liquidity

Apache is functioning normally

The 5 Star Life Insurance Company has been in the business if providing their customers with quality life insurance coverage since 1996. The company is an enterprise of the Armed Forces Benefit Association (AFBA), and it is headquartered in Alexandria, Virginia.

Its parent company, AFBA, was initially founded in 1947, with the assistance of Army General, Dwight D. Eisenhower. This company was established to help with easing the strain on military members, as well as their families, during times of war. At that time, members of the U.S. military were not allowed to buy life insurance that would pay out the death benefit proceeds if the member was killed in a war zone.

AFBA had its initial headquarters in the basement of the Pentagon building in Washington, DC, and for the next 70 years, the company served the Armed Forces during times of both war and peace. The motto of AFBA is, “Serving those who serve this great nation.”

The Armed Forces Benefit Association is still considered to be a growing company. This insurer provides supplemental and voluntary life insurance coverage to the work site/group markets. It also offers individual life insurance via the senior market.

5 Star Life Insurance Company Review

5 star life insurance company reviewBeing a related enterprise of AFBA, 5 Star Life Insurance Company has its main offices in Virginia (although it is considered to be domiciled in Baton Rouge, Louisiana. Today, this company has approximately $41 billion of insurance in force, and it insures more than 800,000 lives.

Based on the 2016 Independent Comparative Report, the company is considered to be strong and stable financially, and it exceeds life insurance industry averages regarding its liquidity ratio, net premiums to capital, capital and surplus to liabilities, and percent of investment portfolio investment grade.

The 5 Star Life Insurance Company has a key focus on providing life insurance coverage. It does so via independent brokers and producers. This coverage can be customized to fit the needs of its policyholders.

Life Insurance Products Offered By 5 Star Life Insurance Company

The 5 Star Life Insurance Company has a focus on offering its products in two specific markets. These include offering term life insurance coverage to employer groups. This coverage can help with providing financial protection to employees’ families.

The company also has a key focus on providing simplified issue whole life insurance in the senior market. This coverage can help with covering the insured’s funeral and other final expenses.  It is also good for people who are in poor health or who may be looking for a smokers life insurance policy without the higher rates.

Work Site Insurance Coverage Offered Via 5 Star Life Insurance Company

The company offers a specific suite of coverage for the worksite market. These products offer competitive premium rates, and they are primarily geared toward small and mid-sized employers. All of these products are sold through an employer or an association.

The primary product that is offered is the Basic Life and AD&D (accidental death and dismemberment). Adding these products can help employees to enhance the group life insurance that they already have. It does so by offering additional benefits, along with coverage for a spouse and/or children.

Some of the highlights of these worksite basic life and AD&D include the fact that the coverage is guaranteed issue. This means that if at least ten employees apply, then an individual cannot be turned down for the coverage – even if he or she has an adverse health condition.

The coverage also offers an emergency death benefit payment. This means that up to $15,000 will be mailed out to the policy’s beneficiary within one business day of notification to help loved ones with immediate expenses.

This particular coverage is portable, meaning that even if the employee or member leaves the group, the coverage can continue – without the individual having to provide evidence of insurability (provided that the premium continues to be paid).

There are some nice advantages for employees or members who apply for this worksite/voluntary coverage.

Including the following:

  • There are dedicated case managers at 5 Star Life Insurance Company who will work with insureds and their beneficiaries. This can make the process of coverage and claims easier for people, as there is just one specific point of contact for all of their questions or concerns.
  • The billing is also easy when it comes to the payment of the premium. There are up to 15 different premium modes that are available, which include direct billing for ported policies.
  • For the employer or association that is offering this coverage, the company offers tailored reporting and billing reconciliation that can conveniently fit the employer’s needs.
  • Individuals are also allowed to enroll and to pay their premiums online.

Final Expense Life Insurance Products Offered By 5 Star Life Insurance Company

The company also offers final expense life insurance. These policies are geared towards paying for funeral and other final expenses – and the coverage can be extremely helpful for a person’s loved ones.

Today, the cost of a funeral can exceed $10,000 in some areas. This is especially the case when adding in items such as a burial plot, a headstone, flowers, transportation, and other related costs. In many cases, a person may also not have medical expenses that are not covered by his or her regular health insurance policy. So, a final expense life insurance policy can also help loved ones to pay off these bills.

The 5 Star Life Insurance Company offers several plans under the name of Silver Premier Choice. These are focused on insureds who are typically between the ages of 50 and 85 years old.

Some of the key highlights of these plans include:

  • Death benefit protection of between $5,000 and $25,000. The amount of the coverage on these plans is guaranteed never to go down – even in light of the insured’s increasing age and / or if they contract an adverse health issue.
  • The premiums on these plans are also quite affordable. The premium is also guaranteed never to increase, regardless of the insured’s age and / or health condition going forward.
  • As long as the premium is paid on these policies, the insurance company cannot cancel the coverage for any reason.
  • The Silver Premier Choice plans are whole life in nature. This means that they will not only provide death benefit coverage, but they will also build up cash value. The cash is allowed to grow on a tax-deferred basis. This means that there is no tax due on the gain that takes place inside of the policy unless or until the funds are withdrawn.
  • There is no medical examination required to qualify for these plans. In fact, many people who apply for this coverage can be approved directly over the phone. And, once they are approved, the coverage will begin on that day.
  • Coverage can last up to a person’s age 121.
  • As with the worksite life insurance plans, these policies also offer an emergency death benefit. This can help to provide funds quickly to loved ones when they need it for final expense and other related costs.

There are two final expense plans that are offered by 5 Star Life Insurance Company. These include the Preferred and the Graded. With the graded plan, the death benefit will not all be paid out at the time of the insured’s passing, if they have only owned the policy for a short time.

As an example, if the insured dies in Year 1, then 30% of the selected death benefit will be paid to the policy’s beneficiary. If the insured dies in Year 2, then 70% of the death benefit will be paid. Once they reach Year 3 – and any time after that – then 100% of the selected death benefit will be paid out when the insured passes away.

There are also several different riders that may be added to the life insurance products offered by 5 Start Life Insurance Company.

