North Carolina is experiencing a boom these days, with record employment growth and an increasing population. If you live in the state, you already know there’s plenty to offer, including beautiful tourist attractions, breathtaking scenery, and a rich history that makes it unique.
But North Carolina also has plenty to offer when it comes to banks and credit unions. Whether you’re looking for an interest-bearing checking account or retirement accounts that offer the biggest bang for your buck, the best bank is the one that suits your needs.
15 Best Banks in North Carolina
If you’re on the hunt for a new bank or credit union, you’re in luck. North Carolina has a little of everything when it comes to bank accounts, from that small local bank with a focus on community service to large banks with branches in the state. This list of the best banks in North Carolina covers a variety of areas to ensure you find the best place to park your cash.
1. U.S. Bank
U.S. Bank offers customers the unique combination of local access with the extensive services of a nationwide bank. By opening a Bank Smartly® Checking account with U.S. Bank, clients can potentially earn up to $300. The qualification process involves two steps within the first 90 days of opening the account online:
Ensure at least two direct deposits totaling $6,000 or more
Register for online banking or download the U.S. Bank Mobile App
This promotional offer is subject to specific terms and restrictions and will remain valid until July 11, 2023. As a member of the FDIC, U.S. Bank ensures customer deposits are protected up to the FDIC’s established limits.
Fees:
$0 – $6.95
No-fee overdraft protection
Balance requirements:
$1,500 minimum balance or $1,000 direct deposit to qualify for free checking
$25 opening deposit
ATMs:
No ATM transaction fees at U.S. Bank ATMs
No surcharge fees at MoneyPass® Network ATMs
Interest rates:
Up to 4.50% APY on money market accounts
Up to 4.75% on fixed-rate CDs
Additional perks:
$300 bonus
Competitive rates on money market accounts & CDs
2. First Citizens Bank
Founded in North Carolina in 1898, First Citizens Bank has expanded over the years. You’ll find First Citizens Bank branches in 21 states, but the majority of its locations are in North Carolina and South Carolina.
If you frequently travel, though, check the service area. You’ll pay a $2.50 out-of-network ATM transaction fee if you can’t locate a First Citizens ATM while you’re away from home.
Fees:
No monthly fees
$10 overdraft fee
Balance requirements:
$50 minimum opening deposit
No minimum monthly balance
ATMs:
Fee-free at 500+ First Citizens Bank ATMs
$2.50 for out-of-network ATM transactions
Interest on balance:
0.03% APY on savings accounts
Up to 0.15% APY on CDs
Up to 0.15% APY on money market accounts
Additional perks:
Credit cards offer generous rewards
Robust mobile banking solutions
3. Chime
Chime is ideal for those who do most of their banking virtually. While you won’t find any brick-and-mortar locations, Chime does offer 24/7 phone support and access to cash through more than 60,000 ATMs nationwide. You can also deposit cash at more than 90,000 retail partners, including CVS and Walmart.
Fees:
No service fee
No overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 for each out-of-network ATM transaction
Interest on balance:
2.00% APY on savings account balances
Additional perks:
Access to direct deposits up to 2 days early
SpotMe covers up to $200 in overdrafts
4. CIT Bank
North Carolina residents interested in online banks should take a look at CIT Bank, which is based in Raleigh, North Carolina. This national bank recently merged with First Citizens Bank, which means CIT Bank customers can enjoy brick-and-mortar banking at any CIT location.
You’ll get everything you need to manage your money in CIT’s mobile banking app, as well as refunds of up to $30 in out-of-network ATM fees each month.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
$25 minimum deposit to open
No minimum daily balance required
ATMs:
No ATMs provided
Up to $30 in ATM fees reimbursed monthly
Interest on balance:
Up to 0.25% APY on checking
Up to 4.736% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.538% APY on money market accounts
Additional perks:
Competitive rates on business loans
Award-winning customer service
5. Coastal Federal Credit Union
Credit unions tend to offer perks you won’t find with banks, and Coastal Federal is no exception. You can qualify if you’re with one of the employers or associations approved for membership or if you live or work in one of the North Carolina cities CFCU services.
As with many credit unions, though, CFCU’s real value comes with its interest rates. Not only will you enjoy an interest checking account, but you can also find great rates on share certificates, which are the credit union version of CDs.
Fees:
No monthly service fees
$31 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at CFCU ATMs
Fee-free at CO-OP ATMs nationwide
$2 out-of-network ATM fee (waived for first five per month)
Interest on balance:
Up to 3.00% APY on savings account balances
Up to 5.00% APY on share certificates
Up to 3.50% APY on money market accounts
Additional perks:
Competitive rates on loans
Financial planning assistance available
6. GO2bank
Another online-only bank is GO2bank, which stands out for its cash accessibility. Not only can you withdraw cash, fee-free, at any Allpoint ATM, but you can deposit cash at more than 90,000 retailers nationwide.
All you need to waive monthly maintenance fees is at least one direct deposit monthly, either from an employer or the government. Those looking to build credit should check out the secured credit card, which you can get with no credit check. Pay your bill on time each month and GO2bank will report your activity to the three credit bureaus, helping you boost your score.
Fees:
$5 monthly fee (waived with requirements)
$15 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum daily balance required
ATMs:
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
4.50% APY on savings accounts
Additional perks:
Deposit cash at 90,000+ retailers nationwide
Secured credit card helps you build credit with no credit check required
7. Ally Bank
Ally Bank is an online and mobile banking option that puts a priority on budgeting and wealth building. The fee-free checking account comes with no minimum requirements and gives you access to more than 53,000 ATMs nationwide. But one of the best features of Ally Bank is its annual percentage yield on savings and CDs. You’ll earn 4.00% APY on savings and up to 5.00% APY on CDs.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
No minimum opening deposit
No minimum balance requirements
ATMs:
Fee-free at 53,000+ Allpoint ATMs nationwide
No out-of-network ATM fees
Up to $10 in ATM fee refunds monthly
Interest on balance:
Up to 0.25% APY on checking accounts
4.00% APY on savings accounts
Up to 5.00% APY on CDs
4.15% APY on money market accounts
Additional perks:
Spending buckets make it easy to save money
Robo Portfolios help automate investing
8. Chase
Like Bank of America, Chase Bank is one of the biggest banks in North Carolina, with more than 4,700 branches and 16,000 ATMs across the country. Currently, Chase is offering a $100 bonus for new checking account customers as long as you complete at least 10 qualifying transactions within the first 60 days.
Whether you go with Chase for your regular banking or not, though, take a look at Chase’s credit card offerings. Chase has multiple card options, with each offering perks like bonuses and cash back rewards.
Fees:
$12 monthly maintenance fee
$34 overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 16,000 Chase Bank ATMs nationwide
$3-$5 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 3.75% APY on CDs
Additional perks:
$100 bonus for new checking accounts
Multiple credit card options with bonuses and generous rewards
9. First Horizon Bank
First Horizon Bank is a regional bank with branches in 11 states across the Southeast, including a heavy presence in North Carolina. One standout feature of First Horizon is its money market rates, which currently go as high as 5.38%. You’ll find ATMs throughout the Southeast, but you can also use your debit card at any Allpoint ATM nationwide without a fee.
Fees:
No monthly service fee
$37 overdraft fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at more than 600 First Horizon ATMs
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 2.78% APY on savings accounts
0.10% APY on CDs
Up to 5.38% APY on money market account
Additional perks:
Business banking options available
Wealth management help available
10. Truist Bank
In 2019, BB&T and SunTrust Banks merged to become Truist Bank. Although Truist has a limited ATM footprint, the Truist One checking account makes it worth it. You’ll get a 10% loyalty bonus based on your monthly balance in addition to a 10% bonus if you choose a Truist credit card.
The interest rates also make Truist a suitable option, since you’ll earn 5.00% APY on 7-month CDs. To waive the $12 monthly service fee on your checking account, you’ll need at least $500 in direct deposit activity each month.
Other options include a combined daily balance of $500 across all your Truist accounts, a Truist credit card or qualifying loan, or a linked business checking account. Students 25 and younger also qualify for a fee-free checking account.
Fees:
$12 monthly service fee (waived with requirements)
No overdraft fees
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at Truist Bank ATMs
$1 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings accounts
Up to 5.00% APY on CDs
Additional perks:
Generous cash rewards with Truist Bank credit card
Checking balances earn rewards
11. Mechanics & Farmers Banks
You may know it as M&F Bank, but it actually started under the name of Mechanics & Farmers Bank in 1907. Throughout the 1900s, it was known as one of the most influential Black-owned businesses in the state of North Carolina. Today, M&F has locations throughout North Carolina and access to 44,000 ATMs nationwide, thanks to partnerships with Bank of America, JPMorgan Chase, and Wells Fargo.
Fees:
No service fee
$35 overdraft fee
Balance requirements:
$50 deposit to open
No minimum balance required
ATMs:
Fee-free at M&F Bank ATMs
Fee-free at Bank of America, JPMorgan Chase, and Wells Fargo ATMs
$3 for each out-of-network ATM transaction
Interest on balance:
Rates not publicly disclosed
Additional perks:
Rewards on debit card transactions
Robust business banking options
12. First National Bank
First National Bank has branches throughout North Carolina, as well as in DC, Maryland, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia. The free checking account is Freestyle Checking, but it does come with overdraft fees, and the exact fee amount isn’t disclosed until you sign up for an account.
You’ll also only get fee-free transactions at First National Bank ATMs, and they’re limited to the First National Bank service area.
Fees:
No monthly fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 1,500+ First National Bank ATMs
Interest on balance:
Up to 0.05% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.25% APY on money market account
Additional perks:
Cash and check deposit available at Smart Deposit ATMs
The site makes ordering banking products and scheduling branch appointments easy
13. PNC Bank
PNC Bank has branches in 29 states, including 107 branches in North Carolina. Currently, new customers are eligible for bonuses of up to $400. You’ll get a $50 bonus simply for opening a Virtual Wallet with a basic checking package, but that bonus bumps up to $200 if you add a Performance Spend checking account and $400 if you upgrade to a Performance Select account.
