Complaints from lenders about a new Fannie Mae policy that requires lenders to secure a borrower’s “refreshed” credit report just prior to a home purchase has resulted in the lending giant pulling the new rule from its website.

According to a Washington Post report, Fannie Mae introduced a new policy this summer that “encourages” lenders to retrieve a borrower’s updated credit report just before a loan closes to see if the borrower has taken on extra debt since applying for the loan.

Lenders say the new policy creates logistical nightmares and could trip up home purchases at a time when consumers and investors are showing more confidence in the U.S. housing market.

In response, Fannie Mae says it is reviewing the policy, which it has removed from its website, and will offer additional guidance by the end of July. Fannie said it was never its intent to tell lenders they were required to perform the additional credit check on all loans, just a suggestion on a “tool they could use”.

The Post story noted that until Fannie Mae clarifies its position on “refreshed reports”, lenders are nervous about the potential consequences, including delays that could prove costly to buyers, especially if they are purchasing foreclosures or participating in a short sale. Those types of purchase contracts can carry harsh penalties for late closings.

Deputy Treasury Secretary Neal Wolin told the Securities Industry and Financial Markets Association (SIFMA) conference in New York recently that Treasury will not propose housing finance reform measures until 2011, and will probably do so in conjunction with the agency’s enforcement of the new financial reform law just passed by the Senate and due to be signed by President Obama next week.

However, several conference attendees question whether Treasury can implement housing finance reform at the same time it is implementing the most sweeping changes to the country’s finance system since the 1930s.

Both sides of the political aisle endorse the need for reform, especially for crippled lending giants Fannie Mae and Freddie Mac, but no one has yet developed a workable plan that would not inflict more harm on the still-sagging housing market.

Congress continues to be leery of implementing big changes that could upset the economic recovery since Freddie, Fannie and the FHA provide the majority of funding for American homebuyers.

Deputy Treasury Secretary Neal Wolin’s keynote address to the SIFMA conference can be read here.

RealtyTrac reports that with 528,000 foreclosures in the first half of 2010, it is likely that more than one million American homeowners will lose their homes to foreclosure by the end of the year.

If true, that number will be 10 percent above the number of foreclosures in 2009, a number that a RealtyTrac executive Rick Sharga called “unprecedented.”

Although foreclosure notices have declined in the past three months, Sharga said that this is due to lenders managing the rate of how fast foreclosures are processed so they can better manage their inventories of foreclosed properties.

According to Lender Processing Services, it takes approximately 15 months for a home loan to go from one month late to that property being foreclosed and sold.

With that rate it mind, Sharga says it could take lenders as long as three years just to deal with their current inventory of foreclosures.

For the full report, go here.

According to Capital Economics, a Toronto-based independent macroeconomic research firm, a double dip in the U.S. housing market is beginning to show itself.

In addition, the Double Dip Begins report found that for every home currently on the market, there are two more waiting to be sold.

In an article at HousingWire.com, the report author Paul Dales noted that, “The expiration of the homebuyer tax credit at the end of April has triggered a double-dip in the housing market, with new home sales falling particularly sharply in May. The only reason why existing home sales did not fall significantly is because they are measured at the contract closing, rather than signing stage.”

Dales’ research also notes that both the foreclosure inventory rate and the mortgage delinquency rate rose in the first quarter, meaning that shadow inventory rose to nearly 7.8 million properties, clearly dwarfing the 3.9 million homes already on the market.

For the full article, go here.

Architecture trade group the American Institute of Architects said in a press release issued on July 14 that commercial real estate construction is expected to decrease by more than 20 percent this year and will only see a marginal increase of just over three percent in 2011.

The AIA says that, even with modest improvements in the economy, poor CRE construction conditions persist because of oversupply, weak demand, a continued decline in commercial property values and a tight credit market.

When things do begin to turn around, the retail and hotel sectors are expected to see the strongest growth, according to AIA Chief Economist Kermit Baker, PhD.

For 2010, the AIA says that hotel construction will be down over 43 percent, office construction will lag 29 percent, retail will be down 25 percent and industrial space construction will be off by 21 percent. All categories except industrial are expected to see single-digit growth by the end of 2011.

For the full AIA press release, go here.

Even in the face of a disastrous dip in new home sales in May (down 30%), many banks have hit the restart button on their mortgage lending operation.

JP Morgan Chase has announced that it will hire 1,200 new mortgage officers for what it anticipates will be a greater need in the not-so-distant future. Citizens Bank, which is owned by the Royal Bank of Scotland and operates in 12 states, is hiring an additional 400 loan officers over the next two years.

