A greater share of residential mortgages in New Jersey were distressed at the end of the second quarter of this year than any other state in the nation, new data shows.
The data from the Mortgage Bankers Association's National Delinquency Survey shows 10.2 percent of mortgages in the state are either in foreclosure or at least three months behind on payments, according to Patrick O'Keefe, director of economic research with CohnReznick. The national rate stood at 3.95 percent.
O'Keefe wrote in a memo that New Jersey's distressed mortgage rate was the "highest among all states for the seventh consecutive quarter."
The association's survey also shows the percentage of mortgages in New Jersey in the foreclosure process remained top in the nation despite a drop in the state's foreclosure inventory.
"As has been the case since the fourth quarter of 2012, New Jersey, New York, and Florida had the highest percentage of loans in foreclosure in the nation," Marina Walsh, the Mortgage Bankers Association's vice president of industry analysis, said in a statement.
New Jersey's foreclosure inventory rate was 7.31 percent, according to the report, while New York had the second highest rate at 5.31 percent. The report also noted that both states have a judicial foreclosure process.
"New Jersey's relatively slow pace in reducing it distressed mortgage inventory is partially attributable to its status as a 'judicial foreclosure' state," O'Keefe wrote. "Court supervised foreclosures entail procedures that are more rigorous – and time consuming – than administrative actions."
read more: http://www.nj.com/business/index.ssf/2015/08/nj_distressed_mortgages.html
Showing posts with label mortgages. Show all posts
Showing posts with label mortgages. Show all posts
Tuesday, August 18, 2015
Wednesday, July 29, 2015
Why 3% Down Mortgages Alone Won't Revive Housing
In the world of mortgage financing there is stuff that's seen and stuff that's not. Lowering down payment requirements from 5% to 3% will surely help some prospective buyers. However, in a world with roughly 4% interest rates and average sales prices that remain 11% below their 2005 peak, down payments are not the only issue to solve.
The government-sponsored enterprises have begun to accept loans with 3% down, but they're not just any old 3% loan. The GSEs want something more, and that "something" is 18% mortgage insurance coverage.
Combine the 3% down payment and the 18% insurance requirement, and Fannie Mae and Freddie Mac are following long-time industry standards by requiring at least a 20% cushion in case something goes wrong.
And while mortgage insurance is a burden, the bigger obstacle to focus on, according to a RealtyTrac home affordability analysis, is non-household debt.
In 92% of the counties analyzed, payments on a median-priced home required less than 43% of median household income, which is the maximum debt-to-income ratio allowed for a qualified mortgage by the Consumer Financial Protection Bureau.
Add in the typical student loan debt and car payment, and less than half — 48% — of U.S. housing markets are affordable for median-income earners using the 43% DTI.
Additionally, the standards for 3% loans is hardly straight-forward, meaning they are not for everyone.
For instance, Fannie Mae's MyCommunityMortgage program is only available if at least one borrower is a first-time home buyer who has completed pre-purchase education and counseling. The loan must have a fixed rate and be secured with a one-unit principal residence — meaning that duplexes, triplexes and quads are off limits. Manufactured housing is also ineligible. However, gifts can be used to bulk-up reserves, a new wrinkle. The program can also be used to refinance existing Fannie Mae loans and cash-out refinancing is also allowed.
read more: www.nationalmortgagenews.com/news/origination/why-3-down-mortgages-alone-wont-revive-housing-1057171-1.html
The government-sponsored enterprises have begun to accept loans with 3% down, but they're not just any old 3% loan. The GSEs want something more, and that "something" is 18% mortgage insurance coverage.
Combine the 3% down payment and the 18% insurance requirement, and Fannie Mae and Freddie Mac are following long-time industry standards by requiring at least a 20% cushion in case something goes wrong.
And while mortgage insurance is a burden, the bigger obstacle to focus on, according to a RealtyTrac home affordability analysis, is non-household debt.
