second mortgages

Apache is functioning normally

A typical 20% down payment on a home in a U.S. metropolitan area costs $80,250, based on the median price of a single-family home of $402,600 in the second quarter of 2023.  However, for many first-time homebuyers, the hurdle of making a substantial down payment can seem insurmountable and many can only put down 3-5%, or $12,078 – $20,130.

This is where down payment assistance programs can come into play, offering a lifeline to those aspiring to become homeowners. But, what are they exactly and how can we help our clients utilize them?

What are down payment assistance programs?

Down payment assistance programs (DPAs) are initiatives designed to help first-time homebuyers bridge the gap between their savings and the down payment required to purchase a home. These programs are typically offered by government agencies, nonprofit organizations and occasionally private entities. DPAs can take various forms, such as grants, loans or second mortgages, and they are typically tailored to meet the specific needs of the target demographic.

There are four main types of down payment assistance:

  • Grants: Gifted money that never has to be repaid.
  • Loans: Second mortgages that are paid monthly along with your primary mortgage.
  • Deferred loans: Second mortgages with deferred payments that only have to be paid when you move, sell or refinance.
  • Forgivable loans: Second mortgages that are forgiven over a set number of years (often five, but maybe up to 15 or 20). These only need to be repaid if you move, sell or refinance too early.

Examples of down payment assistance programs

The FHA offers low down payment loans to first-time homebuyers. With an FHA loan, borrowers can put down as little as 3.5% of the home’s purchase price. This low barrier to entry makes homeownership more achievable for those with limited savings.

Many states in the U.S. also offer their own DPA programs to assist local homebuyers. These programs can provide grants, low-interest loans or second mortgages to cover a portion of the down payment and closing costs. The specific details vary from state to state, but they generally aim to make homeownership more accessible.

Some local housing authorities and city governments provide down payment assistance to residents. For instance, the city of Denver has its “metroDPA” assistance program, which is currently helping people throughout the Front Range become homeowners. If you make up to $188,250 a year and have a credit score above 640, metroDPA can help with a home loan and down payment assistance to help you buy a home.

Nonprofit organizations like Habitat for Humanity have been instrumental in promoting homeownership among low-income individuals and families. They offer sweat equity programs and interest-free loans to help prospective homeowners achieve their dreams.

We all know that one of the most significant barriers to homeownership for first-time buyers is the initial down payment. Many people are eager to learn ways they can afford it but feel lost as they try to navigate the landscape of what to do next. 

This is where we as Realtors are ready to educate our buyers with information and help clients find the right path(s) to alleviate financial burdens by providing funds to cover a portion of the down payment. 

Remind clients about demographics for DPAs

First, we educate clients that DPAs often target specific demographics, such as low-income families, veterans or those living in high-cost housing markets. By doing so, these programs broaden the pool of eligible homebuyers and ensure that homeownership is not solely reserved for the well-off. As a result, we should also set expectations for clients so they don’t assume they’ll have DPAs to rely on. 

Explain the different assistance programs available 

Another factor to guide clients on is that DPA programs provide assistance in the form of grants or forgivable loans, though these are harder to lock in. These funds do not need to be repaid if the homeowner stays in the property for a specified period, typically several years. This helps lower the overall cost of homeownership, making monthly mortgage payments more manageable. Be realistic with clients on whether this is a viable option for them and their current financial situation. 

Suggest credit counseling services

Educate clients on where to turn to for credit consulting. For so many, one medical bill or missed payment can take a hammer on credit scores. Clue clients in on places they can turn to in order to help improve their credit scores.

Find a housing counselor

Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures and credit issues. The counseling agencies on this list are approved by the U.S. Department of Housing and Urban Development (HUD) and they can offer independent advice, often at little or no cost to the client.

Over time, homeowners build equity as they pay down their mortgages and as property values appreciate. DPAs set first-time homebuyers on the path to wealth accumulation, enabling them to build a financial foundation for the future.

The resurgence of down payment assistance programs represents a ray of hope for first-time homebuyers, particularly those facing financial constraints. These programs play a pivotal role in reviving the dream of homeownership by reducing the initial financial barrier and making it more attainable for a diverse range of individuals and families.

By offering assistance in various forms, from government-backed loans to nonprofit grants, DPAs allow first-time homebuyers to step onto the property ladder. This not only benefits the homeowners themselves but also strengthens communities and fosters financial stability.

As the popularity of DPAs continues to grow, they hold the promise of expanding homeownership opportunities for countless individuals, ensuring that the American dream remains within reach for all those who aspire to call a house their home and ultimately build generation wealth.

Jessica Reinhardt is the 2022-2023 chair of the Denver Metro Association of Realtors.

