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Apache is functioning normally

Anyone eyeing mortgage rates, which reached above 8% in October, can be excused for longing for the pandemic lows of sub-3% mortgages. But it’s unlikely those rock-bottom rates will return anytime soon, according to Mark Zandi, chief economist at Moody’s Analytics. Instead, the veteran market watcher expects rates to hover at roughly double that level in the near future. 

“Everybody should get used to 5.50% to 6%, because that’s where mortgage rates are going to settle in, [in the] long run,” Zandi told CNBC on Monday. Mortgage rates tend to trail the 10-year Treasury yield, which he suspects will hover around 4% to 4.50%; that generally puts mortgage rates at that 5.5% to 6% he’s expecting. 

Asked to predict the magic mortgage rate that will have inventory flooding back into the housing market, Zandi said that obviously a 5% rate is better than 6%, but the long-term number will likely be somewhere in between.

In recent weeks, mortgage rates have fallen from their October highs, with the average 30-year fixed rate currently at 7.30%. But in today’s somewhat frozen housing market, that’s barely a start. With a 6% mortgage rate, things start to thaw as would-be buyers and sellers enter the market, but Zandi doesn’t think home sales will get back anywhere near levels seen during the pandemic, before the Federal Reserve began its interest rate hike cycle to lower inflation. Getting closer to that 5% mortgage rate would trigger more activity, he added. 

“The other thing that’s got to happen here, obviously, is we do need to see some weakness in house prices,” Zandi added. “If house prices don’t come [down] to any degree, we’re going to have to see even lower mortgage rates to get sales up.”

Some forecasts, like that of Goldman Sachs, suggest home prices will continue to increase next year. So far, prices aren’t letting up; the national S&P Case-Shiller house price index increased 3.9% on an annual basis in September, according to figures released on Tuesday. 

Meanwhile, existing home sales are at their slowest pace since 2010, when the housing market was reeling in the aftermath of the Great Financial Crisis. That’s largely because of the so-called lock-in effect, which keeps homeowners with low mortgage rates from selling their homes—constraining both buyers and sellers. New home sales, on the other hand, have outperformed existing home sales because homebuilders can offer incentives, like mortgage rate buydowns. Still, higher mortgage rates are curbing demand even there, with new home sales falling more than expected in October.

“Most of the weakness in sales is on the existing side,” Zandi explained. “Homeowners are much more reluctant to cut prices … Builders are doing what it takes to move those homes.”

There is some relief pushing its way through the housing market, and that’s on the rental side. 

“Rents have gone flat to down, particularly at the high end of the market,” he said. “These big multifamily towers are going up in the big urban centers in the Northeast, Chicago, on the West Coast, and that’s putting downward pressure on rent—and, I think, is having some impact on new house prices, and at the high end of single-family housing markets.” 

Realtor.com’s October rental report released on Tuesday showed median rent for studios and one- and two-bedrooms across the top 50 metro areas in the U.S. continues to trail its 2022 levels, experiencing a year-over-year decline for the sixth month in a row. As Zandi mentioned, a lot of that has to do with supply. There was a substantial increase in new multifamily construction in 2022, and that resulted in an uptick in new multifamily completions in 2023, “which significantly augmented the rental supply and exerted downward pressure on rental prices” this year, the report found. 

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Source: fortune.com

Apache is functioning normally

Most of us have experienced getting fired from our jobs at some point in our lives. Some were for petty and weird reasons, others were valid—whichever it is, here are the 18 reasons people get fired!

Caution! Some were so crazy and hilarious that you won’t believe they really happened.

1. Exchanging Alcohol for Shrimp

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One person shared, “I gave the fry guy an alcoholic beverage from the bar in a kids cup. He used to hook me up with coconut shrimp and fiesta rolls. They fired both of us lol. I wonder how Jamaar is doing nowadays.”

The second person replied, “I drank alcohol from a kid’s cup and got fired. I just wanted to try Angry Orchard. It wasn’t even good. I made the mistake of leaving the cup amongst other employee cups and a manager found it. I don’t even like drinking and it was just extra. But I am glad I am not the only person let go for drinking alcohol from a kid’s cup out there! Lol.”

2. Manager Scheduled Me During Class

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Somebody commented, “My manager kept losing my class schedule. Worked at a subway. I had class two days a week. Several times he put me on those days anyway. I gave him multiple copies every time. Owner took me off the schedule for ‘Calling out too much’. When I showed the owner proof he said it was too late and they already hired someone else. This was 12 years ago. I’m still mad.”

Another Redditor replied, “I always hated the ‘taken off the schedule’ bull. Just fire me officially instead of taking the cowards route. This happened to me as well when I did not tell the general manager about a floor manager switching a product display TV to football one day. To be clear, she asked me, ‘Why did you not tell me?’ So she already knew it happened and was mad that I did not say anything. So I got ‘taken off the schedule’ because the other manager did something against policy and I did not narc.”

3. They Fired Me Before I Started

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“A business I went to long ago was hiring, and I got the job. Right after I signed all the paperwork, the department manager comes in and asked who I am. I tell him I was just hired as a temp. Manager says he never authorized any hiring and fired both me and my boss on the spot. I did not work for this company at all, and they fired me,” said one.

The second person replied, “I had a similar experience. I was interviewing for a sales position and I made it all the way up the ladder through three different managers, to the advertising director. Had a great interview. He told me I would be the future of this industry shook my hand, led me to the HR manager’s office, clapped me on the back, and said to her, ‘We’re hiring him. Start the paperwork and I’ll see you Monday.’

“She was pregnant, tired, and annoyed. She looked at me with disgust and said, ‘We eliminated that position yesterday. We’re not hiring anyone.’ I asked if the director or managers knew that. She said they should. What followed was an embarrassing two weeks of promises that they would make a spot for me and weak apologies from the hiring managers. Ooof. Hired and fired within seconds.”

Finally, the third added, “They did you a favor. Working for a company that is broken and dysfunctional would be a nightmare.”

4. I Requested a Raise

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One user commented, “I was denied a raise by HR after consistently working 60-70 hours weeks, and my VP (who had supported and requested the raise for me) told me to stop putting in the extra time, work my 40, and spend that extra time applying to new jobs. Within a month, a meeting was called to ‘mutually part ways’ because my work wasn’t getting done. I was gratified to learn that they had to hire two people to do my job after I left.”

Somebody else added, “Bet that felt good knowing they had to pay two people for what you did all by yourself. Glad you got outta there though!”

5. Fired for Putting in My Two-Week Notice

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Somebody shared, “I got fired once for putting in my 2-week notice. The only other time I’ve gotten fired was working for a trade company during the first week. I was a supervisor, and there was a second supervisor on site. I got a call that my wife had been rushed to the hospital, which was literally less than a mile away. I asked the other supervisor if I could go to attend to her, and he said, ‘Sure, no problem, I’ve got things here. Go.’

“I returned to the job site later to find the boss there, and he let me go on the spot for leaving the team ‘Without a supervisor’. He knew what had happened, and still fired me. I won’t lie, that one kind of [made me mad].”

Then somebody else added with a similar experience with their wife, “Happened to my wife. She was due her first commission check, but they fired her on the spot when she gave notice. Literally about 100 bucks too.”

6. Fired for Sitting Down

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One user said, “For doing my job too quickly and sitting down the rest of the time. Gas station cashier 3rd shift.

“Me: ‘Why should I stand when I’m the only person in the store?’

“Manager: ‘It’s more professional to stand than sit.’

“Me: ‘Then why do you sit in your office?’”

Another one replied, “I never understood that. Not once have I walked into an establishment, seen an employee sitting, and gone, ‘Wow. He’s unprofessional.’ I literally don’t give a f-, as long as you do your job.”