In 92% of the counties analyzed, payments on a median-priced home required less than 43% of median household income, which is the maximum debt-to-income ratio allowed for a qualified mortgage by the Consumer Financial Protection Bureau.
Add in the typical student loan debt and car payment, and less than half — 48% — of U.S. housing markets are affordable for median-income earners using the 43% DTI.
Additionally, the standards for 3% loans is hardly straight-forward, meaning they are not for everyone.
For instance, Fannie Mae's MyCommunityMortgage program is only available if at least one borrower is a first-time home buyer who has completed pre-purchase education and counseling. The loan must have a fixed rate and be secured with a one-unit principal residence — meaning that duplexes, triplexes and quads are off limits. Manufactured housing is also ineligible. However, gifts can be used to bulk-up reserves, a new wrinkle. The program can also be used to refinance existing Fannie Mae loans and cash-out refinancing is also allowed.
read more: www.nationalmortgagenews.com/news/origination/why-3-down-mortgages-alone-wont-revive-housing-1057171-1.html
Monday, July 13, 2015
Michael Estrin: 4 common mortgage errors and how to avoid them
Many people make expensive, easily avoidable mistakes when shopping for a mortgage.
"Borrowers who don't do their homework often end up paying more than they should, and in some cases that extra cost can really hurt," says Paul Sian, a real estate lawyer and Realtor with HER Realtors in Cincinnati.
A study from the Consumer Financial Protection Bureau concludes that many consumers don't shop for mortgages, and they tend to get their mortgage information from lenders and real estate agents, who aren't impartial.
According to Sian, borrowers tend to fixate on the home's purchase price, and secondarily, the loan's interest rate. But factors like closing costs, the loan's total price tag, whether the loan is fixed or variable, and whether the borrower is required to get private mortgage insurance can dramatically alter what borrowers end up paying.
More coverage
Reverse mortgages are due when borrowers die
Change: Where it occurs, and where not
Following are four common mortgage errors and tips for avoiding them.
Shopping just one lender
Whether it's a new car or the latest gadget, consumers know it pays to shop around for the best deal. But half of mortgage borrowers consider just one lender or broker in their shopping process, according to the CFPB study.
"It is a good idea to shop around for mortgages in order to get better rates," Sian says. "Sometimes large banks and lenders don't offer the best rates that can be had. Additionally, some lenders add in fees. While the final fees do show up at the end, many borrowers don't understand the fees and accept them as the cost of getting the loan, even though they could've avoided those fees by shopping around."
A small difference in the interest rate can make a big impact on cost. On a $200,000 fixed-rate, 30-year mortgage, an interest rate of 4.5 percent costs $59 a month more than a 4 percent rate. That adds up to $3,512 in the first five years.
The lower interest rate means the borrower would pay off an additional $1,421 in principal in the first five years, even while making lower payments.
Read more at http://www.philly.com/philly/business/real_estate/residential/Michael_Estrin_4_common_mortgage_errors_and_how_to_avoid_them.html
"Borrowers who don't do their homework often end up paying more than they should, and in some cases that extra cost can really hurt," says Paul Sian, a real estate lawyer and Realtor with HER Realtors in Cincinnati.
A study from the Consumer Financial Protection Bureau concludes that many consumers don't shop for mortgages, and they tend to get their mortgage information from lenders and real estate agents, who aren't impartial.
According to Sian, borrowers tend to fixate on the home's purchase price, and secondarily, the loan's interest rate. But factors like closing costs, the loan's total price tag, whether the loan is fixed or variable, and whether the borrower is required to get private mortgage insurance can dramatically alter what borrowers end up paying.
More coverage
Reverse mortgages are due when borrowers die
Change: Where it occurs, and where not
Following are four common mortgage errors and tips for avoiding them.
Shopping just one lender
Whether it's a new car or the latest gadget, consumers know it pays to shop around for the best deal. But half of mortgage borrowers consider just one lender or broker in their shopping process, according to the CFPB study.