Source: housingwire.com

Apache is functioning normally

TPO and Correspondent, Non-Agency Best Ex, Verification; Equity Figures for Refis; STRATMOR on Customer Experience

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TPO and Correspondent, Non-Agency Best Ex, Verification; Equity Figures for Refis; STRATMOR on Customer Experience

By:
Rob Chrisman

Fri, Nov 17 2023, 11:13 AM

Talk can be humorous. “That lowdown scoundrel deserves to be kicked to death by a jackass, and I’m just the one to do it.” (Attributed to a congressional candidate in Texas.) Here in Dallas, mortgage talk is certainly wide-ranging and varied as there’s a lot going on out there as we head toward Thanksgiving week, including cost cutting, M&A, and Fair Lending. Today’s Rundown features Feliks Viner, VP of Capital Markets with First World Mortgage discussing rate volatility at 3PM ET. We have the Wall Street Journal story about the union between hoops and loans: “Mortgage King Wants the NBA Crown, Too.” Some housing industry observers may only think it was “only a flesh wound,” but the Realtors™ antitrust case decision in Missouri, coupled with other recent settlements and an onslaught of new cases, likely portend real changes for how homes are bought and sold in the US with the assistance of real estate brokers. Attorney Brian Levy, breaks it down and offers his view of the crumbling dam for buyer broker commissions and the Realtors’ control over local listings in his most recent Levy’s Mortgage Musings. (Today’s podcast can be found here, sponsored by LoanCare, the mortgage subservicer known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Interview with Calque’s Chandra Srivastava on the inner workings of a mortgage marketing department and how companies justify ROI on marketing spend.)

Lender and Broker Software, Products, and Services

“Truv is saving Lenders 60-80 percent over competitors. That’s the savings of multiple full-time employees. For example, Compass Mortgage saved roughly 60 percent in verification costs and maintained their same conversion rate. “Truv has given us the ability to lower costs, all while speeding up the verification process and providing better employment data” said Justin Venhousen, COO, Compass Mortgage. Stop wasting money. Contact TRUV today to discuss how we can help you with your income, employment, insurance, and asset verifications.”

The Work Number® can help streamline processes and provide greater value to employment and income verification processes. Wider data coverage can help streamline lending processes. The Work Number is the largest commercial repository for consolidated income and employment data with access to 641 million instantly returned records, updated each pay cycle, provided directly by employers and payroll providers, so there’s no need to collect an applicant’s private banking or payroll credentials, potentially exposing them and yourself to risk. Lenders and brokers have a choice: access The Work Number directly from Equifax OR through our pre-built integrations with over 60 Point of Sale (POS) and Loan Origination Systems (LOS). Not all methods for verification of income and employment are created equal. Discover why The Work Number is the leading choice for seamless, swift, and automated verifications.

In this market, hustle is everything. You can’t afford to waste a single deal, or a single minute. That’s why ReadyPrice has launched Shop, Lock, Deliver, an innovative platform designed to help independent mortgage brokers and their lenders save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in the toughest market. Multiple lenders. One platform. Zero b.s. Come check us out today.

Join MAXEX at 2 p.m. ET on Thursday, December 7, for a special webinar on how the company is expanding its role as the cash window for the non-agency market. MAXEX’s multi-buyer-to-multi-seller exchange now provides more than 300 originators with access to more than 25 leading jumbo, non-QM, DSCR, Agency-eligible (NOO and 2nd Homes), and scratch & dent investors through a single clearinghouse. Join this event to learn about how MAXEX can help your business stay nimble and prepare for profitable, efficient growth in 2024.

Homebot is making a move towards an even more connected consumer experience through its launch of the Homebot Mobile App, allowing clients to connect with their trusted home advisors in a single tap right from their mobile device. With this announcement, every Homebot customer has the opportunity to engage their clients more deeply while generating more relationships with first-time homebuyers. See full story here.

Broker and Correspondent Products

Spring EQ Wholesale is now offering investment property HELOCs for 1st and 2nd lien positions! There is high demand for this product, and now is a great time to reach out to your clients who own investment properties and offer a way to access the equity in those homes. Need help with pricing? Click here to submit a scenario to Spring EQ’s team of Account Executives. Don’t forget, with Spring EQ you can earn up to 2.5 percent in traditional broker compensation on HELOCs and HELOANs. Looking for new opportunities in the mortgage space? We’d love to speak with you! Explore our job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages. So, think of us first for all your seconds. Become a partner now or contact your Account Executive to learn more.

“Now is the perfect time to align yourself with a top-tier correspondent partner like Newrez Correspondent. How are you going to meet and exceed your 2024 goals in this challenging market? By choosing a partner with the strength, size, and quality of Newrez. We provide competitive pricing, an expansive product line and an unwavering commitment to service. Don’t take it from us. Visit our website to read what our valued clients have to say. More reasons? We offer multiple affordable lending options, a comprehensive monthly client training calendar and access to marketing materials you can customize on The Marketplace by Newrez. Non delegated/Non-QM product availability with access to LoanNEX (pricing and product eligibility platform). Contact your RSM to learn more by clicking here. At Newrez, there is much to be thankful for: our team, our clients, and our families. Wishing you and yours a safe and Happy Thanksgiving.”

What if you had a powerful tool that could help you close your purchase pipeline at four times the rate? Rocket Pro TPO’s Verified Approval (VAL) goes beyond typical pre-approvals by providing a fully underwritten solution that includes a review of your client’s credit, income, and assets. As a result, you will realize the benefit of more committed clients with a clear picture of affordability and the confidence to start shopping. And partners can rely on fast Verified Approval reviews to jump start the purchase process: VALs are available to partners from their portal in as little as 24 hours after the request. Plus, clients using a VAL have the option to lock their rate before finding their new home! Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

STRATMOR on Customer Relationships

What if our response to the prolonged market downturn was less about waiting it out, and more about learning and improving? What if we became learners and doers, not just survivors? In his November Customer Experience Tip, STRATMOR CX Director Mike Seminari talks about the need for being active in the downtime, building relationships, gaining product knowledge, reading books and listening to podcasts, always in pursuit of self-betterment and excellence in customer care. He shares three lessons that 2023 has taught us and how we can parlay them into success in 2024. Check out, “Top Three CX Lessons That Will Drive 2024 Success.”