“Especially gas stations. If anything, they’re the kind of jobs I would expect to see someone sitting,” added another.

7. “I’m Only Here Until Something Better Comes Along…”

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Somebody shared their hilarious job-related experience during the interview, “This isn’t why I got fired, but this is why I didn’t get a job. I was 16 and looking to work at a Dairy Queen as my first job. My mom drove me to the interview and I was super nervous.

“She looked me in the eye and said, ‘Just be honest and be yourself, and you’ll do fine.’  I walked into that interview, and when he asked me, ‘How long do you think you’ll work here?’ I responded, ‘Until something better comes along…’”

“OMG. My parents had to coach me on how to get a job when I started hunting. They were wondering why none of the jobs I had applied to had called me back so they started asking questions about the application process. Turns out you shouldn’t be honest on those personality assessments, at least not to the extent I was. They basically told me to answer as if I were another person,” added the second person with a similar experience.

Then somebody else added, “Amazing! Around the same age I was asked, ‘How would your friends describe you?’ and honestly answered. ‘They say I’m the crazy one.’ Weirdly did not get that job.”

8. They Handed Me a Check and Walked Me Outside

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“I talked my way into a job at a software company when they put a hiring notice in a local paper. I had no idea what the software did. I still don’t. They hired me as a trainer and no one ever explained what the product was. I did a few weeks where I was trained on the software but literally none of it ever made sense to me. It was like they were speaking gibberish.

“One day I showed up, a lady I had never seen before gave me a check, and walked me out to the parking lot. No one even ever said ‘you’re fired’ or anything. It’s one of the strangest things that ever happened to me,” shared somebody.

“That reminds me of a time that I got escorted out early from a group interview. The company was a little suspicious altogether, and the interviewer was even more sus because he was just wearing all black (polo and jeans) and was absolutely decked out in gold jewelry. Looked like he stepped out of a mob movie or something,” the second person replied.

9. Because My Wife Was Ill

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One user said, “I missed a lot of work because my wife got brain cancer. They called me in for a meeting and said, ‘Sorry, we are downsizing and letting a lot of people go’. They didn’t fire anyone else, including a co-worker who was caught fabricating reports.”

Then another one added with a question: “They didn’t announce the layoffs over the intercom in alphabetical order, did they?”

10. Job Abandonment; But I Was at the ER

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Somebody stated, “I went to the emergency room instead of work. Came back with an ER note and they said, ‘We won’t be needing that. Can you come with us?’ I was 18 and it was my first full-time job.”

“I had pneumonia and a doctor’s note. Came back to work a week later wheezing and puffing an inhaler. Got fired the next week. Jokes on them. I still got unemployment benefits when they tried to fight it. Doctor’s notes are good things,” added another person.

Finally, the third added, “I went to a funeral and took the three paid days off and called off a fourth because it was my grandmother and we were very close. They called it job abandonment.”

11. Working With a Felony

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Somebody commented, “My parole officer wanted to make sure I actually had a job, so he went to my employer listed on my file to surprise visit me on the job. I did home wiring so I worked at different job sites and rarely in the office. He called me to say he was going to charge me with a violation for lying to him about my whereabouts (this could’ve landed me back in prison for my remaining 10.5 years sentence).

“The owner of the company had to speak with him and vouch for me. My parole office didn’t charge me, but the owner sure did fire me that day. Finding a job with a felony isn’t an easy thing, and it wasn’t long before my PO threatened to charge me with a violation if I didn’t find a job soon.”

The second person replied, “What a f- clown process. I’m sorry you went through that.”

12. Let Go to Hire the Manager’s Girlfriend

Photo Credit: Shutterstock.

Somebody said, “I was a kid and just started at a local pizza place. I was let go couple weeks later because a pizza chef from Chicago had moved into the area and needed a job so it was a business decision that I totally understood. Week later, went to go get my last check and asked how he was doing, the girl up front was like, ‘pizza chef from Chicago? The only new hire was the manager’s new gf.’”

Somebody else replied, “I got let go in favor of hiring the manager’s gf once too. Very irritating.”

13. Fired for Being 10 Minutes Early Instead of 20

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“I refused to come in 15-20 mins early unpaid for my shift. I was always 5-10 min early but they decided they wanted me there earlier. I carried on as normal as I’m not coming in if I’m not being paid. Turned up for a 12pm shift at 11:49, no one would look at me when I arrived, then was thrown in a meeting and fired for being ‘late’. Was out the door before it even hit 12. It was the only time I’ve ever been fired,” shared somebody.

14. Building a Snow Sculpture

Photo Credit: Shutterstock.

“I built a snow scorpion sculpture (I used ketchup for the red glowing eyes and everything) on a particularly miserable day at a ski resort. The guests enjoyed my sculpture very much, management weren’t so happy,” said one.

“Sounds like crap management. Sad. I’m glad to hear you made the guests happy, though,” the second person added.

15. For Sneezing

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One person stated, “They sent me home because I sneezed and I was forced to get tested for Covid. Then, when I tested negative, I was terminated for ‘Abusing pandemic policies to stay home.’”

“That has to be illegal in some form,” replied somebody.

16. The CNA Lied About What Happened

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“I asked the CNA I was working with to stay with a confused patient, while I went and put a new IV in another patient. The CNA left the patient alone. She fell out of bed and got a big bloody skin tear on her arm. After I took care of that, I went and found the CNA and told her the patient was injured because of her insubordination. The CNA cussed at me, and left the unit. I did not see her again that shift. She and another CNA decided on their own to trade assignments.

“I wrote the CNA up. The CNA went to mgmt and lied about me. She said I called her by a racial slur and yelled at her. I did neither. Mgmt fired me rather than deal with a false claim of racism. I collected unemployment.

“The CNA did something similar with another nurse a couple of weeks later, and was fired. My mgr asked if I could be rehired. HR said no. When my mgr quit to start her own nursing agency a year later, she hired me,” one person stated. 

“You can’t pay me enough to go back to work in a nursing home. I have so many stories of problems between nurses and CNA’s getting each other in trouble and the residents caught in the middle,” replied another.

17. They Lowered My Pay So I Slept During My Shift

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“They lowered my pay, so I started sleeping at work and did only half the task they wanted me to do. Took them 3 years to fire me,” shared one Redditor.

“I’m amazed at how long it can take sometimes to fire a person. I had a boss who got shoulder surgery and was wildly add*cted to pain meds. Dude would show up to work high as a kite and started at the ceiling for hours. He got away with it for about 2 years before anyone said anything,” the second person replied.

18. I Gave My Employee Meal to My Mother

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Somebody commented, “I gave my employee meal to my mother. That’s literally it. I didn’t like eating the food there, so I had my mom bring me lunch, and I just gave my employee meal to her. Apparently, that was considered theft, so I was fired.”

Wow, some of the reasons above for getting fired were just crazy! Did you experience the same? Let us know in the comments!

And if you want more of this content, simply hit the thumbs-up button and share it with your friends and family.

Source: Reddit

10 Actors Perfectly Cast for Their Character Roles

Photo Credit: Warner Bros.

Have you ever watched a movie or show and been completely lost in it because of how well an actor or actress became their character? Check out this article for a whole list of actors who were perfectly cast!

11 Vampire Movies That Will Make You Thirst for More

Photo Credit: Columbia Pictures.

You know that feeling where you’re on a movie kick in a certain genre, but you seem to run out of good movies to watch? Well, if you’re down for a vampire movie or three, check out this article for the best ones out there!

10 Incredible Movies That People Rated 10 Out of 10

Photo Credit: Universal Studios.

It’s pretty hard to replicate the experience of watching your favorite movie for the first time, but we’ve put together a list of movies that people have rated at a perfect 10/10. Next time you need a good movie to watch, check this out!

