Advanced Search Volume 9 - Number 24 November 4, 2016 The Department of Veterans Affairs has proposed to allow eligible veterans to purchase less than the minimum amount of mortgage life insurance coverage required for their VA loan to help them reduce out-of-pocket costs. The proposed rule is aimed at helping VA borrowers lower their…
Volume 9 - Number 20
September 9, 2016
Homebuyers in two housing markets encompassing 13 states relied more on FHA and VA than other types financing, according to a new industry study of new single-family homes started in 2015. A study by the National Association of Home Builders found, among other things, that government-backed purchase lending and other forms of non-conventional mortgage financing remained elevated in 2015. For example, homebuyers in the South Atlantic and West South Central regions favored FHA and VA loans over other types of home-purchase financing. States in the South Atlantic region include Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia. Washington, DC, is also in this region. West South Central states are comprised of Arkansas, Louisiana, Oklahoma and Texas. Together, the two regions accounted for more than 26 percent and 21 percent of the ...
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MCLEAN, VA--(Marketwired - Aug 31, 2016) - Freddie Mac (OTCQB: FMCC) today released its Multi-Indicator Market Index (MiMi), showing South Carolina and two additional metro areas -- Atlanta and Augusta, Georgia -- entering their historic benchmark levels of housing activity.
The national MiMi value stands at 85, largely unchanged from last month, indicating a housing market that's on the outer range of its historic benchmark level of housing activity, with a +0.08 percent improvement from May to June and a three-month improvement of +1.37 percent. On a year-over-year basis, the national MiMi value improved +5.76 percent. Since its all-time low in October 2010, the national MiMi has rebounded 42 percent, but remains significantly off from its high of 121.7.
Thirty-eight of the 50 states plus the District of Columbia have MiMi values within range of their benchmark averages, with Utah (97), Hawaii (96.9), Oregon (96.9), Montana (96.8) and Colorado (96.3) ranking in the top five with scores closest to their historical benchmark index levels of 100. Seventy-seven of the 100 metro areas have MiMi values within range, with Los Angeles, CA (99.8), Salt Lake City, UT (100.4), Honolulu, HI (98.9), Portland, OR (98.2) and Provo, UT (98.2), ranking in the top five with scores closest to their historical benchmark index levels of 100. The most improving states month over month were North Carolina (+0.91%), District of Columbia (+0.86%), Louisiana (+0.78%), Georgia (+0.77%), and South Carolina (+0.76%). On a year-over-year basis, the most improving states were Oregon (+12.28%), Colorado (+11.59%), Florida (+11.02%), Tennessee (+10.37%) and New Jersey (+10.31%). The most improving metro areas month over month were Charlotte, NC (+1.70%), Albany, NY (+1.53%), Syracuse, NY (+1.49%), Buffalo, NY (+1.43%) and Columbia, SC (+1.39%). On a year-over-year basis, the most improving metro areas were Orlando, FL (+16.85%), Denver, CO (+14.02%), Tampa, FL (+13.98%), Chattanooga, TN (+13.78%) and Dallas, TX (+13.77). In June, 42 of the 50 states and 84 of the top 100 metros were showing an improving three-month trend. The same time last year, 49 of the 50 states, and all of the top 100 metro areas, plus the District of Columbia were showing an improving three-month trend.
Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:
"Nationally, MiMi in June was largely unchanged at 85, marking a 5.76 percent year-over-year increase and the 50th consecutive month of year-over-year increases. Low mortgage rates and consistent job gains are helping to bolster homebuyer demand, which is reflected in the MiMi purchase applications indicator. Purchase applications, as measured by MiMi, rose 1.75 percent month over month in June to the highest level since December 2007."
The 2016 MiMi release calendar is available online.
MiMi monitors and measures the stability of the nation's housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 100 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture. The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.
For more detail on MiMi see the FAQs. The most current version can be found at FreddieMac.com/mimi.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for approximately one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.