"It is a good idea to shop around for mortgages in order to get better rates," Sian says. "Sometimes large banks and lenders don't offer the best rates that can be had. Additionally, some lenders add in fees. While the final fees do show up at the end, many borrowers don't understand the fees and accept them as the cost of getting the loan, even though they could've avoided those fees by shopping around."
A small difference in the interest rate can make a big impact on cost. On a $200,000 fixed-rate, 30-year mortgage, an interest rate of 4.5 percent costs $59 a month more than a 4 percent rate. That adds up to $3,512 in the first five years.
The lower interest rate means the borrower would pay off an additional $1,421 in principal in the first five years, even while making lower payments.
Read more at http://www.philly.com/philly/business/real_estate/residential/Michael_Estrin_4_common_mortgage_errors_and_how_to_avoid_them.html
Thursday, June 11, 2015
80 percent of banks say credit has tightened, mortgages more difficult to get
CLEVELAND, Ohio -- Nearly 18 months after it became more difficult to qualify for a mortgage, nearly 80 percent of banks say that lending has tightened, and about 19 percent say the impact is "severe."
The American Bankers Association, which conducted a survey about mortgages approved last year, also said the new mortgage rules have hurt the housing market recovery. "Combine that with new mortgage disclosures, which are just around the corner, and we'll continue to see a slow down in what should be the ideal time to buy a home," said Robert Davis, ABA executive vice president.
Cleveland-area banks say the biggest impact on consumers is that borrowers must submit more documentation. Lenders overall said mortgages under the new law cost more, and require bigger down payments and better credit scores.
The Consumer Financial Protection Bureau adopted the rules for "qualified mortgages" in January 2014. The new rules don't absolutely prohibit home loans that aren't "qualified," but say the lender could face penalties and liability if it makes a non-qualified loan and the borrower defaults. Further, the same penalties will affect any company that buys or touches the loan. So a lender is unlikely to originate a non-qualified loan unless it plans to hold on to the loan and not sell it.
About 90 percent of the typical bank's mortgage loans made last year were "qualified mortgages," the ABA said.
The most common reasons for being rejected for a mortgage, according to the ABA, are borrowers with high debts compared to income and the lack of having required documentation.
The ABA also said that, despite ridiculously low 10- and 15-year interest rates, more people took out 30-year loans in 2014 compared with 2013. Half of all loans last year were 30-year loans.
One-third of banks said the impact on business has been "extremely negative." About 54 percent said the effect on business has been moderate.
read more: http://www.cleveland.com/business/index.ssf/2015/06/80_percent_of_banks_say_credit.html
The American Bankers Association, which conducted a survey about mortgages approved last year, also said the new mortgage rules have hurt the housing market recovery. "Combine that with new mortgage disclosures, which are just around the corner, and we'll continue to see a slow down in what should be the ideal time to buy a home," said Robert Davis, ABA executive vice president.
Cleveland-area banks say the biggest impact on consumers is that borrowers must submit more documentation. Lenders overall said mortgages under the new law cost more, and require bigger down payments and better credit scores.
The Consumer Financial Protection Bureau adopted the rules for "qualified mortgages" in January 2014. The new rules don't absolutely prohibit home loans that aren't "qualified," but say the lender could face penalties and liability if it makes a non-qualified loan and the borrower defaults. Further, the same penalties will affect any company that buys or touches the loan. So a lender is unlikely to originate a non-qualified loan unless it plans to hold on to the loan and not sell it.
About 90 percent of the typical bank's mortgage loans made last year were "qualified mortgages," the ABA said.
The most common reasons for being rejected for a mortgage, according to the ABA, are borrowers with high debts compared to income and the lack of having required documentation.
The ABA also said that, despite ridiculously low 10- and 15-year interest rates, more people took out 30-year loans in 2014 compared with 2013. Half of all loans last year were 30-year loans.
