loan

Apache is functioning normally

Apache is functioning normally

Here’s a little nugget of potentially good news that may materialize out of the fiscal cliff.

The Treasury Department is reportedly floating a new initiative, referred to as the “Market Rate Modification Program,” which will allow underwater borrowers with non-agency mortgages to do a rate and term refinance to take advantage of today’s low interest rates.

As it stands, if Fannie Mae, Freddie Mac, or Ginnie Mae don’t back your mortgage, getting a loan modification is difficult, if not impossible.

And while most newly originated loans are now backed by these government agencies, many non-agency mortgages, also referred to as private-label mortgages, were originated during the housing boom.

As a result, millions of Alt-A loans, subprime loans, option arms, jumbo loans, and so forth are not eligible for the existing government refinance and modification programs, such as the popular HARP II.

The Treasury Department has determined that “Significantly Underwater Borrowers,” characterized as those with loan-to-value ratios of 125% or higher who have such loans are more likely to default, despite being current on payments.

In short, these borrowers are unable to get the assistance fellow Americans (or even neighbors) receive because their loans aren’t backed by Fannie, Freddie, or the FHA/VA, so the Obama Administration fears they may walk.

Obviously, the last thing we need is more foreclosures, especially now that everyone seems to think we’ve “turned the corner.”

How the Market Rate Modification Program Would Work

It all sounds quite simple. If you’re one of those “Significantly Underwater Borrowers” that is current on mortgage payments, all you’d need to do is provide a hardship affidavit with your application.

The letter is meant to prove a “reasonably foreseeable default” under mortgage securitization rules to appease investors who might otherwise prefer their higher original yield.

From there, if approved, participating loan servicers would lower your mortgage rate to the “current market rate,” as determined by the Freddie Mac Primary Mortgage Market Survey.

At last check, the going rate for a 30-year fixed was a very attractive 3.32%, a far cry from the 6-7% rates seen during the housing run-up.

Surely that reduction in mortgage payment would make homeowners think twice about hating their “now worthless” properties.

Each month during the five years after the modification took place, the Treasury would pay loan servicers the difference in interest between the borrower’s old rate and new.

After the five years are up, the Treasury would stop compensating servicers, regardless of whether said loans were above water or not, and the borrower’s interest rate would remain at the lower rate.

Apparently this would appease investors while also providing much needed relief to homeowners thinking of throwing in the towel.

It would also provide much needed stability to the housing market, which is surely not yet on solid ground.

Why It’s Important

Back in 2009, I wrote about private-label mortgages, which while only making up a small percentage of total mortgages outstanding, accounted for 62% of the delinquencies.

If these bad loans continue not to be addressed, the resulting defaults and foreclosures could hamper a housing recovery for everyone, including those with agency-backed loans.

So this is a very important initiative, and one that could make the impending fiscal cliff a little less painful.

For the record, House Democrats are also working on a bill that would provide principal reductions for those with Fannie and Freddie backed loans.

Of course, the more they attempt to stuff into negotiations, the longer it will take to reach a resolution.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

Optimization, Document Tracking, MSR Financing Products; Saving Money on Credit Reports and CE

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Optimization, Document Tracking, MSR Financing Products; Saving Money on Credit Reports and CE

By:
Rob Chrisman

Mon, Oct 2 2023, 10:32 AM

As President Jimmy Carter celebrated his 99th birthday seven months into hospice, welcome to the 4th quarter! (Will lenders experience any “Q-4-ia”? Say out loud.) Let’s talk U.S. lists! California, Indiana, Michigan, Texas, and Virginia are top five in pumpkin growing. The National Association of Realtors, U.S. Chamber of Commerce, Pharmaceuticals, American Hospital Association, and Blue Cross/Blue Shield are the leading five lobbying spenders. And you can add the Internal Revenue Service’s Income Verification Express Service (IVES) to the list of “essential” government activities that would continue to operate in the event of a government shutdown. We won’t have to worry about that until mid-November, as the government kicked the can down the road and passed a Continuing Resolution that averts a government shutdown to November 17. HUD (Ginnie Mae and FHA included), USDA, and the VA will continue to operate temporarily uninterrupted, and for a bonus the bill also includes $16 billion in disaster aid and an extension of the National Flood Insurance Program (NFIP). (Today’s podcast can be found here and this week’s is sponsored by TRUE. TRUE creates accurate data that powers automation and optimizes every step of the lending lifecycle, helping lending organizations rapidly process loans, dramatically cut costs and risk, and radically improve the customer experience. Hear an interview with Keyspire’s Michael Sarracini on housing affordability problems and the best advice for young potential homeowners.)

