housing finance

Apache is functioning normally

Two former New Jersey-based mortgage loan originators have been charged with conspiracy to commit bank fraud by the U.S. Attorney’s Office, District of New Jersey according to an announcement by the U.S. Department of Justice (DOJ) and U.S. Attorney Philip Sellinger.

Christopher Gallo has been recognized as a top-producing loan originator, at one point being named Scotsman Guide‘s fourth-ranked LO in America. Gallo previously shared perspectives with HousingWire on his business strategy for 2023 after enduring challenges in 2022. At the time, Gallo was employed by NJ Lenders Corp, which primarily operates in New Jersey, New York and Pennsylvania.

Alongside Gallo, Mehmet Elmas was also named in the complaint, filed by a special agent working under the Office of the Inspector General (OIG) at the Federal Housing Finance Agency (FHFA). The complaint says that Gallo and Elmas were employed by the same company at the time of the alleged offense, with Elmas working as Gallo’s assistant.

Gallo and Elmas have each been released on a $200,000 bond after appearing before a magistrate judge in Newark federal court, the DOJ said.

“From 2018 through October 2023, Gallo and Elmas used their positions to conspire and engage in a fraudulent scheme to falsify loan origination documents sent to mortgage lenders in New Jersey and elsewhere, including their former employer, to fraudulently obtain mortgage loans,” the DOJ alleges.

The pair allegedly “routinely mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates,” adding they “often submitted loan applications falsely stating that the listed borrowers were the primary residents of certain proprieties when, in fact, those properties were intended to be used as rental or investment properties,” the complaint alleges.

The alleged scheme misled lenders about the “true intended use of the properties,” and “Gallo and Elmas secured and profited from mortgage loans that were approved at lower interest rates,” the DOJ claimed.

The alleged conspiracy also included falsifying property records, including “building safety and financial information of prospective borrowers to facilitate mortgage loan approval,” the DOJ alleged.

In a statement, NJ Lenders Corp told HousingWire that it is cooperating with law enforcement as the investigation progresses.

“NJ Lenders is proud of its 33 years of successfully assisting homeowners with integrity and professionalism. We are fully cooperating with law enforcement and the ongoing investigation of two former employees,” said Mark Tabakin, an attorney for NJ Lenders.

“The actions of these former employees appear to have been coordinated to benefit them financially while taking advantage of the reputation and trust of the firm,” he continued. “NJ Lenders’ work will continue uninterrupted as we provide the highest level of service to our clients.”

Gallo originated more than $1.4 billion in loans between 2018 and October 2023, according to the DOJ. When listed as the fourth top-producing LO in 2022 by Scotsman Guide, the publication placed his total volume at $1.175 billion for that year alone. One-third of his loans were purchases, with the remainder being refinances.

“The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest,” DOJ said.

Gallo joined CrossCountry Mortgage in October 2023, according to NMLS licensing information. His webpage at CCM was taken down on Wednesday, and a spokesperson for the Cleveland-based retail lender did not immediately return a request for comment.

This story has been updated with a statement from NJ Lenders Corp.

Source: housingwire.com

Apache is functioning normally

Piggyback, 2nds, POS Products; G-Rate’s CEO Podcast Interview; Agency News

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Piggyback, 2nds, POS Products; G-Rate’s CEO Podcast Interview; Agency News

By:
Rob Chrisman

Mon, Apr 22 2024, 11:28 AM

When I was a kid, whenever I would walk by a pay phone or newspaper vending machine, I’d check the coin change slot. Or periodically check under my Dad’s La-Z-Boy… every penny or dollar counted! (Nowadays, I still get excited when I find a forgotten quarter in my own pants or backpack.) Plenty of folks at last week’s Great River Conference were trying to do the modern equivalent of that by learning about the current vendor offerings of technology, or meeting with their current vendors to see if pennies or dollars could be saved on every loan given the current $12k+ cost per funded loan. Smart and compliant speed and efficiency are critical… speaking of which, found here, today’s podcast features an interview with Guaranteed Rate’s Victor Ciardelli on the company’s goal of closing a loan in one-day and how they will get there. This week’s podcasts are sponsored by Calque. With The Trade-In Mortgage powered by Calque, homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home.

