november

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  • Building a home known as an accessory dwelling unit could be a novel solution to low housing supply. 
  • ADUs are units built on the lot of an existing home and tend to be cheaper to construct and live in.
  • Higher rates have frozen the housing market, leading to a national shortage of homes for sale. 

Apache is functioning normally

The real estate market is kind of strange at the moment.

Everyone expected mortgage rates to jump in 2019, but so far they’ve done the exact opposite.

At the same time, home price appreciation has slowed in much of the country, creating a situation where affordability is actually better than it was a year ago.

To make matters even weirder, negative equity is increasing again, a topic I haven’t discussed for many years.

Refi Candidates Up 75% From November

First those refis – amazingly, the number of homeowners who could both qualify for and benefit from a mortgage refinance rose almost 75% from the 10-year low seen in November 2018, per the latest Black Knight Mortgage Monitor for January 2019.

It also marked a 16% year-over-year increase and the highest number of eligible candidates since January 2018.

There are about 3.27 million homeowners today who could reduce their mortgage rate by at least 0.75%, which would obviously amount of some serious savings monthly and over the life of the loan.

However, the numbers are still down a hefty 30% from late 2017 when 30-year fixed mortgage rates stood below 4%.

Sadly, Black Knight believes the impact will be muted because some 85% of homeowners took out their mortgages more than seven years ago, meaning they’re not likely to refinance.

Still, roughly 250,000 homeowners who took out their mortgages just last year could stand to benefit greatly from a refi, especially those who received rates on the higher end of the spectrum due to bad timing and/or bad credit, etc.

Falling Home Prices?

Now let’s address home prices, which after some really solid years of growth, seem to be getting tested.

It could just be an affordability issue, as new home buyers simply don’t have the ability to purchase real estate at today’s relatively sky-high prices.

Certainly, it’s not for a lack of wanting to buy, nor is it an inventory issue – low supply continues to be a problem.

Despite a limited housing stock and still-low mortgage rates, annual home price appreciation slowed for the 10th straight month in December, per Black Knight.

It fell from a high of 6.8% YoY growth in February 2018 to just 4.6% at the end of 2018, and on a monthly basis in December, the average home price actually declined 0.3%.

The average home price has fallen a combined 0.82% over the past four months, marking a $2,440 loss.

And Black Knight economists expect the same trend in January based on early data collection.

Now the good news – because home price gains have moderated, and even fallen over the past several months, housing affordability has increased.

A prospective home buyer today needs just 22.2% of their median income to purchase the average-priced home with a 20% down payment on a 30-year fixed-rate mortgage.

That’s slightly lower than the post-recession high of 23.4% seen just a few months back, and well below the long-term average of 25% seen in the late 1990s and early pre-bubble 2000s.

Additionally, despite the recent slowdown, annual home price growth is still outpacing its 25-year average of 3.9%, so if anything, the real estate market is simply normalizing after some really hot (unsustainable) years.

Underwater Mortgages Are Back?

That brings us to the issue of negative equity, something I definitely haven’t mentioned on this blog in a long, long time.

It was a hot topic post-housing crisis when something like half of all borrowers with a mortgage owed more than their homes were worth.

That led to a new definition for “underwater” in the dictionary, the advent of underwater mortgage insurance, and the very popular and widely-used HARP refinance program.

Now Corelogic is telling us that the quarterly increase in negative equity during the fourth quarter of 2018 was the first in four years.

Between the third and fourth quarter of 2018, the total number of mortgaged homes in negative equity increased 1.6% to 2.2 million homes, representing 4.2% of all mortgaged properties.

It was the first quarterly increase since the fourth quarter of 2015, and led to some 35,000 properties falling into underwater positions.

Before we ring the alarm bells, if you consider the year-over-year basis, the number of mortgaged properties in negative equity actually fell by a significantly larger 14%, representing some 351,000 homeowners.

And the CoreLogic Home Price Index estimates a 4.5% increase in home prices from December 2018 to the end of 2019, which should lift another 350,000 homeowners above water.

Still hard to believe that millions remain underwater on their mortgages in light of the massive home price gains realized since the recovery got underway. Tells you how bad things got.

Negative equity peaked at a staggering 26% of mortgaged residential properties during the fourth quarter of 2009. It’s been nearly a decade since those very dismal times.

Source: thetruthaboutmortgage.com

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The Hottest Thing in Real Estate Is a Loan From Two Years Ago

Real estate agents are pushing sub-3 percent mortgages as an amenity, just like marble countertops or a view of the mountains.

Experts caution that mortgage transfers from seller to buyer can come with risks. Credit…Sophie Park for The New York Times

June 10, 2023

The only goal was to not lose money.

When Matthew Kilboy listed the Washington, D.C., condominium that he and his husband had bought in 2017, they accepted that higher interest rates and a soft market for condos meant any dollar over the $529,000 they had paid was a dollar they would thank their lucky stars for.

