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If you’re wondering how popular non-QM lending is these days, the answer is not very.

The National Association of Realtors, which conducted its 2nd Survey of Mortgage Originators back in April, revealed today that just 1.6% of loan production in the first three months of the year was considered non-QM.

The overwhelming majority (90.1%) of mortgages originated by lenders who responded to the survey were Qualified Mortgages with Safe Harbor, those which provide the most legal protection to lenders in the event of foreclosure or another loan issue.

Another 8.3% were Qualified Mortgages with Rebuttal Presumption, those which cover higher-priced loans that exceed certain APR thresholds. These QM loans provide less protection in the event of litigation or a buyback.

Most Lenders Have Adapted to QM, Though Rules Have Prevented Some Lending

Despite the low volume of non-QM loans, nearly three-quarters (73.7%) of lenders indicated that they had fully adapted to the new Qualified Mortgage rules.

However, since the rules went into effect at the beginning of 2014, nearly half of lenders said they have been unable to close mortgages as a result.

It’s unclear why or how many loans weren’t closed, but it could be related to debt-to-income ratio issues (max 43%) and/or points and fees (max 3%) issues.

Some lenders have buffers in place to deal with these new limits. For example, the maximum back-end DTI ratio for a QM loan is 43%, but some lenders are limiting it to 41% or 42% in case a mistake is made.

Of course, loans backed by Fannie and Freddie, along with FHA loans, are exempt from the DTI rule, so not all lenders limit DTI ratios to 43% or lower.

As far as the max points and fees of 3%, some lenders have implemented buffers of 2.8% or 2.9%, just in case something unexpected comes up.

If fees were an issue, most lenders simply reduced them, or outsourced title insurance and other services that would have otherwise been handled by an affiliated company. Others simply chose not to originate the loan at all.

Most non-QM lending these days involves interest-only options or jumbo loans with DTI ratios north of 43%, seeing that they’re not exempt from the rule like conventional loans.

But these non-QM products are reserved for high-quality borrowers, not just anyone, and most are staying on the originating lender’s books for now.

As I noted a couple months back, banks have come up with some pretty creative ways to offer aggressive financing without breaking the QM rules, including the ability to get a high LTV QM loan just days after foreclosure or short sale.

So with the exemption of the DTI rule on most loans and the ability to stay in the QM realm while still offering low down payments with flexible terms, there’s not much incentive to go outside of QM.

Only time will tell if more lenders get into the space, but as of now it seems like more of a specialty product designed for high-net worth individuals.

Still, Wells Fargo, the top mortgage lender in the country, believes non-QM lending could eventually represent five percent of all mortgages originated by the bank.

Source: thetruthaboutmortgage.com

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Living in West Virginia means enjoying access to all the scenic landscapes John Denver sings about in his famous song about this Mid-Atlantic state, “Country Roads, Take Me Home.” Located in the Appalachian region of the southeastern United States, West Virginia is known as the Mountain State due to its mountainous and hilly terrain. This makes it a popular state for lovers of nature and outdoor adventure. From hiking in the Appalachian Mountains to boating on meandering rivers, opportunities for outdoor recreation abound.

West Virginia is also notable for its friendly residents and low cost of living. For the most part, things like housing and groceries cost less than the national average. For people seeking an outdoorsy lifestyle at an affordable price, West Virginia fits the bill. But some costs can vary widely between cities, which is why it’s important to examine how the cost of living changes throughout the state. That way, you can figure out the best place to live for your budget. Here’s what the cost of living in West Virginia is like in different cities around the state.

West Virginia housing prices

One benefit of living in West Virginia is that housing costs are extremely affordable. In most major West Virginia cities, the cost of housing falls well below the national average. If you make a good living, it’s easy to afford bigger-sized apartments and rental units here without stretching your budget too much. You could even use an extra bedroom to store all the gear you’ll accumulate for your various outdoorsy pursuits.

Here’s what the average rent looks like in two major West Virginia cities.