Including:

  • Terminal Illness Rider – This plan will pay out 30% (in most states) of the death benefit in a lump sum if the insured is diagnosed with a covered terminal illness and is given a limited life span of fewer than 12 months.
  • TI Air Rider – This is an automatic coverage increase rider that can be purchased for as low as an additional $1 per week by the policyholder.
  • Quality of Life Rider – This rider will accelerate a portion of the death benefit on a monthly basis – 3% or 4% – each month if the insured is faced with a chronic medical condition that requires continuous care. The insured can receive up to 75% of the death benefit in total.
  • Waiver of Premium Rider – If the insured is totally disabled due to sickness or accident, then after a six-month waiting period, the policy’s premiums will be waived.
  • Critical Illness Rider This rider will pay out 30% of the policy’s coverage in the event that the insured has a heart attack, life-threatening cancer, stroke or other specific diagnoses.

Source: goodfinancialcents.com

Apache is functioning normally

It’s the first of the month, and with that comes fear and uncertainty that both homeowners and renters won’t be able to make payments due to loss of income related to the coronavirus.

While it’s not clear how bad things will get just yet, CNBC interviewed FHFA director Mark Calabria to get some preliminary numbers, which he himself called “very rough” and subject to change quickly.

Two Million Missed Mortgage Payments by May

  • 300,000 missed payments for Fannie/Freddie owned loans in April
  • 700,000 missed payments for overall market in April
  • Jumps up to 1M and 2M respectively by May
  • Expected to be worse for government loans backed by FHA/VA

He currently estimates that roughly 300,000 home loans backed by Fannie Mae and Freddie Mac could go delinquent in April, which is just over 1% of their book.

For the overall mortgage market, he said that translates to roughly 700,000 delinquent home loans.

By May, those numbers jump up to one million and a little more than two million missed payments, respectively.

He sees more stress in FHA/VA loans due to their lower credit score requirements, higher DTI ratios, and so on.

While it sounds pretty dire, Calabria was quick to point out that it only represents somewhere between 3-5% of the market, and that he’s “not seeing worst-case scenarios.”

This is counter to a comment made by MBA chief economist Mike Franantoni, who warned that if a quarter of U.S. homeowners (~12.5 million households) sought six months of mortgage forbearance, loan servicers could owe between $75 and $100 billion to investors.

Meanwhile, Mark Zandi, chief economist for Moody’s Analytics, said up to 15 million Americans could default if the lockdown goes through summer.

That would likely crush many loan servicers who lack the liquidity to face a barrage of missed payments, but the hope is it doesn’t come to that. Or the Fed steps in to help.

Calabria noted that if borrowers only miss 2-3 months of payments, most loan servicers should be OK, but if it goes beyond that time frame, a lot of firms will face liquidity problems.

Top retail mortgage lender Quicken Loans also services about 1.8 million home loans, and CEO Jay Farner said the company’s balance sheet is “strong enough” to pay holders of bonds backed by its mortgages in the event many default.

However, most forbearance requests have apparently come from homeowners who’ve never been late, which he says as a good sign they’ll get back on track once normal employment resumes.

Additionally, he pointed out that 70-80% of calls were from homeowners not yet facing hardship, who apparently just wanted to know their options.

He did reiterate that, “If you can pay your mortgage, please do so.”

The CARES Act Allows Borrowers to Miss 6-12 Mortgage Payments

  • Homeowners with a federally-backed mortgage can request forbearance for 180 days (and an additional 180 days)
  • Applies to FHA/VA/USDA and Fannie Mae/Freddie Mac loans
  • Simply requires borrowers to request assistance from their loan servicer and say they are facing a hardship related to COVID-19
  • Lenders may not charge fees, penalties, or interest beyond what would have been due had borrower remained current

The passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows homeowners with a federally-backed residential mortgage to request forbearance for up to 180 days, or six months.

This includes FHA loans, USDA loans, VA loans, and home loans purchased or securitized by Fannie Mae or Freddie Mac.

That’s most of the mortgage market, aside from jumbo loans and portfolio loans kept on banks’ books.

It also grants them the ability to request an additional 180 days of forbearance if needed, or to cancel it at any time.

During the forbearance period, lenders may not charge fees, penalties, or interest beyond what would have been due had the borrower made all contractual payments on time and in full.

It’s still unclear what happens after the forbearance period ends. Does the loan servicer assess the borrower’s ability to get current or simply add the missed mortgage payments to the end of the loan term? Who knows.

Update: You can now get up to 15 months of mortgage forbearance.

Can Anyone Get Mortgage Forbearance Under CARES Act?

  • The CARES Act doesn’t define what a “financial hardship” is
  • Nor are loan servicers allowed to require additional documentation to grant mortgage forbearance
  • Both Calabria and Treasury Secretary Steven Mnuchin have urged homeowners to pay their mortgages if they can
  • But at the moment it appears anyone can qualify without proof of hardship

All a homeowner has to do to get mortgage forbearance is submit a request to their loan servicer that they are “experiencing a financial hardship due, directly or indirectly, to the COVID-19 national emergency,” regardless of delinquency status.

Other than that attestation from the homeowner, a loan servicer may not require additional documentation to grant mortgage payment forbearance.

This means you don’t have to prove loss of income or unemployment to qualify, something Calabria acknowledged while saying “we’re operating on the honor system.”

In other words, it should be very easy to get six to 12 months of mortgage payments put on hold with little more than a request, without the typical hoops to jump through.

While great for homeowners in need, it could be a disaster for loan servicers and the mortgage industry in general, assuming millions take part in the relief effort.

Read more: What’s the Last Day to Apply for Mortgage Forbearance Under the CARES Act?

Source: thetruthaboutmortgage.com

Apache is functioning normally

Non-QM lender First Guaranty Mortgage Corp. (FGMC) filed for Chapter 11 bankruptcy protection at the end of June — leaving four warehouse lenders on the hook for more than $415 million.

Sprout Mortgage imploded in early July, leaving its employees out in the cold. The lender so suddenly shuttered its doors it failed to file advanced notice of the layoffs, as required under federal law. It has since been sued by its former employees.