In "Dreams from my Father", Barack Obama offered an admonition from Reverend Jeremiah Wright: "white folks greed runs a world in need. While getting a jumbo size anything usually means getting a good deal - especially if this comes to hamburgers and fries - it might not mean the best bargain in the case of mortgages, however. It sounds similar to and it is about as welcomed as a similar acronym. " Those words, extracted from a sermon by Reverend Wright, reflected a world view hostile to capital markets, influencing the man who does eventually end up being the 44th President of the United States. How much house do I qualify for? To have the best response to that question, you'll have to complete your financial homework.
Statistical analysis have shown that you will find millions of Americans for each state are actually homeless and has no financial institution to turn to reverse their condition. The last days were spent at home, on a stretcher in the lounge. (prospect), I know you may be thinking you've found a much better deal elsewhere, but did you review carefully whatever they offered? How do you know you could possibly get that rate (given your financial situation)? Are they simply wanting to bait and switch you? Mr. (prospect), I know you may be thinking you've found a much better deal elsewhere, but do you review carefully the things they offered? How do you realize you will get that rate (given your financial situation)? Are they simply trying to bait and switch you? Mr. How long will it take for you both to make a decision? .
Now mortgage cycling may not be for everyone. Tags: sell precious metal, we sell gold, we buy gold, buy goldFast Loans - For Your Benefit Of Those Who Do not Have Jobs By: Calvien Peter - Mark Peter is really a good writer and financial advisor on the loan related issues for quick temporary loans. (Green, 1995, p. These instruments were then sent towards the ratings agencies for their blessing and much more importantly a letter rating. Understood what the reality in lending act disclosure meant.
Commercial loans are procured to get a variety of reasons: to purchase the premises of an existing business, to improvements or enlarge existing premises, to make commercial and residential investments in order to develop the existing property in other ways. In a sense, it's a form of internal transfer, the expense of setting up the agency is reduced. Within several years they were headed for divorce the home was sold for an equitable property division between Joseph and Mary. In the fine print around the guide you will fine the assumptions that the estimated is base on, the primary factor being the cost of a unit of energy, whether it be a Kwh of electricity or perhaps a gallon of gas.
It is important for one to have all of these details in position prior to deciding to start your home search. As she wriggled into partial wakefulness, Butch shot her twice within the torso. Owning your own home enables you to have this. As she wriggled into partial wakefulness, Butch shot her twice in the torso. The Turkish mortgage law that passed on March 2007 has two important properties that are anticipated to boom the mortgage and real estate markets in Turkey:.
Statistical analysis have shown that you will find countless Americans for each state have become homeless and contains no lender to turn to reverse their condition. It holds true that lots of patients die as a consequence of cancer treatment however the time they die isn't in their hands or those of the doctor. Although the market today is facing great negative deficiencies and resource misplacement, the gb home equity was capable of continually provide for their customers who are already under the distress of lacking funds. Although the market today is facing great negative deficiencies and resource misplacement, the gb home equity was in a position to continually provide for their potential customers who have been under the distress of lacking funds. Someone else will take over the servicing of your loan without any change to the terms of your loan.
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MCLEAN, VA--(Marketwired - Feb 24, 2016) - Freddie Mac (OTCQB: FMCC) today issued the company's Monthly Volume Summary for January 2016.
The summary, available on the company's website at www.FreddieMac.com/investors/volsum, provides information on Freddie Mac's mortgage-related portfolios, securities issuance, risk management, delinquencies, debt activities and other investments.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for approximately one in four home borrowers and is the largest source of financing for multifamily housing.Additional information is available at www.FreddieMac.com, Twitter@FreddieMac and Freddie Mac's blog www.FreddieMac.com/blog.
MCLEAN, VA--(Marketwired - Feb 16, 2016) - Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities.The company expects to issue approximately $1.3 billion in K Certificates (K-LH1 Certificates), which are backed by 28 properties indirectly controlled by Lone Star Real Estate Fund IV (U.S.), L.P. The K-LH1 Certificates are expected to settle on or about February 24, 2016.
Class Principal / Notional Amount (mm) Weighted Average Life (Years) Discounted Margin Coupon Yield Dollar Price A $1,344.298 6.58 70 1 mo LIBOR + 70 1.1025% $100.00 X $1,493.665 6.58 Non-Offered
Co-Lead Managers and Joint Bookrunners: Goldman, Sachs & Co. and Wells Fargo Securities, LLC Co-Managers: Citigroup Global Capital Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Samuel A. Ramirez & Company, Inc.