Lender and Broker Software, Programs, and Services

“ACUMA Matata! What a wonderful phrase!” This phrase captures the essence of the ACUMA Annual Conference, where Dark Matter is currently meeting with its Credit Union clients and prospects. Credit unions gather at this event to explore new horizons in loan origination. In this dynamic financial landscape, credit unions require a powerful, adaptable LOS that caters to their unique needs. Enter Empower LOS, Dark Matter’s King of the Jungle. Empower embodies next-gen solutions, automating tasks, and ensuring precision with “lights-out processing.” It enhances loan origination, improves quality, reduces turnaround times, and supports compliance while boosting member satisfaction. Our integrated suite of tools complements Empower, elevating lending operations. From automation assistants to machine learning-powered document management, we have it all. Ready to transform your lending game? Connect with us and we’ll explore how Empower and Dark Matter Technologies can redefine credit union lending. “ACUMA Matata!” No worries: our tech-forward solutions make lending possibilities endless.

Your bank can be more than just a bank. With powerful national resources and personalized, one-on-one relationships with industry experts, you have a strategic edge. Western Alliance Bank Specialized Mortgage Services delivers stable, trusted treasury management and mortgage banking services that can keep pace with your company’s growth needs and help keep your operations running smoothly while taking advantage of competitive rates. Advanced payment technology provides streamlined online wire transfer origination with just a few clicks as well as embedded finance, API, file-based and online platform options, all customizable to meet your current and future priorities. You’ll also appreciate our options for warehouse lending, MSR financing, note financing and other mortgage finance products that offer speed to approval and certainty of execution. Contact Mark Short(469) 702-6212, Nick Richards (646) 708-1211, Nicole Avey (720) 633-4759, Elizabeth Mix (480) 329-2122, Jim Karr (626) 390-8534 and Chris Martin (480) 341-5483. Western Alliance Bank, Member FDIC.

“Falcon Capital Advisors’ team of experienced advisors can take your digital mortgage goals from vision to reality. Our team of subject matter specialists has provided guidance to major lenders and investors, expertly guiding them through the various processes and potential obstacles to quickly stand up their digital mortgage programs. Our comprehensive suite of services includes eMortgage readiness assessments, strategic roadmap development, vendor selection support, program implementation, and securing investor and MERS approval. Our experts can mitigate risks and achieve faster (and less expensive) results and even revitalize stalled eMortgage efforts. Contact Jim Voth to learn more.”

To deliver the best borrower experience and remain compliant, servicers and investors must release liens in a narrow window after payoff. NTC, the leader in lien and assignment release services for 35 years, now offers lenders two options: their traditional full-service offering, and a self-serve, “share-the-work” option: PerfectDocs. The first, complete web-based lien solution, PerfectDocs enables the creation and tracking of all documents needed to complete a lien release and mortgage assignment including reviewing, executing, and notarizing documents and sending them to counties for e-recording for non-MERS and MERS loans. It also features intuitive queues for exceptions, downstream mailings to borrowers or custodians, recording confirmations and fee reconciliations. The platform allows users to share the work with NTC’s team during volume fluctuations or request assistance on complex “cures.” Interested in 100 percent client control with on-demand integration to full service to cure exceptions? Request a PerfectDocs demo to learn more and see how we can share the work!

Fall has arrived, kicking off the football and conference season! And that means plenty of opportunities to grab a pumpkin spice latte and meet up with the Computershare Loan Services (CLS) team at some of the industry’s most significant events. This year, MBA’s Annual Convention is in Philadelphia on October 15-18, and CLS wants to meet you there. Contact them at [email protected] to schedule time together in the city of brotherly love. They’ll tell you all about CLS’ subservicing solutions, origination fulfillment services, co-issue MSR acquisition program, and mortgage cooperative that can help you stay one step ahead.

Free eBook: Market-Proof: How to Build a Flexible Lending Business Resilient in Upcycles & Downturns. The exaggerated upcycles and downturns of the past few years underscore just how crucial it is for lenders to build resilience and flexibility into their businesses. To overcome today’s challenges, lenders need to hone their lending process at each step. In this new eBook, Maxwell provides 12 tips from industry veterans to help you optimize your mortgage process from loan application to the secondary market. You’ll get insight from exclusive interviews with industry veterans on how to increase efficiency, access economic scale, and become resilient to market volatility like never before. Click here to download Maxwell’s new eBook “Market-Proof: How to Build a Flexible Lending Business Resilient in Upcycles & Downturns.”