The PNC Bank basic account only requires $500 in monthly direct deposits or a combined $500 balance between accounts.
Fees:
$7 monthly fee (waived with requirements)
$36 overdraft fee
Balance requirements:
$25 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at PNC Bank ATMs
Fee-free at 60,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 0.03% APY on savings accounts
Up to 4.00% APY on CDs
Additional perks:
Up to $400 bonus for new virtual wallet customers
Financial planning tools built into the app
14. Fifth Third Bank
Fifth Third Bank focuses operations on the Midwest and Southeast U.S. regions, with 1,087 full-service locations in 11 states. You’ll find a variety of banking products, from savings and checking accounts to investment and retirement accounts. Fifth Third Bank offers competitive interest rates on CDs, with a 7-month CD currently offering 5.00% APY.
Fees:
No monthly maintenance fee
$37 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 2,100+ Fifth Third Bank ATMs
Fee-free at 40,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 5.00% APY on CDs
Additional perks:
Early Pay gives you access to direct deposit two days early
Grace period to resolve overdrafts
15. Bank of America
If you prefer what national banks have to offer, you can’t go wrong with Bank of America, which is one of the biggest banks in the country. You’ll find ATMs and branches across the country, as well as a wide variety of services. Although Bank of America does have competitive interest rates on CDs, the basic checking account comes with a $12 monthly fee and a $100 deposit to open.
Fees:
$12 monthly fee
$10 overdraft fee
Balance requirements:
$100 deposit to open
No minimum balance required
ATMs:
Fee-free at 15,000+ Bank of America ATMs nationwide
$5 for each out-of-network ATM transaction
Interest on balance:
Up to 0.04% APY on savings account balances
Up to 4.75% APY on CDs
Additional perks:
Generous bonus on new credit cards
Wealth planning services available
Our Methodology: How We Chose the Best Banks in North Carolina
North Carolina has a large selection of banks, some paying more in interest than the national average. In putting together this list, we kept in mind that each person has different criteria when choosing savings and checking accounts. Your choice of bank will largely depend on your own banking habits. If you tend to do all your banking online, a user-friendly app might be a top priority, while those who prefer the in-person experience might put nearby branches first.
Our top goal was to bring a variety of banking options to this list. We’ve combined local, regional, online, and national banks to help you choose. We also looked at fees and interest rates to help you protect and grow your earnings.
Frequently Asked Questions
You have questions, and we have answers. Here are some of the most frequently asked questions about banks in North Carolina.
What is the safest bank for your money?
Lately, financial security has been a top priority for account holders in search of a new bank. The top thing to look at is a bank’s Federal Deposit Insurance Corporation coverage. This insurance protects each deposit holder for up to $250,000 if a financial institution goes belly up.
Once you’ve verified a bank is FDIC insured, pay attention to any news of mergers or buyouts involving your bank. Selling can be a sign of financial distress.
See also: Safest Banks in the U.S. for 2023
What is the best bank in North Carolina?
That’s a tough question because the definition of “best bank” can vary from one person to another. If you think the best checking accounts come with an annual percentage yield and a mobile app to manage it all, you’ll be looking at different criteria from someone who wants a local bank with personalized customer service.
If you’re going for customer satisfaction ratings, J.D. Power gives high marks to both Capital One and Chase, which both have a heavy presence in North Carolina. But if you’re looking for that local banking experience, you can’t go wrong with First Citizens Bank or M&F Bank.
What is the best credit union in North Carolina?
There are several credit unions in North Carolina, but the one that impressed us most was Coastal Federal. CFCU’s fee-free checking and annual percentage yield on savings and share certificates makes it stand out. But it’s also important to take a look at the interest rates on personal loans and compare them to banks in the area to make sure you’re getting the best deal.
One issue with credit unions is that they tend to come with strict membership requirements. You may find you’re limited to only those that will accept your employer or city of residence, and those credit unions might not have financial accounts that meet your needs. However, there are also some credit unions that anyone can join.
Which bank has the most branches in North Carolina?
If you do most of your banking in North Carolina, you might not care if your debit card works at ATMs across the country. In that case, you’ll need a bank with plenty of branches and ATMs in the areas where you work and live.
When it comes to sheer branch numbers, take a look at Truist Bank and Wells Fargo. Both have a heavy branch presence throughout the state. For smaller banks, First Citizens and First Horizon both have substantial branch coverage in North Carolina.
However, you’ll also need to check your neighborhood. If you’re interested in that in-person bank experience, you’ll be disappointed if you have to drive a half hour or more to get to the closest branch.
What banks are in Charlotte, NC?
North Carolina isn’t just a thriving state filled with business opportunities. The state is a financial center in itself. Not only does Charlotte have smaller banks like M&F Bank and First Citizens Bank, but both Bank of America and Truist Bank are headquartered in North Carolina, as well.
This heavy financial presence has made North Carolina great for finding banking services. The many banks in the state are eager to win your business and offer competitive rates to ensure it happens. That means it’s more likely that checking accounts come with low fees and savings accounts earn top-dollar interest rates. When combined with the many online bank options, the biggest issue will be narrowing the list to just one.
From high-yield savings accounts to fee-free checking accounts, North Carolina has it all. Shopping around will help you choose from the best banks so that you can find the perfect banking partner for you.
If you’re wondering which mortgage company originated the most home loans last year, stop wondering and take a look.
Most people know Wells Fargo is king when it comes to mortgages, and 2015 was no different. But what about the other top 39 lenders?
Well, thanks to some great visualization software from Tableau and some generosity from Richey May and Co., we can see who the major (and slightly less major) players are.
The graphs below are based on Home Mortgage Disclosure Act (HMDA) data, which covers about 95% of all residential mortgages. The raw data was made readable thanks to the pair mentioned above.
Wells Fargo Remained Mortgage King in 2015
Unsurprisingly, San Francisco-based Wells Fargo retained its crown as the top residential mortgage originator in 2015, registering volume of $119.2 billion.
That gave it about 7.3% of the total market share in the United States. While it might not seem like a lot, its closest competitor had nearly half that share.
For the record, its market share has fallen for the past couple years, from 10.5% in 2013 to 7.8% in 2014.
Before we talk about the others, let me add that Wells’s production was 88% conventional and just 5% FHA. There was a sliver of USDA lending in there too.
As far as transaction type, 52% was for a home purchase and 48% was for a refinance.
Quicken Grabbed the Second Spot
Coming in a relatively close second was Quicken Loans, with $74.6 billion in total volume representing a 4.6% market share.
The nonbank mortgage lender saw its market share rise just slightly from a year earlier, but volume was way up from the $55.8 billion seen in 2014.
While conventional loans made up the lion’s share of its production (70%), FHA accounted for a decent chunk (19%) and VA home loans accounted for 11%.
After their very public lawsuit with the Department of Justice over alleged faulty FHA underwriting, my guess is FHA lending will be a lot lower in 2016.
More interestingly, 80% of their total production was refis, with just 20% of volume involving a home purchase. We’ll see if Rocket Mortgage can eventually propel them to the top.
Chase took the third position overall with $62.7 billion in total production, representing a 3.8% market share. That was up from $42.2 billion and 3.5% a year earlier, respectively.
The big New York City-based bank doesn’t seem to like FHA lending seeing that 98% of their production was conventional. It was split fairly evenly between refi (56%) and purchase (44%).
Bank of America came in fourth with $51.9 billion and 3.2% market share. Production was actually up from 2014 but market share still slipped slightly.
They too eschewed FHA, with 96% of production coming via the conventional route. Refis accounted for 59% of production with 41% purchases.
Rounding out the top five was Loan Depot, a nonbank that managed to grab about 1.6% of total market share on a healthy $25.8 billion in production.
The company exhibited a solid mix of lending, with 68% conventional, 18% FHA, 14% VA, and a bit of USDA as well.
They too had a heavy share of refis (67%) versus purchases (33%), which is common with the nonbanks.
People tend to get purchase mortgages from the big banks they already do business with, though it’s not always the case.
The lower half of the top 10 included the likes of US Bank, Flagstar, Citi, Freedom Mortgage, and Caliber Home Loans.
You can see the rest of the names in the graphic above.
Independent Mortgage Lenders Saw Gains in 2015
As you can see from this graph, independent mortgage lenders have been chalking gains over the past few years as the big boys lose market share.
The indie group saw its market share rise from 36% in 2013 to 45% last year. Part of that had to do with the rising number of independent mortgage companies. Perhaps they’ll surpass 50% in 2016.
Meanwhile, the large commercial banks saw their market share fall from 54% in 2013 to just 45% in 2015. The number of commercial banks has also dwindled, which could explain some of the decline.
Credit unions have held a fairly steady ~5% share for the past several years and mortgage companies owned or affiliated with a depository have held a similar share.
And now a few more interesting tidbits:
Top conventional mortgage lender in 2015: Wells Fargo Top FHA mortgage lender in 2015: Quicken Loans Top USDA mortgage lender in 2015: PrimeLending Top VA mortgage lender in 2015: Freedom Mortgage Top purchase mortgage lender in 2015: Wells Fargo Top refinance mortgage lender in 2015: Quicken Loans
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
Decision fatigue is a real thing for folks in the market for a new rewards credit card. If you’re tired of evaluating the ins and outs of credit card rewards programs, there’s no shame in settling for a simple, easy-to-understand alternative.
The SoFi Credit Card is just such an alternative. And it doesn’t require much in the way of settling. It earns a flat 2% cash back on most eligible purchases and 3% back on select travel purchases — plenty generous for a no-annual-fee credit card.