The K-LH1 Certificates will not be rated, and include one senior principal and interest class and one interest only class. The K-LH1 Certificates are backed by corresponding classes issued by the FREMF 2016-KLH1 Mortgage Trust (K-LH1 Trust) and are guaranteed by Freddie Mac. The K-LH1 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-LH1 Certificates.The K-LH1 Trust Class B, C and R Certificates will not be guaranteed by Freddie Mac.
Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities.K-Deals are part of the company's business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds.K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.
This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (SEC) on February 19, 2015; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2014, excluding any information "furnished" to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information furnished to the SEC on Form 8-K.
Freddie Mac's press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2014, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.
This $1 mil-lion-plus house is for sale in Spring Branch. JPMorgan Chase is easing the credit scores it requires on jumbo loans of up to $3 million.
The nation's largest bank has made it a little easier for consumers to buy expensive homes - something that Houston has a lot more of these days.
Last week, JPMorgan Chase said it is relaxing the credit scores and down payments it requires on jumbo loans of up to $3 million, giving the bank access to a bigger pool of borrowers amid escalating home prices.
"Historically, people look at the jumbo market as the ultra-wealthy - your top-level doctors, attorneys, etc.," said Jason Pepsnik, the bank's regional manager for mortgage banking in the South. "We're starting to find the general upper-middle class finding the need for that jumbo financing."
The limit for government-backed loans in Texas is $417,000. Borrowing above that figure typically falls into the jumbo-mortgage category.
On a primary home loan, qualified borrowers with Chase can now have a credit score of 680, compared with the 740 score it required previously. Down payments have also been lowered to 15 percent from 20 percent. Requirements on jumbo loans for second home purchases and "cash-out" refinancing have been relaxed, too.
The number of jumbo-loan requests has been rising in Texas as home prices escalate.
Across the Houston area, the median price of a home reached $225,000 this summer, up 5 percent from a year ago and a record high.
More big loans
As a percentage of Chase's overall mortgage originations in the state, jumbo loans jumped to 25 percent from 14 percent last year, Pepsnik said.
The new changes, he said, aren't aimed at borrowers with serious credit trouble, but at those who may have just a dent or two on their credit history.
"It's really important to understand these are still very safe and secure, well documented and thoroughly underwritten loans," Pepsnik said.
Mortgage broker Marcy Wolf of Action Mortgage in Houston said she's seen a much higher demand for jumbo mortgages as Houston's economy boomed in recent years and homes became more expensive.
She's seen other banks loosen their requirements, as well. "A 680 score is still a very decent score and could be just one hiccup from a medical collection," Wolf said.
The same thing that real estate analysts say is propping up the single-family housing market is also helping to boost apartment occupancy: pent-up demand.
In the four years leading up to 2015, Houston-area employers added around 400,000 new jobs, but the supply of apartments didn't keep up, according to multifamily executives from Camden Property Trust.
"Some of the current absorption is undoubtedly coming from this pool of excess demand," Camden's president, Keith Oden, recently said on a conference call to discuss the company's second-quarter performance.
Leaving the suburbs
Another factor driving demand for rentals - specifically some of the pricey new units coming online - is what Camden calls "inversion," or the shift in housing patterns from the suburbs to the urban core.
CEO Ric Campo mentioned a new high-rise apartment building here that's 80 percent leased, and units are renting for an average of $4,500 per month with "zero concessions." The average renter in the building is 55 years old and has an average income of $385,000 per year.
"Those folks are not energy accountants getting laid off," Campo said. "Those folks are people making the decision they want to move in from their house in the suburbs."
Providing small mortgage loans at non-subsidized prices affordable to the borrower has always been a challenge. The core problem is that the high cost of originating and servicing a mortgage loan is no smaller for a small loan than for a large one, but the dollar amounts of interest and origination fees received by the lender are smaller on small loans. The obvious remedy, charging a higher interest rate or upfront fees on smaller loans, may make it unaffordable, may be interpreted as "price-gouging", and may invite the attention of regulators.