Saving Pennies Into Saving Dollars

My cat Myrtle thinks nothing of enjoying the benefits of minced, line-caught halibut from the 48-degree waters off Kodiak, Alaska. No expense spared. But for lenders and vendors, staring at an autumn and winter with relatively high rates, saving pennies is critical especially if it means saving jobs and many money-saving ideas are simple and right under your nose.

Mike Metz, with VIP Mortgage, and Faith Howard-Mooney, with The Mortgage Collaborative, recently led a discussion at TMC’s Nashville event on cost saving ideas. For example, are you bundling or cascading credit reports and verification providers? Are you looking at alternatives for courier and shipping vendors? Or, looking at alternatives for tax transcripts? You’d be surprised to hear how much these seemingly small things can add up. (If you want to get involved in conversations like these, contact Faith to learn how you can get involved, or about TMC’s next event in Louisville.)

The conversation continues. Lenders are still seeking ways to reduce costs in the current market environment. Lenders One helps its membership with various benefits, such as free NMLS CE Courses via OnCourse Learning. Consider the math. If you have 100 MLOs needing continuing education at an average $100 per course, you’d spend $10,000 just on CE courses. As a member, your MLOs would take NMLS CE Courses at no cost to your company! Also, with L1 Credit, an approved credit reporting agency with a full suite of credit, flood, fraud, and verification solutions, L1 can offer members pricing that is consistently less than other offerings while still providing industry-leading customer support. L1 Verifications includes the top VOE/I and VOA products in an available waterfall sequence for more savings opportunities. L1 Events? Don’t miss the Executive Roundtable in San Diego, 11/7-8, and registration is open for L1 Summit 2024 in LA, 3/3-6. Visit L1 or contact Tricia Migliazzo to learn more.

Capital Markets

The month and quarter ended on Friday, and it was, to put it mildly, an awful month for bonds and MBS, and therefore mortgage rates. The Fed’s restrictive monetary policy has tightened financial conditions by design, and 30-year fixed rate mortgages closed the month at nearly 7.5 percent, up roughly 30 basis points over the past 30 days. The 10-year currently sits around 4.6 percent, a far cry from the 1.5 percent yield it paid in the weeks leading up to the Fed’s initial rate hike in March 2022 (or the 51 basis points low in August 2020, or even the 3.31 percent it closed at on April 6); it closed Friday +13 basis points for the week and +48 basis points for the month. The Fed is showing no sign that it is going to pivot back to an easy money policy anytime soon. The first fed funds cut is forecasted for next summer (2024).

Is a soft landing becoming less likely? The effects of the auto workers strike, higher energy prices, and student loan payment resumption may ripple through the economy in the form of lower consumer spending and a slowdown in hiring. The potential federal government shutdown in mid-November may eventually throw a curveball at the Fed, which admittedly relies on economic data reports to enact forward looking policy.

Meanwhile the year-over-year core PCE index, which excludes food and energy, declined to 3.9 percent in August, its lowest annualized pace since early 2021. The latest update to second quarter GDP was unrevised at 2.1 percent annualized growth, however consumer spending growth was revised down from 1.7 percent to 0.8 percent. Durable goods orders in August rose 0.2 percent, exceeding market expectations for a 0.5 decline as new orders for defense aircraft and parts jumped 19.2 percent. Excluding defense, orders for capital goods increased 0.9 percent as businesses continued to invest in equipment. The resilience of the economy up to this point has increased the prospects of a “soft landing” in the eyes of some Fed officials, however recent economic headwinds have increased the level of uncertainty which could have implications for future Fed policy.

This week culminates with the September payrolls report on Friday, and expectations are for 170k in the headline figure. Several labor market indicators are also on the calendar including JOLTS job opening on Tuesday, ADP employment on Wednesday, and Challenger job cuts on Thursday. Other releases of interest include PMIs, construction spending, factory orders, trade, and consumer credit. Fedspeak is on the heavy side, including four speakers today. Regarding MBS, Agency prepayments will be released after Thursday’s close. Today’s calendar kicks off with the final September S&P Global manufacturing PMI later this morning and will be followed by ISM manufacturing PMI for September and construction spending for August. We begin the day, week, month, and quarter with Agency MBS prices worse than Friday night by .125-.250 and the 10-year yielding 4.62 after closing Friday at 4.57 percent.

Job Openings

“Pezian Search Group continues to have success in this difficult market. With thousands upon thousands of Client contacts and candidates from coast-to-coast throughout the United States, we are the go-to hiring experts in the Mortgage, Banking, Credit Union, Title & Escrow, Financial Services and Technology spaces that help companies succeed and people grow in their careers. We offer flexible search options, added benefits to long-term Clients, as well as a satisfaction guarantee on our placements that cover both skill set and culture fit. From Loan Officers to Loan Operations, Front-office to Back-office, the Call Center, the C-Suite, and everything in between, let us show you how we can make an impact for your organization. Clients and Job Seekers can connect with us and our Leadership on LinkedIn, reach our team, by completing the contact forms on our website, and reviewing our current openings.”