Charleston

Located in the southwestern part of the state, Charleston is West Virginia’s capital city. It’s also the most populous city in the state with 48,018 residents. Situated at the confluence of the Kanawha and Elk rivers, this pretty riverfront city has happening events and festival scenes, great dining and shopping and close-knit neighborhoods. While there are plenty of parks and urban green areas around town, West Virginia’s rugged wilderness is just a short drive away. It ranks well as one of the best state capitals to call home.

Housing costs here are also extremely affordable, falling 40.5 percent below the national average. One-bedroom apartments cost $650 a month on average and two-bedrooms go for $750 a month. Both categories have remained stable over the past year. Data about average rent prices aren’t available. The median sale price for buying a home in the area isn’t available, either. But to give you a ballpark figure, the U.S. census lists the median value for owner-occupied housing units as $156,900.

Considering these rough figures, both renting and homeowning in Charleston are affordable compared to the national average. The national median sale price for a home is $430,982, while the average rent nationwide sits at $1,722 for a one-bedroom apartment.

Morgantown

Morgantown is West Virginia’s third-most-populous city, located in the northeastern part of the state close to the Pennsylvania border. With a charming city center and youthful population, this lively small city is best known for being the home of West Virginia University. Residents can tailgate and cheer on the West Virginia Mountaineers sports teams and enjoy the bustling downtown area. Nearby Cheat Canyon offers great white-water rafting and area lakes provide quiet getaways to fish and boat. Hiking and birding are also extremely popular here.

The cost of housing here is also 17.2 percent below the national average. Everyone from students to families loves the low housing prices. The average monthly rent for a one-bedroom apartment is $589, up 3 percent from last year. Two-bedroom apartments cost around $741 per month, also up 3 percent from last year. While there has been some growth, the small increase indicates that prices are staying relatively the same even in this volatile time for renting.

The median value for owner-occupied housing units as $215,000, according to the U.S. Census.

West Virginia food prices

From multicultural dishes with rich, local histories to bountiful yields of native Golden Delicious apples and maple syrup, West Virginia’s unique food culture and cuisine is one of the best parts of living here. Food is deeply tied to the area’s history and culture and big part of the cost of living in West Virginia. A great example of this is the pepperoni roll, the official state food of West Virginia. These beloved rolls of bread, cheese and pepperoni were originally created as a convenient lunch for coal miners. Many recipes use the incredible bounty of apples, fruits and other ingredients that grow here.

Perhaps because many types of food are grown and sourced locally, food costs in West Virginia are reasonable. Average grocery costs here are 2.1 percent below the national average. The average West Virginian spends between $233 and $266 per month on food, which comes out to between $2,801 and $3,200 annually. That’s about the same food spending as more expensive states like California and New York.

As an affordable college town, Morgantown is the least expensive city in West Virginia for food spending. Here’s how other West Virginia cities compare to the national average for food costs:

  • Charleston is 1.4 percent above the national average
  • Morgantown is 4.5 percent below the national average

In general, food items cost more in Charleston. A half-gallon of milk costs $2.24 in Charleston compared to $1.92 in Morgantown. A dozen eggs in Charleston come with a price tag of $1.80, but only cost $1.39 in Morgantown.

However, Morgantown is the more expensive city when it comes to dining out. The bill for a three-course meal for two at a decent restaurant in Morgantown comes out to around $70. But in Charleston, it’s only $42 which is a difference of 40 percent.

West Virginia utility prices

Overall, the cost of living in West Virginia for utilities, like electricity, water and internet, is less than the national average. If you care about getting your energy from sustainable sources, West Virginia is currently not the best place to live. The state’s deep history with coal mining means that the majority of its energy comes from coal-powered plants. However, renewable energy from hydroelectric and wind sources is on the rise. Looking at all utilities combined, here’s how the cost of utilities in these West Virginia cities compares to the national average:

  • Charleston is 2.4 percent below the national average
  • Morgantown is 9.9 percent below the national average

Morgantown is the least expensive city for utilities. Total energy bills for the month come out to around $148.01 compared to $176.91 in Charleston. For water, West Virginians pay an average of $72 for their water bills. To put that in perspective, the average water bill nationally is $68.

The price of internet is more expensive in some West Virginia cities. While the average internet bill around the U.S. is $56, you’ll be paying $70 in Charleston and $75.40 in Morgantown for 60 megabits-per-second.