M&A is not Lender-Exlusive

Lenders are not the only ones in our biz with shrinking balance sheets, competitive pressures, and owners looking at strategic alternatives to battling it out every day.

Stavvy, a fintech firm specializing in digital and remote collaboration for lending and real estate companies, acquired SigniaDocuments, a technology suite from Texas-based lender Evolve Mortgage Services. “Stavvy will acquire assets, including eClosing tools, eNote and eVault services, eRegistry capabilities for agency and non-agency loans and SigniaDocuments’ SMART Doc technology – a data-driven electronic document engine.” Stavvy will offer eNote, SMART Doc disclosures and loan documents for all 50 states across all loan programs and Evolve’s Charlie Epperson and Tim Anderson will join Stavvy as chief product officer and EVP of digital mortgage strategy, respectively. Recall that in August, Stavvy acquired digital mortgage servicing tech firm Brace to provide a streamlined platform for mortgage servicers and homeowners.

Equity and the Future of Refinance

A report from ATTOM shows that in Q3 2023, fewer homes were equity-rich, meaning their loan balances were less than half of their market values. The share of equity rich mortgaged homes was 47.4 percent. This is a drop from 49.2 percent in Q2 2023, making it the largest quarterly decline since 2019. The decline in equity-rich properties happened despite recent home value rebounds. That said, the percentage of seriously underwater mortgaged homes continued to improve. Only 2.5 percent were considered seriously underwater in Q3 2023. That’s the lowest point in the past four years. It’s down from 1 in 36 homes in Q2 2023 and 1 in 35 homes in Q3 2022.

Elliot F. Eisenberg, Ph.D. writes, “As of 9/23, the percentage of home mortgage holders with negative equity is just 383,000 or 0.7 percent, less than half the percentage prior to Covid and prior to the Housing Bust. The percentage peaked in 2009 at 30 percent. Currently, the city with the highest percentage of underwater mortgage holders is Austin at 2.1 percent, because prices are 14 percent off 2022 peaks, followed by Las Vegas at 1.7% and Phoenix at 1.6 percent.”

Capital Markets

Have you stopped your spending? Inflationary price tags, high interest rates and the return of student loan payments were thought to prompt many Americans to hold back on opening their wallets, but that doesn’t appear to be the case. A strong labor market has helped keep spending afloat across the economy, with new revisions even showing that the blowout retail reports from the summer were even better than initially estimated. Those trends are expected to continue with Black Friday only a week away, followed by the traditional holiday spending spree.

But as the fabled “soft landing” for the U.S. economy comes more and more into focus, we have seen mortgage rates and other bond yields drop as of late. Yesterday morning’s batch of data showed a larger than expected increase in weekly jobless claims coupled with a two-year high in continuing claims, fitting the Fed’s preferred script of seeing some softening in the labor market. Initial claims are at their highest levels since August and continuing jobless claims are at their highest level since November 2021. Export prices were down 1.1 percent month-over-month in October and down 4.9 percent year-over-year. Import prices were down 0.8 percent month-over-month and down 2.0 percent year-over-year. And total industrial production declined 0.6 percent month-over-month in October while the capacity utilization rate fell to 78.9 percent, though all figures were adversely affected by the UAW strike. Today’s calendar kicked off with housing starts and building permits for October (+1.9 percent and +1.1 percent, respectively). As has been the case all week, there are plenty of Fed speakers, and today features Boston President Collins, Vice Chair for Supervision Barr, San Francisco President Daly, and Chicago President Goolsbee. Today is also 48-hour notification for Class D MBS. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 4.40 after closing yesterday at 4.45 percent.

Employment

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

“It’s all part of the Plan! Operating as MWF Home Loans in Tennessee, Mountain West Financial is continuing our expansion plans in Tennessee. Throughout this year, we have continued our growth with recent launches in North Carolina, South Carolina, Florida, and several other states east of Texas. The expansion is part of our overall growth strategy to expand our footprint. EVP and Board member, Ben Holloway has relocated to Tennessee in an effort to help drive our expansion. For more information about our growth plans and career opportunities, contact Ed Adams or Ben Holloway. Or visit us here for more information.”

“At Evergreen Home Loans™, we’ve always believed in supporting our associates and team members in their commitment to local causes. With the establishment of the Evergreen Cares Foundation, we’ve provided a powerful tool to help them do just that. The Evergreen Cares Foundation is our way of enabling our team to make a difference in the community. Whether it’s addressing hunger, promoting education, or providing assistance during crises, this foundation reflects our dedication to community well-being. Our associates are passionate about giving back, and this foundation allows them to channel their energy and resources toward causes they care deeply about. By doing so, we strengthen our community and embody our core values of empathy and support. Learn more about the Evergreen Cares Foundation and the remarkable impact it’s making. Together, we can build a brighter future for everyone.”

“Explore Spring EQ’s job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages.”

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

Source: mortgagenewsdaily.com

Apache is functioning normally

Citigroup announced this afternoon that it will cut 185 jobs in its residential mortgage unit CitiMortgage as it pulls out of the wholesale market for second mortgages amid deteriorating credit conditions.

The layoffs are part of Citi’s ongoing strategy to reduce its exposure to the residential mortgage market, which it outlined two weeks ago.