A large, well-known financial institution is looking to purchase a small wholesale mortgage banker who is in good standing, has its “tickets” with Fannie, Freddie, and Ginnie, and (preferred) has a national footprint with licensing. Loan production volume is not a priority. Strong chance that employees, ownership, and AEs will be retained, as will the name of the seller. Seller/servicer a plus. Interested parties should send me a confidential note for forwarding.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

Real estate investment trust Rithm Capital Corp has entered into a definitive agreement to acquire Computershare Mortgage Services Inc. for about $720 million, the companies announced Monday. The deal includes the purchase of Specialized Loan Servicing LLC.  

The deal represents the second major acquisition that New York-based Rithm, which operates NewRez, Caliber and other businesses, has announced in the past three months. In July, the company struck a deal to acquire Sculptor Capital Management Inc. for $639 million, leading to a dispute among the shareholders at the asset management firm.  

Rithm’s deal with Computershare will add a mortgage servicing rights (MSR) portfolio of about $136 billion in unpaid principal balance (UPB) to the company. It includes $85 billion in third-party servicing and the Specialized Loan Servicing’s MSR portfolio.

“Our track record of acquisitions in the mortgage servicing space continues to deliver value not only for our shareholders but also for the millions of consumers we serve,” Michael Nierenberg, chairman, CEO and president of Rithm Capital, said in a statement. 

Rithm expects to conclude the acquisition in the first half of 2024. 

Following the deal’s closing, Specialized Loan Servicing portfolio and operations will be under Newrez, the 8th largest U.S. mortgage lender in the first six months of 2023, with a production of $17 billion in loans, per Inside Mortgage Finance data.  

Newrez was also the fifth largest company in owned mortgage servicing in the second quarter, with a $540 billion MSR portfolio. Computershare Loan Services was No. 36, with $53 billion in total, according to the IMF data. 

Rithm intends to use a mix of existing cash, available liquidity on the balance sheet and additional MSR financing to close the Computershare deal. 

Rithm had 1.8 billion of total cash and liquidity to support its acquisitions at the end of the second quarter. From April to June, Rithm delivered a $357.4 million GAAP net income — higher than the $68.9 million the prior quarter.  

So far this year, the company has also invested $145 million to purchase $1.4 billion of consumer loans from Goldman Sachs and purchased 371 newly built single-family rental properties from Lennar.    

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

Editor’s Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

What happens if I miss a student loan payment? That’s the question on many borrowers’ minds as federal student loan payments resume after more than three years of emergency forbearance.

Missing payments on student loans can have a variety of negative consequences, including damage to your credit score and wage garnishment. However, the Biden administration is offering a temporary “on-ramp” to ease the transition back into repayment. Until the end of September 2024, borrowers will not have to worry about their student loans falling into default or damage to their credit score if they miss payments.

Interest will continue to accrue during this time, though, and any missed student loan payments will be due eventually. Rather than ignoring your student loan bills, take some time to review your options for making them more affordable. The Department of Education offers various plans to help struggling borrowers get back on track.

What Happens if I Miss a Federal Student Loan Payment?

Missing federal student loan payments typically leads to delinquency and default, but from October 2023 through September 2024, borrowers who miss a payment will avoid these consequences. Here’s a closer look at what this student loan on-ramp entails, followed by what typically happens when you miss payments.

Understanding the Student Loan On-Ramp

Federal student loan borrowers have been exempt from student loan payments and interest since March of 2020. With the end of this emergency forbearance, the Biden administration is offering a one-year on-ramp for borrowers to adjust to the new reality. Until Sep. 30, 2024, borrowers won’t face the usual consequences if they miss payments.

For example, your loans won’t fall into delinquency or default, and missed payments won’t be reported to the credit bureaus. Your loans won’t go into collections, and you won’t have to worry about garnishment of your wages, tax refund, or Social Security benefits.

What’s more, the interest that accrues during this year won’t be capitalized, or added onto, your principal balance when the on-ramp expires. This on-ramp gives borrowers time to start making payments again after the lengthy pause.

However, interest will still accrue during this time, and you’ll still have to pay back your loan eventually. Instead of skipping payments over the next year, you may be better off applying for an income-driven repayment plan for more affordable monthly bills.