Home mortgage lenders prefer to avoid these problems by setting minimum loan amounts, which today are generally in the range of $50,000 to $75,000. Below $50,000, mortgage loans are generally not available. This is a problem for isolated communities in which home prices are very low, and also for borrowers anywhere who are looking to refinance small loan balances.
The Problem of the Small Isolated Town
"In my town, we need mortgage loans from $5,000 to $30,000, and they just aren't available. Is there anything that can be done?"
The town is Winters, Texas, population about 3,000. There are few jobs there or anywhere very close, and median household income is about $26,000. Houses in Winters sell for less than $60,000.
Mortgage loans are not available in Winters. In part, this is because the town is so isolated and the demand so small that it can't support a lending facility. There are no appraisers, for example; if one is needed the cost will be double the cost in a larger center because of the time it takes for the appraiser to get to Winters and back.
The combination of exceptionally high origination costs and exceptionally small loan amounts is deadly. The best option for residents of Winters who need funding is an unsecured loan, as discussed below.
The Problem of Refinancing Small Loans
Another category of borrowers who are potentially vulnerable to the small loan problem are those who have paid their loans down substantially and would like to take advantage of lower interest rates by refinancing.
"I have a 10% loan from way back, should have refinanced years ago, balance is only $42,000 now, is it too late?"
Yes, it is too late. No lender wants to refinance a $42,000 loan into another $42,000 loan. The exception would be the case where the borrower wants to raise a substantial amount of cash from the transaction, which means that the new loan amount will be substantially larger than the balance of the old loan. In that situation, there is no small loan problem because the loan is not small.
Small Unsecured Loans Through the Internet
When I wrote an early version of this article in 2007, www.Prosper.com was a new firm chartered to create a virtual market that provides an attractive return to lenders and a reasonable cost to borrowers. Lenders are given extensive information about borrowers, including credit information and referrals. They can lend as little as $100 on any one deal, which allows them to diversify their risk without committing larger sums. Because it is a virtual market, borrowers can live anywhere, even in Winters.
Prosper charges a reasonable origination and servicing fee for doing all the spade work: compiling borrower information, collecting the payments, keeping the books, and pursuing delinquent borrowers. In the first quarter of 2015, Prosper closed $595 million of loans, with a total to date of more than $3 billion.
Loans from Prosper are too small ($35,000 max) and too short (5 years max) to be used for a house purchase, except perhaps in places like Winters where home prices are very low and mortgage loans are not available. In the 1920s, before the Federal Government entered the marketplace, many mortgage loans had 5-year terms.
The Problem of Small Reverse Mortgage Loans
Lenders originating HECM reverse mortgage loans earn income from two sources. An origination fee based on property value is capped by law: it is $2500 on house values of $125,000 or less, $4,000 on a house value of $200,000, and $6,000 on values of $400,000 or more. The other source of income to originators is the premium paid for the loan in the secondary market, which can run as high as 8% of the loan amount, as contrasted with 4-4.5% in the standard mortgage market. However, reverse mortgage originators earn the premium only on the initial loan; they make nothing on cash draws that occur after the loan closes.
The small loan problem for originators is that they don't make much on transactions in which the borrower wants only a credit line for future use because the initial loan in such case consists solely of the financed settlement costs. Some lenders may refuse to make such loans, but others will because they still earn the origination fee.
Borrowers in this market have a small loan problem if they are planning to save their reverse mortgage borrowing power for future use rather than drawing cash at closing. The problem is that this forward-looking game plan of borrowers runs counter to the financial interest of their originators. The originators I know are scrupulous in not pushing borrowers to draw more cash, but expecting them to discourage borrowers from drawing cash is not realistic.
For more information on reverse mortgages, mortgages in general, or to compare mortgage offerings from multiple lenders in a fair, unbiased environment please visit my website The Mortgage Professor
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Delinquencies on consumer loans continued to rise at the end of the year, according to data released Thursday by the American Bankers Association.
Separately, data show that the number of troubled loans backed by the government's mortgage insurance program is on the rise as economic problems mount, and lawmakers are worried that taxpayers will be stuck with the final bill.