The SoFi Credit Card can’t be everything to everyone, of course. Before you apply, make sure it has all the features and benefits you expect from a rewards credit card.
What Is the SoFi Credit Card?
The SoFi Credit Card is a cash-back credit card with no annual fee. It earns 2% cash back on most eligible purchases and 3% cash back on eligible purchases through SoFi Travel, which uses Expedia’s booking engine.
The SoFi Credit Card is somewhat unusual in that it doesn’t require applicants to have a U.S.-based bank account to qualify. If you’re approved for the card and don’t have a bank account, you can make payments through the SoFi app. You don’t need to use any other SoFi products to qualify for the SoFi Credit Card.
The SoFi Credit Card has some benefits beyond its rewards program, including up to $1,000 in cell phone insurance and monthly credits against eligible Lyft purchases.
What Sets the SoFi Credit Card Apart?
The SoFi Credit Card stands out from comparable cash-back credit cards for a few reasons:
Up to 3% back on eligible travel purchases. You earn unlimited 3% cash back when you book travel through SoFi Travel, which uses Expedia’s travel booking platform. Travel purchases not booked through SoFi Travel earn unlimited 2% back.
Up to $1,000 in cell phone protection. This cell phone protection plan is more generous than most credit cards’, which top out at $600 to $800 per claim.
No bank account needed to qualify. You can qualify for this card without a bank account, though you still need the SoFi app to make payments.
No sign-up bonus. One notable drawback of the SoFi Credit Card is its lack of a sign-up bonus for new cardholders. This could change in the future, but it’s an issue as of now.
Key Features of the SoFi Credit Card
The SoFi Credit Card has a straightforward rewards program and some notable benefits beyond it. Take a few minutes to familiarize yourself with its features before moving ahead with your application.
Earning Rewards
Most eligible purchases earn unlimited 2% cash back. There’s just one exception: Travel purchases made through the SoFi Travel platform earn unlimited 3% cash back.
Redeeming Rewards
You can redeem your accumulated cash-back rewards for:
Cash deposited into a linked external bank account or a SoFi checking account
Investments (including stocks and exchange-traded funds) purchased through SoFi’s investing platform
Payments on eligible SoFi loans
Statement credits against prior SoFi Credit Card purchases
Redemptions for cash, investments, and loan payments are worth $0.01 per cash-back point. Statement credit redemptions are worth only $0.005 per point, so they’re best avoided.
Cell Phone Protection
This card comes with a complimentary cell phone protection plan that reimburses you up to $1,000 per claim. A deductible and annual claim limits may apply.
Other Benefits
This card comes with some other potentially valuable benefits, including:
Up to $5 in monthly credits against eligible Lyft purchases
A complimentary annual membership to Shoprunner, which offers free two-day shipping on eligible online purchases
A complimentary three-month subscription to DoorDash DashPass, which offers a $0 delivery fee on qualifying orders and other perks
Important Fees
The SoFi Credit Card has no annual fee or foreign transaction fee. Other fees may apply, including for balance transfers and cash advance transactions.
Credit Required
This card requires good to excellent credit. You’re unlikely to qualify with a credit score significantly below 700 on the FICO scale.
Pros & Cons
These are the most notable upsides and downsides of the SoFi Credit Card.
No annual fee
Up to 3% cash back on eligible purchases
Up to $1,000 in cell phone protection per claim
No external bank account needed to qualify
No sign-up bonus
No 0% intro APR offer
Few benefits beyond the rewards program
Pros
The SoFi Credit Card is a low-cost, relatively high-reward credit card with some potentially valuable benefits.
No annual fee. This card has no annual fee. You won’t pay anything out of pocket to keep it active, even if you rarely use it.
2% cash back on most eligible purchases. This card earns a flat, unlimited 2% back on most eligible purchases. That makes it an above-average credit card for everyday spending.
Up to 3% back on select travel purchases. You earn 3% cash back when you book travel through SoFi Travel, an online travel portal powered by Expedia. There’s no limit to how much you can earn on eligible purchases.
Unusually generous cell phone protection. This card’s cell phone protection plan covers more than the average credit card’s. It tops out at $1,000 per claim, against $600 to $800 elsewhere.
Credits against Lyft purchases and other potentially valuable perks. You get $5 off Lyft purchases each month, plus a free annual membership to Shoprunner, which could save you a bunch on shipping if you buy a lot online from participating merchants. The three-month complimentary DoorDash DashPass benefit is appealing if you regularly order delivery.
No foreign transaction fee. This card has no foreign transaction fee, so it’s useful if and when you travel abroad or make purchases with overseas merchants.
No bank account needed to qualify. You don’t need a bank account to qualify for the SoFi Credit Card. You can make payments through the SoFi app instead.
Cons
The SoFi Credit Card lacks the more generous features common to top cash-back and travel rewards credit cards.
No way to earn more than 3% cash back. There’s no way to earn cash back at a rate higher than 3% with this card. Some competing cash-back cards offer 5%, 8%, even 10% cash-back tiers.
No sign-up bonus. The SoFi Credit Card has no sign-up bonus. This is a notable drawback for new cardholders eager to start earning rewards.
No 0% intro APR offer. Unlike many competing credit cards, the SoFi Credit Card has no introductory interest-free period. This is a drawback if you need to pay down high-interest balances accrued on another card or you’re planning to make a big purchase that you’d rather not pay off all at once.
Limited travel perks. The SoFi Credit Card has little in the way of travel perks, such as discounts or rewards at participating hotels and airport lounge access.
How the SoFi Credit Card Stacks Up
The SoFi Credit Card is similar to numerous other cash-back credit cards that earn 2% back on most or all eligible purchases. Before you apply, see how it compares against another popular option: the Wells Fargo Active Cash Card.
SoFi Credit Card
Wells Fargo Active Cash
Sign-Up Bonus
No
Yes
2% Cash Back
Eligible purchases except SoFi Travel
All eligible purchases
3% Cash Back
SoFi Travel purchases
None
Annual Fee
$0
$0
0% Intro APR
No
Yes, 15 months on purchases and balance transfers
The SoFi Credit Card is the clear winner if you travel regularly thanks to its 3% cash-back rate on SoFi Travel purchases. But Wells Fargo Active Cash is a better choice if you’re seeking a sign-up bonus or 0% intro APR offer as a new cardholder.
Final Word
The SoFi Credit Card is a straightforward cash-back credit card that’s easy even for credit card novices to understand and use effectively. And that’s a good thing if you’re tired of comparing the minutiae of credit card rewards programs — or don’t want to start doing that in the first place.
Then again, the SoFi Credit Card has some important missing elements. It has no sign-up bonus or 0% intro APR offer, and it lacks some of its peers’ more generous travel perks. It’s not a bad card by any means, but you can do better if you’re willing to shop around.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
SoFi Credit Card
The SoFi Credit Card is a straightforward cash-back card that earns 2% back on most purchases and 3% back on eligible travel purchases. With no annual fee and potentially valuable perks beyond its rewards program, it easily pays for itself. But the missing sign-up bonus and 0% intro APR offer lessen its appeal.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Today, we’ll dig into the details over at Wyndham Capital Mortgage, or WCM for short, which promises no hidden lender fees and competitive, below market mortgage rates.
What’s not to like about that, especially since they bundle certain third-party services to potentially save you thousands in closing costs.
They say their preferred settlement agents can offer better rates than the competition on things like title insurance, which can often be quite expensive.
On top of all that, Wyndham offer a digital mortgage experience for those who prefer to talk less and type more. Read on for additional details.
Wyndham Capital Mortgage Fast Facts
Direct-to-consumer retail mortgage lender
Founded in 2001 by current CEO Jeff Douglas
Headquartered in Charlotte, North Carolina
Licensed to lend in 46 states and D.C.
Funded over $18 billion and served 60,000+ customers since inception
Offer home purchase loans and mortgage refinance loans
Acquired by SoFi in April 2023
Wyndham Capital Mortgage was founded around the turn of the 21st century by its current CEO Jeff Douglas.
The company is headquartered in Charlotte, North Carolina where they also happen to do the most mortgage lending.
Last year, Wyndham Capital did about 12% of its total loan volume in NC, with almost the same amount of volume across the U.S. in California.
Overall, they originated more than $2 billion in home loans, with a near equal proportion of home purchase loans, rate and term refis, and cash out refis.
They appear to be licensed in 46 states and the District of Columbia, with Alaska, Hawaii, Massachusetts, and New York the exceptions.
In April 2023, Wyndham Capital Mortgage was acquired by SoFi.
How to Apply with Wyndham Capital Mortgage
They say it’s so easy you can start and finish your home loan all by yourself
Offer a digital mortgage application powered by fintech company Blend
Allows you to link financial accounts, scan/upload paperwork, eSign documents, and close virtually
You get 24/7 access to your loan status and a dedicated loan team if you have questions along the way
One thing I like about Wyndham Capital Mortgage is the ability to apply for a home loan directly from their website.
You don’t need to search a loan officer directory (although they have one) or wait for someone to call you back after completing an obligatory rate quote request.
Instead, simply cruise over to their website and click on “Apply Now” and you can begin filling out their digital mortgage application powered by Blend.
Lots of mortgage lenders use Blend’s technology, which allows prospective borrowers to complete a home loan application from anywhere on all types of different devices.
Wyndham Capital Mortgage also takes part in Fannie Mae’s Day 1 Certainty, which makes applying for a mortgage even easier and potentially a lot faster too.
This includes things like home appraisal waivers, and automated income, asset, and employment verification thanks to AccountChek by FormFree.
You may even be able to schedule a virtual closing as opposed to having to go anywhere or interacting with someone face-to-face.
Basically, their goal is to make it as quick and painless as possible to obtain a home loan, leveraging the latest technologies available.