Chase said that it is locating new loan officers in the former Washington Mutual branches it acquired in 2008 and also plans to expand its lending operations to other cities it does not currently serve. Chase says its research shows that branch-based mortgages are less likely to default, so it is shifting to a branch-based lending strategy.

According to forecasts by the Mortgage Bankers Association, home loans for new purchases are expected to increase steadily over the next two years to $916 billion, from an expected $725 billion this year. However, MBA forecasters say that refinanced loans will drop from $717 billion this year to $474 billion in 2012.

California Attorney General Jerry Brown has opened an investigation to protect tenants of properties that have been foreclosed on – a group he calls “the forgotten victims” of the housing market collapse.

Brown said that it is estimated more than one-third of all California foreclosures are rental units and that over 200,000 tenants have been displaced.

In a letter to banks, loan servicers, investors and law firms across the state, AG Brown said that his office has been petitioned to take action by more than 20 housing rights and public interest groups that cite illegal conduct and tenant harassment by banks, real estate agents and attorneys trying to fast-track evictions so properties can be sold.

Brown has asked the letter recipients to provide information on their foreclosure policies and procedures by July 19; he specifically requested details on how they “promote and preserve tenancies after foreclosure.”

Tenant advocacy groups say that tenant harassment and illegal evictions continue across California, even though the 2009 Protecting Tenants at Foreclosure Act specifically prohibits such actions.

Under the PTFA, tenants with a lease have the right to remain in their homes for the duration of the lease; those tenants without a lease have up to 90 days to vacate.

As the result of a post-purchase review of mortgage loan files that identified a number of appraisal issues, Fannie Mae has updated its Selling Guide with additional appraisal guidance.

The new policy requirements and clarifications concerning existing lender requirements – which take effect on all mortgage applications dated on or after Sept. 1, 2010 — have been added to a number of appraisal sections of the Selling Guide, including:

• Inclusion of interior photographs in the appraisal report
• Lender changes to the appraised value and guidance on addressing appraisal deficiencies
• Appraiser selection criteria
• Sources of comparable market data
• Selection of comparable sales
• Communication under the HVCC
• Seller concessions
• Treatment of personal property
• Market Conditions Addendum to the Appraisal Report (Form 1004MC)

A copy of the Fannie Mae Selling Guide updates on appraisal policies can be found here.

The National Association of Mortgage Brokers (NAMB) has sent an alert to its members urging them to urge their congressional representatives to oppose the national financial overhaul legislation that is scheduled for a vote in mid-July.

NAMB president Roy DeLoach told his membership that the new legislation would hurt competition in the mortgage market and put smaller mortgage brokers out of business.

The NAMB’s main bones of contention center around the cap on fees and the elimination of yield-spread premiums, which are deal payments mortgage brokers receive for steering borrowers to a certain type of loan product or rate.

Unsurprisingly, NAMB is getting push-back from consumer groups, who blame mortgage brokers in part for the subprime lending mess. However, DeLoach says that brokers are not to blame; in a Wall Street Journal article he noted, “Brokers did not invent these products. We didn’t underwrite these products. And we didn’t fund these products.”

The Mortgage Bankers Association said it is not actively opposing the legislation.

Part of the financial overhaul legislation package requires lenders to retain 5% of the credit risk on loans that carry fees higher than 3% in an effort to make it more difficult for brokers to load up loans with extra fees.

Commercial real estate loans – which went from a high of $230 billion in 2007 to just $3 billion two years later – are making a comeback as major bank players cautiously dip their toes back in the market, lured by more conservative underwriting and the perception that property values have bottomed out.

In the last month, there have been an estimated $5 billion in CRE loans generated on eight issues of commercial mortgage-backed securities. But lenders are still being choosy, with high occupancy, premier properties in major metro areas attracting lenders while smaller markets still struggle to find loans.

A senior managing director of CB Richard Ellis was quoted in a New York Times article as saying, “It really is a tale of two markets. There are those assets that have strong cash flow and there are those that don’t. Those that do will find a home in today’s market and have a robust relationship with lenders, insurance companies and conduits. And those that don’t, it’s almost as if you’re seeing them fall off a cliff.”

Leading issuers include JP Morgan Chase and the Royal Bank of Scotland; Citigroup said it is also poised to re-enter the commercial mortgage-backed market as investor response has exceeded supply.