Just weeks later, a leaked text message from Flagstar Bank provided an inside look at how dire the current climate is for many non-QM lenders. The bank calls out 16 non-QM lenders in the text message, indicating it is ramping up scrutiny of its loan reviews, prior to advancing warehouse funding.

The examples, all within about a month, illustrate a non-QM lending world in disarray, turned upside down in recent months as originators battle an unassailable force over which they have no control: fast-rising interest rates. It’s an ongoing battle, which already has been lost by at least two lenders, FGMC and Sprout. 

And others in the sector, warehouse lenders included, must now navigate the fallout, heed the warning signs and take action to avoid a similar fate. One executive said “it would be naïve” to think Sprout and FGMC will be the only casualties, given the current environment. In time, he said, they may well end up being “more of a trend than outliers.”

The Flagstar text message leaked to the media in mid-July confirmed, going forward, funding advances for non-QM mortgages will require advance approval by the lender’s warehouse lending arm. The bank also indicates it may adjust “haircuts” — the percentage of the loan the originator must fund itself to ensure it has skin in the game. 

Thomas Yoon, president and CEO of Excelerate Capital, a full-service non-QM lender, said the move essentially means Flagstar now will “monitor every loan because they don’t want [to fund loans] that will be hard to sell in the open market, and then they’re stuck with that loan.” 

“So, they are going to babysit now,” Yoon said, adding that from a business standpoint, it will slow down the loan originators’ processes. “Someone at Flagstar has to physically look at the deal and make sure it aligns with what they want before they’re able to fund, and that’s going to cause delays.”

Flagstar spokesperson Susan Cherry-Bergesen verified the authenticity of the text message when contacted by HousingWire and confirmed its content: The bank is adjusting its loan-review process. The leaked message included a list of 16 non-QM lenders that would be affected by the changes, according to published reports.

“We were at a meeting with one of our warehouse providers [recently] and … they asked a smart question: “Is Acra Lending on that list?” recalled Keith Lind, CEO of Acra Lending, a leading non-QM lender. “Of course we’re not. 

“…If lenders didn’t take rates up fast enough, or they didn’t liquidate their positions fast enough, there’s going to be warehouse facilities where the loans [made to lenders] are worth less than the equity [skin in the game] that the originator posted. That’s probably a little more common than people think.”

Lind said many lenders are now trying to digest a plethora of lower-rate loans, essentially “orphaned by the market.” During the height of the refi boom and earlier this year, scores of loans were originated at interest rates much lower than current market rates, which have risen dramatically in recent months. 

As a result, there exists a mismatch between those legacy lower-rate mortgages and the new higher-rate loans. That’s the case even though the lower-rate loans are widely considered to be well-underwritten, quality loans. As of mid-July, according to Freddie Mac’s purchase mortgage-market survey, the 30-year fixed mortgage stood at 5.54%, compared with 3.22% as of the first week of January 2022 and 2.88% in July 2021.

The market’s interest rate woes contributed to non-QM lender FGMC’s downfall. FGMC and its affiliate, Maverick II Holdings LLC, filed for Chapter 11 bankruptcy protection June 30, leaving four of the country’s major warehouse lenders with claims totaling $418 million, according to court filings.

Those warehouse lenders are Customers Bank, Flagstar Bank, JVB Financial Group and Texas Capital Bank. 

Another non-QM lender also was swept up in the “orphaned” loan market. Sprout Mortgage on July 6 closed its doors suddenly, leaving hundreds of employees without jobs and paychecks. Real estate agents and their clients also received no advance warning and multiple deals fell through as a result, sources told HousingWire. The lender also did not file a WARN Act notice — required of any employer of more than 100 that has a mass layoff at one location involving more than 50 employees.

“The New York State Department of Labor has not received a WARN notice from Sprout Mortgage,” states an email from the department sent in response to a HousingWire inquiry. “We do not comment (confirm nor deny) on potential or pending investigations.”

The failure to provide proper notice of the layoffs prompted a class-action lawsuit by former Sprout employees. The litigation — lodged in early July in U.S. District Court for the Eastern District of New York — seeks to recover wages due the workers.

The current interest-rate spread pressure-cooker tends to be even more acute in the non-QM sector, compared with the prime-mortgage market, according to John Toohig, managing director of whole loan trading at Raymond James in Memphis.

“[There’s] a lot of underwater coupons due to rapidly rising rates,” Toohig said. “The problem with non-QM is that most banks won’t be the liquidity source for those loans in whole-loan form [purchasing] vs. the aggregators putting them into RMBS [private label securitization deals] — which doesn’t work right now [either].

“So, I wouldn’t be surprised that there is some pain coming at the warehouse-line level [revolving lines of credit used to fund mortgage originations] as loans start to age. The good news for prime jumbo [is] banks want to own those loans and balance-sheet them. The same cannot necessarily be said for non-QM.” 

Non-QM mortgages include loans that cannot command a government, or “agency,” stamp through Fannie Mae or Freddie Mac. The pool of non-QM borrowers includes real estate investors, property flippers, foreign nationals, business owners, gig workers and the self-employed, as well as a smaller group of homebuyers facing credit challenges, such as past bankruptcies. 

Because non-QM, or non-prime, mortgages are deemed riskier than prime loans, in a normal market they generally command an interest rate about 150 basis points above conforming rates, according to Excelerate’s Yoon.

Excelerate and Acra each raised rates rapidly starting early in the first quarter of this year to stay ahead of the fast-rising interest rate curve, according to Yoon and Lind. The rapid surge in rates in the market is being fueled, in part, by the Federal Reserve’s ongoing benchmark rate bumps, intended to battle inflation. The consequence of failing to anticipate the velocity of rate increases could result in a lender getting stuck with millions of dollars in underwater loans — mortgages that are well-underwritten but valued under par, the lending executives said. 

In other words, these lower-rate — now “scratch and dent” — loans are at a competitive disadvantage in terms of pricing in securitization and loan-trading liquidity channels because they are worth less than the newer crop of higher-rate mortgages. Lind put it this way: “These aren’t bad loans, just bad prices.”