Once your loan is approved, you can check status at any time via the loan portal and get in touch with your loan team if you have any questions.
Wyndham Capital Mortgage Loan Programs
Home purchase financing
Mortgage refinances: Rate and term, cash out, and streamline
Conventional home loans backed by Fannie Mae and Freddie Mac
Government home loans: FHA loans and VA loans
Fixed-rate and adjustable-rate mortgages in various loan terms
One of their claims to fame is that they offer the “widest array of products and programs” in the industry, so my assumption is you shouldn’t have an issue getting whatever it is you need mortgage-wise.
However, they don’t appear to offer USDA loans, and it’s unclear if they offer renovation loans such as the FHA 203k or Fannie Mae HomeStyle.
But they seem to have all the other, more common stuff, including home purchase financing and all types of refinance loans.
Those purchasing a home can take advantage of their “Priority Purchase Program,” which is an actual underwritten mortgage pre-approval that works similar to a cash offer.
And once you’ve got it, you can generate real-time pre-approval letters for specific properties you’d like to make an offer on.
This shows home sellers and their real estate agents that you mean business, and more importantly, that you actually qualify for a mortgage.
If you’re an existing homeowner looking to refinance, you can take advantage of their low rates by way of rate and term refinance, or tap equity via a cash out refinance.
They also offer streamline refinances for those looking to lower monthly payments, without all the usual hoops to jump through.
In terms of specific loan types, you can get a fixed-rate mortgage in a 15-, 20-, or 30-year term, or an adjustable-rate mortgage in a 5-, 7-, or 10-year term.
Wyndham Capital Mortgage Rates
You can see Wyndham Capital Mortgage rates on their website if you click on “Compare Rates,” which is a nice touch.
They allow you to toggle between conventional rates, FHA rates, and VA rates, with 30-year fixed and 15-year fixed options.
Wyndham also shows you the rates of select competitors, such as Bank of America, Chase, loanDepot, Quicken Loans, Wells Fargo, and others.
As you might expect, their listed rate is the lowest relative to those other lenders, at least on the day I checked them.
What’s more, they list their rates with $0 lender fees, so the APR you see listed is basically the interest rate.
Wyndham Capital Mortgage $10,000 On-Time Closing Guarantee
Those who are purchasing a home can take advantage of their $10,000 On-Time Closing Guarantee, assuming certain conditions are met.
That works out to up to $5,000 for you and $5,000 for the home seller if Wyndham Capital Mortgage is unable to fund the loan by your closing date.
In order to qualify, you must use the Priority Purchase Program along with their digital loan portal, and meet various timelines along the way.
Additionally, you must select Wyndham’s preferred settlement service provider to guarantee title is clear to close by your closing date
If you select a non-preferred settlement agent, it’s still possible to qualify for a $5,000 closing guarantee.
In any event, they seem to believe their “speed team” will be able to meet your closing date. So if anything, it’s added peace of mind and a boost of confidence that they can gets things done quickly.
Wyndham Capital Mortgage Reviews
On Zillow, they have a 4.81-star rating out of 5 based on more than 1,000 customer reviews, which is an excellent score. A lot of the recent reviews said the interest rate was lower than expected.
Over at LendingTree, they’ve got a 4.8-star rating out of 5 from almost 7,000 reviews, which is quite a statement in terms of customer satisfaction. And 99% of customers would recommend them.
They also have a 4.8-star rating out of 5 on Google based on over 1,500 reviews, so it appears they’re consistently making folks happy.
Wyndham Capital Mortgage is Better Business Bureau (BBB) accredited, and has been since 2002. They currently have an ‘A-‘ rating based on customer complaint history.
Somewhat amazingly, they also have a 4.97-star rating out of 5 on the BBB website, which is surprising given customer reviews on the BBB website are typically very negative.
In summary, the combination of low mortgage rates, no lender fees, and a tech-backed mortgage loan process seem to be driving high levels of customer satisfaction.
Wyndham Capital Mortgage Pros and Cons
The Pros
They appear to offer low mortgage rates
You can get a mortgage with no lender fees
They don’t charge origination fees
Offer a digital mortgage application powered by Blend
Can apply directly from their website without human interaction
Excellent customer reviews
BBB accredited since 2002 (currently hold ‘A-‘ rating)
$10,000 On-Time Closing Guarantee
Free mortgage calculators and mortgage glossary on site
Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
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Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
By: Rob Chrisman
8 Hours, 39 Min ago
A “crisis” is a time of intense difficulty, trouble, or danger. Think calamity, catastrophe, or disaster. The word makes for attention-grabbing headlines, and a scan through the news shows a mental health crisis, child care crisis, migrant crisis, China property crisis, a climate change crisis, an opioid crisis, a housing crisis… Eventually people become immune to seeing the word, and it loses its effectiveness, especially when nothing pans out from the “crisis.” I mention this because, despite a lot of predictions to the contrary, the banking “crisis” from March seems to have been contained to a few well-known banks. (Let’s hope so.) The Federal Reserve Board, released its results of annual bank stress test, which demonstrates that “large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession.” Of course, not every bank is large, and Ken Sonner telexed over the “The 100 Largest U.S. Banks by Consolidated Assets” which is of interest to anyone who has money in a bank or has a bank for a client. Yes, Chase now equals Wells Fargo plus Citi. (Today’s podcast can be found here and is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Through its top-rated Broker Program, Visio brokers can earn up to 5 percent. Hear an interview with Optimal Blue’s Erin Wester on both Product and Pricing Engines (PPE) and how pricing in the secondary market flows into the primary market.)
Lender and Broker Services, Products, and Software
In 2021, Procter & Gamble won the title of largest advertiser in the world, spending a jaw-dropping $8.1 billion on ads. While the company’s monumental ad budget is impressive, enterprising individuals who find creative ways to succeed with limited resources are doubly inspiring. Mortgage brokers are a perfect example of these types, as the majority of these lone wolves have to juggle customer service, relationship management, marketing, processing, compliance and more. To help brokers run their one-person show more effectively, Surefire by Black Knight has compiled an eBook detailing the marketing strategies and tools needed to succeed in a high-cost market. Download A Mortgage Broker’s Comprehensive Guide to Mortgage Marketing now for free.
“Learn About Current QC Trends and Industry Insights in Our Latest Webinar! With upcoming QC requirements on the horizon, now is the time to familiarize yourself with how they will impact your business. In our highly anticipated webinar, you will hear from ACES Quality Management’s President, Phillip McCall and EVP, Nick Volpe on an analysis of recent Mortgage QC Industry Trends Report, a deep dive into mortgage quality control trend reporting and how it aligns with the current state of the industry, and industry insights and how to best navigate through the volatile financial landscape. Walk away with a better understanding of what’s to come and how you can best prepare for the future. Watch Now.
“Experience unrivaled mortgage lending expertise for your next audit. At Richey May, we don’t just hire from the mortgage industry, we have the top experts who build it. We have defined what it means to be a mortgage expert for almost 40 years and are proud of our team members like Jennifer Hannah, CPA, AMP, who leads our Mortgage Banking Audit practice. As leaders in the mortgage lending industry, we provide extensive education for our clients while forging genuine relationships, communicating effectively, and resolving issues before they become problems. Our team’s extensive knowledge in mortgage technical accounting and audit acumen ensures top-quality service delivery. Guided by strong values, we strive to significantly impact our clients’ success. Reach out or visit our website to learn more about how we can help your audit drive growth, not just check a box.”
Products and Tools for Loan Production
Interest rates may tick up again next month, with experts predicting that mortgage rates will remain around mid-6 percent in the near term, but buyers are still out there. The loan officers with the right tools in place will be the ones to secure their business. With Percy’s homeownership engagement solutions, you can maintain connection with customers even after they’ve closed on a home. Percy’s captivating Equity Insights offer details on a home’s value and show how this value can be leveraged to fund home improvement projects or finance the next move. Need to work more with agents? Percy has 250,000 agents waiting to work with you. With Percy in place, our clients are reaping an average 400 percent ROI… and you can too. Learn more here about how you can use Percy to gain a competitive edge.
“In California, Golden State Finance Authority (GSFA) celebrates 30 years paving a path to homeownership for low-and-moderate income California households, having helped over 85,000 individuals and families to purchase a home and provided more than $660 million in down payment and closing cost assistance. Join us this June and July as we showcase our beginning, our mission, and the many achievements of the past three decades. ‘Golden State Finance Authority, Where Affordability Meets Flexibility®.’ Join our lending team! Start helping more homebuyers in California to Achieve the Dream. Visit www.gsfahome.org and follow us on Facebook, LinkedIn or our YouTube channel.”
“Did you know that OptifiNow provides wholesale Account Executives with an amazing tool that can double their funding volume? OptifiNow TPO is a CRM that expertly manages your wholesale lending sales team, but our Loan Scenario Ticketing Module is an absolute game changer. This module integrates with many popular Product and Pricing Engines (PPE) to enable your AEs to provide instant quotes to broker loan scenarios. OptifiNow automatically emails loan scenario quotes to brokers and follows up with them using a sequence of emails or SMS messages designed to ensure consistent engagement. Every Loan Scenario Ticket is tracked, so you know how frequently brokers are engaging with your AE, the types of products they are interested in and the pricing that was available at that time. AEs using OptifiNow’s Loan Scenario Ticketing module have been shown to double their monthly fundings. Interested? Contact OptifiNow for more information.”
The Fabled “Cost of Hedge”
Home lending is one of the few industries where the customer can lock in a future rate & price. Put another way, if you went to the local gas station, or grocery store, and told them you wanted to pay now for a gallon of petroleum or milk two months from now, you’d be stared at in disbelief. But the futures market is alive and well with companies and individuals locking in prices now for things like bacon, orange juice, wheat, gold, and corn in the future, hedging any impact of prices on their profits. There is a cost, usually the bid/ask price spread, the drop in price from one month to the next, and commissions paid in actually trading the contracts.