Lender and Broker Products, Software, and Services

When people say they can see miles and miles on a clear day, they aren’t wrong: the horizon is about 3 miles away, with some variation depending on your height. And whatever may lie beyond, Dark Matter Technologies is helping lenders prepare with its first annual Horizon user conference. The event kicks off Wednesday at the Fontainebleau Miami Beach and will bring together hundreds of industry notables to network, get the inside scoop on Dark Matter’s innovation roadmap, and explore business trends including market growth strategies, AI, and cybersecurity. Feeling a little FOMO? Request a consultation today and your team could be working smarter with the Empower LOS, and catching some Florida sun, by this time next year.

Does it feel like your current point-of-sale vendor has lost focus on mortgage? As a mortgage-specialized partner, Maxwell is committed to giving lenders a competitive advantage in a changing mortgage market. With Maxwell Point of Sale, lenders can tailor workflows to fit the unique needs of their organization, so back-end teams can work quickly without costly interruptions. Compared to a top competitor, Maxwell Point of Sale averages a 5.9 percent higher pull-through rate from rate-lock to close. For the average lender using Maxwell POS, this equates to $42MM in additional loan volume. Schedule a call with the team to learn how Maxwell Point of Sale can start working for you, your borrowers, and your lending team quickly.

Take your accounting department from “Cost Center” to Revenue Generator” with Loan Vision & LV-PAM. Loan Vision customers report a 10 percent reduction in loan fallout, 30 percent+ decrease in days to close the books, and 20 percent+ reduction in accounting headcount. Interested in learning how Loan Vision can reduce internal costs and help you gain a competitive edge? Contact Carl Wooloff to schedule a call today.

LoanStream wants you to Spring into more business with its April Specials on Prime, Non-QM and Closed End Seconds now through April 30th, 2024. Includes 25 BPS Price Improvement on FHA/VA loans 620+ FICO (excludes DPA and CalHFA) on Prime, 25 BPS price improvement on all Non-QM loans (excludes Select) and 25 BPS Price Improvement on all Closed-End Seconds. Restrictions apply so contact your LoanStream Account Executive to learn more. Specials are valid for loans locked 4/1/2024 through 4/30/2024. Offers subject to change at any time, terms and conditions apply.

Symmetry Lending introduces its April Special for Piggyback Pricing! Enjoy a remarkable discount on Piggyback HELOC transactions until April’s end, including a -1.00 percent Spring Discount for qualified customers with a FICO score of 740+ and a draw of $200k+, equating to Prime + .25 percent margin. This offer demonstrates appreciation for clients’ support and trust. Ready to seize this opportunity? Connect with your Symmetry Lending Area Manager to formulate a plan for getting these solutions in front of your clients today!

eClosing Survey by STRATMOR

Today, Snapdocs released new industry research that found lenders using the company’s eClosing platform experience 18-day faster loan velocity than their industry peers. The survey was conducted by STRATMOR Group with data self-reported by mortgage lenders. I got a note from Michael Sachdev, CEO of Snapdocs that said eClosing technology, when paired with the right partner to scale adoption, is helping lenders set new industry benchmarks for loan processing speed, operating costs, and borrower satisfaction. So often we see vendors make claims about their product value, but this report is a good example of that validation being sourced directly from the lender users themselves.

Agency and Investor News

Last week, the Department of Housing and Urban Development issued a HUD final rule that it says will increase lender participation in the Section 184 Indian Housing Loan Guarantee program, strengthen regulations to meet growing demand, and ensure the program will remain a vital resource for Native American families for years to come. Miki Adams, president of CBC Mortgage Agency, a correspondent investor that is wholly owned by the Cedar Band of Paiutes in Utah, stated, “The Section 184 program is a vital tool for so many Native American homebuyers. The new regulations will bring more clarity and predictability to this important program, and we applaud the Administration for the improvements and their efforts to work closely with Tribal leaders and other stakeholders. There is still more that must be done to modernize the program and we look forward to working collaboratively with HUD on future improvements.”

Loss mitigation: what would you do? A borrower is out of work, is three months delinquent on their mortgage payments, has been offered a new job in another state, and will relocate within 60 days. They’re also unable to catch up on their arrears and have equity in the home. What should the servicer do? Review this and other scenarios from Fannie Mae’s March Loss Mitigation webinar and download the presentation.