10 Famous People Who Canceled Themselves With Their Own Stupidity

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We’ve all been there: you make a comment you haven’t thought through at all, and the whole room goes silent at what you’ve just said. But can you imagine doing that as a famous person—and getting canceled? Check out this list of celebrities who did just that!

13 Things You Shouldn’t Do When You’re in the US

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Are you planning a trip to the US? Culture varies a lot between countries, even countries that share borders. So if you’re headed to the good old U. S. of A, here are a few pointers to make your travels go more smoothly!



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Source: financequickfix.com

Apache is functioning normally

Apache is functioning normally

MSR Sales, Subservicing, Margin Mgt., PPE, HELOC, Pre-Approval Tools, Don’t Ignore HMDA Requirements

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MSR Sales, Subservicing, Margin Mgt., PPE, HELOC, Pre-Approval Tools, Don’t Ignore HMDA Requirements

By:
Rob Chrisman

5 Hours, 0 Min ago

Home schooling is the goodest thing I ever did for my two kids. Hopefully, they both learned that an inverted yield curve doesn’t automatically create, or lead to, a recession. As we approach 2024, short term rates have been higher than long term rates since 2022, and when you think of the last 10 recessions eight of the last 10 were preceded by an inverted yield curve. But now the “experts” are saying that this yield curve inversion is due to artificial reasons, namely the U.S. Federal Reserve’s actions that shifted rates, rather than more natural factors. Time will tell, and no one can eliminate business cycles, so we may have a recession (and with it, lower rates) at some point. But for now, “The U.S. economy is becoming increasingly recession resistant. State, local, and federal government spending as a percentage of GDP has risen from 29 percent in 1962 to 35 percent today. Healthcare spending has risen from 5 percent of GDP in 1962 to 18 percent in 2021. Collectively they have risen from 34 percent of GDP to 53 percent and most critically, both sectors are not particularly interest-rate sensitive.” So spoketh Dr. Elliot Eisenberg. (Today’s podcast can be found here, and this week’s is sponsored by MCT. MCT’s technology and know-how continues to revolutionize how mortgage assets are priced, locked, protected, valued, and exchanged, offering clients the tools to thrive under any market condition. Hear an interview with Lender Price’s Dustin McClelland on how lenders can upgrade or enhance their pricing technology.)

Lender and Broker Products, Programs, and Services

Revolution Mortgage estimates that they can save up to $20,000 in cost on verifications with TRUV over competitors. Femi Ayi, EVP Operations shares how he estimates he is saving 80 percent on his verification costs with Truv in this recorded event. “Let’s talk about our documentation costs and those giant monopolies that are out there and laughing at customers and increasing prices because they have a particular monopoly. You want to lower your manufacturing costs.” Contact TRUV today for your income, employment, insurance, and asset verifications.

When a borrower or Realtor needs an updated pre-approval letter to submit an offer, how quickly can your loan officers turn it around? This quick?

Cutting-edge technology, lower rates, exceptional service… these are many of the claims made by today’s HELOC providers. It’s important to thoroughly research these companies before partnering with them. Check with insiders and peers to learn about their experiences. A company with a solid reputation is worth its weight in gold. Symmetry Lending is a HELOC company you can trust and rely on, offering… SUCCESS: Symmetry’s proprietary technologies and dedicated fulfillment teams deliver industry-leading turn times and streamlined documentation processes. Built on three main principles: service, speed, and simplicity, Symmetry presents a foundation of long-term success for their business and clients. STABILITY: Symmetry began in 2018 with an exclusive focus on HELOCs. Their experienced leadership team has a combined 150 years of industry experience. VALUE: With on-demand staff, service, and resources, Symmetry is committed to creating exceptional, consistent experiences from submission to close. Follow Symmetry on Facebook and LinkedIn to learn more about what differentiates them.

LoanPASS PPE and Uplist have announced a strategic partnership that integrates Uplist’s suite of smart, real-time home shopping tools directly into LoanPASS’s powerful product and pricing engine. This will allow loan officers to provide Uplist’s SmartBuyer™ Tool directly to perspective buyers from their LoanPASS interface. Loan officers will also have remote access to their rates through Uplist Quick Quotes, featuring real-time pricing, which includes detailed calculations for the popular 2-1 buydown. This fusion of technology will enable loan officers to easily deliver real-time, personalized solutions direct to their homebuyers and agents with the click of a button. Lenders and loan officers interested in leveraging this patent-pending technology can learn more by scheduling a no-pressure call with Uplist.

So, you’ve been dying to uncover the mystical wonders of Performance Marketing, right? Look no further! TrustEngine just dropped its Performance Marketing eBook in the digital realm. Hold onto your seats, folks, because TrustEngine is hyping up Performance Marketing like it’s the reigning rockstar of the century. This isn’t your average eBook; oh no, it’s the clandestine weapon of epicness, crafted to illuminate our fabulous community. Learn the differences between traditional and performance marketing; the Mortgage Performance Marketing Platform and crafting a performance marketing strategy in 7 steps. Click here to download the FREE eBook today.

With mortgage volume struggling to recover, now is the perfect time for lenders to focus on their profitability with MCT’s exclusive whitepaper: “Margin Management Best Practices.” Dive deep into the intricate world of margin management, where success in the dynamic mortgage industry is defined. MCT’s Capital Markets Technology Advisor, Cody Echols, unravels the complexities, challenges, and actionable techniques to boost profit margins and navigate lending volumes with agility. Discover the strategic compass for effective margin management: analyze market share dynamics, understand volume trends, and fortify profitability against volatility. Don’t just survive; thrive in the ever-transforming mortgage landscape! Ready to adapt and conquer? Download the MCT Whitepaper and elevate your margin management game.

“As year-end quickly approaches, lenders are hopeful that the recent rate rally continues, which is a great thing if you are originating loans. But what about lenders with servicing portfolios? As we consider a possible change in Fed cycle and liquidity needs, Lenders still have time to execute a trade on their portfolio by year end. Blue Water (“Blue Water Financial Technologies Services, LLC”) can assist lenders to sell bulk MSR, regardless of size. With BlueRATE™, a lender can obtain an instant portfolio valuation and then determine what to sell – whether it be a small geo carve or the entire MSR portfolio. Blue Water can also assist in moving your product quickly with Blue Water’s proprietary SuperTransfer™. With SuperTransfer™, transferring the portfolio to a buyer is easier than ever. Connect with our expert Sales Team to learn more.”

Earlier this year, Zillow Home Loans selected PHH Mortgage to provide subservicing for its residential mortgage portfolio. Following a collaborative onboarding and integration cycle, Zillow Home Loans and PHH completed an initial transfer of loans in August. PHH has worked with Zillow Home Loans to purchase loans on a correspondent and co-issue basis since 2019 and 2021, respectively. As of September 30, 2023, PHH Mortgage’s total servicing portfolio was approximately $296 billion, which included approximately $167 billion of subservicing. Earlier this year, PHH was recognized for servicing excellence for the third consecutive year through Freddie Mac’s Servicer Honors and Rewards Program (SHARP)SM in the top-tier servicing group and for the second consecutive year through Fannie Mae’s Servicer Total Achievement and Rewards (STAR)TM performer recognition. The Company also achieved HUD’s Tier 1 servicer ranking. No other servicer in the U.S. has been more highly decorated with these top awards from all three agencies over the past two years.

Compliance and Supervising LO’s

Our biz is still talking about the November 28 CFPB consent order fining Bank of America $12 million for failing to collect and report race and ethnicity information under HMDA. The CFPB alleges that the bank’s loan officers failed to ask applicants for their race and ethnicity information, and instead recorded that the applicant chose not to provide the information, which the bank reported.