“I don’t think [Sprout and FGMC] are the only two lenders that are in a bind,” Lind said. “I’m sure there’s other originators that are in difficult situations, given this movement in rates and probably their inability to get liquidity or to sell loans fast enough.”

Yoon said the Sprout and FGMC failures are likely going “to be more of a trend than outliers.”

“A lot of lenders took on, or funded, these really low-coupon loans,” Yoon continued. “And they probably had them sitting in their gestation pipelines thinking that the things will get better, and they could sell them off. That day never came.

“What I’ve been told through warehouse lenders and Wall Street aggregators is that there’s several billion dollars’ worth of these [low-coupon] loans out there, still sitting on balance sheets. At some point, they [lenders] will have to pay the piper, right? It’s naive to assume we’re not going to see more casualties.”

***

Q&A

HousingWire contacted half a dozen non-QM lenders seeking interviews for this story, including Angel Oak Cos., Deephaven Mortgage, CarVal Investors, Verus Mortgage Capital, Acra Lending and Excelerate Capital. All the lenders, as well as the now-failed Sprout Mortgage, participated in a prior story on the same subject — the state of the non-QM market, which was published in April. 

This time around, only Acra and Excelerate agreed to participate. Representatives of the other lenders declined to comment or make executives available for an interview, with most saying the executives didn’t have time. The top executives at Acra and Excelerate, Lind and Yoon, respectively, each declined to comment on specific competitors in the non-QM market, but they did share their views on current market conditions and the challenges faced today by non-QM lenders in general.

Lind and Yoon stressed they are not predicting with certainty other non-QM lenders will fail, nor do they hope that will be the case. Both, however, predict due to the runup in rates, there will likely be painful losses incurred by some non-QM lenders, which will have to be dealt with somehow.

All non-QM lenders now face the same economic challenge — coping with the fallout from interest rates rising at a faster clip than the market has seen in decades. Following are comments from Acra’s Lind and Excelerate’s Yoon on a range of issues affecting the non-QM lending space.

Interest Rates

We saw the market [earlier in the year] and knew it would only get worse, at least in the short-run, and we put our rates above market at that time sharply. …We’re positioned really well to navigate the current market. That doesn’t mean it’ll be easy, but you know, we’re positioned better than most, so we feel fortunate about that. … When we raised our rates that significantly in the first quarter, it essentially blew up our pipeline in the short-run, but we felt like we needed to do that. …Going into October, November, December [of last year] and into January [2022], everyone was thinking, including us, that we’re going to have a banner 2022. Then the market changed on us overnight. There was only a handful of us that that made the move [to raise rates sharply], and they are positioned well going forward. — Thomas Yoon of Excelerate Capital

We’ve moved rates 18 times in 2022 [to date] — mostly up, with maybe one or two down. Listen, everyone’s got a different execution or [liquidity] outlet. I can just tell you that we’re breaking even or making a little bit of money in the first few quarters [of this year], and our rates are higher than others. I don’t know how some of these other people [lenders] have been able to do it. But if they have, then kudos to them. …You’ve probably heard this before: Don’t fight the Fed [the Federal Reserve]. The Fed is bigger than everyone. Well, guess what? So is the housing market, and you don’t fight the housing market. Everyone’s like, “Oh, I’m going to keep rates low because I need market share.” I think it’s always better to be prudent and pay attention to rates. It’s not a race [or sprint]. This is a marathon to be successful in this business. That’s the way we look at it. — Keith Lind of Acra Lending

Warehouse Lenders

The biggest problem in non-QM right now is the fear of liquidity, right? It’s whether they’re able to sell off their closed loans. If they don’t, then it becomes a burden and a debt. The biggest, I think, challenge that these non-QM platforms face — outside of what’s happening in the market — is will they maintain a stable relationship with their warehouse lines. …I expect lower limits in warehouse funding capabilities and more haircuts, so that they [warehouse lenders] feel that they’re protected. Oftentimes, warehouse divisions are a real profit-maker for banks, but we’re going through a cycle change, and originations have dropped 40-plus percent nationally. It means that everyone’s taken a hit. …Most warehouse lenders are banks and, of course, they’re feeling it too. — Yoon of Excelerate Capital

Regional banks [who are warehouse lenders] have a lot more exposure now and could be holding loans that are underwater. I’ve heard some of them are comfortable with the risk, and they’ll just wind down these positions over time. It’s still a good return for the bank. Others are looking for exit strategies. … Some of these regional warehouse lenders may ultimately do a full turbo feature where they collect all interest and principal, and the originator gets nothing. It’s going to be harder for the little guy [smaller originators] to come back because warehouse providers, as well as people that are lending money [generally], are going to demand more capital. — Lind of Acra Lending

Raising Capital

If you’re a [non-QM] executive and have a $300 million negative on the balance sheet [due to underwater loans], any company that’s going to provide capital is going to question whether [the leadership of the lender] knows how to run a mortgage-banking platform in this marketplace. …It’s not like they will be using that capital to build technology or to hire more great talent or [launch] a new system. To be clear, it’s to make themselves whole, right? That’s a tough, tough sell in today’s market. — Yoon of Excelerate Capital

You don’t throw good money after bad, right? — Lind of Acra Lending

Market Share

We took flack for raising our rates and recalibrating ourselves. A lot of our competition, for example, kept their rates really low and kept them low for all of the first quarter. They took on a massive risk, and their logic was that the market will turn for the better … and they’ll be able to sell these [loans] off at a profit, instead of just breakeven. They looked at it as an opportunity to gain market share. Everyone that did that, you know, they were wrong. — Yoon of Excelerate Capital

The originators that have made it through the first two quarters in [good] financial shape absolutely I would expect all of us to gain market share. There are going to be [originators] that go out of business, as we’ve seen, and they’re probably not the last, and then others are probably going to struggle. — Lind of Acra Lending