Fannie Mae has launched “Mission Index,” a new initiative to sell agency mortgage-backed securities (MBS) that cater to socially conscious investors, aiming to attract more buyers to the market, Bloomberg reported. Fannie Mae assigns scores to MBS pools based on affordable rental housing availability, borrower location (high-poverty or rural areas), and other indicators, giving investors more visibility into the underlying mortgages and stimulate lending to underserved borrowers, potentially leading to lower interest rates for these borrowers.

Saving for a down payment is a barrier first-time homebuyers face. While there are numerous down payment assistance programs (DPA) available, it can be difficult for housing professionals to find programs that meet the specific needs of their borrower. Given the number of DPA programs in the market, there hasn’t been a consistent way to match the right DPA program to the needs of a particular borrower. To address this issue, Freddie Mac launched DPA One®, a free online solution to help DPA program providers reduce submission errors and program requirement questions from lenders by developing a single, standardized, online access point to manage their DPA program information. To learn more, read Freddie Mac’s case study about how one of Freddie Mac’s housing finance agency partners, Southeast Texas Housing Finance Corporation (SETH), is promoting affordable housing in the Southeast Texas community.

As part of a recent Fannie Mae Mortgage Lender Sentiment Survey® (MLSS) special topic analysis, Fannie’s economists surveyed senior executives of mortgage lending institutions to better understand how they feel about Technology Service Provider (TSP) solutions, particularly as TSPs have become an increasingly essential part of lenders’ day to day operations. The results are in a new Perspectives blog.

Ginnie Mae announced revisions to its monthly single-family reporting requirements to include expanded Payment Default Status (PDS) reporting. The expanded PDS dataset will include loan default information, any mitigation actions taken, and the timing of those actions. For more information regarding the transition to the new reporting requirements, see All Participants Memorandum (APM) 24-06.

In Bulletin 2024-1, Freddie Mac announced changes to trust income requirements pertaining to history of receipt for trust income with pre-determined fixed payments, and documentation of continuance for all trust income types. Pennymac is aligning with these changes effective with loan deliveries on or after April 30, 2024. View Pennymac Announcement 24-36 for details.

Pennymac posted Announcement 24-37 informing it will update Conventional LLPAs effective for all Best Efforts Commitments taken on or after Monday, April 22, 2024.

Capital Markets

Investor attitudes drive investor demand, and therefore rates. So, what is driving investor attitudes? There is the escalated geopolitical uncertainty between Iran and Israel (central bankers are girding for potential oil shocks that could reignite consumer-price growth), there is rising volatility amidst fear of a potential rate increase due to sticky inflation (voting Fed members have not ruled out the possibility of a future rate hike and have urged patience for any potential easing at least until year-end), there is also cautious optimism surrounding the world economy (earnings season continues on Wall Street this week), and new economic releases are always on the docket, even if most are backward-looking (Q1 GDP, due out later this week, is expected to have risen to 2.9 percent as of the most recent estimate).

More germane to the mortgage industry, we learned last week that existing home sales were down 4.3 percent during the month of March. Meanwhile, housing starts fell 14.7 percent in March although some of the decline was attributed to weather conditions in parts of the country. In terms of the American consumer, retail sales in March rose 0.7 percent which was well above market expectations for a 0.3 percent increase. Additionally, retail sales from February were revised higher from the initial release. The 1.1 percent jump in control group sales led some economists to increase their forecast for personal consumption growth in the first quarter.

Bank economists are growing more optimistic about the outlook for credit conditions compared to the latter half of 2023, according to the American Bankers Association’s latest Credit Conditions Index. Conditions are expected to improve for a second consecutive quarter in Q2, which would mark the highest level in two years, reflecting a moderate increase in optimism. Job growth is expected to continue, inflation is forecasted to ease toward the Fed’s 2 percent target, and three rate cuts are expected by the end of the year.

This week’s highlights include month-end supply consisting of $183 billion in fixed coupons and $44 billion 2-year FRNs auctioned over tomorrow through Thursday, flash PMIs from S&P Global, new home sales, Fed surveys, durable goods, Q1 GDP, PCE, and Michigan Sentiment. No Fed speakers are scheduled with the Fed in blackout ahead of the May 1/2 FOMC meeting. The week gets off to a quiet start with one data point, Chicago Fed National Activity Index for March, due out later this morning. We start Monday with 30-year Agency MBS prices worse roughly .125 from Friday evening and the 10-year yielding 4.65 after closing last week at 4.62 percent.