One-third of banks said the impact on business has been "extremely negative." About 54 percent said the effect on business has been moderate.
read more: http://www.cleveland.com/business/index.ssf/2015/06/80_percent_of_banks_say_credit.html
Tuesday, May 19, 2015
Amazingly, Securitization Of Mortgages Actually Worked
Matt Levine makes a lovely point over at Bloomberg . One which is entirely contrary to current received wisdom. That point being that securitization of mortgages actually worked, actually did what it said it would. And this is true despite even the lying about what was going into those packages.
Start from the basic macroeconomic point of what was going on. The desire is to spread the risk around, to slice and dice the risk even, of lending money to people to buy houses. This is one of the functions of financial markets and it’s the entire economic point of having speculation. There’s people out there who really don’t want to be carrying risk at all. Either from temperament or for sound business reasons. There’s also people out there with a much greater appetite for risk than most other people. So, what we’d like to do is transfer that risk from those who don’t want it to those who do. The most obvious example of this is in a futures market. The farmer is growing grain, the baker making bread. Neither of them is particularly keen on carrying the risk that the price of wheat (one’s output, for the other an input) is going to vary as a result of, say, summer rains or not in the Ukraine. But there’s plenty of people out there who are happy to bet on there being rain in the Ukraine this summer or not. So, the farmer sells a futures contract, the baker buys one: and in the middle we’ve that froth of speculation. The speculators are carrying the risk as the price for both the farmer and the baker is now set. Reducing risk on those who don’t want it and adding it to those who do is a synonym for us all becoming richer.
ADVERTISING
There’s also mathematics that we can use to transfer risk: risk pooling we can call it. This is what insurance is based upon. That my house might burn down has a very low probability (that probability perhaps changing dependent on how often I try to make french fries on return from the bar). But it would be devastating if it did. Across the whole population we know that some houses will burn down each year. Pool the risks of any one house burning down, everyone pays a small premium and there’s the funds to compensate those poor saps it does happen to.
see more: http://www.forbes.com/sites/timworstall/2015/05/14/amazingly-securitisation-of-mortgages-actually-worked/
Start from the basic macroeconomic point of what was going on. The desire is to spread the risk around, to slice and dice the risk even, of lending money to people to buy houses. This is one of the functions of financial markets and it’s the entire economic point of having speculation. There’s people out there who really don’t want to be carrying risk at all. Either from temperament or for sound business reasons. There’s also people out there with a much greater appetite for risk than most other people. So, what we’d like to do is transfer that risk from those who don’t want it to those who do. The most obvious example of this is in a futures market. The farmer is growing grain, the baker making bread. Neither of them is particularly keen on carrying the risk that the price of wheat (one’s output, for the other an input) is going to vary as a result of, say, summer rains or not in the Ukraine. But there’s plenty of people out there who are happy to bet on there being rain in the Ukraine this summer or not. So, the farmer sells a futures contract, the baker buys one: and in the middle we’ve that froth of speculation. The speculators are carrying the risk as the price for both the farmer and the baker is now set. Reducing risk on those who don’t want it and adding it to those who do is a synonym for us all becoming richer.
ADVERTISING
There’s also mathematics that we can use to transfer risk: risk pooling we can call it. This is what insurance is based upon. That my house might burn down has a very low probability (that probability perhaps changing dependent on how often I try to make french fries on return from the bar). But it would be devastating if it did. Across the whole population we know that some houses will burn down each year. Pool the risks of any one house burning down, everyone pays a small premium and there’s the funds to compensate those poor saps it does happen to.
see more: http://www.forbes.com/sites/timworstall/2015/05/14/amazingly-securitisation-of-mortgages-actually-worked/
Sunday, April 26, 2015
Low-down-payment mortgages are back
One of the culprits in the building and bursting of the nation's housing bubble -- the low-down-payment mortgage -- is back in favor and readily available at a lender near you.