A similar two-bedroom and two-bath unit in the building had recently gone for just under half a million. The $549,000 price they listed in April was basically a wish.

A month later, the couple closed at $565,000 — thanks to a little-known amenity that has become increasingly popular as mortgage rates have risen. Their unit came with an assumable 30-year mortgage, with a 2.25 percent fixed rate that the couple had locked in after a November 2020 refinancing. By advertising that the buyer could inherit the mortgage, the couple, who have moved to Denver, got several over-asking-price bids that seemed like a relic from the warped real estate market during the Covid lockdown.

“It was the very first sentence of the listing,” said Mr. Kilboy, 39, a former Navy nurse whose loan, backed by the Department of Veterans Affairs, could be passed to the buyer. “No one could find an interest rate that low, so we were really pushing it.”

resumed their ascent, despite a huge increase in borrowing costs. The refrain among real estate agents and economists is that anyone who secured a mortgage rate of 3 percent or lower owns a valuable asset that they are loath to give up.

But every asset has a price. And now an emerging cadre of investors and real estate agents are trying to, in effect, sell mortgage rates from several years ago by transferring them to new buyers.

Redfin, the real estate brokerage, has seen a steep rise in listings like Mr. Kilboy’s that have comments like “beautiful home with assumable loan at 3.25 percent.” Facebook groups have popped up to find buyers for them, while new companies are pitching services to speed up the transfer.

Assumption Solutions, a consulting firm that, for a $1,100-per-deal processing fee, helps real estate agents navigate transferring mortgages between sellers and buyers. In his pitch to agents, Mr. O’Boyle argues that they push sub-3 percent rates as they do marble countertops or a view of the mountains.

“You market this, and let’s say you’re competing against the house next door, your house should sell either faster or for more money,” he said.

2/1 buydown,” in which a borrower pays for an interest rate reduction of two percentage points during the first year and one percentage point in the second.

Put simply: “Most homes are unaffordable at today’s rates,” said Luis Solis, a real estate agent in Phoenix and Portland, Ore.

A majority of Mr. Solis’s recent deals have had some form of interest rate compensation that is a price cut in all but name, he said. Usually it’s a lump sum at closing that buyers use to buy temporarily lower rates. Sellers with a lot of equity can cut out the middleman and finance the buyer’s purchase below prevailing rates by acting as a lender — seller financing, it’s called.

Assuming mortgages, paying down rates: These are creative but straightforward solutions to rising borrowing costs. But on the margins, a rising number of investors looking to buy homes with minimal cash are trying a gray technique of finance — known as “Subject to” or “Subto” — in which they try to find people who have fallen behind on their debts and make a side agreement to take over their (low-interest) payments. (The deal is said to be “subject to” an existing loan.)

@ConorDougherty

A version of this article appears in print on  , Section BU, Page 1 of the New York edition with the headline: The Hot New Thing Is a Loan From 2021. Order Reprints | Today’s Paper | Subscribe

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Source: nytimes.com

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November 22, 2021
by Zach Festini

The slow mortgage rate climb continues on. Read more about it and get a refresher on other important news in this week’s industry update.

Rates Update

During the week of November 15, Freddie Mac’s Primary Mortgage Market Survey saw an overall increase in rates with notable changes for both 30 and 15-Year options. Similar to previous weeks, this further reinforces the trend of rising rates that we’ve been seeing since earlier in the year. An important note to remember: Freddie Mac gathers mortgage rate data on a weekly basis and the results are always subject to change. To get the most up-to-date mortgage rate info, get in touch with your Total Mortgage loan officer.

As for future predictions, mortgage rates could rise or fall in the coming months. Past data suggests that lower mortgage rates correlate with higher COVID cases; and if rising COVID cases correlate with colder weather, we could potentially see a subsequent decrease in mortgage rates during the winter season. It’s also worth considering that the holiday season will bring more consumer spending, which in turn could drive mortgage rates higher.

With so many variables affecting the market, it’s important to stay updated. Check back next week for more on mortgage rates and don’t hesitate to contact us if you have any questions.

Other News to Keep in Mind

Aside from last week’s rate changes, let’s take a rapid-fire look at some other recent news that you may have missed.

  • Conventional loan limits increased. The borrowing amounts for conventional loan options increased recently, giving buyers more spending power and more opportunities in the market.
  • Cash-out refinance numbers are up. Compared to last November, the number of cash-out refinances is up 33 percent. With less options on the market, now is a great time to consider what you could do with your current home equity.
  • Mortgage rates are still at historic lows. We may be observing a gradual increase in mortgage rates, but remember: compared to previous years, they are still very low and favorable for buyers. If anything, the trending increase we’re seeing should motivate consumers to buy now before rates get too high.

If you have questions about any mortgage-related news, we’re here to help. Contact your Total Mortgage loan officer for personalized advice and more information about any of the above.

In Closing

With the winter season approaching, mortgage rates could stagnate, decrease altogether, or continue on with their gradual increase. Things are a bit uncertain for now, but we’ll continue to keep you updated week by week with the latest information. Enjoy the rest of your Monday and have a great week!