What Normally Happens When You Miss a Student Loan Payment

Normally, your student loan is considered delinquent the day after you miss a payment. Even if you start making the next payments, your account will remain delinquent until you make up for the missed payment or receive deferment or forbearance.

Once 90 days pass, your loan servicer will let the major credit reporting agencies know that your loan is delinquent. Your credit score will take a hit, making it more difficult to qualify for good terms on loans or credit cards or to rent an apartment.

If you continue not paying, your loan will go into default. For federal loans, the government will wait 270 days. Defaulting on your student loan has serious consequences. The entire amount you owe on your loan, including interest, becomes due immediately.

You won’t be able to take out any other student loans, and you’ll no longer qualify for deferment or forbearance or be able to choose your own mortgage, car loan, or other forms of credit. The government may take your tax refund or federal benefits to pay off your loan. You may also have your wages garnished, meaning your employer will take part of your paycheck and send it to the government to be applied toward the loan.

It’s rare, but the government can also sue you at any time — there’s no statute of limitations. You may also be responsible for collection fees, attorney’s fees, and other costs. In other words, you do not want to default on your student loans. (If you do, options exist for getting out of default, such as the Fresh Start program.)
💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

What Happens if I Miss a Private Student Loan Payment?

Private lenders usually give you much less leeway than the federal government. Exactly what happens if you miss a payment depends on the company’s policies and your loan terms. A private lender can tack on late fees and transfer your loan to a debt collection agency.

Also, private lenders can sue you if you stop paying your student loans. If they win, a court can sign a judgment allowing them to garnish your wages. States set the statute of limitations for lawsuits about payment of private loans; the time period usually ranges from three years to a decade. But the lender can continue trying to collect the debt for as long as they want. Plus, certain actions can reset the statute of limitations, such as making a payment or even acknowledging that the debt belongs to you.

Will My Loans Eventually Go Away if I Can’t Pay?

If you stop paying your student loans, they will not go away. However, it may be possible to discharge student loans in bankruptcy or qualify for student loan forgiveness or discharge.

For example, federal student loans can be discharged if you suffer from a total permanent disability or your school closes while you’re attending or soon after you leave. You can also pursue student loan forgiveness programs, such as Public Service Loan Forgiveness or Teacher Loan Forgiveness.

Student loan cancellation from an income-driven repayment plan may also be an option. Income-driven plans will discharge your remaining student loan balance at the end of your term. While the term is 20 or 25 years for some plans, the new SAVE plan will offer forgiveness after 10 years if your original principal balance was $12,000 or less. On all the income-driven plans, it’s possible that your monthly payment could be $0, depending on your discretionary income.

For instance, borrowers who earn less than $32,800 as individuals or $67,500 as a family of four in most states could have $0 monthly payments on the SAVE plan. If this describes you, you could essentially stop paying your student loans and see them go away after anywhere from 10 to 25 years on the plan, depending on how much you borrowed and whether you took out the loans for undergraduate or graduate school.

However, you’ll have to apply for income-driven repayment and recertify your income annually to stay on the plan and keep making progress toward loan cancellation. If you give the Department of Education permission to access your tax information, it can recertify your plan automatically each year.

What if I’m Experiencing Financial Hardship?

If you are having a tough time with your finances or are putting off making a late student loan payment, don’t just ignore your loans; instead, approach your lender or loan servicer to discuss your options.

For federal loans, an income-driven repayment plan could help. Income-driven plans, which include SAVE, PAYE, Income-Based Repayment, and Income-Contingent Repayment, adjust your monthly payments based on a percentage of your discretionary income. Most also extend your loan terms and offer loan forgiveness if you still owe a balance at the end. The new SAVE plan particularly has the most generous terms for borrowers.

You might also be able to qualify for a deferment or student loan forbearance, allowing you to temporarily stop or reduce payments. If you’re in deferment, depending on the type of loan you have, you may not be responsible for paying the interest that accrues during the deferment period. Among other reasons, you can apply for deferment if you’re in school, in the military, unemployed, or not working full-time.

You can apply for forbearance if your student loan payments represent 20% or more of your gross monthly income, if you’ve lost your job or seen your pay reduced, if you can’t pay because of medical bills, or if you’re facing another financial hardship, among other things. Private lenders are not required to offer relief if you’re facing hardship, but some, including SoFi, do.

Will I Be Sent to Collections if I Do Not Pay My Student Loans?

It is possible that if your student loan is in default it may be sent to a collections agency. Federal student loans in default are managed by the Department of Education’s Default Resolution Group. The Default Resolution Group oversees collections for all federal student loans that are in default, so they are not sent to a private collections agency.