Numerous firms are taking part in a new and somewhat controversial program offered by Fannie Mae for fixed-rate conventional home loans with 3 percent down payments. Freddie Mac started backing similar loans in January.
The two bailed-out housing finance corporations reintroduced their 3 percent down products in December as a way to assist prospective first-time home buyers who have the income to pay off a mortgage but lack the savings for a large upfront payment. Before the announcement, Fannie and Freddie's lowest down-payment option was 5 percent.
Lenders say that millennial home buyers -- those born after 1980 -- can especially benefit from this 3 percent down program.
Proponents contend that these 3 percent-down-mortgages are vastly different from the risky subprime mortgage products that fueled the housing bubble and led to the financial crisis. As a result of the crisis, the federal government infused Fannie and Freddie with $187 billion once borrowers started defaulting. (They've since repaid the bailout with a $38 billion profit.)
Adjustable rates or interest-only teaser periods are forbidden. Borrowers must accurately document their finances and ability to repay. They also need a minimum 620 credit score, a low debt-to-income ratio, and must take a home ownership education course.
"There's many factors that go into the risk of a certain loan and down payment is just one of them," said Fannie Mae spokesman Andrew Wilson. "You get into the danger zone when you're layering a lot of risk factors."
Still, some lawmakers have questioned whether the 3 percent-down products are a return to the loose lending practices that brought on the 2007-08 real estate market collapse.
That danger -- real or exaggerated -- was a hot topic among Republican members of the House Financial Services Committee during Jan. 27 testimony by Melvin Watt, director of the Federal Housing Finance Agency that regulates Fannie and Freddie.
"You're once again putting people into homes that they can't afford," said Rep. Jeb Hensarling, R-Texas.
Down payments of about 20 percent were the norm for most home mortgages prior to the 1980s. A large down payment helps assure lenders that a borrower has enough of a stake in the property to keep up with the monthly payments. Sizable down payments also make it less likely that borrowers will walk away if home values fall and they owe more on their mortgage than the property is worth.
Fannie Mae and Freddie Mac relaxed their down payment requirements during the 1990s, moving from 10 percent to 5 percent to 3 percent, and later even zero percent down in the early 2000s.
The government's Financial Crisis Inquiry Report concluded that Fannie and Freddie "added helium to the housing balloon" by buying subprime mortgage-backed securities and loosening their standards for guaranteeing loans. But they weren't central causes of the crisis: "They followed rather than led Wall Street and other lenders in the rush for fool's gold."
After the crash, Fannie and Freddie were crucial to propping up the housing market when lenders were skittish to make loans without government guarantees. Together, both entities own or guarantee just under 60 percent of all new U.S. mortgages.
Research by the Urban Institute, a left-leaning think tank, shows that default rates on recent Fannie Mae-backed mortgages are similar among borrowers who make 20 percent down payments and 3 percent to 5 percent payments. Defaults on older, pre-crash loans were much higher with low down payments.
Numerous firms are taking part in a new and somewhat controversial program offered by Fannie Mae for fixed-rate conventional home loans with 3 percent down payments. Freddie Mac started backing similar loans in January.
The two bailed-out housing finance corporations reintroduced their 3 percent down products in December as a way to assist prospective first-time home buyers who have the income to pay off a mortgage but lack the savings for a large upfront payment. Before the announcement, Fannie and Freddie's lowest down-payment option was 5 percent.
Lenders say that millennial home buyers -- those born after 1980 -- can especially benefit from this 3 percent down program.
Proponents contend that these 3 percent-down-mortgages are vastly different from the risky subprime mortgage products that fueled the housing bubble and led to the financial crisis. As a result of the crisis, the federal government infused Fannie and Freddie with $187 billion once borrowers started defaulting. (They've since repaid the bailout with a $38 billion profit.)
Adjustable rates or interest-only teaser periods are forbidden. Borrowers must accurately document their finances and ability to repay. They also need a minimum 620 credit score, a low debt-to-income ratio, and must take a home ownership education course.