Filed Under: Uncategorized

Source: totalmortgage.com

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Home prices aren’t crashing, despite what the housing bubble boys are saying. In fact, home prices have firmed up higher recently.

The housing bubble boys are a crew that from 2012 to 2019 screamed housing crash every year. They went all in during COVID-19 in 2020, doubled down in 2021 as the forbearance crash bros but really bet the farm on a massive home-price crash in 2023 after the most significant home sales crash ever in 2022. 

Well, it’s June 9, 2023, and home prices have been firm month to month, not showing anything that resembles the housing bubble crash years. Those who know my work over the last 10 years know that I have Batman/Joker relationship with the housing crash people, because they never stop. I mean, it’s year 11 now of the housing bubble 2.0 crash.

Each year is different, but here are some reasons they gave for home prices to crash over the past 11 years:

  • 2012 – Shadow inventory
  • 2013 – Higher mortgage rates
  • 2014- QE ending in October
  • 2015- Manufacturing recession
  • 2016- Home prices got back to the bubble high
  • 2017 – No good reason
  • 2018- 5% mortgage rates (Start of the bubble crash for sure)
  • 2019 – Home-price growth was cooling off
  • 2020- COVID-19
  • 2021 – Mortgage forbearance
  • 2022- 7% mortgage rates
  • 2023- Historically low housing demand

The point of this article is not to focus on the years 2012-2021, but on how crazy the housing data has been since 2022 and when the housing market changed from a historic crash in demand to stabilization.

In 2022 it was all about finding a point in time when I thought mortgage rates would fall, which was key to understanding how the purchase application data would react to lower mortgage rates.

We have had plenty of times in the previous decade when mortgage rates fell and demand improved, but that was with a lot lower mortgage rates. In 2022, mortgage rates got as high as 7.37%, so the question was: how low do rates have to go for housing demand to get better?

But first, let’s start with some key dates in 2022.

On June 16, 2022, I put the housing market into a recession, which is where housing demand, housing jobs, housing income and housing production all drop. We can see this over the last year as jobs are being lost in the industry, incomes are falling due to less transaction volume, housing demand collapsed and housing permits fell since the builders had a backlog of homes to work off.

Then on Aug. 5, 2022, a few days after I presented to The Conference Board, I raised my sixth recession red flag for the overall economy. My recession red flag model doesn’t say we are in a recession, but means we should be more mindful to track economic data at this stage, especially what can lead to higher jobless claims. According to this model, the U.S. economy is still not in a recession.

Now begins the journey to stabilization in housing data.

When did the 10-year yield peak?

The 10-year yield is central to all my economic work, but trying to find a top in 2022 was very challenging due to the market conditions where bond yields rose so fast and the strong dollar put so much stress on the world markets. For instance, England almost lost its pension funds, and Japan needed intervention for theirs. Even the IMF was begging the U.S. to stop hiking rates.

For me, 4.25% on the 10-year yield was the top. On Oct. 27, 2022, I made a case for lower mortgage rates using one of the Fed’s critical recessionary indicators: the 3/10 bond yield inversion. That was key because historically the next big move in yields would be lower.

Not only did I hold that line toward the end of 2022, but it was also the staple range in my 2023 forecast. In that forecast, I wrote that if the economy stays firm, the 10-year yield range should be between 3.21% and 4.25%, equating to mortgage rates between 5.75% and 7.25%.

I have also stressed that it would be hard for the 10-year level to break below 3.37% and 3.42%. I call it the Gandalf line in the sand: “You shall not pass.” Now, if jobless claims break over 323,000k on the four-week moving average, the 10-year could break under 3.21% and get toward 2.73%. That could send mortgage rates under 6%.

Let’s look at the 10-year yield and add the CPI inflation growth. So far, as you can see, the forecast from the peak of 4.25% has stayed true, and we haven’t been able to break below the critical line in the sand either, indicated by the red line below.

Mortgage rates ranged from 7.37% to 5.99% during this period, and how the market reacted to them changed the dynamics of the housing discussion and home prices. That is the next step of this process.

Purchase application data

The housing market began to change starting Nov. 9, 2022, from a housing sales crash to a stabilization period. That day, I wrote an article about how bad the home sales data was getting due to the affordability hit and that existing home sales should get down toward 4 million and below. This is key because it’s rare since 1996 to get sales below 4 million and we have many more workers now than in previous cycles. 

With that in mind, I wanted to see how purchase application data would act. From November until Feb. 3, most weekly prints were positive once you exclude some holiday prints. This was a big deal because mortgage rates didn’t need to get to 5.5%-5% to stabilize demand. Since Nov. 9, 2022, we have had 17 positive and 11 negative purchase application prints. This changed the demand aspect of housing.


It’s not like we have a booming sales market. I believe the giant existing home sales print we had in March will be the peak in 2023 unless we get some better purchase application data, which will need lower mortgage rates.