In that release, Citi said it planned to increase agency-backed lending to 90 percent of production by the third quarter, up from 65 percent in 2007, and said its CitiMortgage division had already reduced third party second-lien lending by more than 90 percent from a year ago.

The affected employees were working in the home equity division in Des Moines, Iowa, where roughly 180 workers will remain after the layoffs.

CitiMortgage will also pull the plug on mortgage broker-originated stand alone and combo home equity loans effective tomorrow, according to a statement posted on their website.

“The last day to register and lock either a stand alone second or combo is Tuesday, March 18. On Wednesday, March 19 these products will no longer be available on the Citi Home Equity Web site at www.CitiHomeEquity.com. All stand alone and combo loans in the pipeline must fund on or before May 12, 2008.”

“With this change in strategy, I do want to reiterate two things. First, home equity products are still available via Citi’s retail distribution channels. Second, CitiMortgage intends to remain an industry leader in both Wholesale Lending and mortgage lending overall and we thank you for your continued business as we work through this time in the industry together,” said Fred Bolstad, Executive Vice President of Wholesale Lending.

Shares of Citi ended the day down $1.16, or 5.86%, to $18.62, hitting a fresh 52-week low in the process.

Update: The number of layoffs involved in the closure could total roughly 500 employees.

(photo: tesfox)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Gone are the days of the zero-down mortgage. At least for the typical home buyer.

Instead, the 2023 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) revealed that down payments haven’t been higher in decades.

This, despite the widespread availability of low-down and zero-down home loan options.

As for why, it could be because inventory remains low, which has kept competition lively in spite of much higher mortgage rates.

Another reason might be those high interest rates themselves, which make it less attractive to take out a large loan.

Median Down Payments Highest Since 1997 for First-Time Home Buyers

Per the NAR report, the typical down payment for a first-time home buyer was 8%, which might not sound like a lot.

But it is the highest figure since 1997, when it stood at 9%. If you look at the chart above, you’ll notice it dipped pretty close to zero in those bad years back in 2005-2006.

At that time, creative financing and lax underwriting (aka no underwriting at all) allowed home buyers to purchase a property with nothing down.

While that may have been risky on its own, they could also use stated income to qualify for the loan.

And they could choose a super toxic loan type, such as the now forgotten option ARM, or qualify via an interest-only payment.

That may explain why we experienced the worst mortgage crisis in recent history, followed by the nastiest housing market crash in generations.

So certainly some good news there, with down payments on the rise despite unaffordable conditions.

To that end, home buyers could be opting to put more down to get a more favorable mortgage rate, and/or to avoid mortgage insurance (PMI) and unnecessary pricing adjustments.

Back when mortgage rates were hovering around 3%, it made sense to put down as little as possible and enjoy the low fixed-rate financing for the next 30 years. Not so much today.

Another reason home buyers might be putting more money down is due to competition. While the housing market has certainly cooled this year, there is still a dearth of supply.

This means if and when something decent pops up on the market, there may still be multiple bids.

And those who are able to muster a larger down payment will generally be favored by the seller.

The one worrisome thing was how first-time buyers were securing their down payments recently.

They’ve had to increase “reliance on financial assets this year,” including the sale of stocks or bonds (11%), a 401k or pension (9%), an IRA (2%) or the sale of cryptocurrency (2%).

Always a bit questionable if selling retirement assets to purchase a home.

Typical Down Payment for Repeat Home Buyers Up to 19%

Meanwhile, the typical repeat buyer came in with a 19% down payment, which is the highest number since 2005 when it was 21%.

Down payments for repeat buyers also tanked prior to the early 2000s housing crisis because underwriting was so loose at the time.

There was really no reason to come in with a large down payment at the time given the wide availability of flexible loan products, and the notion that home prices would just keep on rising.

This explains why homeowners at the time also favored negative amortization and interest only home loans.

They all assumed (or were told) that the home would simply appreciate 10% in a year or two and they could refinance over and over again to better terms.

Today, it’s more in line with levels prior to that fast and loose era, and appears to be steadily climbing.

This could also have to do with a large number of all-cash home buyers, such as Boomers who are eschewing the 7% mortgage rates on offer.

But it is somewhat interesting that the median number was 19% and not higher.

After all, a 20% down payment on a home comes with the most perks, like lower mortgage rates and no private mortgage insurance requirement. But I digress.

Note that all the figures from the survey only apply to buyers of primary residences, and do not include investment properties or vacation homes.

How Much Do You Need to Put Down on a Home These Days?

As noted, low and no-down mortgages still exist, though they are typically reserved for select applicants, such as VA loans for veterans and USDA loans for rural home buyers.

However, you can still get a 3% down mortgage via Fannie Mae or Freddie Mac, which virtually every lender offers.

There are also FHA loans, which require a slightly higher 3.5% down payment, but lower credit score requirements.

On top of this, there are countless homebuyer assistance programs, including silent second mortgages that can cover the down payment and closing costs.

In other words, there is no shortage of affordable loan options today.

But there is an advantage to putting more down, such as eliminating the need for mortgage insurance and having a smaller outstanding loan balance.

With mortgage rates so high at the moment, the less you finance the better.

This could also make it easier to apply for a rate and term refinance if and when rates do fall, thanks to a lower LTV ratio.

Regardless, it’s good to see down payments rising as home prices become more expensive.

This contrasts the bubble years back in 2004-2006 when homeowners put less and less down as property values increased. It didn’t turn out well.