Survival Strategies

Our liquidity channels are still really viable. We have strong relationships with our aggregators and outlets. We’re very fortunate, but we also recognize how volatile [this market] is. We have to be nimble. So, we have a plan A, but we also have plan B and C ready, just in case. …The market is moving so quickly, so we’re shooting higher [on rates] than we normally would to make sure that the collateral bought is worth something when they securitize it — [a process that can take months]. The dramatic move [in rates] that we saw in the first quarter and second quarter, I don’t think it’s going to be that exaggerated [going forward], but we’re constantly chasing the bogey here, so to speak. — Yoon of Excelerate Capital

There are three aspects that we focus on. First of all, we focus on rates. And I told you, we’ve moved rates 18 times since January 3. We were at a 4.5% coupon, and now we’re low 8% [range] in terms of where our portfolio is. …Two is liquidity. If you don’t have strong liquidity, and you’re not getting off loan sales fast enough and at the [right] prices, that’s going to be difficult. So, rates, liquidity and then lastly operational expenses. Are you managing your expenses? We took our headcount from 450 down to 350. We did that two months ago. And we’re still looking at that, to make sure that that we are managing expenses and salaries. We’ve not only reduced headcount, but we’ve made adjustments to salaries. — Lind of Acra Lending

Downturn Duration

We’re going to go into a recession — if we’re not already in it right now. I hope that it’s a mild recession. We’re prepping as if this is going to be a 12- to 24-month downcycle for us as an industry. If it [ends] earlier, we look at that as very fortunate. But we anticipate that this year and the bulk of next year is going to be trying times for us. We’re taking a very conservative approach. — Yoon of Excelerate Capital

I’m going to take the view that until we have a better understanding of where we are with inflation and taming it, that this market is going to be choppy. And when the overall market has a more comfortable understanding of where inflation is, and that it’s under control, I would think that things will fall back into order. …There’s still a lot of tailwinds in the housing market, however. We’re short [some] 5 million homes [in the housing market], and I think from an investor perspective, depending on the price and the homes picked, there’s good cash flow every month. I think that’s why you’re seeing more and more people, as far as mom-and-pops [small landlords, who are non-QM borrowers] getting into the housing market as opposed to the equity market moving forward. I like the tailwinds in housing, for sure. — Lind of Acra Lending

Source: housingwire.com

Apache is functioning normally

Getting life insurance is an important part of most any good – and complete – financial plan. By having this important coverage, you can help to ensure that your loved ones won’t need to face financial hardship in the event of the unexpected.

allianz life insurance company reivewThese proceeds may be used for a variety of situations, including the payment of funeral and final expenses, the payment of large debt obligations such as a mortgage balance, and / or for paying ongoing living expenses. This can be especially beneficial if your loved ones count on you for some or all of their financial support.

When applying for a life insurance policy, it is essential to understand what type of coverage you are purchasing. The amount of life insurance protection is also paramount so that you can ensure that loved ones will have enough to provide for their needs. However, another key factor to be aware of is the insurance carrier that you are obtaining the policy through.

In this case, you will want to know that the insurance carrier is strong and stable financially, as well as that it has a positive reputation for paying out its claims to its policyholders. One company that ranks highly in this area is Allianz.

The History of Allianz Life Insurance Company

Allianz Life Insurance Company is a leading provider of life insurance, as well as income-producing products and overall retirement solutions. This company has been in the business of offering products to its customers for more than 115 years.

This company has held strong through both bull and bear markets – and it consistently has received high ratings from the insurer rating agencies. Because of this, customers who own insurance and financial products from Allianz can be more assured that the company will be there if or when the time comes for filing a claim.

Allianz has a conservative investment philosophy that is diversified across a variety of different asset classes. The company, when investing for its portfolio, seeks long-term financial results.

A Review of Allianz Life Insurance Company

Today, Allianz Life Insurance Company has more than 85 million customers around the world. The company is considered to be the 31st largest company worldwide, and it is the world’s third-largest money manager. It is also the second largest company in the diversified insurance industry, based on both market value, as well as on assets. In 2015, Alliance Life collected more than $11 billion in life insurance premiums.

It is the company’s overall cash reserves that allow it to back its insurance guarantees. As of year-end 2015, Allianz held more than $7.5 billion in equity. Therefore, the company can help to ensure that the funds and the policies that are entrusted with it will be there when the money is needed the most.

Allianz Life Insurance Company’s Ratings and BBB Grade

Due to its strong financial backing, Allianz has been given high marks in terms of its overall financial strength ratings. These include the following:

  • A+ (Superior) from A.M. Best
  • A2 (Good) from Moody’s
  • AA (Very Strong) from Standard and Poor’s

Allianz is not presently an accredited company of the Better Business Bureau (BBB). However, the BBB has provided Allianz Life Insurance Company of North America with a grade of A+. This is on an overall grade scale of A+ through F. The company, over the past three years, has closed no complaints via the Better Business Bureau. And, there are no customer reviews for Allianz that are posted on the BBB’s website.

Life Insurance Products Offered By Allianz

Allianz Life Insurance Company offers a wide variety of life insurance products. Because of that, its customers are able to find the type of coverage that can best fit their need – and policyholders can also revise their coverage should their ongoing needs change.

There are numerous benefits to owning life insurance coverage. The funds that are received by the policy’s beneficiary are income tax-free. This means that, instead of having to pay a large portion of the proceeds to Uncle Sam, 100 percent of these funds can be put to work by your loved ones for paying off debt, paying ongoing living expenses, or any other potential need that they may have.

With permanent life insurance coverage, there is both death benefit protection, as well as the ability to build up a nice amount of savings through the cash-value component of the policy. Here, funds are allowed to grow on a tax-deferred basis. This means that there will be no taxes due unless or until the money is withdrawn. Money may be either borrowed or withdrawn from the cash component of a life insurance policy for any reason – including the supplementing of retirement income, the payoff of debt, and / or for taking a nice vacation.

One of the primary forms of life insurance coverage that is offered via Allianz Life Insurance Company of North America is fixed index universal life. This type of coverage offers a flexible death benefit option, as well as the ability to earn interest in the cash component that is based on a variety of crediting methods and index allocation options. These policies also offer additional riders that may be added. Doing so may help to provide more customized life insurance protection to policyholders. The life insurance plans that are offered by Allianz include the following:

Allianz Life Pro+ Fixed Indexed Universal Life Insurance Policy

This policy begins with an income tax-free death benefit. It also provides the opportunity to accumulate cash value based on positive changes in the underlying market index of the policy. Riders are available to help policyholders with meeting specific needs.