"There's many factors that go into the risk of a certain loan and down payment is just one of them," said Fannie Mae spokesman Andrew Wilson. "You get into the danger zone when you're layering a lot of risk factors."
Still, some lawmakers have questioned whether the 3 percent-down products are a return to the loose lending practices that brought on the 2007-08 real estate market collapse.
That danger -- real or exaggerated -- was a hot topic among Republican members of the House Financial Services Committee during Jan. 27 testimony by Melvin Watt, director of the Federal Housing Finance Agency that regulates Fannie and Freddie.
"You're once again putting people into homes that they can't afford," said Rep. Jeb Hensarling, R-Texas.
Down payments of about 20 percent were the norm for most home mortgages prior to the 1980s. A large down payment helps assure lenders that a borrower has enough of a stake in the property to keep up with the monthly payments. Sizable down payments also make it less likely that borrowers will walk away if home values fall and they owe more on their mortgage than the property is worth.
Fannie Mae and Freddie Mac relaxed their down payment requirements during the 1990s, moving from 10 percent to 5 percent to 3 percent, and later even zero percent down in the early 2000s.
The government's Financial Crisis Inquiry Report concluded that Fannie and Freddie "added helium to the housing balloon" by buying subprime mortgage-backed securities and loosening their standards for guaranteeing loans. But they weren't central causes of the crisis: "They followed rather than led Wall Street and other lenders in the rush for fool's gold."
After the crash, Fannie and Freddie were crucial to propping up the housing market when lenders were skittish to make loans without government guarantees. Together, both entities own or guarantee just under 60 percent of all new U.S. mortgages.
Research by the Urban Institute, a left-leaning think tank, shows that default rates on recent Fannie Mae-backed mortgages are similar among borrowers who make 20 percent down payments and 3 percent to 5 percent payments. Defaults on older, pre-crash loans were much higher with low down payments.
see more: http://www.rep-am.com/Business/876977.txt
Tuesday, April 21, 2015
Commercial mortgages triple in South Florida
Overall commercial mortgage volume more than tripled in South Florida between 2009 and 2014, according to a study released by Miami-based BridgeInvest, a private mortgage lender.
Over $11.4 billion in commercial mortgages were financed in 2014, up from about $9.8 billion in 2013 and $3.5 billion in 2009
Miami-Dade County captured the biggest slice of mortgage volume in the region in 2014 with 57 percent, followed by Palm Beach County at 23 percent and Broward County at 20 percent.
BridgeInvest used data from CRS Power Tool Mortgage, a Cushman & Wakefield research publication, for the study.
While Miami-Dade captured almost two-thirds of the commercial mortgage volume in 2014, the county also saw the most growth with a 42 percent year-over-year increase, compared to the 13 percent growth in Palm Beach and a 26 percent decline in Broward over the same period.
“Miami-Dade consistently has had more, but it’s considerably more this year when compared to Broward and Palm Beach,” said Alex Horn, managing partner of BridgeInvest. “Miami grew so much more. It’s very interesting and alludes to the fact that we’re seeing so much changing in the county,” he said.
The study broke out into seven classes of mortgages: land and construction, retail, multifamily, industrial, office, hotel and other. Land and construction dominated, with about $10.1 billion in mortgages, or 23 percent, followed by retail with $9.4 million, or 18 percent, and multifamily with $7.1 billion, or 17 percent.
see more at: http://www.bizjournals.com/southflorida/blog/morning-edition/2015/04/commercial-mortgages-triple-in-south-florida.html
Over $11.4 billion in commercial mortgages were financed in 2014, up from about $9.8 billion in 2013 and $3.5 billion in 2009
Miami-Dade County captured the biggest slice of mortgage volume in the region in 2014 with 57 percent, followed by Palm Beach County at 23 percent and Broward County at 20 percent.
