds.

The government-sponsored enterprise put more money aside as mortgage interest rates rise and home prices start to decline.