.
The importance of this is that 2022 had the most significant home sales crash ever recorded in U.S. history, and because of that, not even low inventory could prevent home prices from declining month to month in the second half of 2022. However, that changed once the 10-year yield peaked, mortgage rates fell, and demand stabilized. Now we can talk about the final stage: inventory in the U.S.

Housing inventory

The No. 1 story in the second half of 2022 was that after mortgage rates spiked, new listing data started to go negative year over year, which was crazy because we were already working from all-time lows. This was a big deal, and the weekly Housing Market Tracker of new listing data was all over this. The weakness in the new listing data carried us all the way to where we are today in 2023 at all-time lows.


How would new listing data trending at all-time lows impact the active inventory in 2023? We know mortgage rates fell toward the end of 2022, and forward-looking demand was improving. This doesn’t bode well for vigorous inventory growth in 2023, as lower mortgage rates improve demand, which takes housing inventory off the market. This also means there will be no bubble crash in prices in 2023. The active inventory growth is so slow this year that we are heading toward negative year-over-year numbers.

This all works together because we’re watching a housing market that went from crashing in demand and inventory rising with some speed to a market that reacted better with lower mortgage rates, stabilized home sales, and slowed inventory growth. With stable demand, this chart becomes more critical. Total active listing data still is low historically.


Also, we don’t have much credit stress in the system right now. As you can see in the chart below, we don’t have the credit stress that led to the housing bubble crash years.

This article shows the historical change in one of the craziest housing periods ever recorded. We created the weekly Housing Market Tracker so you can be ahead of the lagging data and understand what is coming next. One thing is certain — it’s not a housing crash.

Source: housingwire.com

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Washington, DC
CNN
 — 

Mortgage rates are beginning to feel the impact of the debt-ceiling standoff, jumping higher for the second week in a row amid the uncertainty.

The 30-year fixed-rate mortgage averaged 6.57% in the week ending May 25, up from 6.39% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 5.10%.

“The U.S. economy is showing continued resilience which, combined with debt ceiling concerns, led to higher mortgage rates this week,” said Sam Khater, Freddie Mac’s chief economist.

Mortgage rates topped 5% for the first time since 2011 a little more than a year ago and have remained over 5% for all but one week during the past year. Since then they have gone as high as 7.08%, last reached in November. Since mid-March, rates have gone up and down but have stayed under 6.5%.

But with current uncertainty, rates tipped over 6.5% this week. Zillow projects that home buying costs could spike by 22% and mortgage rates could top 8% should the US default on its debt. Even the threat of a deal not being reached is having a financial impact on people. (Here’s how to be prepared.)

The rate climbed this week following the trend of 10-year Treasury yields, as investors closely track the ongoing debt ceiling negotiations and evaluate the possible direction of Federal Reserve interest rate policy, said Jiayi Xu, an economist at Realtor.com.

“Although the probability of a default remains low, even the fears and panic related to a potential government default could cause creditors to ask for higher interest rates from the US Treasury, resulting in a significant increase in various borrowing costs, including mortgages,” said Xu. “Resolving the debt impasse sooner rather than later would mitigate potential adverse effects on the housing market, which is already contending with high prices and elevated mortgage rates.”

Federal Reserve rate moves

If that weren’t enough, investors are also looking at the Federal Reserve’s actions, as revealed in the minutes released from May’s meeting.

“Although investors anticipate a pause at the upcoming meeting after ten consecutive rate hikes, the minutes revealed a sense of uncertainty regarding the future direction of monetary policy,” said Xu. “Generally, officials concurred on the importance of closely monitoring incoming economic data and maintaining flexibility leading up to the next policy meeting.”

The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

Home buyers remain sensitive to mortgage rate spikes, with mortgage applications dropping last week, according to the Mortgage Bankers Association.

“Ongoing volatility in the financial markets has pushed mortgage rates higher recently, contributing to weaker activity for purchase and refinance applications,” said Bob Broeksmit, MBA president and CEO. “Prospective sellers continue to be reluctant to jump into the market because of still-high mortgage rates that would replace their existing low rate mortgages.”

High prices and elevated mortgage rates have prompted buyers to seek more affordable options, said Xu.