BridgeInvest used data from CRS Power Tool Mortgage, a Cushman & Wakefield research publication, for the study.
While Miami-Dade captured almost two-thirds of the commercial mortgage volume in 2014, the county also saw the most growth with a 42 percent year-over-year increase, compared to the 13 percent growth in Palm Beach and a 26 percent decline in Broward over the same period.
“Miami-Dade consistently has had more, but it’s considerably more this year when compared to Broward and Palm Beach,” said Alex Horn, managing partner of BridgeInvest. “Miami grew so much more. It’s very interesting and alludes to the fact that we’re seeing so much changing in the county,” he said.
The study broke out into seven classes of mortgages: land and construction, retail, multifamily, industrial, office, hotel and other. Land and construction dominated, with about $10.1 billion in mortgages, or 23 percent, followed by retail with $9.4 million, or 18 percent, and multifamily with $7.1 billion, or 17 percent.
see more at: http://www.bizjournals.com/southflorida/blog/morning-edition/2015/04/commercial-mortgages-triple-in-south-florida.html
Tuesday, April 7, 2015
Urban Institute: 4 million missing mortgages
A new Urban Institute study says that tight credit standards curbed mortgage lending activity from 2009 to 2013.
Based on the authors’ estimates, if the cautious standards of 2001 had been in place rather than the more severe standards that were in place over these five years, lenders would have made more than 4 million additional loans.
“The number of potential loans that were not made-which we call ‘missing loans’-grew from 0.50 million in 2009 to 1.25 million in 2013. African American and Hispanic families have been particularly affected by this tight credit environment,” the authors say.
The full study can be read here.
Based on the authors’ estimates, if the cautious standards of 2001 had been in place rather than the more severe standards that were in place over these five years, lenders would have made more than 4 million additional loans.
“The number of potential loans that were not made-which we call ‘missing loans’-grew from 0.50 million in 2009 to 1.25 million in 2013. African American and Hispanic families have been particularly affected by this tight credit environment,” the authors say.
The full study can be read here.
Thursday, April 2, 2015
Guess who's issuing slews of mortgages? Not your bank
More home buyers enter the market this spring, but big banks are continuing their retreat from mortgage lending.
That is opening the door ever wider for independent, nonbank lenders. Both volume and profit at these lenders are up from a year ago, according to the Mortgage Bankers Association, but their share of all lending is where the numbers are really soaring.
Nonbank lending rose to 37.5 percent of the market during 2014, up from 14 percent in 2011, according to publication Inside Mortgage Finance.
"That was attributable to a combination of nonbanks being more aggressive, both in terms of rates and underwriting, and large banks pulling back slightly in the conforming markets," Editor Guy Cecala said.
The leaders in nonbank growth were names like Quicken and Penny Mac as well as other smaller nonbanks, like Charlotte, North Carolina-based Movement Mortgage.
"Our building actually sits in the shadow of a Bank of America headquarters building, and we've been able to gain number one purchase market share in that city inside of five years by offering great service to homeowners," said Casey Crawford, CEO of Movement Mortgage, which he founded in 2007.
Movement's angle is a promise to borrowers that it can close a loan in eight business days, the fastest the federal government allows. It fulfills that promise by approving borrowers before they even apply for a loan.
read more: http://www.cnbc.com/id/102553213
Monday, March 16, 2015
Are you a mortgage misfit?
Are you over 45? Self-employed? Divorced and remortgaging late in life? Got your eye on a great ex-council house? Or like the look of that cheap studio flat? If you are in any of these groups, you are likely to be among the growing number of “mortgage misfits” who struggle to find a lender willing to offer a loan.
Tough restrictions imposed by the City regulator to ensure borrowers can really afford a mortgage – and wariness about lending on certain types of properties – mean that many applicants are being turned down.
Eight out of 10 mortgage brokers say they have had to reject customers in the past six months, according to figures from the Intermediary Mortgage Lending Association. Brokers cite interest rate stress tests and tougher evidence of income and spending required by lenders as the reasons why many applicants fail.