West Virginia transportation prices

Most cities around West Virginia have access to public transportation, which is a great way to save money on gas and vehicle expenses. It also helps reduce traffic, cuts down on commuting times and is a more environmentally-friendly method of travel. In towns and rural areas, mass transit is an essential link between communities.

For the most part, public transportation in West Virginia is affordable, costing less than the national average. But there are exceptions, as you’ll see when we compare transportation costs in these two cities to the national average:

  • Charleston is 28.5 percent above the national average
  • Morgantown is 8.6 percent below the national average

Charleston is the most expensive city for public transportation in West Virginia. Let’s take a closer look at mass transit services in these cities and what they cost.

KRT in Charleston

The Kanawha Valley Regional Transportation Authority, or KRT for short, provides mass transit services to Charleston’s metro area. Consisting of a fleet of buses and vans, it operates 20 fixed routes. All rides are a flat fare of $1.50. Day passes are available for $2.50 and a 31-day pass costs $60. Discounted fares are available for senior citizens and those with disabilities.

Charleston is also one end of the 88-mile West Virginia Turnpike that connects Charleston to Princeton on Interstate 77. Toll fees vary depending on what class of vehicle you’re driving, the distance you’ve traveled on the turnpike and whether you’re paying in cash or have an E-ZPass. For 2-axle passenger vehicles, fees range from $2.73 to $4.25.

In addition to taking the bus or having your own car, Charleston is also a decent city to navigate on foot. With a walk score of 48 and a bike score of 39, certain neighborhoods and parts of town are both pedestrian- and cyclist-friendly.

Mountain Line Transit Authority in Morgantown

Residents of Morgantown have several different forms of mass transit to choose from. The biggest is Mountain Line Transit Authority, which operates 20 different routes with its bus fleet. Its routes connect the different WVU campuses, the city of Morgantown and surrounding Monongalia County. The Grey line also provides direct service to Pittsburgh for $15.

There’s a reason the cost of transportation in Morgantown falls well below the national average. Mountain Line Transit is publicly supported and funded, allowing riders to use the service for very low costs. One-way fares are between 75 cents and $1, and an unlimited monthly Monster Pass costs $125. Transfers cost an extra 75 cents to $1. All students, staff and faculty of the university get to ride for free, as well.

Morgantown also has the Personal Rapid Transit, an efficient, innovative people-mover that connects the different WVU campuses to downtown. This all-electric mode of transit not only makes life easier for students, faculty and staff of the university but also offers a more sustainable way to get around. A recent study found that the PRT saves 2,200 tons of carbon emissions each year. Use of the PRT, which has five different stops, is free for WVU personnel and students and the general public pays $0.50 a ride.

Between buses and the PRT, it’s easy to get around Morgantown using mass transit. The city also has a good walk score of 50. Certain areas, like downtown and the university campuses, are very walk-friendly. Morgantown isn’t quite as bike-friendly, though, with a lower score of 34.

West Virginia healthcare prices

Healthcare costs in West Virginia are slightly higher than the national average. One of the reasons for this is that the general population struggles with a variety of health issues like heart disease and cancer. West Virginia doesn’t rank well nationally for the general health of its residents, which could be one reason the cost of living in West Virginia for healthcare is higher. However, it’s important to note that because healthcare costs can vary widely on a person-by-person basis due to factors like pre-existing conditions or the cost of prescribed medicines, it’s difficult to determine accurate healthcare averages.

Healthcare costs in most major West Virginia cities are roughly the same. For example, here’s how much a doctor’s visit costs in these different cities:

  • Charleston: $153
  • Morgantown: $141.23

Going to the dentist costs almost the same in both cities, at $102.30 in Morgantown and $103 in Charleston. This is how healthcare costs in these cities compare to the national average:

  • Charleston is 1.4 percent above the national average
  • Morgantown is 2.5 percent above the national average

While similar, Charleston does have slightly more expensive healthcare costs. Since WVU in Morgantown has several university-affiliated hospitals, that could contribute to lower costs and higher quality care. Morgantown is also one of the 50 cheapest cities for healthcare costs.