I periodically receive questions about the “cost to hedge” for mortgage bankers with locked pipelines. It is not an easy question to answer, like the cost of unleaded gas down at the corner. Hedging is a loan level activity where each loan’s program, interest rate, lock period, etc., is analyzed. It is tricky because company policies like extensions and renegotiations enter into it. Specifically, extensions and renegotiations increase it, and while the production team is helped, the capital markets department usually incurs the expense. And the price drop in the securities market often changes during the lock period. And then there’s always the “what is the cost of a loan that falls out?”
Capital markets vet James Hedvall recently weighed in. “Manufacturing loans faster, and bringing loans to market quicker, reduces a lender’s interest rate exposure to some degree. Thus, the reason bond loans can be an issue for some lenders. Unfortunately, I think many hedge vendors look at the problem 2-demonsionally, when it’s a 3-D issue. The problem isn’t necessarily all “speed-to-originate,” but rather “hedge model efficiency.” What assumptions are being made about the duration/beta of the hedge instrument, and pull through, broken down by product groups and cross referencing at what stage in the loan life cycle loans have fallen out in the past. Volatility in the To Be Announced (TBA) markets will kill a lender’s gain on sale. Lenders can be profitable in a rising rate environment, and profitable in a falling rate environment, but sudden swings in the bond market, and therefore interest rates, will kill you every time and all models break down.
“The cost to hedge is constantly changing. Viewed in a vacuum, I can say right now our hedge cost is around $X per loan, while the market is behaving rationally and my pull through acts as it has historically. This is also assuming I’m sending loans to market at the right time, I’m using broker/dealers that aren’t trying to pick off an additional +, and all the while having a stable ‘best efforts to mandatory’ spread. Ask me in six months how much my hedge is running and I’ll no doubt have a different answer. I believe that the real value of originating the loan quicker is a reduction in your finance fees from your warehouse bank, and not necessarily on your hedge side.” Thank you, James.
Capital Markets
Are long onboarding processes stopping you from making a switch? In a recent case study, NBH Bank describes their process getting started with MCT and how they were able to get mortgage pipeline hedging and best execution loan sales up and running in just ten days. “MCT exceeded our expectations for this onboarding process,” said Ajay Timothy, Vice President and Director of Secondary and Capital Markets at NBH Bank. “We were in a compromised position with our previous hedge provider and needed to get this done quickly…we got this done in about 10 days.” NBH Bank relied on MCT to come together with multiple teams to support them in a safe, effective way outside of normal processing times to ensure there were no gaps in their hedge coverage. Download the case study to learn how MCT is innovating the onboarding experience for clients.
Rate-wise, the main economic headline yesterday was Fed Chairman Powell’s remarks at an ECB event in Portugal, where he said that core U.S. inflation won’t hit 2 percent until 2025. He also said that there is significant disinflation in the pipeline, but that the dot plot is projecting another couple rate hikes. On a separate note, as noted in the opening paragraph, the Federal Reserve released the results of its annual stress test of banks and Wall Street’s biggest banks passed, clearing a key hurdle for returning billions of dollars to investors. The 23 largest U.S. lenders showed they can withstand a severe global recession and turmoil in real estate markets.
Fed Chair Powell once again spoke in Europe before the open to kick off today’s economic calendar. Besides Chair Powell, Atlanta’s Bostic is scheduled to speak and Sweden’s Riksbank will also be out with its latest monetary policy decision where a 25-basis points hike is expected. We’ve also received the final look at Q1 GDP (+4.1 percent) and weekly jobless claims (down to 239k, down 26k, very strong; continuing claims 1.742 million). The core PCE (personal consumption) deflator came in at +4.2. Later this morning brings the Pending Home Sales Index for May, Freddie Mac’s Primary Mortgage Markets Survey. We begin the day with Agency MBS prices worse .250-.375 and the 10-year yielding 3.79 after closing yesterday at 3.71 percent; the 2-year is up to 4.84, up .13 on the news.
Jobs
“PrimeLending LOs “tell all” at our first ever Loan Officer Roundtable! Join us for a live webinar on July 11th at 1:00 PM Eastern, where you’ll gain invaluable insights from our top mortgage loan originators. You can learn firsthand why PrimeLending could be your next best professional move. Hear personal stories, explore our work culture, and get answers to your burning questions about a career at PrimeLending. This exclusive (and anonymous) event is designed for loan officers like you, seeking a career boost. Contact Nic Hartke today to secure your spot at this one-of-a-kind opportunity to get the inside scoop from your peers. What are you waiting for?”
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Servicing, Lead Source, AI, MERS Review Products; Cybersecurity News; STRATMOR on Artificial Intelligence
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Servicing, Lead Source, AI, MERS Review Products; Cybersecurity News; STRATMOR on Artificial Intelligence
By: Rob Chrisman
8 Hours, 47 Min ago
As the U.S. faces nationwide flight delays, one must ask if there are processes in place for the FAA to deal with them. “Trust the process” is a common thing to hear, but attorney Brian Levy reminds us of why process is important in the actions of government in light of the FHFA’s rescinded DTI pricing. The CFPB knows a thing or two about the process, and the Consumer Financial Protection Bureau issued an order against Nebraska’s ACI Worldwide and one of its subsidiaries, ACI Payments, for improperly initiating approximately $2.3 billion in unlawful mortgage payment transactions. ACI’s data handling practices negatively impacted nearly 500,000 homeowners with mortgages serviced by Mr. Cooper (formerly known as Nationstar). “By unlawfully processing erroneous and unauthorized transactions, ACI opened homeowners to overdraft and insufficient funds fees from their financial institutions. Today’s order requires ACI, among other things, to pay a $25 million civil money penalty.” (Today’s podcast can be found here and is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Through its top-rated Broker Program, Visio brokers can earn up to 5 percent. Hear an interview with Visio Lending’s Jeff Ball on all things rental lending and debt service coverage ratio – DSCR – lending.)
Lender and Broker Services, Products, and Software
“Need a third-party reviewer for your 2023 MERS® Annual Report? Look no further than Falcon Capital Advisors. Only our review team consists of former members of the MERS legal, operations, membership, and compliance departments, who have first-hand experience developing, reviewing, and enforcing the requirements of the Annual Report. The MERS® Annual Report is not due until 12/31, but the submission window has already opened. Don’t delay. Contact Tim Renner today to learn more about how Falcon can put our unmatched experience and expertise to work for you. Discounted pricing available to those who sign up by September 1.”
Hey there, mortgage industry movers and shakers! Let’s talk tech, baby! Technology has been revolutionizing the mortgage industry, from LOS systems and underwriting systems to cloud-based credit reports. But wait, there’s more! Artificial Intelligence (AI) is on the horizon, and we’re here to explore how it’s going to shake things up. Love it or hate it, understanding its potential is crucial to staying relevant in the industry. Our free eBook is your ticket to discovering how AI can take your customer experience to the next level, boost productivity, slash costs, keep you compliant, streamline workflows, and give you a crystal ball into your borrowers’ future. Don’t miss out! Download Artificial Intelligence: 7 Ways AI is Transforming the Mortgage Industry today. Follow Birchwood Credit Services to gain access to a plethora of industry-related news and informative content that will aid you in closing more loans at lightning speed!
Own Up is the nation’s only mortgage concierge marketplace enabling mortgage companies, banks, credit unions and brokers to access exclusive, high intent and highly qualified borrowers. A recipient of numerous accolades, including Fintech Breakthrough’s “Best Digital Mortgage Platform,” Own Up is currently onboarding select lenders to further its national expansion. Own Up seamlessly integrates into all major lender CRMs, lead management systems and pricing engines. Lenders interested in acquiring qualified leads with industry-leading conversion should reach out to [email protected] to learn more.
Servicing Products and Tools
It’s time for a quick riddle! Every company wants this, but few achieve it. And when you have it, it speaks for itself. The answer? CREDIBILITY. Mortgage servicers of all sizes trust their portfolios to MSP®, Black Knight’s loan servicing system – and for good reason. MSP has consistently set the industry standard for delivering best-in-class functionality and fully integrated solutions that support every servicer’s unique needs. No need to take our word for it, though, just check out what MSP clients are saying. Credibility speaks for itself. If you want to learn more about the proven system capabilities to transform your servicing operations, contact our team today.
Top mortgage subservicer PHH is asking “what if?” What if you could reduce your servicing complaints by 75%? What if you could save more than $1 million per year just by switching subservicers? What if your subservicer could help reduce defaults and increase recapture? What if your customers loved your servicing technology, including mobile apps, videos, and online chat capability? No other servicer has been more highly decorated for servicing excellence over the past two years than PHH with top awards from Fannie Mae STARTM and Freddie Mac SHARPSM. Clients like Curtis Dair, CFO of Sierra Pacific Mortgage Company, said “PHH has shown an unwavering commitment to providing the highest levels of customer service.” In 90-120 days, PHH can help you make the jump to the next generation of subservicing: cost savings, customer-centric tech, and award-winning service. Find out how to join the PHH Mortgage family, starting with a call or email to Chris Sabbe at 415-828-1222.
Prepare to act on your servicing portfolio when delinquencies increase! Do you have the right team in place to help manage your servicing portfolio when borrowers become delinquent? When it comes to mortgage delinquencies, getting in front of distressed borrowers is important. Velocity Servicing™, a LoanCare® division focused on specialty servicing and investor ROI, can provide you with critical and specialized support for your distressed loan portfolio. Within 12 months, Velocity achieved a 36% lift in loan resolution compared with traditional servicing models for their specialty servicing clients. We accomplish return on investment earlier through an intelligent network of triggers, exceptions, and loan-level conditions to keep your most distressed customers’ loans on their pathway to performance. Velocity’s team prioritizes maximizing opportunities to return your distressed loans to performing portfolios faster by using an award-winning data analytics platform to drive payment success. Click to learn more or call today: 646-361-6808.