Employment

radius financial group inc. is looking for an experienced Accounting Manager to lead all accounting operations. radius is a full-service retail mortgage banker that has been making mortgages better through a customer obsessed and team inspired culture since 1999. We are seeking an experienced Accounting Manager to lead all loan accounting, financial reporting, accounts payable and payroll functions. The Accounting Manager will report to the CFO and must have experience in a mortgage accounting system (Loan Vision is a plus), branch reporting and MSR accounting. Remote candidates will be considered and should send confidential inquires to Mike Clark.

Imagine a world where you, as a loan officer, aren’t stuck choosing between a broker model and a retail model. What if there was a company that blended the best of both worlds: the transparency of a broker model with the solid support of a retail banking platform? What if this company not only generated qualified local leads for you but also helped you add value for your existing realtor partners and connect with new ones? What if I told you this company is not just a dream: It’s real and it’s here to revolutionize your workflow. Please schedule a confidential Zoom meeting with Next Wave Mortgage.

TAYGO INC. presents an enticing new opportunity for a SaaS Sales Representative! This pivotal role is instrumental in propelling the success of TAYGO through selling our SaaS solutions to prospective clients. The key focus is comprehending the requirements and challenges of mortgage lenders (as well as mortgage brokers) and adeptly showcasing how our products, WEB-GO and RIN-GO, can optimize their operations and business performance. You must have a strong understanding of CRM products, their features, and the mortgage industry. You must effectively engage with prospects to understand their needs. You must also carefully monitor existing clients’ activities to identify upsell opportunities. You must have exceptional communication skills for online demos and meetings, cold or warm calls and emails. Your expertise, patience, and ability to build and maintain strong customer relationships will be vital in achieving our sales goals and ensuring customer satisfaction. Please send your resume to [email protected].

Alanna McCargo, President of the Government National Mortgage Association (Ginnie Mae) and whom I have had the opportunity to spend some time with, will resign from public office, effective May 3. “McCargo has served in the Biden-Harris Administration since January 2021, first as the Senior Advisor for Housing Finance in the U.S. Department of Housing and Urban Development (HUD) for former Secretary Marcia Fudge and then later nominated by President Biden to lead Ginnie Mae. McCargo’s confirmation, with bipartisan support by the U.S. Senate, made history as she became the first woman and woman of color at the helm of this U.S. Government corporation.”

The announcement came with the usual platitudes from Ms. McCargo about the Administration and Ginnie Mae and its “complex $2.5 trillion guarantee business” as well as others saying some very nice things about her.

Principal Executive Vice President (PEVP) Sam Valverde will serve as the Acting President upon President McCargo’s departure. Senior Advisor for Strategic Operations and Interim Chief Operating Officer Laura Kenney will assume additional responsibilities as part of this transition.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

As thousands of Chicago-area families go house-hunting this spring, the dream of homeownership continues to drift further and further away.

By Don DeBat

21-Apr-24 – Average long-term mortgage rates inched above 7 percent nationwide for the first time this year, reported Freddie Mac’s Primary Mortgage Market Survey on April 18.

Benchmark 30-year fixed-rate home loan rates hit 7.10 percent, up from 6.88 percent a week earlier. That’s its highest level since October 26, 2023, when 30-year fixed loans hit 7.79 percent. A year ago, 30-year fixed mortgage rates averaged a more affordable 6.39 percent.

“The 30-year fixed-rate mortgage surpassed 7 percent for the first time this year,” said Sam Khater (left), Freddie Mac’s Chief Economist. “As rates trend higher, potential home buyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year.”

Interest charges on 15-year fixed loans on April 18 averaged 6.39 percent, up from 6.16 percent a week earlier. A year ago, 15-year fixed mortgages averaged 5.76 percent.

Khater noted that home purchase applications rose modestly the week before, but “it remains unclear how many home buyers can withstand increasing rates in the future.”

The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who place a down payment of 20 percent and have an excellent credit score of 740 or higher.

The truth is home buyers in Chicago and across the nation really are starting to get rate-shy. Sales of existing homes in the United States fell 4.3 percent in March to a seasonally adjusted 4.19 million, reported the National Association of Realtors (NAR). That’s the first monthly decline in sales since December 2023, and follows a nearly 10 percent monthly sales jump nationwide in February.