Source: thetruthaboutmortgage.com

Apache is functioning normally

It’s time to check out “Toll Brothers Mortgage,” which is a subsidiary of home builder Toll Brothers.

Toll Brothers is one of the largest home builders in the United States, priding itself on being a luxury home builder.

Instead of relying on third-party lenders to provide financing to their customers, they have a built-in financing division.

This allows them to oversee the process firsthand and navigate the complexities of new construction financing.

They say they’ve got a proven track record of smooth closings, and if they can offer you a mortgage rate the other guys can’t, they could be worth looking into.

Toll Brothers Mortgage Fast Facts

  • Direct-to-consumer retail mortgage lender
  • Provides new construction lending and home purchase loans
  • Parent company is nation’s 5th largest home builder
  • Founded in 1967, headquartered in Fort Washington, PA
  • Licensed to do business in 24 states nationwide and D.C.
  • Funded nearly $2 billion in home loans last year
  • Most active in California, Pennsylvania, and Texas
  • Offers mortgage rate specials to Toll Brothers customers
  • Also operates a full-service title and insurance company

As noted, Toll Brothers is a major home builder, the fifth largest at last glance, behind only D.R. Horton, Lennar, Pulte, and NVR.

They are a publicly-traded company (NYSE:TOL) and are currently valued at around $9 billion.

The company was founded in 1967 and refers to itself as the nation’s leading builder of luxury homes.

This includes both new construction homes and quick move-in homes. The company’s dedicated mortgage division is known as Toll Brothers Mortgage Company, or TBI Mortgage for short.

They exist solely to serve Toll Brothers customers who need to finance their new home purchases, and have about 77 loan officers on staff, per the NMLS.

In 2022, the company funded a healthy $2 billion in home loans, with 20% of volume coming from the states of California and Texas, and another 9% from Pennsylvania.

The company also did a lot of business in Arizona, Colorado, Florida, Idaho, Nevada, and Virginia.

They are licensed to lend in Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington.

Those purchasing a Toll Brothers home can also take advantage of in-house title, escrow, and insurance services via Toll Brothers Insurance Agency.

How to Get Started

To begin, you can visit a new home sales office or simply check out their website.

If you go online, they have a contact form and a loan officer directory that lists individual employees by state.

They can provide loan pricing and answer mortgage questions you might have about the loan process.

If you’re ready to proceed, they’ll ask you to complete a mortgage pre-qualification questionnaire and create a secure Toll Brothers account.

Within 14 days of signing a home purchase agreement, you’ll be asked to submit the loan application and upload required documents.

Their digital loan application is powered by ICE (formerly Ellie Mae). It allows borrowers to start the process from any device and complete most tasks electronically.

This includes linking accounts like pay stubs, tax returns, bank statements, along with eSigning necessary disclosures.

If approved, they’ll provide you with a loan commitment, as well as conditions needed to fund your loan.

Importantly, the loan approvals are valid through the completion of your home. And are integrated with Toll Brothers to sync with the builder process.

Since building a new construction home can take up to 12 months, their loan process may have longer timelines than a typical existing home purchase.

But they also offer quick move-in properties, in which case the process will likely only be 30 to 45 days.

Loan Programs Offered

  • Home purchase loans
  • Conventional loans backed by Fannie Mae and Freddie Mac
  • FHA loans
  • VA loans
  • Fixed-rate mortgages: terms ranging from 10 to 30 years
  • Adjustable-rate mortgages: initial fixed terms of 3, 5, 7, 10, or 15 years
  • Available on primary residences, second homes, and investment properties

While Toll Brothers Mortgage only offers home purchase loans (no mortgage refinances), they have a decent loan menu.

This includes all the usual offerings such as conforming loans backed by Fannie/Freddie, jumbo loans, FHA loans, and VA loans.

The only loan programs they appear to be missing are USDA loans and second mortgages, though these aren’t widely used by home buyers these days.

They’ve got a good selection of both fixed-rate mortgages and adjustable-rate mortgages, including a 10-year fixed and 15-year fixed.

With regard to the adjustable-rate loans, they’ve got the 5/6 ARM, 7/6 ARM, and even an ARM with an initial fixed term of 15 years.

And you can get an ARM if taking out an FHA loan or VA loan, which is less common.

So there’s no shortage of loan programs, and they finance primary residences, second homes and investment properties.

Toll Brothers Mortgage Rates and Fees

Like other mortgage lenders, they do not have a page dedicated to mortgage rates, nor are they publicized elsewhere.

Instead, they simply say they offer “competitive rates,” which obviously doesn’t give us a lot to go on.

However, they offer personalized financing packages and there’s a good chance they’ve got some special financing offers unique to home builders.

If you browse the Toll Brothers main website, you might see specials for certain communities.

I came across an exclusive offer of 5.99% on a 30-year fixed while rates are closer to 7.5% at the moment.

Lately, the captive mortgage lenders of home builders have been hard to beat, thanks to their big temporary and permanent mortgage rate buydowns.

Many are offering rates well below market if you buy certain homes by a specific date.

But always take the time to compare their rates and fees to outside lenders as well. You’ll never know what else is out there if you don’t put in the time to look.

LockSolid Rate Protection program

Since the home building process can take time, Toll Brothers Mortgage offers a special mortgage rate program called “LockSolid Rate Protection.”

Since It allows home buyers to lock in a mortgage rate for up to 345 days, with no cost until loan closing.