“Although the national housing market is experiencing a slow spring, there is growing competition in relatively affordable markets, particularly in the Northeast and Midwest regions,” said Xu. “As more and more buyers flock to relatively affordable places, it further reduces the opportunities available for first-time home buyers.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

Source: cnn.com

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Accounting, Digital, Broker Comp Tools; FHA, VA, USDA Developments; Why Rates are Stubborn

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Accounting, Digital, Broker Comp Tools; FHA, VA, USDA Developments; Why Rates are Stubborn

By:
Rob Chrisman

4 Hours, 13 Min ago

Imagine my surprise at finding tag (like on the playground) is an organized sport. Imagine my surprise at finding two gas stations at the same intersection yesterday in Truckee, California with two different prices for unleaded! Rather than wait for the CFPB to tell me that I could save money by going to the cheapest station, as it did by paying for a study on how different lenders have different mortgage prices, I actually reasoned, all by myself, that I could, and did, buy the least expensive gasoline. Switching gears, but continuing on with the thinking vein, a lot of reasoning went into determining that a) the earth is round, and b) globes are not some newly invented conspiracy theory. Someone needs to let Georgia’s current GOP district chair Kandiss Taylor know globes are globes. What the heck am I missing by subscribing to the round earth concept? And how about this for sensationalist headlines from Auction.com: One-Third of Buyers Expect Home Prices to Decline. Really? “Despite rising expectations for a home price correction in 2023, 87% of buyers said they planned to increase or keep the same their property acquisitions for the year, up slightly from 86% in 2022.” (Today’s podcast can be found here and this week’s is sponsored by Built Technologies. Join Built Technologies on June 20th at 12 PM CST for an exclusive webinar that will dive into proactive portfolio monitoring as Built’s experts share best practices for achieving greater visibility into your construction portfolio.)

Broker and Lender Services and Software

Quorum Federal Credit Union has upgraded its Borrower Paid Broker Compensation Program. The program offers partners the opportunity to earn up to 2.00 percent borrower paid broker compensation on the entire line amount, up to $5,000, for all HELOC products. Primary and Second Home HELOCs offer no minimum draws, no early termination fees, and no annual fees. With minimum loan amounts at $25,000, Quorum offers financing up to $350,000. Investment Property HELOCs also offer no minimum draws and no early termination fees with minimum loan amounts at $50,000 and financing up to $250,000. Contact your Account Executive, visit the Quorum Partner Portal or email [email protected] for more information.

“Unite your mortgage process with an end-to-end digital closing solution. Initially, American Federal implemented the Mortgage Suite without Blend Close, but later realized our digital closing solution aligned with their growth strategy. Find out how they were able to speed up the borrower’s journey, close loans faster, and save more time. Dive into their case study.”

For independent mortgage banks coping with shrinking production volumes and rising costs per loan, outsourcing accounting is an elegant solution to what’s become a very common challenge. Whether you have no accounting expertise in-house or you have a new team with no mortgage experience, you can tap the Richey May Client Accounting and Advisory Services (CAAS) team for the support you need. This team is stacked with mortgage industry experts who can tailor your solution to meet your most pressing needs in a volatile time, with no training needed. Need help transitioning to loan level accounting? Need a fully outsourced function? You got it! Need industry training for your controller? We can do that. In this article, Richey May’s expert Kim Dittmer answers all your most frequently asked questions around outsourced accounting as a mortgage bank.

Ginnie, USDA, FHA, and VA Updates

The industry’s applications include about 25 percent VA, FHA, and USDA. These products continue to garner the lion’s share of production for underserved and, let’s face it, low-quality borrowers. These are the borrowers targeted by the Biden Administration. Freddie and Fannie (the GSEs) ask seller-servicers for these “mission loans” but LOs know that there are few cases where a lender could or should advise a consumer to take out a conventional loan versus FHA/VA. Let’s see what’s going on out there.

Anyone making a living on refinancing FHA or VA loans is in for a rough road. Overall, roughly 33% of all American homeowners wrapped into 30-year agency mortgage bonds are paying 3% or less on their home loans. Chris Maloney with BOKF writes, “Breaking that down across the three segments for how much of the universe is paying 3% or less on their mortgages as of the end of May, for conventional 30-year borrowers that comes to 32%, for FHA 30-year borrowers 21.9% and for VA borrowers 50.7%. And using the Optimal Blue lending rates as a guide, the amount of the 30-year universe that is out-of-the-money (defined as not having at least 50 basis points of incentive) finds 99.6% of the conventional 30-year and FHA borrowers in that state while for the VA borrowers it’s 99.5%.”

FHA posted a draft of Mortgagee Letter (ML), Payment Supplement Partial Claim, on its Single-Family Housing Drafting Table (Drafting Table) for public feedback. The draft ML proposes a new loss mitigation option, the Payment Supplement Partial Claim (Payment Supplement PC), to assist struggling borrowers that are delinquent on their mortgage payments and are unable to obtain a significant payment reduction with other available loss mitigation options. This option will be particularly useful for borrowers who have below market interest rates. View the FHA Press Release for details.

Don’t forget that the FHA is seeking comments on its proposed HECM Mortgagee Default Requirements. FHA recently posted a draft Mortgagee Letter (draft ML) that would expand FHA’s processes related to actual or anticipated mortgagee default on obligations to a borrower under Home Equity Conversion Mortgages (HECMs) insured by FHA.

At the end of May, The Community Home Lenders of America (CHLA) commended FHA Commissioner Julia Gordon for the announcement that FHA is proposing a program to create a flexible partial claim loan modification option for defaulted borrowers, which avoids having to take the underlying loan out of a Ginnie Mae loan pool. CHLA was the first national association to ask FHA to develop such a program option, in a letter to FHA last August.