“Home sales essentially remain stuck because mortgage rates have been stable and inventory is not really rising,” said Laurence Yun (right), NAR’s Chief Economist.

Unfortunately, Yun predicted that mortgage rates are likely to rise above 7 percent in the coming weeks. Early in 2024, Yun had predicted that 30-year fixed loan rates would average 6.3 percent by the fourth quarter of this year.

The interest rate rise is a direct result of the Federal Reserve’s aggressive interest rate hikes intended to tame soaring inflation numbers not seen in 40 years.

The Fed has raised its key benchmark lending rate to a range of 5.25 to 5.50 percent, the highest level since 2007. Based on moves by the Fed, mortgage analysts say 30-year fixed home loans could reach – or surpass – the 8 percent level in the near future. Home loan rates have not hit the lofty 8 percent level since August 11, 2000, more than 23 years ago.

Searching for a better deal, some borrowers are beginning to flock to riskier adjustable-rate mortgages (ARM), lenders say.

“This week we have issued 30-year loan commitments with rates as high as 7.5 percent, depending on down payments and borrower credit scores,” said Jeremy Rose (left), Chicago-based loan consultant for Loan Depot, one of the largest lenders in the nation. “Mortgage interest rates may have gradually declined over the past two decades, but home prices have tripled.”

Today, the buyer of a $400,000 home with a credit score of 740, who places a 25 percent down payment and takes out a $300,000 mortgage for 30 years at Loan Depot, would pay a rate of 7.5 percent. If the buyer is willing to pay a 1 percent discount point, or a loan fee of $3,000, the interest rate would drop to 7.125 percent.

“The most motivated buyers will accept the current level of mortgage rates and make offers when they find a place that’s suitable,” said Holden Lewis (right), a home and mortgage expert at Nerd Wallet. “High mortgage rates aren’t holding buyers back as much as lack of inventory and high prices.”

“If you’re always waiting for the perfect market conditions to arise, you could end up missing out on a lot of great opportunities,” warned Jacob Channel, Senior Economist at Lending Tree.

Mortgage rate history

Thirty-year fixed-mortgage interest rates ended 2020 at a rock-bottom 2.65 percent – the lowest level in the Freddie Mac survey history, which began in 1971.

Home loan rates set new record lows an amazing 16 times in 2020, and tens of thousands of homeowners refinanced.

Archives of the now-defunct Federal Housing Finance Board show long-term mortgage rates in the 1960s were not much higher than the Great Depression, when lenders were charging 5 percent on five-year balloon loans.

Nearly six decades ago, between 1963 and 1965, you could get a mortgage at 5.81 to 5.94 percent. Between 1971 and 1977, the now-defunct Illinois Usury Law held rates in the 7.6-to-9 percent range.

In the early 1980s, runaway inflation caused home loan rates to skyrocket into the stratosphere. According to Freddie Mac, benchmark 30-year mortgage rates peaked at a jaw-dropping 18.45 percent in October 1981 during that Great Recession.

Rates finally fell below 10 percent in April 1986, and then bounced in the 9-to-10 percent range during the balance of the 1980s. Twenty-three years ago, in August 2000, when some of today’s Millennial borrowers were still in diapers, lenders were quoting 8.04 percent.

(Left) October 1981 issue of Inc. magazine

Between 2002 and 2011, rates bounced in the 4-to-6 percent range. They inched into the 3-to-4 percent range until 2020, when they fell into the rock-bottom 2 percent bracket.

Good luck, loan hunters!

Source: loopnorth.com

Apache is functioning normally

The Federal Housing Finance Agency (FHFA) this week announced a new product proposal for government-sponsored enterprise (GSE) Freddie Mac that would allow the agency to purchase certain single-family, closed-end second mortgages.

This would offer borrowers an alternative way to access their home equity without surrendering a first mortgage with a more favorable interest rate than is currently available.

The proposal, published in the Federal Register, recognizes that existing borrowers “face limited options” if they seek to access equity on their primary residence, particularly if they have a mortgage rate from a loan originated during the low-rate environment of the COVID-19 pandemic.

“[A] traditional cash-out refinance today may pose a significant financial burden, as it requires a refinancing of the entire outstanding loan balance at a new, and likely much higher, interest rate,” FHFA said in its proposal. “Homeowners may also use second mortgages to access the equity in their homes, [where] only the smaller, second mortgage would be subject to the current market rate, as the original terms of the first mortgage would remain intact.”