West Virginia goods and services prices

You’ll also be paying less than the national average for miscellaneous goods and services in West Virginia. This includes everything from getting a haircut to buying toothpaste, as well as leisure activities like going to the movies. Here’s a look at how those costs compare nationally:

  • Charleston is 0.1 percent below the national average
  • Morgantown is 3.7 percent below the national average

While Morgantown is the less expensive city, some costs in both cities are pretty neck and neck. It costs $30 to get a haircut in Morgantown and is only $0.50 more expensive in Charleston at $30.50. Movie tickets only cost three cents more in Morgantown at $11.16 compared to $11.13 in Charleston. Buying a pizza costs $10.64 in Morgantown and $10.39 in Charleston.

From the friendly neighbors to the abundance of things to do outdoors, West Virginia is a very family-friendly state. So, if you’re planning on raising a family here, you’ll also need to factor the cost of childcare into your monthly budget. Paying for a month of private preschool or kindergarten for one child is more expensive in the state capital, costing $900. In Morgantown, it’s $300 cheaper at $600.

Taxes in West Virginia

West Virginia’s statewide sales tax is 6 percent. For every $1,000 you spend in West Virginia, you’ll be paying $60 on top of that in sales tax.

Many municipalities around the state tack an additional 1 percent sales tax on the statewide rate. This includes Charleston and Morgantown:

  • Charleston has a combined tax of 7 percent
  • Morgantown has a combined tax of 7 percent

That brings the amount you pay in taxes for every $1,000 spent up to $70. While expensive, 7 percent is the maximum you’ll pay in sales tax throughout the state.

How much do I need to earn to live in West Virginia?

To figure out if you can afford to live in a particular state or area, first, you need to know what you can afford to pay for rent or housing. The cost of housing is usually the biggest expense in a monthly budget. Experts recommend that you only spend 30 percent of your gross monthly income on housing. This helps ensure a balanced budget, with enough left over for other essentials like groceries, as well as fun activities like going out.

Data isn’t available on West Virginia’s statewide average rent. We’ll use the average rent in Morgantown for this example. The average rent for a one-bedroom apartment in Morgantown is $589. To only spend 30 percent of your monthly income on rent, you’ll need to make $1,963 a month or $23,556 annually.

West Virginia’s median household income is $48,037, so most people living in West Virginia can follow the 30 percent rule and comfortably afford housing. This example is only specific to Morgantown, so you may need to make more per month elsewhere in the state to afford rent.

This rent calculator can help you determine what you can afford to pay in rent each month based on monthly income, expenses and where you want to live.

Living in West Virginia

Like John Denver, you too may soon be singing West Virginia’s praises while living here. Not only is the state incredibly beautiful and fun to explore, but the cost of living West Virginia is also very affordable for most budgets. If friendly small cities, endless hiking and water sports and cheap housing sound like your cup of tea, those country roads will be the ones taking you home, too.

The Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of July 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.

Source: rent.com

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Broker Pricing and Non-QM Products; Seminars and Conferences; Rates Higher on Producer Prices

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Broker Pricing and Non-QM Products; Seminars and Conferences; Rates Higher on Producer Prices

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Fri, Aug 11 2023, 10:22 AM

As the MMLA conference wraps up (congratulations to Dan Grzywacz, CMB, and nearly 40-year industry vet, who was this year’s James T. Barnes Award winner), the conversations still involve some seemingly endless topics. One of which is W2 versus 1099. There’s been a lot of “quacking:” about whether originators can be paid as independent contractors (1099) or need to be employees (W-2). Mortgage Muser and attorney Brian Levy has some new thoughts on this topic that are worthwhile even if he “ducks” providing legal advice in his entertaining and insightful mortgage blog. View past editions of the Mortgage Musings and subscribe to get emailed about new postings for free here. Another is sticky higher interest rates, and today at 3PM ET, Skylar Olsen, Zillow’s Chief Economist, will be co-hosting The Mortgage Collaborative’s Rundown, covering current events in the economy and mortgage market for 30-45 minutes. And there’s volume. According to Curinos, July 2023 funded mortgage volume decreased 30% YoY and 13% MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. (Today’s podcast can be found here and is sponsored by SimpleNexus, an nCino Company, developer of mortgage technology uniting the people, systems, and stages of the mortgage process into one seamless, end-to-end solution. Hear an interview with Equifax’s Joel Rickman on leveraging income and employment verifications during the home equity line of credit (HELOC) origination process.)