Here is a US Consumer Financial Protection Bureau’s enforcement action. The CFPB ordered Bank of America to pay a $12 million penalty for submitting false mortgage lending information to the federal government under a long-standing federal law. For at least four years, hundreds of Bank of America loan officers failed to ask mortgage applicants certain demographic questions as required under federal law, and then falsely reported that the applicants had chosen not to respond. Under the CFPB’s order, Bank of America must pay $12 million into the CFPB’s victims relief fund.

Hundreds of Bank of America loan officers reported that 100 percent of mortgage applicants chose not to provide their demographic data over at least a three-month period. In fact, these loan officers were not asking applicants for demographic data, but instead were falsely recording that the applicants chose not to provide the information. Why? Because that is easier! It is sloppy, though: If you continually report that 100 percent of your applicants decline to answer, eventually someone will notice.

The issue didn’t spring up overnight. In 2013, BofA made attempts to train and monitor for this issue after noting that its rate of applicants not providing this HMDA information was high. The consent order alleges that in 2016, the bank’s monthly monitoring still showed that several offices and loan officers had information-not-provided rates three to four times the bank’s average, but the bank discontinued its monitoring.

In addition, the consent order alleges that in 2020, the bank found that over 400 loan officers recorded that applicants chose not to provide their race and ethnicity information on 100 percent of applications over a three-month period. The consent order also alleges that the loan officers were not asking applicants for their race, ethnicity, or sex, and instead were “wrongly recording on applications that the applicants chose not to provide the information.”

Capital Markets

Bonds once again climbed yesterday, the third consecutive day of gains, on bets the Fed will be able to start cutting rates in the first half of 2024, though Fed officials have signaled that cuts aren’t coming so soon. The Federal Reserve’s Beige Book for November noted that economic activity slowed since the October report, as four Districts reported modest growth, two reported little change, while six reported declining activity. Discretionary retail sales decreased as consumers showed more sensitivity to prices. Travel remained healthy while demand for transportation services was sluggish. The outlook among manufacturers weakened while demand for business loans dipped. Consumer credit was healthy, but some banks saw rising delinquencies. Demand for labor slowed while price increases moderated but remained at a generally elevated level.

We also learned yesterday that Gross Domestic Product rose at the fastest pace in almost two years (+5.2 percent) while consumer spending advanced at a less-robust rate. The Fed’s preferred inflation metric, PCE, was also revised down to 2.3 percent, signaling rate hikes are working. Put it all together and it paints the picture that the U.S. economy was effectively booming in the third quarter despite higher interest rates, aided by a strong labor market and disinflation that fueled healthy consumer spending activity. The volatility index (VIX) or so-called “fear gauge,” dropped to its lowest since January 2020.

Personal income and spending (both +.2 percent, as expected) and weekly jobless claims (218k, as expected; 1.9 million continuing) led off today’s calendar. PCE was +.2 percent, core flat. After Richmond Fed President Barkin argued yesterday the Fed should keep hikes on the table, which was in contrast with Cleveland President Mester signaling support for standing pat next month and Atlanta President Bostic signaling he is increasingly convinced that prices and the economy will moderate, later today brings remarks from New York Fed President Williams. Markets will also receive Chicago PMI for November, pending home sales for October, and Freddie Mac’s latest Primary Mortgage Market Survey. We begin the last day of November with Agency MBS prices worse a few 32nds, the 10-year yielding 4.29 after closing yesterday at 4.27 percent, and the 2-year at 4.65 percent after a bunch of news that came in as expected.

Employment

“If you are looking for a lifeline to save your people and your business in this challenging rate environment, you have an opportunity to partner with a well-capitalized independent mortgage company with over 40 years of experience. We offer a portfolio product line that gives our origination team the opportunity to quote unique scenarios for DPA, 2nd liens, ARMs, non-owner, Jumbo, Doctor/Professional, and more. Our proprietary coaching program is free to all Loan Officers. Even in this market, we’ve doubled-down on the support we provide, from a dollar-for-dollar marketing match to in-house creative & design services, video marketing, social media, training, and credit services. With unmatched operations support at the branch and corporate levels, your clients and referral partners will be more than impressed. Our company is Fannie and Freddie seller/servicer, FHA, VA, and USDA approved. For a confidential conversation, please contact Anjelica Nixt and mention this opportunity.”

PrimeLending’s Forward Commitment program opens doors to new opportunities for our LOs, offering homebuilders a quick way to move existing inventory without compromising value. By entering a short-term agreement with PrimeLending, builders can secure a block of funds at a significantly lower interest rate, enabling them to pass these promotional rates to potential homebuyers and convert more sales. The success speaks for itself! A builder in the Carolinas turned a $3 million agreement into the sale of 10 inventory homes within just 14 days. Forward Commitment is just one of many examples of how PrimeLending helps LOs redefine the narrative, stay ahead of the competition, and ultimately find new ways to close loans in the local market. Contact Nic Hartke now and discover how a move to PrimeLending can transform your approach and elevate your business. Your advantage starts here.

Don’t forget that the FHFA, which oversees Freddie & Fannie, is hiring.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

The Federal Housing Administration (FHA) announced new loan limits for 2024 this week, bumping up the “floor” on FHA loans to $498,257.

This represents a 5.56% increase from the current 2023 FHA loan limit of $472,030, which is based on home price movement over the past year.

There is also a ceiling loan limit for FHA loans for high-cost areas, which was increased to $1,149,825 from $1,089,300.

Together, this should boost access to the FHA’s low-down-payment home loan program at a time when affordability has rarely been worse.

FHA loans comes with various perks, whether it’s a cheaper mortgage rate or a lower minimum required credit score.

2024 FHA Low-Cost Area Floor Loan Limits

One-unit property: $498,257
Two-unit property: $637,950
Three-unit property: $771,125
Four-unit property: $958,350

For 2024, the low-cost area “floor” FHA loan limit will be $498,257 for a one-unit property.

It will rise as high as $958,350 for a four-unit property in these low-cost areas, which includes metros like Chicago, Tampa, and Tucson, Arizona.

The floor is set at 65% of the 2024 conforming loan limit, which also announced an increase to $766,500 this week.

It applies to areas of the country where 115 percent of the median home price is less than the floor limit.

Given the large difference in maximum loan amounts, roughly $250,000, it could sway the decision to choose a conventional loan instead of an FHA loan.

For example, if buying a $525,000 home with 3.5% down, you’d be forced to go with a conventional loan in these low-cost areas.

Or you’d need to come in with a larger down payment to make the numbers work.

You can search the FHA loan limits by state and county here to see where your area stands.

2024 High-Cost Area Ceiling Loan Limits

One-unit property: $1,149,825
Two-unit property: $1,472,250
Three-unit property: $1,779,525
Four-unit property: $2,211,600

Similar to the conforming loan limits for Fannie Mae and Freddie Mac-backed loans, there are high-cost loan limits for FHA loans.

These can vary based on the respective median home price in each area, but will be somewhere above the floor to as high as the ceiling.

Speaking of, that ceiling is a hefty $1,149,825 for a one-unit property, which sounds like quite a lot for an affordable home loan option. But I digress.

Some areas between the floor and ceiling include Atlanta ($649,750), Austin ($571,550), Boston ($862,500), Nashville ($943,000), Philadelphia ($557,750), and Phoenix ($530,150).

As you can see, there is quite a range in maximum loan limits, so those buying a particularly expensive property may not qualify for an FHA loan.

Cities at the ceiling include pricier places like Heber, UT, Jackson, WY, Los Angeles, New York City, San Francisco, and Washington D.C.

The FHA noted that maximum loan limits will increase in 3,138 counties in 2024, with 96 county loan limits remaining unchanged.