Those who are age 80 and younger are eligible to apply for this policy. Although there are several different risk classes. These include:

  • Juvenile – For age 0 to 17
  • Tobacco – For ages 18 to 75
  • Non-tobacco – For ages 18 to 80

The minimum amount of death benefit on this policy is $100,000, and proceeds may be applied for up to $65 million. There are also several different ways in which the death benefit on this policy is structured. For example:

  • Level – With the level death benefit option, the amount of coverage will remain the same throughout the life of the policy.
  • Increasing – With the increased death benefit option, the death benefit amount will be equal to a specified amount, plus the accumulation value.
  • Return of Premium Option – There is also a return of premium option available. With this option, the death benefit will be equal to a specified amount, plus the amount that the policy holder paid into the policy.

If the insured lives to age 120, the death benefit amount will equal the amount of the policy’s accumulation value. At this time, no additional premiums will be accepted by Allianz, unless they are deemed as necessary for keeping the policy in force.

There are some indexes that may be selected with this policy. These include the Barclay’s U.S. Dynamic Balance Index ll, the S&P 500 Index, or a blended index that includes the Dow Jones Industrial Average (DJIA), the Barclay’s Capital U.S. Aggregate Bond Index, the Russell 2000 Index, and the EURO STOXX 50 Index.

There are also several additional riders that may be placed on this policy to help with customizing the plan to best fit a policy holder’s specific needs. These are:

  • Waiver of Specified Premium Rider
  • Convertible Term Rider
  • Enhanced Liquidity Rider
  • Loan Protection Rider
  • Child Term Rider
  • Additional Term Rider
  • Other Insured Term Rider

Allianz Life Pro+ Survivor Fixed Index Universal Life Insurance Policy

The Allianz Life Pro+ Survivor Fixed Index Universal Life Insurance policy is a good and cost effective way to insure two individuals at the same time. The proceeds of this policy will be paid out upon the death of the second insured. This type of plan can be more cost effective than the purchase of two individual life insurance policies. Also, in the event that an insured is diagnosed with a terminal or a chronic illness, a portion of the policy’s benefits may then be accessed.

Those who are between the age of 30 and 80 are eligible to apply for this particular plan. The death benefit amount starts at $100,000 and can go to $65 million, within certain guidelines. There are different options for how the death benefit will be structured, which include level, increasing, or a return of premium option. There are also optional riders available, including:

  • Chronic Illness Accelerated Benefit Rider
  • Terminal Illness Accelerated Benefit

Other Products Offered

In addition to just life insurance coverage, Allianz also provide other types of financial and income tools. These include:

Annuities

Allianz provides retirement annuities to its customers, as these products can help to ensure that they can receive ongoing income – regardless of how long they may live. The company offers several different types of annuities so that clients may choose the one that will be best for their goals. The types of annuities that are offered are:

  • Fixed Index Annuities – A fixed index annuity offers returns that are based on an underlying market index. If for example, the index performs well during a given period, then the value of the account will rise, up to a stated cap or percentage. If, however, the underlying index performs poorly in a given period, then the value of the account will not endure a loss, but rather will typically be credited with a 0% for that period. These annuities also allow for tax-deferred growth inside of the account, meaning that there is no tax due each year on the gain until the funds are withdrawn. When the annuity is converted over to income, annuity holders will have several options for how – and how long – they wish to receive the payout. One of these is the lifetime option, which will pay out an income for the remainder of the individual’s life, regardless of how long that may be. In many cases, another individual such as a spouse or partner may also be able to receive lifetime income from the annuity as well.
  • Variable Annuities – A variable annuity has its funds invested in sub-accounts, which can typically include equity options such as mutual funds. Here, the opportunity to earn a nice return is available. However, due to potential market volatility, there is also more risk with this type of annuity.
  • Index Variable Annuities – An index variable annuity will also allow its holder to participate in potential market gains, yet with a level of protection against market downturns.

Allianz also offers a myriad of retirement planning tools. These include materials that can help individuals and couples to plan for the future, as well as financial calculators to help determine if you are on track.

How to Get the Best Life Insurance Premium Quotes

When shopping for a life insurance policy quote, it is typically best to work with either a company or an agency that has access to more than just one single life insurance carrier. This way, you will be able to more directly compare the benefits, the companies, and the premium prices that are available to you.

If you are ready to move forward, we can help. We work with many of the best life insurance companies in the marketplace today, and we can provide you with the details that you need. All you have to do in order to get started fill out the form on the side of this page. 

We understand that purchasing life insurance can seem a bit confusing. But we can help you to ensure that you are going in the right direction with the type of plan that you choose, and the premium that is charged. So, contact us today – we’re here to help.

Source: goodfinancialcents.com

Apache is functioning normally

Dark pools, sometimes referred to as “dark pools of liquidity,” are a type of alternative trading system used by large institutional investors to which the investing public does not have access.

Living up to their “dark” name, these pools have no public transparency by design. Institutional investors, such as mutual fund managers, pension funds, and hedge funds, use dark pool trading to buy and sell large blocks of securities without moving the larger markets until the trade is executed.

Who Runs Dark Pools?

Investment banks typically run dark pools, but some other institutions run them as well, including large broker-dealers, agency brokers, and even some public exchanges. Some trading platforms, where individual investors buy and sell stocks, also use dark pools to execute trades using a payment for order flow.

Recommended: What Is a Market Maker?

The role of dark pools in the market varies over time. Consider this: At the start of 2021, it comprised half of trades in a single day, but a few months later that share had fallen to 12.91% of U.S. equity volume.

Because trades in a dark pool aren’t reflected in the prices on a public exchange, participants in a dark pool trade based on the prices offered on a public exchange, using the midpoint of the National Best Bid and Offer (NBBO) to set prices.