The rules were put in place in April 2014 for a good reason: to prevent a repeat of the dodgy lending practices common before the financial crisis. But critics argue that a “computer says no” approach is denying perfectly good applicants a loan.
You are over 40
The majority of lenders will only grant a mortgage to your planned retirement date. So if you are aged 45 and expect to retire at 67, the maximum mortgage term might be just 22 years.
Adrian Anderson, director of mortgage broker Anderson Harris, says: “The ageist attitude being taken by lenders is a result of their interpretation of the MMR [mortgage market review] guidelines. Given that the average age of a first-time buyer is now 37, it is all rather worrying as it doesn’t leave much time to get a mortgage paid off before retirement.”
read more: http://www.theguardian.com/money/2015/mar/14/mortgage-misfit-borrowers-lenders-criteria
Tough restrictions imposed by the City regulator to ensure borrowers can really afford a mortgage – and wariness about lending on certain types of properties – mean that many applicants are being turned down.
Eight out of 10 mortgage brokers say they have had to reject customers in the past six months, according to figures from the Intermediary Mortgage Lending Association. Brokers cite interest rate stress tests and tougher evidence of income and spending required by lenders as the reasons why many applicants fail.
The rules were put in place in April 2014 for a good reason: to prevent a repeat of the dodgy lending practices common before the financial crisis. But critics argue that a “computer says no” approach is denying perfectly good applicants a loan.
You are over 40
The majority of lenders will only grant a mortgage to your planned retirement date. So if you are aged 45 and expect to retire at 67, the maximum mortgage term might be just 22 years.
Adrian Anderson, director of mortgage broker Anderson Harris, says: “The ageist attitude being taken by lenders is a result of their interpretation of the MMR [mortgage market review] guidelines. Given that the average age of a first-time buyer is now 37, it is all rather worrying as it doesn’t leave much time to get a mortgage paid off before retirement.”
read more: http://www.theguardian.com/money/2015/mar/14/mortgage-misfit-borrowers-lenders-criteria
Friday, March 13, 2015
Senators would extend tax breaks for people who renegotiate mortgages
Although most real estate markets have rebounded from their recession lows, this harsh fact remains: About 7 million homeowners continue to be stuck in the tar pit of serious negative equity, with mortgage debt at least 25 percent higher than the value of their property, according to the research firm RealtyTrac.
Many of these owners are also hurting financially. They are behind on mortgage payments, often in negotiations with their lenders on ways to modify their loan terms or write off a portion of their debt. Or they may be discussing a short sale to avoid foreclosure — selling the house for less than the mortgage amount owed to a new buyer with the lender forgiving the unpaid balance. Improvements in housing prices have largely bypassed these folks, as has the overall economic recovery in the past several years.
All of which underlines the significance of a legislative effort now getting underway in Congress to spare these people from punitive federal taxes on any amounts forgiven.
see more: http://www.washingtonpost.com/realestate/senators-would-extend-tax-breaks-for-people-who-renegotiate-mortgages/2015/03/12/dda4a16a-c679-11e4-a199-6cb5e63819d2_story.html
Many of these owners are also hurting financially. They are behind on mortgage payments, often in negotiations with their lenders on ways to modify their loan terms or write off a portion of their debt. Or they may be discussing a short sale to avoid foreclosure — selling the house for less than the mortgage amount owed to a new buyer with the lender forgiving the unpaid balance. Improvements in housing prices have largely bypassed these folks, as has the overall economic recovery in the past several years.
All of which underlines the significance of a legislative effort now getting underway in Congress to spare these people from punitive federal taxes on any amounts forgiven.
see more: http://www.washingtonpost.com/realestate/senators-would-extend-tax-breaks-for-people-who-renegotiate-mortgages/2015/03/12/dda4a16a-c679-11e4-a199-6cb5e63819d2_story.html
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