Lender and Broker Software, Products, and Services

“Brokers can now shop, lock, and deliver on one platform that seamlessly connects brokers, lenders, and originators. In this market, hustle is everything. You can’t afford to waste a single deal… Or a single minute. That’s why ReadyPrice has launched its innovative new Shop, Lock & Deliver loan exchange platform, designed to help independent mortgage brokers like you save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, and all on a single platform, at no cost to brokers. It’s the industry’s most powerful universal delivery portal, and it’s already helping thousands of brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Come check us out today.”

Mega Capital Funding is proud to be a 25 yr. partner to the broker community. The team at Mega Capital continues to grow and expand across the US. Mega has recently added another 10 outside AEs across the country to further support the broker community. The team at Mega is also expanding our products this month with additions to our Non QM suite. ITIN is new and improved along with our Expanded DSCR options which also includes a No Ratio DSCR. We at Mega are looking to continue to be a destination for brokers and bankers to find all their lending needs under one roof. Conv, FHA, VA, USDA, Jumbo and Non QM. Mega Capital is also excited to be at NAMB this year. Please come by and see us in Vegas.

Looking Ahead to Conferences and Training

A good place to start is here, and click on “events.”

The Mississippi Mortgage Bankers Association is holding its fall conference September 7-8 in Jackson. Our theme for this year is “Building a Strong MS” We are focusing on building relationships, strategies, and opportunities for the real estate housing industry in MS. Our fall conference is open to loan originators, realtors, and other industry affiliates. Realtors will receive Continuing ED (CE) credits for attending the Fall Conference.

Save the dates of September 10-12 and join lending professionals from the Pacific Northwest at the Riverhouse in Bend, Oregon, for the Pacific Northwest Lenders Conference. This event promises to be a catalyst for professional growth, offering a unique platform to expand knowledge, build valuable connections, and elevate lending businesses in the region.

Prepare to be amazed and delighted when you swing by the Plaza Home Mortgage® booth at the NAMB National Conference, September 8-11, at Caesars Palace in Las Vegas.

Register for free with the code PLAZAFREE and pop by Plaza’s booth #607 or schedule a meeting with us at [email protected].

Zelman’s Virtual Housing Summit is September 18-21, though not exactly in person.

Network and collaborate with your industry colleagues while learning the latest updates on mortgage industry standards at MISMO’s Fall Summit, September 18 – 21 in Washington, DC

New To MISMO? Check out this 20-minute presentation “Intro to the MISMO Summit Experience” to learn what to expect and how to best prepare so that you get the most out of the Summit.

AzAMP Annual EXPO, Luncheon, and 8-Hour NMLS CE Class, September 27–28, at the We-Ko-Pa Resort and Casino. Begin your experience on Wednesday, Sept. 27 with Part 1 of NMLS CE class. Full day of events begins on Thursday, September 28 including NMLS CE class Part 2, Luncheon with Keynote Speakers Allen Beydoun, UWM Executive Vice President and Rob Chrisman, The Chrisman Commentary Daily Mortgage News, followed by the AzAMP Expo.

Watch on demand, at your leisure: Millennials and Gen Zers represent the largest group of first-time homebuyers. In less than 10 years, 3.1 million will have entered the market. Of these buyers, roughly 75 percent of them report checking social media daily. Making social media a necessary strategy for loan officers. Join Homebot’s VP of Marketing, Ashley Remstad and Mortgage Advisor Sosi Avila as they discuss key strategies and tactics for using social media to your advantage. Register for the webinar here.

It’s time to register for the New England Mortgage Bankers two-day Conference, September 13-14 in Portsmouth NH. Multiple venues all within walking distance for a new NEMBC experience.