These new mortgage loan limits are effective for FHA case numbers assigned on or after January 1, 2024.

Ceiling in Special Designated Areas Even Higher

One-unit property: $1,724,725
Two-unit property: $2,208,375
Three-unit property: $2,669,275
Four-unit property: $3,317,400

Last but not least, the ceiling in specially designated areas including Alaska, Hawaii, Guam, and the U.S. Virgin Islands will be even higher.

And even I say higher, I mean way higher. We’re talking maximum loan amounts ranging from $1.7 million to over $3.3 million.

This is to account for higher construction costs in these regions, those with limits this high, I wonder how many home buyers are actually getting anywhere close.

Again, FHA loans are typically reserved for lower-income buyers, so it’s a bit of a head scratcher.

But this is just how the math formula works, prescribed by the National Housing Act.

Along with this announcement, the HECM (FHA reverse mortgage) maximum claim amount will increase from $1,089,300 in calendar year 2023 to $1,149,825 as of 2024.

Note that if home prices happen to fall in 2024, theses loan limits won’t decrease. They’d merely stay unchanged.

Source: thetruthaboutmortgage.com

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For the first time since 2021 when Americans relocated in droves, Nashville once again is a top migration destination, according to a new report from Redfin.

Nashville, also known as Music City, is No. 9 on the list of the most popular destinations for homebuyers looking to relocate to a new metro area in October. Most people surveyed relocated there from Los Angeles.  

“A lot of Nashville locals have been priced out of homeownership, but when you’re coming from somewhere like California or New York, housing prices here still seem reasonable,” Redfin Premier real estate agent Kristin Sanchez said in a statement. “Nashville has relatively low property taxes, insurance costs and utility prices, along with no state income tax, all of which definitely help if you’re looking for a lower cost of living.”

While a lot of Sanchez’s clients were from California, she also reported working with people from Chicago, New York and Florida. Housing affordability remains one of the strongest assets of the Nashville housing market, but many buyers also relocated for professional reasons. Big companies such as financial firm AllianceBernstein or Amazon have headquarters in the city.

The typical home in Nashville in October went for $448,910 compared to $880,000 in Los Angeles. 

Sacramento, California, was the most popular destination among homebuyers relocating to a new metro area in October. Many people moving to Sacramento were from San Francisco, where the typical home costs $1.5 million versus the $578,000 in Sacramento.

Myrtle Beach, South Carolina, came in at No. 4 after appearing on Redfin’s list of most popular destinations for the first time in July at No. 9. Four Florida metros ranked in the top 10 in October: Orlando, North Port-Sarasota, Cape Coral and Tampa.

These metros have some elements in common: their affordability in comparison to outbound destinations, their location in the Sun Belt and their exposure to significant climate risks.

The rising threat posed by natural disasters such as hurricanes and flooding prompted many homeowners insurance providers to pull out from risk-prone areas in recent months. This could have a negative impact on home prices in those markets.

Homebuyers flee expensive cities

Homebuyers are deserting San Francisco, New York City and Los Angeles at a faster pace than any other metros in the United States. That’s according to a Redfin measure, the net outflow, which calculates how many more Redfin.com users are looking to leave a metro than move in.

It’s a common trend for people to leave expensive job centers in search of more affordable housing elsewhere. This explains why many homebuyers leaving Los Angeles chose to relocate to Las Vegas, where home prices are 50% lower.

However, some people are choosing to stay in expensive cities, especially when the median home sale price cools. San Francisco, for example, posted a net outflow of 25,700 in October 2023, down from 35,700 in October 2022.

Redfin attributes this decline to softening home prices in October, when the median home sale price was 10% below the record-high level in April 2022.

Source: housingwire.com

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Farmhouse decor has been a prominent design style in recent years, popular for its ability to create inviting and warm spaces in the home. Embracing natural wood, vintage furniture, and cottage architectural details, farmhouse is a cozy and timeless style of decorating.

While farmhouse decor ideas typically lend themselves best to older homes that have interesting details that help create the look, the farmhouse trend has no doubt been embraced in recent years in newer homes too. With the right furniture and colors, a farmhouse style can be successfully achieved to create a cozy home. 

home decor trend still relevant in the world of interior design? We spoke to the interior design experts to get their take on whether this is one to take forward into 2024. 

Is farmhouse decor still on trend?

‘Farmhouse style has seen many iterations over the past decade, with Joanna Gaines of Magnolia Farms starting a craze when she popularized shiplap on her show, Fixer Upper. It’s evolved quite a bit since then,’ says Lina Galvao of interior design studio Curated Nest.

‘I would not say it’s no longer on trend, though the look of it has evolved to become fresher, more colorful, and more modern,’ she suggests. While Lina proposes that farmhouse decor may be somewhat less of a core interior design trend, she suggests that the farmhouse look is more of a timeless design style that will be continually embraced by homeowners.

Brian Paquette: At Home

farmhouse kitchen will have country accents such as curved “feet” on the toe-kick, beams, schoolhouse or barn-style lighting, and maybe a vintage range,’ Lina says.

For Lina, embracing farmhouse decor yet keeping it relevant for 2024 is all about ensuring it has a modern twist: ‘I think there’s room for this farmhouse look, which could be easily updated to become more modern via the hardware or lighting to adapt to current interior design trends as needed.’

(Image credit: Adam Carter)

Nicole Cullum, interior designer and founder of Color Caravan also suggests that the timeless nature of farmhouse decor means it’s one that’s here to stay; striking a balance between modern and traditional decor. 

‘Any good trend has something timeless to it. Farmhouse decor has stuck around because it speaks to our love of pairing natural textures with modern color trends and palettes. Rustic wood tones mixed with matte blacks, warm neutrals, and crisp whites give a comforting and sophisticated style without going overly modern or too traditional.’

‘I hope the beautiful parts of farmhouse decor, like mixing organic textures with modern color palettes continue in design,’ Nicole says. 

(Image credit: Kate Marker)

Chicago-based interior designer Kate Marker’s advice is to embrace the simplicity and natural beauty of farmhouse decor by focusing on its original details.

‘Farmhouse decor can still be relevant if done in an authentic, repurposed way. Actual farmhouse details that can be installed in a fresh setting lend warmth and interest – think of a farm sink, reclaimed barn wood or beams, or an old steel window. Keeping things rustic and simple so the natural beauty of materials is on display is always a winning way to channel a farmhouse style.’

Kate Marker

Kate Marker Interiors, Kate oversees all design projects to ensure they are a reflection of the client while incorporating the KMI aesthetic. Kate’s strengths lie in her endless ideas & inspiration, relentless work ethic, unwavering vision, and great sense of humor, which, lucky for everyone she works with, is infectious.

While interior designers say that farmhouse decor is a timeless look that will most likely continue to be embraced in 2024, the design style can be interpreted in a number of ways, especially in the kitchen. Tom Howley, Creative Design Director at Tom Howley Kitchens explains how you can achieve a farmhouse kitchen, creating a classic and homely feel.

‘Farmhouse interiors are known for their original features – rustic beams, exposed stone walls, weathered floors, and quirky nooks. Kitchens within these idyllic properties are often designed with a focus on comfort, traditionalism, and tactility, making this style an appealing choice for those wanting to create an inviting sanctuary.’

(Image credit: Tom Howley)

‘Traditional shaker-style cabinetry is perfect for creating a welcoming, lived-in look. The shaker style has universal appeal with beautifully balanced proportions that focus on scale, symmetry, and simplicity. Natural wood is an integral part of farmhouse kitchens, as it adds a sense of warmth and tactility. You can incorporate wood in the form of flooring, stand-alone furniture such as a farmhouse table, shelving, chopping boards, or integrated wooden trays to break up painted cabinetry.’