The up-front lock deposit is advanced by Toll Brothers, giving buyers peace of mind in an uncertain mortgage rate environment.

Additionally, a float down option is available on many programs. So if rates happen to fall below the rate you locked in within 30 – 45 days of closing, they can re-lock your loan at a better price.

The program is available on both fixed- and adjustable-rate mortgages offered by the company.

Just keep in mind that it doesn’t always make sense to lock in a rate well ahead of time. If you have an extended time horizon, floating your mortgage rate can provide more opportunities.

It’s also generally cheaper to lock in a rate with a shorter lock period.

Toll Brothers Mortgage Reviews

There aren’t a ton of reviews for Toll Brothers Mortgage specifically, though I did come across some.

Over at Zillow, they have a pretty poor 1.36/5-star rating from about a dozen reviews. Not a big sample size, but not glowing reviews either.

Similarly, they have a 1.8/5 from another dozen mortgage reviews on Google for their Fort Washington, PA headquarters.

They have a 5-star rating on Redfin, but it’s only from three reviews. Meanwhile, their parent company has a 1.12/5 rating on the Better Business Bureau (BBB) website from 85 reviews.

However, the company maintains an ‘A+’ rating based on customer complaint history, so they appear to handle issues that come up appropriately.

Take the time to read the customer reviews and complaints to see what the common issues are, and how you might be able to avoid them.

At the end of the day, using the builder’s lender can make sense if they offer a below-market mortgage rate.

There’s also the perception that they’re in better sync with the builder as the companies operate under the same parent.

But based on the complaints, this isn’t always the case. So be sure to shop around and get quotes from other mortgage companies and some independent mortgage brokers too.

Even if you do decide to use Toll Brothers Mortgage, you can use those other quotes to negotiate a better deal.

Toll Brothers Mortgage Pros and Cons

The Good Stuff

  • Can apply for a home loan online
  • Offer a digital, mostly paperless application powered by ICE
  • Loan approvals good through completion of your home
  • May offer special financing incentives to Toll Brothers customers
  • Lots of loan programs to choose from including ARMs
  • LockSolid Rate Protection program
  • A+ BBB rating
  • Mortgage glossary and mortgage calculator online

The Maybe Not

  • Only licensed in a handful of states where they build homes
  • Poor customer reviews
  • Do not offer USDA loans or second mortgages
  • Do not offer mortgage refinances

(photo: Montgomery County Planning Commission)

Source: thetruthaboutmortgage.com

Apache is functioning normally

A new report released by credit bureau Equifax and Moody’s Economy.com revealed that 4.46 percent of mortgages were at least 30 days past due at the end of the first quarter, up from 3.98 percent the prior quarter and 2.92 percent a year earlier.

More troubling, the foreclosure rate surged to 1.39 percent from 1.08 percent last quarter, and was more than double the 0.58 percent rate a year ago.

The increases in both delinquency rate and foreclosure rate were the largest since the firms began reporting such data in 2000.

Florida led the nation in delinquent first mortgage payments, with 7.03 percent of borrowers falling behind, followed by Nevada at a rate of 6.59 percent and Rhode Island at 5.85 percent.

The national default rate for closed-end second mortgages was 5.36 percent, with 11.98 percent in default in California, followed by 11.41 percent in Florida and 9.87 percent in Nevada.

Home equity lines of credit weren’t half as bad with a national default rate of 2.37 percent, but Alaskan borrowers led the nation at a rate of 5.15 percent, followed by Nevada at 4.97 percent and Florida at 3.75 percent.

Bucking the trend was North Dakota, which had the lowest first mortgage default rate at just 1.40 percent, a default rate of zero on home equity loans, and the lowest closed-end second mortgage default rate in the nation at just 1.51 percent.

In terms of overall delinquency rate, Florida, Nevada, and Mississippi fared worst, while North Dakota, South Dakota, and Wyoming performed the best.

Meanwhile, a record $715 billion in consumer debt is now delinquent or in default, up from $300 billion three years ago, proving that a spillover is a very real problem.

(photo: laffy4k)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Subprime racial disparities grew during 2007 at some of the nation’s leading banks and mortgage lenders, according to a new report released by Inner City Press and Fair Finance Watch.

The consumer watchdogs studied loans that are defined as high-cost, those with a rate spread of three percent over the yield on comparable Treasury securities on first mortgages, and five percent on second mortgages.

They then compared the number of high-cost loans extended to whites versus other minority groups such as African Americans and Latinos, as well as loan application success rate.

The study found that Chase subjected African Americans to higher-cost loans 2.44 times more frequently than whites, while Latinos wound up with costlier loans 1.60 times more than whites.

Interestingly, the percentage of Chase’s loans that were considered high-cost went up in 2007 to 20.96 percent of all loans from 19.28 percent a year earlier.

The numbers were even worse in Chase’s hometown of NYC, and in New Orleans more than 50 percent of mortgage applications submitted by African Americans were denied.

Bank of America and Countrywide extended high-cost loans to African Americans nearly twice as many times as to whites, and denied applications to Latinos about 1.5 times more frequently than whites.

In the Los Angeles metropolitan statistical area in 2007, Countrywide confined 18.91 percent of its African American borrowers to high cost loans over the rate spread.

Citigroup’s numbers were the worst when it came to purchase loans, with high-cost loans extended to African Americans 3.41 times more frequently than whites.