Second mortgages are also typically offered at a lower interest rate than certain alternative products like personal loans, so Freddie Mac’s proposal is to purchase “certain closed-end second mortgage loans from primary market lenders” that are already approved to sell mortgages to Freddie Mac, the proposal states.

“In a closed-end second mortgage loan, the borrower’s funds are fully disbursed when the loan closes, the borrower repays over a set time schedule, and the mortgage is recorded in a junior lien position in the land records,” FHFA stated. “Freddie Mac has indicated that the primary goal of this proposed new product is to provide borrowers a lower cost alternative to a cash-out refinance in higher interest rate environments.”

FHFA Director Sandra Thompson explained that such options are needed in the current mortgage rate environment.

“The proposed activity is intended to provide homeowners with a cost-effective alternative for accessing the equity in their homes,” Thompson said in an announcement of the proposal. “Reviewing and considering comments from the public will be a critical component of our review as the agency exercises its statutory responsibility to evaluate new enterprise products.”

This is specifically designed to benefit consumers during the high rate environment, the agency said.

“In the current mortgage interest rate environment, a closed-end second mortgage may provide a more affordable option to homeowners than obtaining a new cash-out refinance or leveraging other consumer debt products,” the proposal explained. “A significant portion of borrowers have low interest rate first mortgages, and the proposal would allow those homeowners to retain this beneficial interest rate on the first mortgage and avoid resetting to a higher rate through a cash-out refinance.”

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act (HERA) of 2008, requires the GSEs to provide advance notice to FHFA of any potential actions or products they aim to pursue. This notice demonstrates that FHFA is fulfilling its mandate and seeks public comments on the proposal.

The comment period lasts 30 days from the publication of the proposal in the Federal Register, making May 16, 2024, the end of the comment period. Interested parties can submit comments to the agency on its website or via email.

Source: housingwire.com

Apache is functioning normally

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The Upshot

A Huge Number of Homeowners Have Mortgage Rates Too Good to Give Up

On a scale not seen in decades, many Americans are stuck in homes they would rather leave.

Emily Badger and

April 15, 2024

Something deeply unusual has happened in the American housing market over the last two years, as mortgage rates have risen to around 7 percent.

Rates that high are not, by themselves, historically remarkable. The trouble is that the average American household with a mortgage is sitting on a fixed rate that’s a whopping three points lower.

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Average fixed mortgage rates

8%

Existing
mortgages

6%

3.2-
point
gap

Rates on
new loans

4%

Rates on new home loans now far surpass rates locked in by Americans with existing
mortgages.

2%

2000

2005

2010

2015

2020

2023

Average fixed mortgage rates

8%

Existing
mortgages

6%

3.2-
point
gap

Rates on
new loans

4%

Rates on new home loans now far surpass rates locked in by Americans with existing
mortgages.

2%

2000

2005

2010

2015

2020

2023

Source: Federal Housing Finance Agency analysis. Note: New loan figures show the predicted rate that existing mortgage holders could get on the same mortgages at new market conditions.

The gap that has jumped open between these two lines has created a nationwide lock-in effect — paralyzing people in homes they may wish to leave — on a scale not seen in decades. For homeowners not looking to move anytime soon, the low rates they secured during the pandemic will benefit them for years to come. But for many others, those rates have become a complication, disrupting both household decisions and the housing market as a whole.

new research from economists at the Federal Housing Finance Agency, this lock-in effect is responsible for about 1.3 million fewer home sales in America during the run-up in rates from the spring of 2022 through the end of 2023. That’s a startling number in a nation where around five million homes sell annually in more normal times — most of those to people who already own.

These locked-in households haven’t relocated for better jobs or higher pay, and haven’t been able to downsize or acquire more space. They also haven’t opened up homes for first-time buyers. And that’s driven up prices and gummed up the market.

Share of existing mortgages with rates below or above new market rates Percentage point difference from rates on new mortgages BELOW
-3
-2
-1
0
+1
+2
+3
ABOVE
Federal Housing Finance Agency analysis. Note: Data covers all fixed-rate mortgages in the U.S.