The banking group said the delinquency rate during the fourth quarter of 2008 across multiple consumer loans increased to 3.22%. It is the highest delinquency rate since the ABA began tracking the data in the 1970s. The delinquency rate was 2.90% during the third quarter.
Job losses during were the primary reason for the rise in loan delinquencies during the quarter, says James Chessen, the ABA's chief economist.
The ABA said these credit trends are unlikely to improve before 2010.
"Job losses have really hurt the economy and will continue to inflict pain for several months," Chessen said. "The greater the losses are, the more severe an impact it has on all credit markets."
The ABA study covers direct auto, indirect auto, closed-end home equity, home improvement, marine, mobile home, personal, and recreational vehicle loans. It excludes bank credit card and education loans.
"We've seen delinquency rates across the board in consumer loans go up, and continue to go up," Bank of America Chief Executive Ken Lewis said Thursday on CNBC television. But he said "early" delinquencies, or payments missed shortly after loans are taken out, have begun to abate in a "smattering" of products at the largest U.S. bank.
At a Senate subcommittee hearing, Sen. Kit Bond, R-Mo., warned Thursday that the Federal Housing Administration is a "powder keg" waiting to explode, and said the Congress and the Obama administration shouldn't place a greater financial burden on the already strapped agency.
"The taxpayer credit card is maxed out," Bond said.
However, Housing and Urban Development Secretary Shaun Donovan told senators that the Federal Housing Administration is "unlikely to face the catastrophic losses borne in the subprime sector." That's partly because the agency didn't back loans for more expensive properties that have plummeted in value, particularly in places like California, Donovan said.
As of February, 7.2% of loans backed by the FHA were either 90 days overdue or in foreclosure, up from 5.8% last August.
The FHA became the main source of home loans to borrowers with poor credit and low down payments after the subprime lending market's collapse. It allows borrowers to take out home loans with a down payments of as low as 3.5%, compared with 20% for a typical loan that doesn't require mortgage insurance.
FHA loans are made through by banks, insured by the government and sold as mortgage backed securities by Ginnie Mae, the government's mortgage finance agency. The FHA currently backs around a third of new home loans, up from about 3% in 2006.
President Obama last month nominated longtime real estate industry David Stevens to head the FHA. Stevens is currently president and chief operating officer of Long and Foster, a Chantilly, Va., based real estate brokerage. The position requires Senate confirmation.
The next time you see an ad to refinance your mortgage for "free" or with "no closing costs," run the other way. The Federal Trade Commission has just fined a mortgage lead generator company half a million dollars for making claims like that. The FTC says the company broke not one, not two, but three laws and rules by marketing mortgages refinances this way.
The defendants are certainly not alone. I see similar ads everywhere--from online to on telephone poles. The wording varies but they are all making the same false promise of a mortgage or refi with no closing costs. It's a lie. How to they get away with it? Two ways:
In scenario one, instead of giving you the best possible mortgage interest rate for which you qualify, they charge you a higher rate. That means you're paying extra every single month for 30 years. Trust me, closing costs are actually a better deal.
In scenario two, they tack the closing costs onto the amount of principal you owe. You still end up paying the closing fees, you just pay them at the end instead of the beginning --AND you pay interest on them for 30 years. Yuck.
"An ad that says you can refinance your mortgage for free is clearly deceptive if you have to pay money at some point before you sign on the dotted line," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "Lead generators need to understand that federal laws governing truth in advertising apply to them as well as everybody else."
For more information about obtaining a mortgage fair and square, Check out the Federal Trade Commission's resources for home owners here.
Opinions expressed in this column are solely those of the author.
Elisabeth Leamy is a 20-year consumer advocate for programs including "Good Morning America" and "The Dr. Oz Show." She is the author of "Save BIG" and "The Savvy Consumer." Elisabeth is also a professional speaker, delivering talks nationwide on saving money, media relations and career success. Elisabeth receives her best story tips from readers, so please connect with her via Facebook, Twitter or her website to share your ideas.
Write something about yourself. No need to be fancy, just an overview.