Data from a slew of other large banks, including Washington Mutual, National City, Wachovia, SunTrust, revealed similar disparities.

Take a look at the complete release here.

(photo: devnull)

Source: thetruthaboutmortgage.com

Apache is functioning normally

If you’ve got your eye on a Taylor Morrison home, you may have come across their affiliated lender “Taylor Morrison Home Funding.”

As with many other home builders, they’ve got their own in-house mortgage lender to streamline the home buying process.

This affords them better control, ideally boosting customer service, and gives them the ability to offer special pricing incentives.

With fewer parties involved, they should be able to get you from application to closing quicker than the other guys.

And if they can throw in a big mortgage rate buydown as well, it might be a win-win. Read on to learn more about the company.

Taylor Morrison Home Funding Fast Facts

  • Affiliated lender for home builder Taylor Morrison
  • Offers home purchase financing to new home buyers
  • Founded in 1982, headquartered in Maitland, Florida
  • Has 84 licensed mortgage loan officers
  • Parent company is publicly traded (NYSE: TMHC)
  • Licensed to lend in 11 states nationwide
  • Funded over $3 billion in home loans in 2022
  • Most active in Texas, Florida, Arizona, and California

Taylor Morrison is one the largest home builders in the United States, serving home buyers and renters in 19 markets across 11 states.

Only a handful of builders are larger, including D.R. Horton, Lennar, Pulte, NVR, and Toll Brothers.

The company was formed in 2007 after Taylor Woodrow Inc. and Morrison Homes Inc. merged. Dispute this recent development, their building operations date back to the early 1900s.

They are now headquartered in Scottsdale, Arizona and build new homes in 11 states, including Arizona, California, Colorado, Florida, Georgia, Nevada, North Carolina, Oregon, South Carolina, Texas, and Washington.

These are also the states where they are licensed to lend, as their primary focus is extending financing to the buyers of their new homes.

Taylor Morrison Home Funding is most active in the state of Texas, which accounts for about 25% of total loan production.

At last glance, there were 84 licensed mortgage loan officers working for the company throughout the country, per the NMLS.

They also own Inspired Title Services, which is a full-service title insurance and real estate settlement provider operating in the states of Arizona, Colorado, Florida, Nevada, and Texas.

How to Apply

To get started, you can either visit a new home sales office and get connected to a sales rep, or simply navigate to their website.

If you go online, they have the option to pre-apply via “Dorothy,” which is their “state-of-the-art mortgage technology that can take you home with just a few clicks.”

A play on the Wizard of Oz, Dorothy works alongside a human Taylor Morrison Home Funding team to get you to the finish line quicker and easier.

The process includes a digital loan application with automated verifications to reduce the need for paperwork and documentation, powered by fintech company Blend.

Applicants can eSign disclosures and take advantage of secure document uploading to ease the burden.

Once complete, you will be presented with tailored mortgage solutions based on the information you provide.

And a licensed loan officer will then provide solutions and “market-competitive rates” with your goals and budget in mind.

Those who prefer more guidance can simply click on “Contact a Loan Consultant,” where they’ll find contact information for loan officers near their market.

After your loan is submitted, you’ll be able to check loan status via the online portal, satisfy outstanding conditions, and get in touch with your lending team if and when you have questions.

Able Ready Own (ARO)

Those who need help qualifying for a home purchase can take advantage of their complimentary program called Able Ready Own (ARO).

In a nutshell, ARO Consultants work with prospective home buyers to strengthen their credit profiles and boost their chances of getting approved for a home loan.

The goal is to educate consumers about the home buying and mortgage process, and create tailored plans that produce better qualified home buying candidates.

If successful, they might be able to boost your credit scores and fine tune other areas that are key for mortgage qualification.

In the end, these changes could put you in a stronger position when it comes to buying and financing a home.

If they’re able to increase your credit scores, you may also qualify for a lower mortgage rate.

Available Loan Programs

  • Home purchase loans
  • Conforming loans backed by Fannie Mae and Freddie Mac
  • Jumbo loans
  • FHA loans
  • VA loans
  • Fixed-rate and adjustable-rate options
  • Temporary buydowns including 3-2-1
  • Permanent buydowns for life of loan

Taylor Morrison Home Funding has a limited menu of loan programs, but still all the main stuff to satisfy the needs of most home buyers.

They are fully focused on providing home purchase loans to their customers, meaning no mortgage refinances here.

In terms of loan choice, you can get a conforming loan backed by Fannie Mae or Freddie Mac, or a jumbo loan if purchasing an expensive new home.

Government-backed loans are also available, including FHA loans and VA loans.

They don’t appear to offer USDA loans or second mortgages, including any sort of home equity loans or lines.

However, you can get both a fixed-rate mortgage, such as a 30-year fixed or 15-year fixed, or an adjustable-rate mortgage, such as a 5/6 ARM or 7/6 ARM.

Additionally, buydowns might be offered, including temporary and permanent buydowns, to help reduce payments for the first couple years or for the life of the loan.

Taylor Morrison Home Funding Rates and Fees

While they don’t have a page dedicated to their mortgage rates and lender fees, my guess is they provide special financing if you use them to buy a Taylor Morrison home.

This is a common setup for home builders with their own financing departments. They’re able to structure deals that include big mortgage rate buydowns.

Not only does this help the home buyer qualify, it also allows them to avoid price reductions if affordability is strained.