STRATMOR on Artificial Intelligence
Let’s face it: AI is part of our industry’s future, and we’d all like to have insight into its potential impact. In the June issue of STRATMOR Group’s Insights Report, STRATMOR experts including Senior Partner Garth Graham, Senior Advisor Brett McCracken and Principals Jennifer Fortier, Jennifer Smith and Kris van Beever answer questions about artificial intelligence and its future in our industry. For the AI perspective, STRATMOR went to ChatGPT, the current poster child for AI, and asked it the same questions posed to STRATMOR’s team. On some questions STRATMOR and ChatGPT agree; on others, the experts with decades of mortgage experience show why AI isn’t the be all, end all answer. Read, “The Rise of AI: STRATMOR Experts and ChatGPT on Artificial Intelligence in the Mortgage Industry,” for a glimpse into what may be a best-case scenario for how we share the future with these powerful new technologies in the June Insights Report.
Cybersecurity and Protection
Kris Van Beever with STRATMOR observes, “Everyone needs to be ultra-diligent in watching out for fraudulent texts and emails. With the availability of highly functional AI, perpetrators of fraud are now able to leverage this new tech to eliminate many of the things that used to give them away. All employees should be trained in looking for misspellings, poor grammar, and otherwise inappropriate tone. ChatGPT and similar tools now eliminate all the obvious telltale signs of fraudulent messages. They can even mimic the style and tone of humans with references that are near impossible for us to decipher. We may be heading into an electronic world where we have to use complicated multi-factor authentication for all interactions. I am not claiming the sky is falling… It has fallen.”
Along these lines, FundingShield announced a partnership with Mastercard. “As payment related fraud spikes, we are addressing the cybersecurity-based challenges with solutions that deepen our ability to serve the mortgage and real estate sector but provide industry agnostic payment verification tools. FundingShield entered a partnership with Mastercard to leverage its open banking platform delivered by Finicity, a Mastercard company. FundingShield provides live, source data-based technology products and SaaS solutions that have been used to secure the funds of over $2.5 trillion in mortgage closings.”
FundingShield CEO Ike Suri shared, “FundingShield has over 95% coverage of licensed service providers in the real estate, mortgage, closing and settlement space in our live repository. This partnership with Mastercard allows us to leverage its open banking connectivity of over 95% of U.S. based deposit accounts for consumer-permissioned access to real-time, bank-sourced data to expand our B2B and B2B2C payment verification solutions for clients.”
“FundingShield’s solutions manage risk for B2B and B2B2C firms facing a surge of cybersecurity threats like hacking and fraud. FundingShield’s payment verification solutions support bank account ownership that is confirmed with consumer-permissioned data from the banking institution where the account is held, using Mastercard’s open banking platform. This source data is then used to help approve payments ahead of a FundingShield client initiating a wire, ACH, or other payment method from the customer’s banking institution.”
Capital Markets
Economies have so far proved more resilient to rate hikes than most had expected, with the Fed’s benchmark rate now north of 5%. There are several explanations for the phenomenon, ranging from pandemic-era forces and tight labor markets to wage gains and consumer spending. It also takes time for higher rates to filter through the economy, with many economists still anticipating a recession over the next six to 18 months if central banks extend their hiking cycles. The yield curve between the 2-Year Treasury (US2Y) and 10-Year (US10Y) has even widened by more than 100 basis points, marking the greatest disparity between the two instruments since late 1981. But…
Looking forward, expectations stubbornly call for a recession starting in a few months, but various economic data are telling a far different story. Stronger than expected durable goods orders data and an above-consensus and highest year-to-date Consumer Confidence report for June released yesterday morning helped harden sentiment that the Fed will remain hawkish, with rates subsequently rising as a result. It was a busy day for data, most of which depicted continued strength and resilience in several corners of the U.S. economy, including the May New Home Sales report that came in at 763k, easily beating 665k estimates. That was the fastest annual rate of new home purchases in more than a year, and up 15.5 percent compared to May of last year. Markets also responded to the day’s $43 billion 5-year note auction, which met weaker demand than Monday’s stellar 2-year note sale.
The May New Home Sales figures are consistent with the recent firming in home price growth and homebuilder optimism over the past few months. Steady buyer demand and low existing home supply continue to bolster the new home market across all regions. May saw the second largest increase on record for sales of new homes that have not yet been started, which surged to an annual rate of 195k, the highest level since January 2022. Also aiding homebuyers is stalling home price growth: the Case-Shiller Home Price Index reported an annual overall decrease of 0.2 percent in April. The median new home price fell 7.6 percent on a year-over-year basis to just over $416k. The average sales price fell 6.6 percent to $487k. Separately, FHFA reported that home prices rose 0.7 percent month-over-month in April and 3.1 percent on a year-over-year basis, though there were declines in the West and the Mountain states.
On the central bank front, ECB President Christine Lagarde indicated yesterday that the European Central Bank will likely hike rates in July and that additional rate hikes may be required to thwart inflation. That largely echoes the Fed’s message that rates are likely to remain elevated throughout 2024. However, there have been some Fed members that think the Fed should stand pat, such as Atlanta Fed President Raphael Bostic. “My baseline is that we should stay at this level for the rest of the year (to assess the impacts of the Federal Reserve’s rate-hiking cycle on the real economy),” he said. Market participants are slowly capitulating to the Fed’s “higher rates for longer” theme, as pricing in fed funds futures have largely priced in another 25-basis points rate hike at the upcoming July FOMC meeting. That said, markets continue to price in a nearly one-in-three chance that the Fed pulls an about-face and cuts rates by a quarter percentage point by December.
Mortgage applications from MBA kicked off today’s economic calendar, increasing 3.0 percent from one week earlier. The week’s results included an adjustment for the Juneteenth holiday. We’ve also received Advanced indicators for May with the goods trade deficit (down to $91.1 billion which could add to GDP), wholesale inventories (+.8 percent), and retail inventories (+.8 percent, strong). Later today brings remarks from Fed Chair Powell in Portugal and Treasury auctions of $22 billion reopened 2-year FRNs and $35 billion 7-year notes. We begin the day with Agency MBS prices a few ticks (32nds) better, the 10-year yielding 3.73 after closing yesterday at 3.77 percent, and the 2-year’s at 4.74.
Employment and Transitions
“Homestead Funding’s commitment to community service is evident through the involvement of our Loan Originators in various volunteer activities. By living in the same areas they serve, our LOs are deeply connected to their communities and actively contribute to their betterment. Debb, for instance, selflessly volunteers her time as a driver for Disabled American Veterans, supporting veterans in need. Joel’s annual golf game raises funds for the local Boys & Girls Club, showcasing his commitment to empowering youth. Phil’s involvement in National EMT Day demonstrates his recognition of the vital role emergency medical technicians play in saving lives. Mark’s hockey team raises funds for Make-a-Wish, supporting critically ill children. We not only recognize the efforts of our LOs, but we provide corporate, marketing, and financial support, which helps amplify their impact and enables them to contribute more effectively. Interested in pursuing a career with Homestead Funding? Call Michele Teague (518)-368-1494.”
Agile, the industry’s first MBS fintech, has appointed a new company president, Greg Vacura, former SVP of Correspondent Pricing at Wells Fargo Funding. “He’s now been tasked with applying that deep industry expertise towards achieving Agile’s mission of creating a better MBS market… to fulfill Agile’s mission to create a better mortgage-backed securities (MBS) market through increasing liquidity and automation in TBAs, MBS pools, and AOTs.
And there was this news recently out of St. Louis: Employee-owned USA Mortgage, announced new leadership roles for three senior executives. Announcing the transition was Doug Schukar, who formed DAS Acquisition Company, LLC, (marketed as USA Mortgage nationwide) in 2001. Schukar handed off his duties as DAS Acquisition’s Chief Executive Officer to current President and Chief Operating Officer Linda Pring. (Schukar retains his role as Chairman of the Board.) Ron Mueller assumed the role of President of DAS Acquisition. And Dani Ploch, Chief Administrative Officer, succeeds Pring as the company’s Chief Operating Officer. The company has offices in 34 states and licensed in 49 plus the District of Columbia. Currently, it employs nearly 800 people at 142 locations nationwide.
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Eco-conscious consumers know that trade-offs are a fact of life. Just about every purchase we make has a carbon footprint, as do activities as simple as flicking on the lights or turning on the air conditioner.
The Aspiration Spend & Save account is designed for people eager to reduce their environmental impact while still earning a decent return on their purchases and savings. It’s one of the better high-yield savings and rewards checking accounts around, though there is a monthly cost to take full advantage of its benefits.
Aspiration Spend & Save has some important drawbacks, both on the environmental and financial fronts. So take some time to learn about its capabilities, upsides, and downsides before opening an account.
What Is Aspiration Spend & Save?
Aspiration Spend & Save is a checking and savings account package that pays interest on eligible balances and offers rewards on select debit card purchases. It has no required monthly maintenance fee, but some features aren’t available without a paid subscription to Aspiration Plus ($7.99 per month).
Aspiration Plus users can earn up to 3.00% APY on the first $10,000 in the account. Aspiration Standard users’ yield tops out at 1.00% APY, also on the first $10,000. Both plans require at least $500 in monthly debit card purchases to earn interest.
Aspiration offers several ways to reduce your carbon footprint, including the option to have Aspiration plant a tree for every debit card purchase and automatic carbon offsets for your driving.
What Sets Aspiration Spend & Save Apart?
Aspiration Spend & Save stands out from competing accounts for several reasons:
Up to 10% back on eligible debit card purchases. Aspiration rewards you for debit card purchases with brands in its Conscience Coalition, a group of eco- and climate-friendly brands like Warby Parker and Blue Apron. You can earn up to 5% as an Aspiration Standard member and up to 10% with Aspiration Plus.