The Department of Education is temporarily offering a Fresh Start program for student loans in default. By calling your loan servicer or logging into myeddebt.ed.gov, you can get your loans back into active repayment, enroll in a new repayment plan, and have the record of default removed from your credit report. You’ll also regain access to federal financial aid.

Private student loans may be sent to a collection agency as soon as the loan enters default, which is generally after 90 days of non-payment.

What if I Don’t Expect My Situation to Change Anytime Soon?

Deferment, forbearance, and relief offered by private lenders are temporary solutions. If your financial hardship looks like a long-term issue, you’ll need a permanent fix.

With federal loans, you may be eligible for an income-driven repayment plan. The government currently offers four plans that aim to make payments affordable by tying them to your monthly income.

On most plans, the payments range between 10% and 20% of your discretionary income, and if you make them on time, the balance is eligible to be forgiven in 20 or 25 years.. As mentioned, though, the new SAVE plan may offer loan forgiveness after just 10 years, depending on your original loan balance. Plus, starting in July 2024 it will cut monthly payments on undergraduate loans in half. For most borrowers, the SAVE plan will likely offer the most affordable monthly payments. However, parent loans are not eligible for SAVE. If you’re a parent borrower, your only option for an income-driven plan is Income-Contingent Repayment.

Private student loans are also not eligible for income-driven repayment, and most private lenders don’t offer this option. If you’re struggling to afford your private student loan bills, though, it’s worth explaining your situation to the lender and seeing if they can work with you on a feasible repayment plan. It’s in their interest to continue collecting even partial payments from you, rather than seeing payments stop altogether and having to go through the trouble of lawsuits or referrals to collection agencies.

Why You May Want to Consider Refinancing

Another potential long-term solution to unaffordable payments is student loan refinancing. With a private lender like SoFi, you can refinance federal student loans, private loans, or both. Refinancing involves obtaining a new loan to pay off all of your old ones and committing to the new terms and interest rate.

Refinancing your student loans can make sense if you qualify for a lower interest rate, which, depending on the term you choose, may be able to cut down the money you spend in interest over the life of your loan. Or, if you choose a longer term than you originally had when refinancing, you could lower your monthly payments, which can make the loan more affordable for you now. You may pay more interest over the life of the loan if you refinance with an extended term.

When you refinance with SoFi, you won’t pay any origination fees to refinance, and if your financial situation improves down the line and you want to pay off your loan faster, you won’t face prepayment penalties. It takes just two minutes online to figure out whether you qualify and the potential rates you can obtain.

The Takeaway

Missing student loan payments can have serious consequences, including entering default and damaging your credit score. Fortunately, borrowers have some leeway through September 2024 as they adjust to making payments on their federal loans again. However, private student loans offer no such benefit.

Refinancing could be an option to consider for borrowers looking to secure a lower interest rate. Consider SoFi — where there are zero fees for refinancing student loans and qualifying borrowers can secure a competitive interest rate.

Hoping to get a handle on your student debt? Look into whether refinancing your student loans with SoFi could help you lower your payments or save money in the long term.

FAQ

What happens if I’m late on a student loan payment?

If you are late on a student loan payment, the loan may be considered delinquent. The loan will remain delinquent until a payment is made, or other arrangements — such as deferment or forbearance — are made. Through Sep. 30, 2024, missing payments on your federal loan payments won’t cause them to go into delinquency or default thanks to the student loan on-ramp.

Does a late payment on a student loan affect credit?

A late payment may have a negative impact on your credit score. With the exception of the student loan on-ramp through the fall of 2024, federal loans are normally reported to the credit bureau if they remain delinquent for 90 days. Private student lenders may report a late payment to credit bureaus after 30 days.

What happens if you miss a student loan payment by 270 days?

If you fail to make payments on your federal student loan for 270 days, the student loan will enter default (again, with the exception of the temporary student loan on-ramp). Consequences of default can be serious, such as the total balance of the loan becoming due immediately.

Private student loans may be considered in default after 90 days.

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

Student Loan Refinancing
If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. (You may pay more interest over the life of the loan if you refinance with an extended term.) Please note that once you refinance federal student loans, you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as the SAVE Plan, or extended repayment plans.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

SOSL0923018

Source: sofi.com

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Source: gao.gov

Apache is functioning normally

Apache is functioning normally

Wells Fargo sent out an e-mail to its retail sales force today, notifying them that its Equity Direct guidelines will be experiencing a series of changes amid the ongoing mortgage crisis.

Effective end of business Friday, the maximum debt-to-income ratio for home equity lines of credit and home equity loans will be cut by five percent to 50 percent, an underwriting guideline change that actually matters because most of these loans are now full doc.