All Participants Memorandum (APM) 23-08, Ginnie Mae announced updates to the adoption of Single Family and Manufactured Housing Program pooling into the new Single Family Pool Delivery Module (SFPDM) in MyGinnieMae. This transition from GinnieNET to the SFPDM application will enhance user experience and align Ginnie Mae with mortgage industry standards by using the MISMO-compliant Pool Delivery Dataset (PDD).

USDA Rural Development posted a bulletin on 05/30/2023, Interest Rate Decrease for SFH Direct Programs.

FHA announced the availability of 203(k) Rehabilitation Mortgage Program fact sheets for consumers and aspiring and current FHA203(k) Consultants. These materials are designed to help increase awareness and understanding of the features and benefits of the program. The fact sheets include a program overview with features, benefits, and requirements, as well as additional 203(k) Program resources.

PRMG Product Update 23-29, includes Investor Solution update on AirDNA requirement for short term rentals on a purchase. Clarification on UT Utah Housing FHA for wholesale loans regarding the allowance of In-House and Third-Party Processing Fees charges, and multiple clarifications on CO CHFA FirstStep Plus.

AmeriHome Mortgage General Announcement 20230512-CL summarizes previously published changes made during May, additional changes made with the announcement, and recent Agency and regulatory news.

Capital Markets

Why did rates improve Thursday, and this week, especially when there is no “big” data? Well, initial jobless claims, which are a leading indicator, hit their highest level since November 2021. That connotes some softening in the labor market which the Fed would like to see, and which could tip it toward holding, rather than raising, the overnight Fed funds rate.

Supply is also on the radar screen but expected. Investors remain cautious ahead of next Wednesday’s Federal Open Market Committee meeting and fears about the impending sale of $1 trillion of Treasury bills is also not helping sentiment: With the debt ceiling deal in place, the Treasury will issue more than $1 trillion in short-term debt to keep the lights on. This will push up short term rates at least in the near-term, which won’t help those looking for mortgage rate relief.

In addition to rate worries, as mortgage-backed security spreads remain at the widest levels since the 1980’s, home prices continue to move higher. Lower mortgage rates earlier in the year likely played a role in the uptick, however scarce supply of desirable homes continues to add to price pressures. A strong job market helps housing demand, particularly in the face of challenging affordability and last week’s release of the May employment report generally showed a healthy labor market, with the headline reading coming in around 145k above analysts’ estimates to register at 339k. Despite that new robust employment data, downward revisions to earlier numbers suggest a broad cooling trend remains intact. The numbers now show the US added an average of 182k private sector jobs in the past three months, the fewest since January 2021.

Despite a strong labor market, consumer sentiment also slipped in May to register down 9.1 percent from April, according to the University of Michigan Consumer Sentiment Survey. Inflationary expectations for the near term fell, while longer-term expectations rose to 3.2 percent, the highest level in 12 years. The Fed pays close attention to the UM inflationary expectations, so this is bad news for those hoping for rate cuts this year and does not bode well for those hoping for a sudden window of billions of dollars’ worth of mortgages coming into refinance incentive again

Lastly, while we’re waiting for all those recession predictions to come true, yield curve inversion has increased over the past couple of weeks as the market continues to capitulate to the Fed’s “higher rates for longer” message. The latest run up in rates over the past couple of weeks was a function of the market correcting its Fed Funds “hike, pause, cut” path. That upward pressure on the front-end of the yield curve immediately re-flattened the yield curve back into deeply negative territory.

Moral of the story: the Fed is not set to cut rates anytime soon as inflation remains an issue and investors have been forced to unwind bets that rate cuts will be in store later this year. As recently as a couple of weeks ago, three rate cuts were expected before year end. With no economic data on today’s schedule, we begin a slow news Friday with Agency MBS prices worse about .125 and the 10-year yielding 3.74 after closing yesterday at 3.71 percent; the 2-year’s up to 4.55 on continued inflation worries.

Employment

Village Capital & Investment is excited to announce that Pete Tamoney has recently been hired to help grow its Correspondent Lending division. Pete has been in correspondent sales for 20 years, most recently with Northpointe Bank. Village Capital is a GNMA buyer with no overlays and a consistently strong execution. You can contact Pete.

“Equity Resources is pleased to continue our expansion throughout our 19 states along the east coast and mid-west. We are an independent and family-owned mortgage banker that is proudly celebrating our 30th anniversary this year, continuing to create incredible opportunities for our team members, Realtor partners, as well as our B2B partners. We are currently searching for talented and career-focused loan officers that have a demonstrated “self-sourced” business philosophy. Equity Resources is an agency direct lender that offers an exceptional compensation and marketing platform for our loan officers, including a media and video production team, an underwriting “hotline,” a talented marketing and social media group, and an exceptionally tenured leadership team. We offer a full suite of loan products and programs (including several specialty lending programs). To learn more about “Why Equity Resources” and to join our award-winning team, please contact Tom Piecenski, EVP of Sales and Development (614.327.5353).”