It’s clear that farmhouse decor is a timeless design style that’s here to stay. Perfect for achieving a home that feels welcoming and laid back, farmhouse decor is all about embracing the original, rustic features and building upon these by decorating with neutrals and adding cozy textiles. 

However, to ensure this style doesn’t end up looking dated, consider a more modern farmhouse style that balances the old and new for a fresh take on this core design trend.

Source: homesandgardens.com

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Living in New York City is expensive in every facet of life. Not only is it the most expensive U.S. city overall, but with an average of $6,499 a month for a two-bedroom unit, it has the most expensive apartments in the nation, as well.

Some people just have their hearts set on fancy, expensive apartments in Manhattan with every convenience and amenity imaginable. But there is an elite group of renters who are on the hunt for the most expensive apartment. And that honor goes to a three-bedroom, three-and-a-half-bath penthouse in Chelsea that will run you nearly 16 grand a month.

Meet Penthouse D at the Beatrice Apartments in Midtown, the most expensive apartment in New York City. Here’s what makes this grand “ultimate space for comfort, luxury and leisure” 54 stories above Manhattan worth so much.

The perfectly convenient Midtown South neighborhood

The Beatrice Apartments could not be more convenient. The building is located at the corner of 29th Street and Sixth Avenue. The complex is set inside the 12-square-block swath where the North Chelsea neighborhood overlaps Midtown South. Other Midtown neighborhoods, including the Garment District, NoMad, Koreatown, Flatiron and Rose Hill, are all steps away.

Nearly everything you could desire is just a short walk away. Every variety of restaurant, boutique, café, bodega and bar is nearby. Greeley Square Park is just two blocks away and Madison Square Park is four. The Empire State Building is a four-minute walk, and the Theater District and Times Square are just 15.

The building’s block rates a perfect Transit Score of 100, a “Rider’s Paradise.” Stops for the 1, 2, 3, B, D, F, M, N, Q, R and W subways and PATH trains are within a few-minute walk. And Penn Station is just four short blocks away for access to Amtrak, Long Island Rail Road and New Jersey Transit.

In addition, the location earns a Walk Score of 99, a “Walker’s Paradise,” and a “Very Bikeable” Bike Score of 84. And the property charges no broker fee.

A deluxe apartment in the sky with stunning views

The most expensive listed apartment in New York City is Penthouse D, one of the building’s four penthouses. It occupies the southeast quadrant of the building’s top floor, the 53rd just under the rooftop lounge. The unit features wall-to-wall floor-to-ceiling windows above 6th Avenue, which is officially Avenue of the Americas. The spot offers direct views of the Empire State Building. But if interest in seeing out over Brooklyn and Long Island wanes, the entire unit offers blackout shades.

The three-bedroom and three-and-a-half bath unit stretches over 1,673 square feet in total. Its 10-foot ceilings hover over oak hardwood and porcelain tile floors. Every room has heat and air conditioning with its own controls.

The master suite features a 14-by-18 foot bedroom, a massive walk-in closet and two linen closets. The master bath offers a separate stand-up glass shower and soaking tub and a double-sink vanity. Both the 11-by-12 foot second bedroom and 12-by-12 foot third bedroom feature reach-in closets and their own full en suite bathrooms. All three bedrooms have eastern views out towards the Empire State Building.

The compact kitchen includes high-end stainless steel appliances from Sub-Zero, Viking and Miele and Italian marble and granite countertops. The kitchen island looks out over the spacious 21-by-21 foot living and dining area. And across from the second bedroom is a half bath.

Exclusive facilities 50 stories above New York

The “sleek, sophisticated and ultra-luxurious” Beatrice Apartments occupy 29 floors of a much taller building. The Beatrice begins on the 24th floor of the 54-story building, with the remainder occupied by the posh Kimpton Hotel Eventi. In all, the 620,000-square-foot building, completed in 2010, tops out at 614 feet in architectural height. That makes the structure the 92nd tallest in New York and 375th in the country.

Community facilities include a private catering kitchen, conference meeting room and fitness center with Peloton bicycles and a yoga studio. But the most prominent amenity is the Beatrice’s exclusive Cloud Lounge on the 54th-floor rooftop just one floor up from the apartment. The combined indoor/outdoor space is perfect for personal or party pleasure, with stunning eastern views all the way out to Brooklyn. Relax on the terrace, or play in the recreation lounge with two 60″ LCD televisions and a Brunswick billiards table.

The entire apartment building is fully pet-friendly and smoke-free. It offers 24-hour staff, including an around-the-clock concierge desk. Services include in-house valet dry cleaning and monthly parking. And the staff host annual Independence Day and winter holiday parties for residents and guests.

What else you could get for that money

Even for a jaded New Yorker, spending nearly $16,000 a month on a Manhattan apartment is a little crazy. But how do you put that kind of expense into perspective? Here are a few other things you can buy each month for the price of this penthouse at the Beatrice.

  • 5,814 rides on the MTA subway
  • 89 pairs of Vagabond shoes that are longing to stray
  • Thirty pounds of USDA Prime dry-aged strip steak from Peter Luger’s Steak House
  • 139 tickets to see the New York Giants, but 170 tickets to see the New York Jets who play at the same stadium
  • Ten medium-sized Louis Vuitton handbags from Saks Fifth Avenue, or 320 knockoff medium-sized Louis Vuitton handbags from a table at the corner of Broadway and Canal

More affordable but still expensive units

Make no mistake, even a lousy apartment in New York City will still cost you a pretty penny. But if money is no object, what is one to do if you wish to live in the lap of luxury but this penthouse just isn’t your cup of high tea? Here are five other pricey Manhattan apartments that are slightly more affordable.

  • 170 Amsterdam, 170 Amsterdam Ave. (Lincoln Square): $15,352 for three bedrooms
  • Prism at Park Avenue South, 50 E. 28th St.(Rose Hill): $10,480 for two bedrooms
  • West 96th, 750 Columbus Ave. (Manhattan Valley): $8,482 for two bedrooms
  • 300 East 39th, 300 E. 39th St. (Murray Hill): $8,021 for two bedrooms
  • Parc East, 240 E. 27th St. (Kips Bay): $7,500 for two bedrooms

Enjoy it if you can afford it

Living in a swank penthouse apartment in Chelsea is the stuff of a rom-com or heist movie. That’s what you’d expect from the most expensive apartment in New York City. It’s a pipe dream for New Yorkers not named Icahn or Bloomberg. So, maybe a walk-up in the Village or a brownstone on the Upper West Side are more your speed.

But if your budget is a little less, head on over to rent.com and find a slew of apartments in Manhattan or elsewhere in New York that won’t break the bank.

The rent information included in this article is accurate as of September 2021 and is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Michael is a Philadelphia-based writer with a variety of interests, including music, concerts, TV, politics, travel and sports. His background includes a decade as a programming executive in network television, six years as a marketing executive at a technology company, and time at two magazines and two advertising agencies. He currently works as Craft Beer & Brewery contributor for the Visit Philly Greater Philadelphia Tourism Bureau and sits on the board of a non-profit law firm that assists veterans with disabilities. Michael is a proud Syracuse grad (Newhouse) who has lived in Wichita, Albany, Chicago, Washington DC, Boston and beyond.

Source: rent.com

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Here’s how to go about breaking your lease.

Breaking a lease can be a daunting task, but circumstances may arise that necessitate early termination of a lease agreement. Whether it’s due to a job relocation, changes in personal circumstances or dissatisfaction with the rental property, understanding the process and your rights is crucial. This guide aims to provide a comprehensive overview of everything you need to know about how to legally break a lease, ensuring you navigate the complexities with confidence.