In addition, as of July 19, an 185 basis point economic adjuster will be required to qualify a borrower for these types of loans, instead of a typical qualification method based on the fully indexed mortgage rate.

So if a borrower is eligible for a loan at say five percent, an additional 185 basis points will be added on top to serve as the qualification rate, bumping the rate up to 6.85 percent fully amortized in that example.

Effective July 12, loans-to-value ratios (LTV) on these second mortgages will be reduced by five percent across the board, with new limits ranging between just 70-85 percent.

In “severely distressed” markets such as Orange and Los Angeles County, the max LTV for a home equity line or loan will be a mere 70 percent.

Wells Fargo Equity Direct is also eliminating bridge loan products.

Despite managing to avoid much of the mortgage mess thanks to their conservative lending philosophy, Wells was warned of rising delinquencies within their hefty home equity loan portfolio.

(photo: soylentgreen)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

Well, another year has passed, and unlike previous years, 2012 was a fairly decent year for the housing market.

After all, 30-year fixed mortgage rates chalked their “lowest annual average in at least 65 years,” per Freddie Mac.

Home prices also increased, which created a number of positives for the market. So what can we expect in 2013? I’ll take a crack at it.

1. Mortgage rates will move sideways

The direction of mortgage rates always seems to top the list, largely because tracking them is about as fun as gambling.

Currently, the 30-year fixed is averaging an amazingly low 3.35%. Back in January, it averaged 3.91%, a rate most thought wouldn’t go any lower.

We continued to be pleasantly “surprised” in 2012, but I don’t see that trend continuing in 2013. Sorry folks. This may be as good as it gets.

Look for mortgage rates to stay close to current levels, though there may be some ups and downs in the first half of the year as uncertainty looms.

In the latter half of 2013 expect mortgage rates to rise, though not by any material amount.

2. Home prices will rise slightly

While mortgage rates could tick higher as the year progresses, home prices should also extend their recent rise.

They already appeared to hit bottom in many metros throughout the United States, though some cities may experience further declines before things turn around.

Either way, don’t expect home prices to rise at their current clip. A panel of 107 economists polled by Zillow predicts home prices will rise just 3.1% in 2013.

That compares to a 4.6% rise this year, something that doesn’t appear to be sustainable moving forward.

However, that could change, and economists still see prices rising at a healthy three percent annual rate through 2017.

3. The mortgage interest deduction will be altered

House values aren’t necessarily safe at all price points. There’s a great chance some kind of change will come to the hotly contested mortgage interest deduction (MID).

It’s unclear what that change might be, but there’s a decent likelihood it could limit deductions to just $500,000 in loan amount.

If that’s the case, higher-priced homes could actually experience some depreciation next year.

But only time will tell on that one…

4. The Mortgage Debt Relief Act will be extended

There’s also a lot of fear surrounding the expiration of the Mortgage Debt Relief Act of 2007, which has been extended each year since inception.

But with the fiscal cliff looming, there’s been more uncertainty about its future.

Still, with millions of short sales on standby, it’s unlikely the IRS rule that forgives homeowners for selling short won’t be extended.

If it’s not, the housing market will surely be rattled, with less harmful short sales quickly turning into a nasty flood of foreclosures.

That would throw everything out of whack, and result in home price declines.

5. Housing inventory will continue to be tight

Speaking of home prices, any price movement will likely be limited by a continued lack of inventory.

If you haven’t looked at available homes for sale lately, I’ll save you the time and effort. There is NOTHING out there, at least in desirable areas of the country.

Don’t expect a flurry of sellers to appear in 2013 either. Why sell on the way up if we’re just beginning to experience the start of a long recovery?

6. Refinances will slow, purchases will rise

While purchases might not go haywire in 2013, they should represent a larger share of the mortgage market as refinancing wanes.

Let’s face it; most homeowners have already taken advantage of the low interest rates available, and with rates predicted to hold steady or even rise, it would be silly to expect similar volume in 2013.

The MBA sees refinance volume falling from $1.2 trillion in 2012 to $785 billion in 2013, while purchase activity is slated to rise from $503 billion to $585 billion.

In other words, the total mortgage market will contract fairly significantly in 2013.

7. Mortgage layoffs will rise

As a result of lower loan origination volume forecasts, a decent number of those who were hired for the refinance boom will likely need to be transferred or laid off.

Still, there are a handful of mortgage companies that are expanding, so opportunities will present themselves in the industry.

Old names like Nationstar Mortgage and Impac Mortgage are growing rapidly, as are newcomers like PennyMac, which is essentially a reincarnation of Countrywide.