Multiple eco-friendly features. Several Aspiration features can help reduce your carbon footprint, or at least the guilt you feel about it. Even if these features’ tangible benefit is unclear, they go well beyond what most other financial institutions offer.
Deposit insurance well above standard FDIC coverage. Aspiration offers deposit insurance on balances up to $2 million, several times the standard FDIC coverage limit. This is a big advantage for higher-net-worth users.
Need to pay a monthly fee to unlock all benefits. One of Aspiration Spend & Save’s biggest disadvantages is Aspiration Plus’s relatively high monthly fee. Unless you use Aspiration as your primary financial institution, it might not pay for itself.
Aspiration Spend & Save Plans
Aspiration offers two plans: Aspiration Standard and Aspiration Plus. Aspiration Standard has no required monthly fee, though you can pay one if you want. Aspiration Plus costs $7.99 per month.
Your choice of plan determines which features you have access to and how much you can earn on your purchases and savings:
Aspiration Standard
Aspiration Plus
Yield on Balances
1.00% APY on the first $10,000
3.00% APY on the first $10,000
Cash Back on Purchases
Up to 5%
Up to 10%
Early Direct Deposit
Yes
Yes
Free ATM Withdrawals
Yes, in-network
Yes, in-network plus one monthly out-of-network
Optional Tree Planting
Yes, free
Yes, free
Automatic Driving Offsets
No
Yes, at no extra cost
Purchase Assurance
No
Yes, on eligible items for 90 days from purchase
Basically, Aspiration Plus is potentially much more rewarding than Aspiration Standard, but you need to maintain a significant balance and regularly make purchases with Aspiration’s Conscience Coalition partners to get real value from it.
Key Features of Aspiration Spend & Save
Aspiration Spend & Save has the same basic features and parameters as other online bank accounts, but it throws some curveballs as well.
Account Yield & Requirements
To earn full interest on your balance in a given month, you must make at least $500 in qualifying debit card transactions during the period.
Once you clear that hurdle, you can earn interest on balances at least up to $10,000 in your Save account. Balances above $10,000 earn no interest for Aspiration Standard users and 0.25% APY for Aspiration Plus users. Aspiration Plus users also earn 0.25% APY on their balances even if they don’t spend enough on their debit card.
The yield is 1.00% APY with Aspiration Standard and 3.00% APY with Aspiration Plus, subject to change at Aspiration’s discretion.
Account Fees & Minimums
The minimum deposit and ongoing balance is $10. There’s no monthly maintenance fee with Aspiration Standard unless you want to pay one. Aspiration Plus has an unavoidable $7.99 monthly fee.
Cash Back on Eligible Purchases
You can earn cash back on eligible debit card purchases with Aspiration’s Conscience Coalition partners, which include well-known retail brands and service providers like Warby Parker, Allbirds, Imperfect Foods, and Blue Apron.
The cash-back rate varies by partner and your plan level. The maximum payback is 5% with Aspiration Standard and 10% with Aspiration Plus.
Early Direct Deposit
Regardless of your plan level, you can get your paycheck direct-deposited up to two days early if your employer or benefits provider qualifies. Most private employers and government agencies qualify.
ATM Access
Aspiration has more than 55,000 fee-free machines in its ATM network. With Aspiration Plus, you also get one monthly reimbursement for out-of-network ATM fees.
Mobile Features
Aspiration is a mobile-first platform built around its iOS and Android mobile apps. The mobile app earns high marks from Google Play and App Store reviewers, and Aspiration has made several significant updates (each adding new features) since 2019. The interface is intuitive and uncluttered and can handle essential banking functions like remote check deposit and online bill payments.
Climate-Friendly Features
Environmental consciousness and action are core to Aspiration’s brand. In addition to built-in incentives to shop with eco- and climate-friendly brands, Aspiration’s eco-friendly features include:
A debit card made from recycled plastic
The option to have Aspiration plant a tree (or finance its planting) every time you swipe your debit card, at no out-of-pocket cost to you
A personal impact score, updated in real time, that measures the environmental and social impact of your purchases
Automatic carbon offsets for your driving at no out-of-pocket cost, based on how much you drive and how much fuel you consume (only with Aspiration Plus)
Aspiration also pledges to give at least 10% of its profits to charity, though not all contributions go to environmental causes specifically.
Purchase Assurance (Aspiration Plus Only)
As an Aspiration Plus member, you qualify for purchase assurance for 90 days on eligible items purchased with your debit card. Purchase assurance is a basic insurance policy that reimburses you for qualifying theft or damage.
Other Purchase Protections
Regardless of your plan level, you get other purchase protections:
Extended warranties on most purchases, typically double the length of the manufacturer’s existing warranty
Refunds on eligible purchases for up to 60 days from sale, even if the retailer won’t accept your refund
Up to $600 in cell phone protection when you pay your phone bill with your Aspiration debit card
Deposit Insurance
Aspiration Spend & Save comes with FDIC insurance up to $2 million. That’s eight times the standard maximum of $250,000.
Pros & Cons
Aspiration Spend & Save is a rewarding money management platform with potentially significant environmental impact, but it has some notable downsides.
No required monthly fee
Excellent cash-back rate on eligible purchases
Above-average yields with Aspiration Plus
Multiple opportunities to reduce carbon impact
Best yields capped at $10,000 maximum balance
Minimum debit card purchases required to earn interest
$7.99 monthly fee for Aspiration Plus
Pros
Aspiration Spend & Save can more than pay for itself with regular use and is one of the few financial platforms that pays more than lip service to environmental causes.
No required maintenance fee. Aspiration Standard has no required monthly maintenance fee. You can still earn interest and debit card rewards without pay out of pocket each month.
Earn up to 10% on eligible debit card purchases. You can earn up to 10% on eligible debit card purchases with Aspiration Plus. If you spend heavily with Conscience Coalition partners, you can almost certainly offset Aspiration Plus’s monthly membership fee with earned rewards.
Yields up to 3.00% APY with Aspiration Plus. That’s not quite a category-leading yield, but it’s better than most traditional bank savings accounts pay.
Extra deposit insurance at no additional cost. Aspiration guarantees deposits up to $2 million per account holder. This is a big deal for the select few users who hold more cash than the FDIC’s standard deposit insurance covers.
Low minimum balance. Aspiration’s minimum balance is just $10, which shouldn’t be a hurdle for the vast majority of account holders.
Multiple opportunities to reduce carbon impact. Although the precise impact is difficult to quantify, Aspiration offers several good-faith opportunities to reduce the environmental impact of your purchasing habits and lifestyle (including your driving).
Bigger-than-average fee-free ATM network. Aspiration has more than 55,000 fee-free ATMs in its network, located all across the United States.
Cons
Aspiration Spend & Save reserves its best features for paying customers, who can still lose money on the deal, and there’s a natural limit to how much you can earn in rewards and interest.
Top yield only applies to the first $10,000. With Aspiration Standard, you only earn interest on the first $10,000 in your account. Aspiration Plus entitles you to interest on your entire balance, but at a greatly reduced rate (currently 0.25% APY). This limits your return on savings and makes it harder to offset Aspiration Plus’s full cost.
Must make at least $500 in qualifying debit card purchases to earn top interest. You must spend at least $500 on your debit card in any month you wish to earn the full interest rate. Otherwise, you earn no interest at all with Aspiration Standard and just 0.25% APY with Aspiration Plus.
Paid membership required for all features and value. To get the most out of Aspiration Spend & Save — both financially and environmentally — you need to pay nearly $8 per month for Aspiration Plus.
Environmental benefits are opaque and difficult to measure. Aspiration contracts with reputable environmental organizations to plant trees and purchase carbon offsets. However, it’s inherently difficult to measure the actual impact of carbon-reducing actions (like planting trees, some percentage of which die as saplings) and products (like carbon offsets based on anti-deforestation agreements that counterparties often violate). Aspiration is probably lower-impact than big global banks like Citibank or Wells Fargo, but by how much is less clear.
How Aspiration Spend & Save Stacks Up
Aspiration Spend & Save is a potentially rewarding financial platform that can improve your finances while lessening your impact on the environment. But before you apply, see how it compares to popular competitors like the Signature Federal Credit Union High-Yield Checking account.
Aspiration Spend & Save
Signature FCU High-Yield
Maintenance Fee
$0 to $7.99 per month
$0
Minimum to Open
$10
$0
Minimum Ongoing
$10
$0
Maximum Yield
3.00% APY with Aspiration Plus
4.00% APY
Qualifying Activities
Yes
Yes
Maximum Balance to Earn
Yes, $10,000
Yes, $20,000
Spending Rewards
Up to 10% cash back
None
Aspiration Spend & Save has more potential value than Signature FCU High-Yield Checking thanks to its cash-back rewards program and unlimited base yield for Aspiration Plus users. But if all you care about is maximizing your yield on day-to-day balances, Signature FCU’s higher interest rate makes it the better choice.
Final Word
Aspiration Spend & Save is one of the better high-yield checking and savings packages available to U.S. residents. Its eco-friendly features enhance its appeal for users who want to reduce the ecological impact of their everyday choices without sacrificing financial rewards.
That said, Aspiration Spend & Save has some important shortcomings, both financially and ecologically. Before you open an account, figure out how much you expect to use it — and how much you expect to keep in your account — and decide whether it’s worthwhile.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Aspiration Spend & Save
Despite some important limitations, Aspiration Spend & Save has a rewarding cash-back program and offers above-average yields on eligible balances. It’s also among the most intentionally planet-friendly financial platforms out there, even if its actual impact is fuzzy. But if you’re tempted to upgrade to Aspiration Plus, run the numbers and make sure you can offset the monthly fee.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Well, were about halfway through the year and mortgage rates seem to have settled in around the high 6% range.