Register for the AzAMP Annual EXPO, Luncheon, and 8-Hour NMLS CE Class on September 27th and 28th at the We-Ko-Pa Resort and Casino. Don’t miss Luncheon Speakers Allen Beydoun, UWM EVP, and Rob Chrisman, The Chrisman Commentary Daily Mortgage News. Stay the night at the resort and attend all the events.

Registration for the NCEO 2023 Fall Forum in Houston, September 26-28 is now open. Featuring top industry experts and thought leaders, the forum will update you on the latest trends and best practices in employee ownership. Network with other employee owners and industry professionals from across the country, sharing ideas, challenges, and successes.

Secure early-bird pricing through June 23rd. From close-knit conversations to invigorating keynotes, the forum is the place to rocket your company into the stratosphere.

MBAC 67th Annual Convention Oct 1-4, 2023 at the Francis Marion Hotel, Charleston, SC.

Sponsorship opportunities available, reserve your room at the Francis Marion Hotel use Promo Code MBAC2023 for special rate, Last Day to reserve at this rate, September 11, 2023.

Mark your calendars and make plans for ACUMA’s 2023 Annual Conference! Registration is now open for the biggest event tailored for the credit union mortgage professional. This year’s theme, Make Your Mark, is the largest and most comprehensive event on ACUMA’s education calendar and is scheduled for Oct. 1-4 at the Gaylord National Resort in National Harbor, Maryland, just down the Potomac River from Washington, D.C. Make plans now to attend this year’s largest gathering of mortgage lenders, and plan to continue to Make Your Mark in credit union mortgage lending! Here’s the link to register! ACUMA 2023 Annual Conference.

At Turning Stone Casino & Resort, Verona, NY., October 4th at 12:00 PM – October 6th at 12:00 PM (EDT), NYMBA 2023 Annual Convention & Golf Tournament, a premier event that brings together industry leaders, professionals, and innovators in the mortgage banking sector. This convention serves as a platform to foster collaboration, share knowledge, and explore emerging trends, ultimately shaping the future of the mortgage banking industry in New York and beyond.

As we celebrate America’s independence, we have many other reasons to celebrate as well. This October 15-18, we’re taking the original gathering of real estate finance professionals to the birthplace of our country, and we’re celebrating some of the reasons you’re going to love it: MBA’s Annual Convention & Expo 2023.The largest annual gathering of real estate finance professionals, this is the one event you need to gain access to the industry’s power players and innovators. Be inspired and get informed by engaging speakers on the Main Stage. Meet with dozens of exhibitors in THE HUB and get hands-on access to the latest products and services. Dive deep into Breakout Sessions to get the insight you need on all the facets of the business.

There’s only one venue where you can get timely updates on where the reverse mortgage industry is headed, the 2023 Annual Meeting & Expo, October 23-25 in Nashville, TN.

Get the latest news on the HECM program. Learn about proprietary product opportunities. Find out what other regulatory changes are forthcoming. Pre-sale registration, the lowest registration rate, expires at midnight (Eastern Time) on Tuesday, August 22.

The kind of news you want to know, VIBE 2023, a very important broker exchange, is here! What is VIBE 2023?* The biggest growth mindset event for Mortgage Brokers featuring a VIP lineup of some of the most influential speakers in the country! Join us at the Westin South Coast Plaza in Costa Mesa, CA on 10/24/2023. Register to attend using your UNIQUE CODE**, provided by your Kind Account Executive. Learn more by visiting here. *VIBE 2023 event is open to all licensed Mortgage Brokers in the United States. No commitments to establish a partnership with Kind Lending are required to attend. **Unique Codes are provided by your Kind Lending Account Executive. If you do not have an account executive or are not yet working with Kind TPO, email us to learn more.

TMBA is working through the summer planning outstanding events including the 6th Annual Mortgage Symposium, November 6-7 at the Westin Dallas Southlake Hotel in Southlake TX. The Texas Women Mortgage Bankers event will be held on November 6 at the Westin Dallas Southlake Hotel.

October Research, LLC is happy to bring back the Women’s Leadership Summit (WLS) for its second year. It will be held November 6-7 at the Naples Grande Beach Resort in Naples, FL. We are now accepting registrations and speaker nominations! Built around the four pillars (Develop, Grow, Support and Empower) WLS provides attendees with the tools for success in a fun and supportive environment. Attendees come from across the country to learn from our visiting experts and each other about how to meet their goals. Visit OctoberResearchWLS.com for more information.