If you visit the Taylor Morrison Homes website, you’ll be able to see special offers by clicking on a particular market they serve.

I came across some pretty spectacular deals, including a combination of a temporary and permanent buydown where the interest rate started as low as 2.75%.

Just pay attention to closing costs and the mortgage APR, which factors in the lender fees and the interest rate.

And always take the time to gather outside mortgage rate quotes so you can negotiate with the builder’s lender.

Taylor Morrison Home Funding Reviews

There don’t seem to be a ton of reviews online for Taylor Morrison Home Funding, though I was able to track down a handful.

Their Irvine, CA location currently has a poor 1.0/5-star rating on Yelp from 32 reviews. Poor communication seems to be the main gripe.

You might also be able to find individual loan officer reviews on Zillow and other websites.

Or you can search their many home builder locations and check out their Google reviews. Granted, those might combine the home builder and lender experience.

Over at the Better Business Bureau (BBB) website, the company has an ‘A-‘ rating based on customer complaint history. There don’t appear to be any complaints on file at the moment.

Their parent company has an ‘A+’ BBB rating, but over 200 complaints filed over the last three years. And over 100 in the past 12 months.

But the high letter grade should indicate that they handle those complaints in a timely and professional manner.

At the same time, the customer reviews for the parent company on the BBB website aren’t great, with a 1.15/5 rating at last glance.

So be sure to take a gander to determine what customers are complaining about, and how you can avoid those same issues.

To sum things up, Taylor Morrison Home Funding could be a good option if you’re buying a Taylor Morrison property.

The biggest incentive being the special mortgage rate offers that are hard to beat, especially from an outside lender.

However, you should still take the time to comparison shop as you would any other lender.

While they might make things easier, and have better communication between builder and lender, their mixed reviews indicate some hiccups too.

Taylor Morrison Home Funding Pros and Cons

The Good Stuff

  • Can apply online via a digital mortgage application
  • Mostly paperless process with the latest technology
  • Plenty of loan programs to choose from including ARMs
  • Offer temporary and permanent buydowns
  • Can get a long mortgage rate lock
  • Big mortgage rate incentives on Taylor Morrison properties
  • Complimentary ARO service
  • Free mortgage calculator and mortgage glossary online

The Perhaps Not

  • Only offers home purchase loans
  • No refinance loans, USDA loans, or second mortgages
  • Do not list rates/fees online
  • Mixed customer reviews
  • Not licensed in all states
  • May not service your loan after funding

Source: thetruthaboutmortgage.com

Apache is functioning normally

About a week ago, Bank of America released details of its so-called “Mortgage to Lease” program, which as the name implies, allows homeowners to lease the homes they previously mortgaged.

So let’s take a closer look to see just what Bank of America is doing here.

First things first, this is a very limited pilot program, so don’t assume you can head down to Bank of America, fill out some paperwork, and then ditch your pesky mortgage but not your beloved house.

In fact, fewer than 1,000 customers will be “invited” to participate in the Mortgage to Lease program, meaning your chances of being selected are only slightly better than winning the Mega Millions jackpot.

Additionally, only homeowners in Arizona, Nevada, and New York are part of the pilot, so if that’s not you, you’re out of luck, at least for the moment.

Requirements for the Mortgage to Lease Program:

[checklist]

  • Mortgage is owned by Bank of America
  • Mortgage is 60 days + delinquent
  • All other loan modification solutions have been exhausted or ignored
  • Face high risk of foreclosure
  • Have no second mortgages
  • Still occupy the home
  • Have enough income to make affordable rent payments

[/checklist]

So while this looks like a lengthy list, it’s probably not all that uncommon. Well, the lack of second mortgages probably is, as most homeowners who are currently in trouble went with 100% financing. And most used second mortgages to get there.

But for those with one loan who still managed to find themselves underwater, or at least behind on mortgage payments, and couldn’t manage a short sale or deed-in-lieu of foreclosure, this program may be a winner.

That is, if you actually want to stay in the home that gave you so much heartache.

How the Mortgage to Lease Program Will Operate

Assuming you do, participants in the program will agree to transfer title of their home to Bank of America, and their outstanding principal will be forgiven. In other words, you won’t owe the bank anything for owing more than the mortgage is worth.

In exchange, you’ll have the opportunity to rent the house you currently reside in for up to three years, with rental payments set at or below the current market rental rate.

The rental payment will be less than the old mortgage payment, and the homeowner will be relieved of normal homeowner costs, such as homeowners insurance and property taxes.

Bank of America will have a property management company oversee the rental properties, and eventually the inventory of homes will be transitioned to investor ownership.

However, if all goes well, the investors can keep the tenants in the homes for as long as they see fit. And possibly even sell them back to the homeowners.

Will it Work?

Bank of America’s Mortgage to Lease program isn’t at all groundbreaking. In fact, Fannie Mae’s very similar Deed for Lease program has been around for more than two years.

Regardless, it seems like Bank of America’s new initiative is very limited in scope, and only targets customers who have made no effort to change their unfortunate situation.

If anything, it seems like a last gasp opportunity to avoid a foreclosure for BofA (and the losses that come with it), while the homeowner in question is probably just seeing how long they can hang on without making a payment (free rent).

My guess is a homeowner that hasn’t shown any interest in a loan mod or any other foreclosure alternative probably won’t be all that interested in this program, given the only upside is staying in a house they can’t afford, or aren’t willing to fight for.

Source: thetruthaboutmortgage.com