Why Institutions Use Dark Pools

Large, institutional investors such as hedge funds, may turn to dark pools to get a better price when buying or selling large blocks of a single stock. That’s because of the way that large trades impact the public markets.

If a mutual fund manager, for example, wants to sell a million shares of a given stock because it’s underperforming or no longer fits their strategy, they’d need to use a floor trader to unload the position on a public exchange. Selling all those shares could impact the price they get, driving down the VWAP (volume weighted average price) of the total sale.

To avoid driving down the price, the manager might spread out the trade over several days. But if other traders identify the institution or the fund that’s selling they could also sell, potentially driving down the price even further.

The same risk exists when buying large blocks of a given security on a public market, as the purchase itself can attract attention and drive up the price.

Recommended: How to Identify an Underperforming Stock

New Risks

The risks of attracting attention from other traders have intensified with the rise of algorithmic trading and high-frequency trading (HFT). These strategies employ sophisticated computer programs to make big trades just ahead of other investors. HFT programs flood public exchanges with buy or sell orders to front-run giant block trades, and force the fund manager in the above example to get a worse price on their trade.

But with a dark trade, that institutional investor can sell a million shares of a stock without the public finding out because dark pool participants don’t disclose their trades to participants on the exchange. The details of trades within a dark pool only show up after a delay on the consolidated tape – the electronic system that collates price and volume data from major securities exchanges.

There are other advantages for an institutional trader. Because the buyers and sellers in a dark pool are other institutional traders, a fund manager looking to sell a million shares of a given stock is more likely to find buyers who are in the market for a million shares or more. On a public exchange, that million-share sale will likely need to be broken up into dozens, if not hundreds of trades.

Recommended: Institutional Investors vs. Retail Investors

Criticism of Dark Pools

As dark pools have grown in prominence, they’ve attracted criticism from many directions, and scrutiny from regulators. For instance, the lack of transparency in dark pools and the exclusivity of their clientele makes some investors uneasy. Some even believe that the pools give large investors an unfair advantage over smaller investors, who buy and sell almost exclusively on public exchanges.

The Takeaway

As discussed, dark pools are sometimes referred to as “dark pools of liquidity,” and are a type of alternative trading system used by large institutional investors to which the investing public does not have access. They’re typically run and utilized by large investment banks.

Given the nature of dark pools, they attracted criticism from some due to the lack of transparency, and the exclusivity of their clientele. While the typical investor may not interact with a dark pool, knowing the ins and outs may be helpful background knowledge.

Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an account gives you the opportunity to win up to $1,000 in the stock of your choice.

Photo credit: iStock/DNY59

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
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.
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Source: sofi.com

Apache is functioning normally

Think mortgage rates are high now? Connie Strait remembers when she was starting her career in real estate in the early 1980s and buyers were contending with rates three times higher.

Strait recalled one couple who were actually relieved when they locked in a 30-year fixed-rate mortgage at 19% in September 1981. The couple had told her they were hoping to close on their new home before rates moved any higher.

“They were so delighted to be closing at 19%,” said Strait, who now works at William Raveis Real Estate in Danbury, Connecticut. “They said, ‘We made it in just under the wire, next week it is going to 20%!’”

The following month, in October 1981, the average weekly interest rate for a 30-year, fixed rate loan hit an all-time high of 18.6%, according to Freddie Mac. The average mortgage rate is based on a survey of conventional home purchase loans for borrowers who put 20% down and have excellent credit. But many buyers pay even more.

This week, the 30-year fixed-rate mortgage rate hit an average of 6.70%. Although it may come as cold comfort to someone who let a 3% rate slip through their fingers just seven months ago, today’s interest rates are, historically speaking, still relatively low.

“Unfortunately, now people don’t remember how Baby Boomers were getting rates of 10%, 12% and higher for most of the 1980s,” Strait said. “Meanwhile, our kids are shocked by 6%.”

Those ultra-high rates made homeownership less affordable in the early 1980s than it is now. By the mid-1980s though, mortgage rates had fallen somewhat, making financing more affordable, even with rates near 10%.

But many things have changed since the 1980s.

Given wage growth, sky-high home prices and rapidly rising interest rates, homes today are the least affordable they have been in 35 years.

Home affordability has worsened

Mortgage rates were high in the 1980s, but home prices were a lot less expensive, too.

In October 1981 a typical home cost $70,398. But with mortgage rates averaging 18.45% that month, the $870 monthly payment took up about 55% of the median income at the time, according to Black Knight, a mortgage data company.

By October 1986, rates had dropped to 9.97% and a typical home was $91,488. That brought the monthly payment down to $640, and took up just 30% of the median income.

“If you reduce interest rates by 8.5% that doubles your buying power,” said Andy Walden, vice president of enterprise research at Black Knight.

With the typical home currently costing $434,978, and rates over 6%, the monthly mortgage payment of $2,061 eats up more than 36% of the median monthly income, according to Black Knight.

“When we lower interest rates it allows home prices to grow much more quickly than incomes,” said Walden. “It gives folks the ability to buy more home with the same amount of income. So a 1% decline in interest rates allows you to buy 10% to 12% more home, with the exact same amount of money.”

Interest rates have been below 5% for the past 11 years, with the weekly average reaching an all-time low of 2.65% in January 2021. That’s part of the reason why home prices are so high today.

Incomes aren’t keeping up

Making affordability matters worse, home prices are significantly out of whack with income levels.

Over the past five years, while the average home price has gone up 60%, the average income has risen less than 15%.

“We now have the highest ratio of home price to income that we’ve seen in the past 50 years plus,” said Walden. “We have data going back to 1970 and it is the highest we’ve seen by far.”

Historically, home prices were between three to four times the median income, a ratio that remained consistent from 1975 until 2000, according to Black Knight. In 2000, as interest rates began to drop below 8%, the ratio began to rise, reaching a point in 2005 where home prices were almost five and a half times the median income.

The sharp rise in 2005 was largely fueled by expanded credit in the mortgage market, said Walden, with mortgages being offered based on a buyer’s unverified income, and through products like interest-only, adjustable-rate and negative amortizing loans.