Capital Markets

Not only do the earth’s temperatures keep going higher, but inflation does as well, but at a slower pace! It was revealed yesterday that the consumer price index rose a temperate 0.2 percent in July and 3.2 percent year-over-year, matching consensus expectations. That marked the smallest back-to-back gains in more than two years, adding to a steady wave of disinflation in recent months. Excluding the volatile food and energy components, the “core” index rose 4.7 percent year-over-year versus 4.8 percent in June. The index for shelter accounted for 90 percent of the increase, but is almost back to pre-pandemic levels and will continue to moderate after home price appreciation peaked last year.

While the recent trend is encouraging and confirms that inflation is headed in the direction the FOMC wants, it’s likely premature to get overly excited about a sustained return to the Fed’s 2 percent inflation target. The Fed’s fear is that a pause will reignite home price appreciation, exacerbate the affordability problem, and push inflation higher. Look for the Fed to leave interest rates unchanged at the next policy meeting in September, but add the caveat that the job isn’t done yet. Initial claims also moved in a direction last week to corroborate the thinking that there is some softening in the labor market, which is what the Fed expects and hopes to see. However, bond yields rose by the day’s close after the U.S. Treasury closed out this week’s auction slate with a weak $23 billion 30-year bond offering.

Today’s calendar kicked off with MBA reporting that the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.37 percent of all loans outstanding at the end of the second quarter of 2023, down 19 basis points from the first quarter of 2023 and down 27 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the second quarter fell by 3 basis points to 0.13 percent.

We’ve also received the July Producer Price Index, which increased .3 percent month-over-month and .8 percent years-over-year versus 0.2 percent month-over-month and 0.6 percent year-over-year expectations and both 0.1 percent month-over-month and year-over-year previously. Core PPI rose (), +2.7 year over year. The only other release scheduled for today is at 10AM ET with the preliminary August Michigan sentiment. We begin the day with Agency MBS prices worse .125-.250 from last night and the 10-year yielding 4.13 after closing yesterday at 4.08 percent.

Employment and Transitions

“Keith McKay, CEO of Prime Choice Funding, invites you to participate in reshaping the mortgage industry. Our mission for 2023 is to become the top mortgage broker in the nation. Join our team and expand your professional horizon with our diverse loan programs, flexible compensation plans, and a unique opportunity to earn extra by offering solar solutions to your clients. Backed by comprehensive marketing resources, cutting-edge platform, and robust operations support, your potential for growth is limitless. With a history dating back to 2007, Prime Choice represents stability and innovation in finance and sustainability. Register for our webinar today and explore these rewarding opportunities.”

The Maryland office of USA Mortgage has added nationally prominent Loan Officer, Sam Rosenblatt, to its roster. Rosenblatt joins William “Bill” Sohan in his venture to expand USA’s national footprint. Active in the mortgage industry since 1995, Rosenblatt was the #1 producer in units in Maryland in 2021, filing 978 closed loans valued at $338,087,603, and is among the top 50 originators in the nation. “I’m excited to join USA Mortgage because they have great loan options for my clients, state-of-the-art marketing, and cutting-edge technology that makes the mortgage process as efficient and smooth as possible”, he said. Founded in St. Louis in 2001, USA has offices in 34 states and is licensed in 49 states plus the District of Columbia. For a confidential conversation about joining USA, contact Brooke Anderson at 609-500-1520.

Switching gears, Michael Dresden, the President of Dart Appraisal, sent the sad news that Tim Laden, Dart’s Chief Appraiser, passed away. “Tim impacted so many appraisers across the country through his love for coaching and mentoring. Tim was such an asset to Dart and helped us elevate many areas of our business. We’re better because of Tim.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

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Housing affordability across the country is especially tough in the nation’s urban areas, but in the country’s largest metros it’s often the suburbs that are the least affordable.