“Are you frustrated as a retail loan officer or mortgage banker with the lack of flexibility to provide custom loan options? Take control: follow the lead of over 24,000 MLOs like you who have joined the wholesale channel in the last year. Whether you open your own independent mortgage brokerage or join a team as a loan officer, you’ll have the ability to provide your clients with the personalized solutions they need. Contact our team at BeAMortgageBroker.com today and you’ll be well on your way to a more fulfilling tomorrow.”

A Louisiana based full-service, independent mortgage banker averaging $1 billion in production annually is searching for a proven retail sales leader to run all business development initiatives. The Sales, Recruiting, and Marketing departments will report directly to this head of business development role, and the role will report directly to the CEO. The ideal candidate will have a demonstrated track record of hiring and managing multiple production offices across several states. The IMB is well capitalized, has agency direct approvals, offers niche products, significant technology advancements and a world-class operations team with experienced, tenured sales and fulfillment employees. For confidential consideration, please email resume to Chrisman LLC’s Anjelica Nixt for forwarding.

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Source: mortgagenewsdaily.com

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“Persistently high inflation and the recent spike in lending rates will trigger a correction in the UK (Aa3 negative) housing market,” Moody’s Investor Service said in a report.

Matt Cardy | Getty Images News | Getty Images

LONDON – The U.K.’s biggest bank temporarily withdrew mortgage deals via broker services on Thursday, as the effect of higher interest rates ripples through the British housing market.

HSBC told CNBC Friday that it was reviewing the situation regularly, but did not specify whether the new deals would differ from its previous offerings. Higher rates are a possibility, given that the Bank of England is continuing to increase interest rates.

It comes eight months after hundreds of mortgage deal offers were pulled in one day after market chaos at the time sparked concerns about rising base rates.

In a statement issued Friday, HSBC said: “We occasionally need to limit the amount of new business we can take each day via brokers. All products and rates for existing customers are still available, and we continue to review the situation regularly.”

The banking group said the protocol was in order to ensure it meets “customer service commitments” and stressed that it remains open to new mortgage business.

Soaring rates

The HSBC decision comes as analysts expect mortgage rates to soar and housing prices to plummet in response to the increased base rate.

A large number of fixed-rate mortgage deals is set to expire this year, leaving homeowners vulnerable to the impact of interest rate hikes, according to economic research company Capital Economics.

The organization made an upward revision to its mortgage rate forecasts, which showed borrowers would be “subject to a larger interest rate shock than … previously envisaged.”

“Those coming to the end of a 2-year fix will see a particularly large increase in the cost of their mortgage. While those refinancing a 5-year fix this month may see their mortgage rate jump from 2.1% to 4.9%, those on a 2-year fix will see an increase from 1.4% to 5.2%,” Capital Economics said in a note published Thursday.

There are also warnings that house prices will tumble in the next two years, with credit ratings agency Moody’s forecasting a 10% decline. 

“Persistently high inflation and the recent spike in lending rates will trigger a correction in the UK (Aa3 negative) housing market,” Moody’s Investor Service said in a report.

The Halifax House Price Index showed that U.K. house prices were flat in May after a 0.4% fall in April, while the average U.K. property now costs £286,532 ($360,000).

In February, U.K. house prices experienced their sharpest contraction since November 2012, according to building society Nationwide.

Prices tumbled 1.1% year-on-year, logging their first annual decline since June 2020.

The Bank of England raised its interest rate to 4.5% from 4.25% as the central bank attempts to tackle high inflation that currently sits well above the 2% target, at 8.7%. 

The Organization for Economic Cooperation and Development predicts the U.K. will have the highest inflation rate out of all advanced economies this year.

Lenders and homeowners will be watching the central bank closely for its next base rate decision on June 22. It is widely expected the bank will agree its thirteenth consecutive increase.

Source: cnbc.com

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Last Updated: May 27, 2023 BY Michelle Schroeder-Gardner – 47 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

If you’re anything like me, then you probably LOVE the holidays. I enjoy the decorations, the food, the people, and everything that goes along with it.

However, I know not to get ahead of myself even though I love the winter holidays an incredible amount. Holiday spending can quickly get out of hand and it’s quite easy to destroy a holiday budget.

According to the National Retail Federation, the average family in the U.S. spent $730 on the winter holidays in 2013 (it hovers around this amount most years).

Holiday spending can quickly add up when you are paying for food, gifts, decorations, and more. Plus, if you plan on traveling then your holiday spending may be much higher than this $730 amount.

This high price tag sometimes causes families to put their holiday spending on a credit card.

This is a big problem because that debt will eventually need to be paid off. Plus, interest and other finance charges may be added to this amount, which may cause the small amount you may have put on your credit card to inflate into a much bigger number. This can then impact your credit score, your credit history, your debt to income ratio, and more.