“That allowed those shopping to buy more home than their income level would traditionally support,” he said. It also created a bubble that led to the 2008 housing crash.

Today, the typical home price is six times the median household income of about $71,000.

Credit availability has greatly increased

Another reason why rates were so high in the 1980s was that there was less credit available to borrow, making it more difficult and costly for buyers to secure a mortgage. Banks had to charge higher rates for taking on the risk. But today’s mortgages are often bundled and sold into investment products. That secondary market makes it profitable for lenders to give loans to many more people, and at lower interest rates.

“Back in the early 1980s, rates were in the mid- to upper-teens,” said Pete Miller, senior vice president for residential policy at the Mortgage Bankers Association. “Part of the reason was that the supply of mortgage credit was more constrained. We didn’t have the secondary market liquidity we have today.”

Miller – who bought his first home in California in the mid 1980s with a 13% adjustable rate mortgage – said 6% for a fixed-rate 30-year loan is historically a very good interest rate.

“I remember when interest rates went to single digits and saying, ‘I thought that would never happen.’”

Source: cnn.com

Apache is functioning normally

A hedge fund is an investment vehicle that invests in securities and other assets with money pooled from investors. They’re similar to mutual funds or exchange-traded funds, but they are riskier and more expensive. Because of this, they’re subject to different government regulations and only sophisticated investors.

While most investors may not engage with a hedge fund, especially younger ones, it can be useful to know what they are and how they work.

What Is a Hedge Fund?

Hedge funds are set up by a registered investment advisor or money manager, often as a limited liability company (LLC) or a limited partnership (LP). They differ from mutual funds in that they have more investment freedom, so they’re able to make riskier investments.

By using aggressive investing tactics, such as short-selling, debt-based investing, and leveraging hedge funds can potentially deliver higher-than-market returns, but they also have higher risks than other types of investments. In addition to traditional asset classes, hedge funds can a diverse array of alternative assets, including art, real estate, and currencies.

Hedge funds tend to seek out short-term investments rather than long-term investments. Of course assets that have significant short-term growth potential can also have greater short term losses.

Historically, hedge funds have not performed as well as safer investments, such as stock market indices. However, the goal of hedge funds isn’t necessarily to outperform the stock market. Investors also use hedge funds to provide growth during all phases of market growth and decline, providing diversification to a portfolio that also contains stocks, cash, and other investments.

Generally speaking, only qualified investors and institutional investors are able to invest in hedge funds, due to their risks and the high fees that get paid to fund managers.

Types of Hedge Funds

Each hedge fund has a different investing philosophy and invests in different types of assets. Some different hedge fund strategies include:

•   Real estate investing

•   Junk bond investing

•   Specialized asset class investing such as art, music, or patents

•   Long-only equity investing (no short selling)

•   Private equity investing, in which the fund only invests in privately-held businesses. In some cases the hedge fund gets involved in the business operations and helps to take the company public.

What Is a Hedge Fund Manager?

Hedge funds are run by investment managers who make investment decisions and manage the risk level of the fund. If a hedge fund is profitable, the hedge fund manager can make a significant amount of money, often up to 20% of the profits.

Before selecting and investing in a hedge fund, it’s important to look into the fund manager’s history as well as their investing strategy and fees. This information can be found on the manager’s Form ADV, which you can find on the fund’s website as well as through the Security and Exchange Commission’s (SEC) website.

Who Can Invest in a Hedge Fund?

Hedge funds are not open to the general public, and there are several requirements to be able to invest in them. In order for an individual to invest, they must be an accredited investor. This means that they either:

•   Have an individual annual income of $200,000 or more. If the married investors must have a combined income of $300,000 per year or more. They must have had this level of income for at least two consecutive years and expect to continue to earn this level of income.

•   Or, the investor must have an individual or combined net worth of $1 million or more, excluding their primary residence.

If the investor is an entity rather than an individual, they must:

•   Be a trust with a net worth of at least $5 million. The trust can’t have been formed solely for the purpose of investing, and must be run by a “sophisticated” investor, defined by the SEC as someone with sufficient knowledge and experience with investing and the potential risks involved.

•   Or, the entity can be a group of accredited investors.

How to Invest in a Hedge Fund

Investing in hedge funds is risky and involves a deep understanding of financial markets. Before investing, there are several things to consider:

The Fund’s Investing Strategy

Start by researching the hedge fund manager and their history in the industry. Look at the types of assets the fund invests in, read the fund’s prospectus and other materials to understand the opportunity cost and risk. Generally speaking, the higher the risk, the higher potential returns.

In addition, you need to understand how the fund evaluates potential investments. If the fund invests in alternative assets, these may be difficult to value and may also have lower liquidity.

Understand the Minimums

Investment requirements can range between $100,000 to $2 million or more. Hedge funds have less liquidity than stocks or bonds, and some require that money stays invested in the fund for a specific amount of time before it can be withdrawn. It’s also common for there to be lock-up periods for funds and for there to only be certain times of year when funds can be withdrawn.

Confirm You Can Make the Investment

Make sure that the fund you’re interested in is an open fund, meaning that it accepts new investors. Financial professionals can help with this research process. Each hedge fund will evaluate an individual’s accreditation status using their own methods. They may require personal information about income, debt, and assets.

Understand the Fees

Usually hedge funds charge an asset management fee of 1-2% of invested assets, as well as a performance fee of 20% of the hedge fund’s profits.

The Takeaway

Hedge funds offer investors — usually, wealthier investors — the chance to invest in funds that are usually high-risk, but offer high potential returns. There are many rules surrounding hedge funds, and many investors may not even consider them as a part of an investing strategy.

For accredited investors, investing in a hedge fund may be one part of a diversified portfolio, although it depends on the investor’s risk tolerance, time horizon, and investing goals. If you’re not an accredited investor, or you’re worried about the risks associated with hedge funds, it may make more sense for you to consider other types of investments or to stick with ETFs, mutual funds, or funds of funds that emulate hedge fund strategies.

Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an account gives you the opportunity to win up to $1,000 in the stock of your choice.

Photo credit: iStock/gece33

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
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.
Fund Fees
If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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Source: sofi.com