A new Zillow analysis examines the financial burden of housing payments in urban, suburban and rural parts of the country. Finding a home within their budget is the top concern for both renters and home buyers, according to the 2018 Zillow Group Report on Consumer Housing Trends, but where a home is located can affect that budget, forcing many to accept tradeoffs.

Urban home buyers nationwide have to dedicate a larger share of their income to monthly mortgage payments (26.5 percent) than buyers in the suburbs or rural areas do – 20.2 percent and 13.4 percent, respectively. In urban areas of the Seattle metro, for example, buyers would need to dedicate 40.4 percent of their income to monthly housing costs, more than they would have to in either the suburbs (27.4 percent) or rural areas (24.4 percent). The same hold true in less than a third of the country’s largest markets.

The suburbs are the most common destination for today’s home buyers, with 48 percent of all buyers purchasing a home in the suburbs. Yet suburban living is a bigger financial burden for buyers in nearly half of the country’s largest markets (17 of the top 35 metros), compared with the costs of urban or rural housing.

In San Diego, for example, paying for a suburban home requires 40.9 percent of the median household income. Mortgage payments on a rural home would take up 37.3 percent of the median income, and housing costs for an urban home would require 35 percent of the typical income.

“Choosing where to live depends on many factors other than strictly financial terms. The size and space of the home, and the nearby amenities have to meet your needs, or come as close as possible,” said Zillow Director of Economic Research and Outreach, Skylar Olsen. “How close you can come to those ideal options is always limited by what you can afford, and tradeoffs are almost always necessary. Finding a home in your budget can be a stressful process, whether you’re looking to buy or rent. The difference between an urban core or more distant suburb could make all the difference.”

Across the country, renters signing a new lease typically spend more of their income on monthly housing costs than homeowners do, in large part due to still-low interest rates for buyers. The difference between national affordability trends and what is happening in the 35 largest housing markets is more pronounced for renters.

Nationally, rental payments in an urban area require 36.8 percent of the median household income each month, well above the commonly recommended 30 percent. Suburban rents are also slightly above that threshold, requiring 31.8 percent of the median household income. Rural rents nationwide are the smallest financial burden, taking 23.9 percent of the typical income.

Urban rents in the Dallas market take up a much larger share of income than those in suburban or rural areas of the metro. The financial burden for urban renters exceeds the 30 percent standard, with the typical urban rent requiring 38.8 percent of the median income.

However, in about two-thirds of the biggest U.S. housing markets rents are least affordable in the suburbs, where rental supply is slow to grow. Renting a home in the suburbs of Chicago, for example, requires 30 percent of the median income, more than what would be required in either urban or rural parts of the metro.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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Source: realtybiznews.com

Apache is functioning normally

President Donald Trump’s administration is teasing real estate investors with the possibility of significant tax breaks when they buy properties in “distressed economic areas” that have since been labeled as “opportunity zones” by the U.S. Treasure Department.

Steve Mnuchin, the Treasury’s Secretary, said the newly designated zones could attract as much as $100 billion in investment.

The idea for the tax breaks is to tempt investors to inject new capital into areas of the U.S. that have fallen behind the rest of the country since the Great Recession. The plan is that capital gains in a certified opportunity zone can avoid taxation through the end of 2026, or until the investment is sold, whichever comes first. Any gains would be permanently shielded from being taxed if the investors holds the asset for at least 10 years. In addition, after a seven year period, the initial investment will be discounted by up to 15 percent for taxation purposes.

The Treasury Department also says that “large scale” projects could possibly qualify for tax breaks. For example, those who invest capital for startup business in opportunity zones could be exempt. Also include are individuals, corporations, businesses, REITs and estates and trusts. More guidance will be issued at the end of the year, the Treasury Department said.

The Treasury Department has published a full list of “Opportunity Zones”, available here.

“The creation of opportunity zones is one of the most significant provisions of the Tax Cut and Jobs Act,” Mnuchin said earlier this year. “Incentivizing private investment into these low-income communities can be transformational, stimulating economic growth and job creation across the country. This administration will work diligently with states and the private sector to encourage investment and development in opportunity zones and other distressed communities so that they may enjoy the benefits of robust economic growth.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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Source: realtybiznews.com