8. FHA will tighten lending standards

This isn’t so much of a prediction as it is a reality, though it’s not entirely clear what changes may come to the under-pressure FHA.

It already announced a few changes for FHA loans in 2013, including higher mortgage insurance premiums, higher down payment amounts for certain loans, and higher credit score requirements.

New FHA borrowers may also be subject to paying mortgage insurance for as long as the FHA insures the loans, which would increase the true cost of such mortgages considerably.

9. More previously foreclosed borrowers will take out mortgages

Now that some time has passed since the mortgage crisis, borrowers who were previously foreclosed on will be eligible to get back in the game.

After all, Fannie and Freddie only require a five-year waiting period, and the FHA only requires three years to have passed.

This means many of those who walked away or were simply foreclosed on will be able to purchase new homes, assuming they have steady employment and improved credit scores.

Hopefully more homeowners will get it right this time around…

10. No more mortgage assistance will be granted

Lastly, I don’t expect any new assistance to arrive for at-risk homeowners. It seems the government has used all the weapons in its arsenal, including the FHA streamline refinance, HAMP, HARP II, HAFA II, etc.

Not to mention the artificially low mortgage rates, thanks to aggressive Fed buying of mortgage securities.

There have been plenty of stirrings of a modification or refinance program for mortgages not backed by Fannie or Freddie (or the FHA), but such a plan keeps falling on deaf ears.

The latest proposal would be part of successful fiscal cliff negotiations.

It’s possible, but not probable, especially seeing that so much time has passed since things took a turn for the worse.

If borrowers have made it this far, throwing them a lifeline now seems a lot less likely.

So that’s that. Let’s all hope for the best in 2013. Happy New Year!

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

By Holden Lewis | NerdWallet

October mortgage rates forecast

Die-hard homebuyers, driven by life circumstances, will press forward in October. Everyone else will be inclined to wait for mortgage rates to fall, making homes more affordable. They’ll have to bide their time for months, not for weeks. In September, mortgage rates reached their highest levels since 2000, and they could inch upward in October.

Intrepid home shoppers might discover that more sellers are reducing their asking prices, but most would-be buyers will struggle to find suitable places to make offers on.

Rates rose after the Fed meeting

The Federal Reserve’s monetary policy committee met Sept. 19 and 20. Its updated summary of economic projections included Fed members’ forecasts about the direction of short-term interest rates for the next three-plus years. Mortgage rates didn’t move much in the three weeks before the Fed meeting as the market waited for the summary of economic projections to drop.

The projections surprised the mortgage market. The Fed members signaled that they expect to keep short-term interest rates higher for longer than the mortgage market had expected. Mortgage rates played catch-up after the Fed meeting, with the 30-year fixed-rate home loan rising past 7.25% for the first time since late 2000.

Home affordability fades

Rising mortgage rates chip away at home affordability, which has been declining since early 2021. The Federal Reserve Bank of Atlanta has a home affordability index with data going back to the beginning of 2006, and July’s affordability (the most recent available) was the lowest in the index’s 17-year-plus history. And mortgage rates have gone up since July, making a home even harder to afford.

Mortgage rates have gone up five months in a row, making mortgage payments higher for a given loan amount. The impact on affordability has motivated almost 40% of home sellers to reduce their initial asking prices, according to Mike Simonsen, president of real estate analytics firm Altos Research, in a weekly commentary posted to YouTube. In spring, when mortgage rates were lower, about 30% of the homes on the market had taken a price cut.

Homebuyers might rejoice at the news that more sellers are reducing their asking prices. But the lack of properties to choose from remains a drag. According to the National Association of Realtors, 1.1 million homes were for sale at the end of August, the latest available data. In August 2019, a closer-to-normal, pre-pandemic market, 1.83 million homes were for sale.

What other forecasters predict

Fannie Mae and the Mortgage Bankers Association disagree in their mortgage rate forecasts for the last three months of the year. Fannie Mae predicts a slight increase at year end, while the MBA expects a sharp decline foreshadowing a recession in the first half of 2024. Both organizations published their forecasts before the Sept. 19-20 Fed meeting that hinted at a sustained level of higher interest rates.

What happened to mortgage rates in September

At the end of August, I predicted that mortgage rates might rise in September because of uncertainty about what the Federal Reserve will do.

Indeed, mortgage rates rose after the Sept. 20 Fed announcement. Freddie Mac reported that the average rate on a 30-year mortgage climbed to 7.31% in the week of Sept. 28, the highest since the week of Dec. 15, 2000.

More From NerdWallet

Holden Lewis writes for NerdWallet. Email: [email protected]. Twitter: @HoldenL.

Source: syracuse.com