Distribution of fixed rates held by existing mortgage holders
1999
Before the dot-com recession
2005
During the housing boom
2011
Emerging from the Great Recession
2019
On the eve of the pandemic
2023
Post-pandemic

Source: Federal Housing Finance Agency analysis. Note: Data shown captures the fourth quarter of each year.

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Source: nytimes.com

Apache is functioning normally

Job recruiters in the South are facing hurdles to attract skilled professionals from the Midwest despite offering competitive compensation packages, according to a Bloomberg report published Friday. That’s because many of these potential hires are locked into super-low 30-year mortgages.

During the fourth quarter of 2023, the proportion of job seekers in the U.S. who relocated for employment dwindled to a mere 1.5%. That marked the lowest level on record, according to a survey by Challenger, Gray & Christmas. 

Janet Rivera Jones, founder of Florida-based 5 Star Global Recruitment Partners, told Bloomberg that potential hires who are repaying low-interest mortgages are often reluctant to move unless they’re offered relocation packages that account for the differential in housing costs.

According to an analysis conducted by Bloomberg on data from the Federal Housing Finance Agency, approximately one-fifth of U.S. homeowners carry mortgages with interest rates below 3%, while nearly 35% have rates ranging between 3% and 4%. Current rates for a 30-year fixed mortgage are about 7% and have more than doubled since hitting a historic low point of 2.85% in December 2020.

Meanwhile, the costs associated with employee relocations are on the rise. For mid-level managers, average relocation expenditures in the U.S. last year stood at $78,330 for homeowners and $33,349 for renters, according to data from ARC Relocation, a consultancy that offers employee relocation assistance for federal agencies and corporate clients.

Source: housingwire.com

Apache is functioning normally

If you’re thinking about refinancing your home loan or paying off your mortgage early, you might request a mortgage payoff statement. The amount due on this document is likely to be different from your current balance because it includes interest owed until the payoff date and any fees due.

Read on to learn more about what a mortgage payoff statement or letter is and when you might need one.

What Is a Mortgage Payoff Statement?

Starting with mortgage basics, a mortgage is a loan used to purchase different types of real estate, including a primary home. A bank or other lender agrees to lend money, which the borrower commits to pay back monthly for a set period of time and with interest.

The different types of mortgage loans include conventional and government-insured mortgages and reverse mortgages.

There are jumbo loans, which exceed the dollar limits set by the Federal Housing Finance Agency, and home equity loans.

Say you have a mortgage and want to know exactly how much you’d need to pay to satisfy the loan. A mortgage payoff letter will tell you that magic number. Unlike your current balance, the payoff amount includes interest owed up to the day you intend to pay off the loan. It may also include fees that you’re on the hook for and haven’t paid yet.

Your monthly mortgage statement, on the other hand, only shows your loan balance and the amount due for your next monthly payment.
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How Does a Mortgage Payoff Statement Work?

You can request a payoff statement from your loan servicer at any time. Note: Your mortgage servicer may be different from your lender. The company that manages your loan handles billing, accepts loan payments, keeps track of your principal and interest, and fields questions from borrowers.

You may request a payoff statement for any type of loan, including mortgages, student loans, personal loans, and auto loans. However, if you need your mortgage payoff statement, go to your mortgage servicer directly. The name and contact information of your mortgage servicer is included in your monthly statements.

When you make the request from the company that handles your mortgage servicing, you’ll need to provide the following details:

•   Your name

•   Address

•   Phone number

•   Your loan number

•   The date you want your payoff to be effective if you’re seeking to pay off your mortgage early.

Asking for a payoff statement does not necessarily mean that you intend to pay off your loan immediately. You may simply be determining whether or not paying off your mortgage early is feasible, for example. The request itself does not initiate the prepayment process.

Traditional lenders, such as brick-and-mortar banks, may mail you a paper mortgage payoff statement. Online lenders may send a payoff statement online.

Recommended: 5 Tips for Finding a Mortgage Lender

What Information Do Mortgage Payoff Letters Contain?

All mortgage payoff letters tend to contain similar information, including:

•   Payoff amount: The amount of money that would satisfy the loan.

•   Expiration date: The date through which the payoff amount is valid. The letter may also include an adjusted amount should you pay before or after the expiration date.

•   Payment information: The letter will also usually tell you who to make the final check out to and where to mail it.

•   Additional charges: You will be alerted to any additional fees and charges that you’ll need to include.

💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.

Do You Need a Mortgage Payoff Statement?