Understanding lease agreements

A lease agreement is a legally binding contract between a tenant and a landlord, outlining the terms and conditions of the rental arrangement. It typically includes details like rent amount, lease term and responsibilities of all parties. Breaking a lease involves terminating this contract before its specified end date, which can have legal and financial implications.

Lease termination options

  • Early termination clause: Some leases include an early termination clause that allows tenants to end the lease before its expiration date, usually for a fee. Review your lease agreement to understand the terms and conditions of this clause.
  • Negotiating with the landlord: Communication is key. Discuss your situation with your landlord openly and negotiate the terms of breaking the lease. Some landlords may be willing to work with you, especially if they can find a new tenant quickly.
  • Subleasing: In certain situations, subleasing might be an option. Ensure that your lease agreement permits subleasing and follow the necessary procedures outlined by your landlord.

Sublease agreements

Subleasing can be a viable option for tenants looking to break a lease early. In a sublease arrangement, the original tenant finds a replacement tenant to take over the lease for the remaining duration. However, it’s crucial to check the lease agreement to determine if subleasing is allowed, as some leases may explicitly prohibit this practice.

If permitted, the tenant must follow the specified procedures, which may include obtaining the landlord’s approval and ensuring the new tenant meets certain criteria. Subleasing can provide a way for tenants to fulfill their lease obligations while offering flexibility in changing life circumstances.

New lease agreements

In some cases, tenants may negotiate with their landlords to break the existing lease and enter into a new lease agreement. This approach requires open communication between the tenant and landlord to discuss the reasons for the lease termination and the terms of the new lease.

Landlords may be willing to accommodate tenants’ needs, especially if there is a valid reason for the lease break. However, both parties need to formalize any changes in writing to avoid misunderstandings and ensure that the new lease agreement clearly outlines the terms, conditions and responsibilities of all parties involved.

Fixed terms

Leases are often structured with fixed terms, specifying the duration for which the lease is valid. Breaking a lease with a fixed term typically incurs additional challenges, as the agreed-upon timeframe binds tenants. Early termination may be allowed by most landlords under certain conditions, like the inclusion of an early termination clause in the lease.

Tenants must carefully review the lease agreement to understand the implications of breaking a lease with a fixed term and work within the parameters outlined in the contract. Communication with the landlord and, if necessary, legal advice can help tenants navigate the complexities of breaking a lease with fixed terms.

Giving written notice

Most leases require tenants to provide written notice when intending to break a lease. This written notice typically includes the reason for the lease termination, the intended move-out date, and any other relevant details.

It’s crucial to follow the specific notice requirements outlined in the lease agreement, which may specify the notice period and the method of delivery. Providing written notice establishes a clear record of the legal reason for the tenant’s intent to break the lease and helps both parties navigate the process in accordance with legal and contractual obligations.

Rental history

A tenant’s rental history can significantly impact the process of breaking a lease. If a tenant has a positive rental history—consistently paying rent on time, maintaining the property, and adhering to lease terms—it may positively influence the landlord’s willingness to negotiate or provide flexibility.

On the other hand, a history of late payments or lease violations may make the process more challenging. Communicating openly about the reasons for the lease break and demonstrating a commitment to fulfilling any outstanding obligations can help mitigate potential issues related to rental history.

Landlord responsibilities

Understanding the landlord’s responsibilities is crucial when contemplating breaking a lease. Landlords are generally obligated to properly maintain the property in a habitable condition, address repairs promptly, and adhere to health and safety codes. If the landlord fails to fulfill these responsibilities, tenants may have legal grounds for breaking the lease.

Documenting instances of neglect or code violations and communicating these concerns to the landlord in writing is essential. If the issues persist, tenants may need to seek legal advice to navigate the process of breaking the lease based on the landlord’s failure to meet responsibilities.

Landlord harassment

Harassment by a landlord can be a challenging situation for tenants. If a landlord engages in harassment tactics to force a tenant out, it may constitute a breach of the lease agreement. Examples of harassment include unwarranted and repeated entry into the rental unit, threats, or creating an environment that interferes with the tenant’s right to peaceful enjoyment of the property.

In such cases, tenants should document instances of harassment, keep written records, and seek legal advice. Breaking a lease due to landlord harassment may require demonstrating that the harassment has created an uninhabitable living situation for new tenants.

New owners

If the rental property changes ownership while a tenant is still under lease, it may impact the lease-breaking process. In many cases, the new owner is obligated to honor the existing lease agreement.

However, tenants should carefully review the lease to understand any provisions related to changes in ownership. Communication with property management and the new owner is essential to ensure a smooth transition and clarify any concerns or questions regarding the lease terms and conditions.

Legal considerations

  • Landlord-tenant laws: Familiarize yourself with the landlord-tenant laws in your state. These laws govern the rights and responsibilities of both parties and may affect the process of breaking a lease.
  • Written notice: Most leases require tenants to provide written notice before breaking a lease. This notice period varies by state and is often 30 days, but it’s essential to check your lease agreement for specific requirements.
  • Early termination fees: Be aware of any early termination fees specified in your lease agreement. These fees are intended to compensate the landlord for the financial loss resulting from the early termination.
  • Security deposit: Understand the conditions under which you may be entitled to a full or partial return of your security deposit. Failure to adhere to the terms of the lease could result in the forfeiture of this deposit.

Legal protections

  • Servicemembers Civil Relief Act (SCRA): Military personnel may be protected under the SCRA, allowing for lease termination under certain circumstances, such as deployment.
  • Domestic violence and family violence: Some states have provisions allowing victims of domestic or family violence to break a lease without penalty. Check your local laws to determine eligibility.
  • Constructive eviction: If the rental unit becomes uninhabitable due to the landlord’s negligence, you may have grounds for constructive eviction, justifying the termination of the lease.

Seeking legal advice

If you are unsure about your rights or encounter challenges during the lease-breaking process, seeking legal advice is crucial. Consult with an attorney who specializes in landlord-tenant law to ensure you make informed decisions and protect your interests.

Handling the lease breaking process

  • Lease breaking steps: Follow the specific steps outlined in your lease agreement for breaking the lease. This may include providing written notice, paying any applicable fees, and adhering to the agreed-upon timeline.
  • Replacement tenant: If your lease allows for subleasing, actively search for a replacement tenant. Ensure that the new tenant meets the landlord’s criteria and follows the necessary application procedures.
  • Rent payments: Continue paying rent until the lease termination process is complete. Failure to do so may result in additional fees or legal consequences.
  • Document everything: Keep detailed records of all communication with the landlord, including written notice, emails, and any agreements reached during negotiations. This documentation can be crucial if legal issues arise.

Understanding the fine print

  • Lease terms and conditions: Read the fine print of your lease agreement thoroughly. Understand the consequences of breaking the lease, including any financial penalties or legal actions that may be taken by the landlord.
  • Credit report impact: Breaking a lease can impact your credit report. Be aware of this potential consequence and take steps to mitigate any negative effects by fulfilling your obligations as outlined in the lease.

State and local laws

  • Local laws and regulations: In addition to state laws, be aware of local laws and regulations that may impact the lease-breaking process. Some cities or counties may have specific requirements or protections for tenants.
  • Health and safety codes: Familiarize yourself with health and safety codes that may affect the habitability of the rental unit. If the property violates these codes, it may provide legal grounds for lease termination without penalty to the tenant.

Special circumstances

  • Job relocation: If you’re breaking the lease due to a job relocation, check if your employer offers any assistance or resources to help with the relocation process.
  • Health issues: In cases of severe health issues, consult with your landlord and provide any necessary documentation to support your need for early lease termination.

Knowledge is power

Breaking a lease is a significant decision that requires careful consideration and adherence to legal obligations. Understanding your lease agreement, state and local laws and exploring all available options for legal action are essential steps in the process.