These are all things that no one wants to experience, especially since the holidays are not about the money you spend – they are about spending time with your loved ones.

While sticking to your holiday budget at times may seem impossible, I want you to know that you can enjoy the holidays and not go into holiday debt.

Continue reading below to read more about the several ways to lower your holiday spending and stick to your holiday budget.

Create and stick to a holiday budget.

Before you start your holiday spending, you should create a holiday budget. Creating a holiday budget will help you analyze your spending so that you can spend less money and not go into any holiday debt.

You should look at how much money you have set aside for the holidays, how much you estimate you will spend, and possibly even add a little buffer just in case you go over your holiday budget.

Some of the things you may need to budget for include:

  • Decorations
  • Food (such as if you are hosting or attending a holiday party)
  • Gifts and cards
  • Travel and transportation

Related: How To Live On One Income

Plan a group gift exchange.

Instead of swapping gifts with numerous people, you may want to do a gift exchange where everyone draws names and each person only has to get one person a gift. This can save a person a lot of money, plus more thought and time can go into each gift.

This is something that we do with my husband’s family. All the younger children still get gifts from everyone, but all of the adults just do an exchange. It makes it much easier and more enjoyable!

Earn extra money for your holiday spending.

You may want to look into ways to earn extra money for your holiday budget if you want to spend more money than you have saved.

There are many things you can do in order to earn extra money for your holiday spending. You could sell items from around your home, work additional hours at your job, find a part-time position (tons of places hire during the holidays!), freelance, and more.

Below are several posts that may help you find ways to make extra money for your holiday budget:

Shop early.

I know this might be a little difficult since it’s already November, but starting now is better than waiting until the last day.

I know some who start shopping almost a full year before the holiday they are celebrating. You may call them crazy, but I’m sure it saves them a lot of stress and money later.

The earlier you start shopping, the more money you are likely to save. This is because you won’t be in a rush to find what you need and you will be able to shop the sales as they come. When someone is low on time, they are more likely to buy items they may not need at a price that is higher than usual.

Find the best deals.

Prices can vary from store to store. Before you start any of your holiday spending, you may want to shop around and see what stores have the lowest pricing.

You can find the best deals by:

  • Shopping online. I like to shop online first. This way I don’t have to waste any gas driving around and I can save time by shopping at home as well. Amazon is definitely my favorite place to shop online.
  • Using a cash back website. I highly recommend using a cash back website (such as Ebates – signing up under my link will give you a free $10 gift card to a store of your choosing as well, such as Target), so that you can receive free cash back for the money you are already spending.
  • Finding coupon codes for the products you are buying. Before you buy something, type the store’s name plus coupon code into a search engine to see if any coupon codes will pop in. An example would be “Airbnb coupon codes.”
  • Buying discounted gift cards. There are many gift card companies online that sell “used” gift cards you can get for cheap. You could gift one of these or just do your shopping with them so that you are shopping on a discount.

Do you tend to stick to your holiday budget? How do you feel about holiday spending?

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Source: makingsenseofcents.com

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With high mortgage rates deterring unnecessary borrowing, a whopping one-third of U.S. home buyers are buying homes in cash, the highest share in close to a decade, according to a report Wednesday from Redfin. 

In April, 33.4% of buyers across the country dipped into their cash reserves, up from 30.7% from a year ago and the highest level since 2014. 


With interest rates at a 15-year high, it’s no surprise that cash purchases are now accounting for a larger share of deals, with buyers who would rely on mortgages shunning the market far more than their cash-spending counterparts. 

Case in point, across the 40 most populous U.S. metros the report analyzed, overall home sales were down 41% year over year in April, while all-cash sales logged a smaller 35% decline. 

The 30-year fixed-rate stood at 6.79% as of Wednesday, close to November’s high of just over 7%, according to lending giant Freddie Mac. 

“A home buyer who can afford to pay in all cash is weighing two potential paths,” Redfin senior economist Sheharyar Bokhari said in the report. “They can use cash to pay for the home and avoid high monthly interest payments, or take out a loan and pay a high mortgage rate. In that case, they could use the money that would have gone toward an all-cash purchase to invest in other assets that offer bigger returns, which could partly cancel out their high mortgage rate.”


Of course cash buyers can still be deterred by high interest rates and may decide that their money is better spent on investments that benefit from higher returns, the report said. 

Meanwhile, buyers who can’t afford to pay in all cash “also have two potential—but different—paths,” Bokhari said. “They can avoid a high mortgage rate by dropping out of the housing market altogether, or they can take on a high rate. That discrepancy is the reason the all-cash share is near a decade high even though all-cash purchases have dropped: Affluent buyers have the choice to pay cash instead of dropping out of the market.”

A smaller “but still noteworthy reason” for the increase in all-cash sales is competition among home buyers, the report said. A chronic lack of homes for sale in certain areas is motivating some shoppers to make an all-cash offer to beat out the other potential buyers.

Source: mansionglobal.com