There are a few common situations in which you might need a payoff statement.

•   Refinancing a mortgage: When you refinance your mortgage, your chosen lender pays off your old home loan with a new one, preferably with a lower interest rate and possibly a new term. When you seek to refinance, your new lender may ask you to provide a payoff statement on your current loan.

•   Prepaying a mortgage: It’s possible to pay off a mortgage early. A payoff statement will show you exactly how much you’d need to pay to do so. Most prepayment penalties for residential home loans that originated after January 10, 2014, are prohibited. Still, check before you decide to prepay.

•   Working with a debt relief company: If you’re having trouble managing your debts, you’ve fallen behind on payments, or you otherwise need mortgage relief, you may choose to work with a debt relief company that can help negotiate with your lenders. The company will need to see payoff statements to get an idea of the scope of your debt.

•   Collections and liens: A lender might send you a payoff statement if you’ve fallen behind on your payments and they are sending your debt to a collection agency. In this case, the payoff statement may tell you how much you need to pay to stop the collection action.

   If your lender decides to seize your home to recoup unpaid mortgage payments, they may place a lien on the property. They may send a payoff statement that alerts you that your property will be seized if the specified amount isn’t paid in full.

There are other ways to figure out how much you owe on your mortgage loan. You can talk to your lender and ask for a verbal payoff quote. This will provide an estimate, but understand that it is not a legal agreement and isn’t binding.

The Takeaway

If you have a home loan, you may want to request a mortgage payoff statement, especially if you’re thinking about refinancing or paying off your mortgage early. Requesting the mortgage payoff letter does not initiate any formal processes, so it’s fine to think of it as an information-gathering exercise.

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FAQ

How do I get my mortgage payoff statement?

Contact your loan servicer to request your mortgage payoff statement.

When should I get my mortgage payoff statement?

Request your mortgage payoff statement when planning to prepay your mortgage, refinance, or consolidate debt.

How long does it take to get a mortgage payoff statement?

Generally speaking, you should receive your mortgage payoff statement within seven business days of your request.

Photo credit: iStock/Vadym Pastukh

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Source: sofi.com

Apache is functioning normally

The Conference of State Bank Supervisors (CSBS) and the Federal Housing Finance Agency (FHFA) have signed onto a memorandum of understanding to formally share information between each other related to nonbank mortgage companies.

“The [MOU] establishes substantive information sharing protocols between state financial regulators and FHFA, improving the ability to coordinate on market developments, identify and mitigate risks, and ultimately, further protect consumers, taxpayers, and the nation’s housing finance system,” a joint announcement from CSBS and FHFA said.

The agreement, signed on Tuesday, is significant due to the regulatory roles of both bodies. CSBS is a conference of the primary regulators of nonbank mortgage companies at the state level, while FHFA is both regulator and conservator to the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, the most important counterparties for nonbank mortgage entities.

“While each supervisory agency maintains specific authorities related to the mortgage industry, only state financial regulators have complete prudential authority over nonbank mortgage companies,” the joint announcement said.

The MOU should lead to a more collaborative relationship between CSBS entities and FHFA according to Lise Kruse, North Dakota’s commissioner for financial institutions and CSBS board chair.

“Information sharing between state regulators and federal supervisors is common sense given our shared interest in a vibrant, stable mortgage marketplace,” Kruse said. “Establishing information sharing opens the door to a more collaborative oversight process that is beneficial to all involved.”

The MOU is seen as an important step for maintaining oversight over all the involved entities according to Sandra Thompson, the director of FHFA.

“The development of an information sharing framework is an important milestone that will better equip both FHFA and state regulators to oversee our respective regulated entities,” Thompson said. “Improved communication leads to better coordination, which in turn leads to better outcomes for consumers, market participants, and taxpayers.”

CSBS entered into a nondepository-focused MOU with the Consumer Financial Protection Bureau (CFPB) in 2011 which covers all 50 states, the District of Columbia and Puerto Rico. It also entered into a similar MOU with the U.S. Department of Housing and Urban Development (HUD) in 2013.

FHFA also routinely collaborates on information sharing with the CFPB through multiple MOUs, and entered into a formal MOU with HUD overseeing the GSEs in 2021 signed between Thompson and Former HUD Secretary Marcia Fudge with a focus on fair housing enforcement.

Source: housingwire.com