By approaching the situation with transparency, communication and knowledge, you can navigate the complexities of breaking a lease while minimizing potential legal and financial consequences. Remember to seek legal advice when needed and always act per the terms outlined in your lease agreement to protect your rights as a tenant.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

A native of the northern suburbs of Chicago, Carson made his way to the South to attend Wofford College where he received his BA in English. After working as a copywriter for a couple of boutique marketing agencies in South Carolina, he made the move to Atlanta and quickly joined the Rent. team as a content marketing coordinator. When he’s off the clock, you can find Carson reading in a park, hunting down a great cup of coffee or hanging out with his dogs.

Source: rent.com

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Key takeaways

  • Adjustable-rate mortgages (ARMs) have gained popularity as interest rates have risen.

  • ARMs carry slightly lower rates than fixed-rate mortgages.

  • If you expect rates to fall, or plan to move before the initial fixed-rate period expires, getting an ARM can make sense.

With mortgage rates trending up and home prices still climbing, more borrowers are looking to adjustable-rate mortgages. This type of mortgage can be a more affordable means to get into a home, especially as higher rates on fixed mortgages begin to price some borrowers out — but is it worth the risk? Here’s how to know if you should get an adjustable-rate mortgage.

Why ARMs are popular right now

Adjustable-rate mortgages, or ARMs, come with lower fixed interest rates for an initial period, after which the rate moves up or down at regular intervals for the remainder of the loan’s term.

At the beginning of 2022, very few borrowers were bothering with ARMs — they accounted for just 3.1 percent of all mortgage applications in January, according to the Mortgage Bankers Association (MBA).

Fast-forward to September 2022, and that figure tripled to more than 9 percent. (Intriguingly, the share of ARMs hasn’t changed much over the past year — ARMs accounted for 8.8 percent of new mortgages the week of Nov. 15, 2023, MBA reports.)

The surge is directly related to the rise in fixed mortgage rates, which have rapidly gone up past 6 percent, a range not seen since 2008. With less purchasing power at higher fixed rates, the lower introductory rates attached to ARMs have started to look much more appealing:

“Given still-high home prices and this rising rate environment, potential homebuyers are finding ways to reduce their monthly payments and view ARMs as more attractive given the widening spread between rates for ARM and fixed-rate loans,” says Joel Kan, vice president of Economic and Industry Forecasting at MBA.

Still, ARM volume isn’t likely to set records this time around. In mid-2005, ARMs represented nearly 45 percent of mortgages originated, according to CoreLogic. (Those teaser rates were part of the lead-up to the housing bubble). Since 2009, they’ve accounted for only as much as 18 percent of originations, and as little as 8 percent.

Is an ARM loan a good idea right now?

An ARM is essentially a bet on the future of mortgage rates. If you think mortgage rates will be lower in a few years, an ARM can let you cash in by allowing your rate to move lower once the fixed-rate period ends. Many housing economists expect mortgage rates to fall in the coming months. For instance, Lawrence Yun, chief economist at the National Association of Realtors, predicted in mid-November that mortgage rates would be below 7 percent by the spring of 2024. If he’s right, taking an ARM now might be a good move.

However, even adjustable-rate mortgages carry fixed rates for a few years, so it doesn’t matter to you what rates do six months from now. It’s all about where rates are when your fixed-rate period ends, typically in three, five or seven years — and predicting rates that far into the future is quite difficult.

Another caveat: An ARM shifts the risk of interest rates from the lender to the borrower. If rates go down, you win. If rates go up, you lose. Because you’re taking on uncertainty with an ARM, the rates are lower.

Mortgage

As of Bankrate’s Nov. 15 survey, the reward for taking an ARM was small. The average rate on a 5/6 ARM was 7.47 percent, compared to 7.66 percent for a 30-year fixed-rate loan.

Who is an adjustable-rate mortgage best for?

A lower monthly mortgage payment sounds like a no-brainer, but ARMs are risky, and they’re not a fit for every borrower. As you weigh the pros and cons, here are some situations when an ARM is a good idea:

  • You’re not buying your forever home. ARMs typically have fixed-rate introductory periods of three, five, seven or 10 years, so they “can make sense for a borrower with plans for a shorter time frame in their new home of five to 10 years, where they would likely sell before their rate resets,” says Kan.

  • You’re comfortable with the risk. If you’re set on buying a home now with a lower payment to start, you might simply be willing to accept the risk that your rate and payments could rise down the line, whether or not you plan to move. “A borrower might perceive that the monthly savings between the ARM and fixed-rates is worth the risk of a future increase in rate,” says Pete Boomer, executive vice president at Guaranteed Rate, a mortgage company based in Chicago, Illinois.

  • You’re borrowing a jumbo loan. Borrowers taking out bigger loans tend to go for ARMs. As of March 2022, 37 percent of originations above $1 million were ARMs, according to CoreLogic.

  • You’re able to make extra payments in the introductory period. If you have room in your budget to pay extra toward the loan principal during the initial rate period, a lower-rate ARM can help you maximize those interest savings. (Bankrate’s additional mortgage payment calculator can help you weigh different scenarios.)

The risks of ARMs

While ARMs have staged a comeback in today’s rising rate environment, it can be more difficult to qualify for one compared to a fixed-rate mortgage. That’s because you’ll need a higher down payment of at least 5 percent, versus 3 percent for a conventional fixed-rate loan.

There’s also the need to verify that your current financial situation allows for a higher payment down the road — even if you plan to move before the lower-rate period ends.

“Most ARM loans now are underwritten based on the highest payment expected on the loan to ensure the borrower can handle the payment shock from a rate increase,” says Kan. “Many other factors come into play, such as rates over the longer five- to 10-year horizon, the borrowers’ income and employment situation, housing market conditions that impact their ability to refinance or sell (if necessary) when their fixed period expires and more.”

That “if necessary” piece underscores the primary risk with ARMs: It’s impossible to predict the future. What if you’re nearing the end of the introductory period and lose your job? What if your plan to sell the home gets derailed by a market downturn? Nothing in life is certain, so if you need a stable monthly payment — or simply can’t tolerate any level of risk — it’s best to go with a fixed-rate mortgage, despite the expense.

Types of ARMs to consider

If you qualify for an ARM and plan to get one, you’ll have a few options. The 5/1 ARM is the most common type of adjustable-rate mortgage. With this ARM, you’ll have the same interest rate and principal and interest payments for the first five years. After that, the “1” comes into play: Every year, your interest rate will adjust up or down based on the current market.

In addition to 5/1 ARMs, 5/6 ARMs are becoming more popular. With this type of loan, you’ll still get the five-year introductory rate, but the interest rate resets more frequently: every six months.

There are other types of ARMs as well, including:

  • 3/1 or 3/6 ARM – You’ll have an introductory rate for three years, followed by annual or six-month rate resets. Since you’re only getting the fixed rate for a short time, that rate might be the lowest ARM rate you find. 3/1 ARMs aren’t as common as other kinds of ARMs, however.

  • 7/1 or 7/6 ARM – You’ll have a fixed rate for seven years, then pay a new rate (either higher or lower) every year or six months.

  • 10/1 or 10/6 ARM – A 10/1 or 10/6 ARM has the longest period of stability: a full decade of fixed-rate, predictable payments, followed by annual or six-month adjustments. Since you’re getting 10 years of the same payments, the introductory rate usually isn’t as competitive as rates on shorter ARMs.

Most ARMs have caps on how much the rate can increase in one year (or whatever the interval is), along with a lifetime cap that limits the amount it can increase throughout the loan’s term. You can use Bankrate’s adjustable-rate mortgage calculator to estimate whether you’d be able to shoulder the largest possible monthly payment based on your lifetime cap.

Source: finance.yahoo.com