While averages vary based on the source, Freddie Mac last posted a rate of 6.67% for the popular 30-year fixed.
This rate began the year 2023 around 6.50% and has yo-yoed a bit since, falling as low as 6.09% and climbing as high as 6.79%.
So it appears mortgage rates have become somewhat range-bound, hovering around double what they were in early 2022 (3.25%).
The question is when will they drop again? Or could they even rise higher from here?
New Forecasts Put Mortgage Rates Back in the 5s by 2024
First the good news. Several economic forecasts predict that 30-year fixed mortgage rates will return to the 5s.
The bad news is this might not happen until the second half of 2024. In other words, another full year of rates in the high 6s could be in store.
Fannie Mae’s June 2023 Housing Forecast expects the 30-year fixed to peak at 6.6% in the third quarter of 2023, then fall to 6.3% in Q4.
Thereafter, rates are forecast to trickle down to 6.1% in Q1 2024, 5.9% a quarter later, and eventually 5.6% by year-end.
So that’s something to be excited about if you’re in search of a lower mortgage rate.
Similarly, Goldman Sachs pegs the 30-year fixed at 5.9% in 2024, with a little bit of relief coming in the second half of 2023.
But not a whole lot – we’re talking an average rate of 6.6% in Q3 and 6.4% in Q4, compared to 6.7% in the second quarter of this year.
Then there’s the latest forecast from Wells Fargo, which puts the conventional 30-year fixed at 5.81% in 2024.
That’s down from an average of 6.57% in 2023 and represents about a .75% improvement. It would also push the average mortgage rate closer to the 2021 average of 5.38%.
Higher Mortgage Rates for Longer, But Some Relief Is in Sight
It seems most economists are now on the same page regarding mortgage rates.
For a while, there was a real fear we could push 8% and even double-digits, but there appears to be more clarity now.
Perhaps the Fed is close to wrapping up its many rate hikes, which can help guide long term rates like mortgages lower.
If the worst is truly behind us, with respect to inflation, those forecasts might come to fruition.
But as noted, it could take time. And even then, we’re still looking at an average mortgage rate that is about double recent lows.
Per Wells Fargo economists Charlie Dougherty and Patrick Barley, “Until inflation is fully tamped down, however, the Fed is likely to keep a restrictive policy stance and mortgage rates will likely remain elevated.”
They add that the recent widening of mortgage rate spreads “adds another layer of uncertainty to the outlook for mortgage rates.”
Still, after staring at 7% mortgage rates for a year or so, an interest rate in the mid-5% range won’t look so bad, right?
It could even allow recent home buyers to refinance their mortgages to a lower rate. And make home buying a bit more affordable for those yet to dive in.
How to Navigate Mortgage Rates in the Meantime
If there’s an expectation that mortgage rates will gradually improve over the next 12 months, here are a few things to consider.
One, paying points. It doesn’t make sense to pay discount points if you expect to refinance in the near future. The same is true for those who expect to sell in the short term.
Simply put, you pay a lot of money upfront for monthly savings spread out through the loan term.
If you only keep the loan for a year or less, you won’t actually realize those savings. But you’ll still pay for them. And there aren’t any refunds on points.
A better alternative, assuming mortgage rates go down in 2024, is a temporary buydown.
These provide payment relief for the first couple years of the loan before reverting to the full note rate.
In that sense, you can actually get the full benefit if you keep the loan for only 12-24 months.
Then you can refinance to a lower rate at or around the time the interest rate is due to move higher.
Another thing to look at is mortgage type. While adjustable-rate mortgages aren’t widely available at the moment, or heavily discounted, a 5/1 ARM or 7/1 ARM could potentially save you money.
These loan products are fixed for five or seven years, respectively, before the first adjustment. So if you expect lower mortgage rates in 2024, you could use one until rates come back down.
As an example, Wells Fargo is advertising a 7/6 ARM for 6.375% and a 30-year fixed for 6.625%.
Not a huge spread between the two products, but savings nonetheless.
On a $600,000 home loan, we’re talking about $100 in savings per month. Keep it for five years and it’s $6,000.
Ideally, you shop around and find an even bigger discount.
Lastly, it could make sense to take on a slightly higher rate in exchange for no closing costs, if offered.
The same argument applies. If you only expect to keep the mortgage for a short period of time, you won’t want to pay a lot to obtain it.
In short, the mortgage rate doesn’t carry as much weight if it’s going to be short-lived anyway.
So be sure to explore all your options when shopping for home loan. Consider interest rates, closing costs, loan types, temporary buydowns, and more.
And be prepared to refinance in 2024 if mortgage rates do indeed fall by nearly 1% from current levels.
Wells Fargo is stepping back from the multitrillion-dollar market for U.S. mortgages amid regulatory pressure and the impact of higher interest rates.
Instead of its previous goal of reaching as many Americans as possible, the company will now focus on home loans for existing bank and wealth management customers and borrowers in minority communities, CNBC has learned.
Dual factors of a lending market that has collapsed since the Federal Reserve began raising rates last year and questions about the long-term profitability of the business led to the decision, said consumer lending chief Kleber Santos. Regulators have heightened oversight of mortgage lending in the past decade, and Wells Fargo garnered further scrutiny after its 2016 fake accounts scandal.
“We are acutely aware of Wells Fargo’s history since 2016 and the work we need to do to restore public confidence,” Santos said in a phone interview. “As part of that review, we determined that our home-lending business was too large, both in terms of overall size and its scope.”
It’s the latest, and perhaps most significant, strategic shift that CEO Charlie Scharf has undertaken since joining Wells Fargo in late 2019. Mortgages are by far the biggest category of debt held by Americans, making up 71% of the $16.5 trillion in total household balances. Under Scharf’s predecessors, Wells Fargo took pride in its vast share in home loans — it was the country’s top lender as recently as 2019 when it had $201.8 billion in volume, according to industry newsletter Inside Mortgage Finance.
More like rivals
Now, as a result of this and other changes that Scharf is making, including pushing for more revenue from investment banking and credit cards, Wells Fargo will more closely resemble megabank rivals Bank of America and JPMorgan Chase. Both companies ceded mortgage share after the 2008 financial crisis.
The slimming down of those once-huge operations has implications for the U.S. mortgage market.
As banks stepped back from home loans after the disaster that was the early 2000s housing bubble, nonbank players including Rocket Mortgage quickly filled the void. But these newer players aren’t as closely regulated as the banks are, and industry critics say that could expose consumers to pitfalls. Today, Wells Fargo is the third-biggest mortgage lender after Rocket and United Wholesale Mortgage.
Third-party loans, servicing
As part of its retrenchment, Wells Fargo is also shuttering its correspondent business that buys loans made by third-party lenders and “significantly” shrinking its mortgage-servicing portfolio through asset sales, Santos said.
The correspondence channel is a significant pipeline of business for San Francisco-based Wells Fargo, one that became larger as overall loan activity shrank last year. In October, the bank said 42% of the $21.5 billion in loans it originated in the third quarter were correspondent loans.
The sale of mortgage-servicing rights to other industry players will take at least several quarters to complete, depending on market conditions, Santos said. Wells Fargo is the biggest U.S. mortgage servicer, which involves collecting payments from borrowers, with nearly $1 trillion in loans, or 7.3% of the market, as of the third quarter, according to data from Inside Mortgage Finance.
More layoffs
Altogether, the shift will result in a fresh round of layoffs for the bank’s mortgage operations, executives acknowledged, but they declined to quantify exactly how many jobs will be lost. Thousands of mortgage workers were terminated or voluntarily left the company last year as business declined.
The news shouldn’t be a complete surprise to investors or employees. Wells Fargo staff have speculated for months about changes coming after Scharf telegraphed his intentions several times in the past year. Bloomberg reported in August that the bank was considering paring back or halting correspondent lending.
“It’s very different today running a mortgage business inside a bank than it was 15 years ago,” Scharf told analysts in June. “We won’t be as large as we were historically” in the industry, he added.
Last changes?
Wells Fargo said it was investing $100 million toward its goal of minority homeownership and placing more mortgage consultants in branches located in minority communities.
“Our priority is to de-risk the place, to focus on serving our own customers and play the role that society expects us to play as it relates to the racial homeownership gap,” Santos said.
The mortgage shift marks what is potentially the last major business overhaul Scharf will undertake after splitting the bank’s operations into five divisions, bringing in 12 new operating committee members and creating a diversity segment.
In a phone interview, Scharf said that he didn’t anticipate making other major changes, with the caveat that the bank will need to adapt to evolving conditions.
“Given the quality of the five major businesses across the franchise, we think we’re positioned to compete against the very best out there and win, whether it’s banks, nonbanks or fintechs,” he said.
This week, the Joint Center For Housing Studies at Harvard University released this year’s “State of the Nation’s Housing.” The report is damning for those who are trying to expand opportunities for homeownership and presents an incredible challenge for policymakers, stating, “As the cost of homeownership rises, the prospect dims for eliminating racial homeownership gaps.”
The report highlights how the lack of affordable housing supply combined with high interest rates are pricing out those on the margin, especially focusing on minorities.
The impact as highlighted in the report is stark, stating that in the past year, “millions of renters were priced out of homeownership.”
Consider this: When looking at new units being built for housing, from single-family detached, condo, 2-4, 5-20, 20+, and manufactured housing, the new supply of housing being created today is a shadow of years past. In fact, the current state of new units being created has never been this low looking all the way back to the early 1930s.
This is truly disgraceful for a nation that recognizes the value of homeownership. So far we are learning that talk is cheap, but the real work is much harder.
Vice President Kamala Harris gave a speech in Maryland in February about the importance of homeownership in which she shared her own story about growing up. “For most of my childhood, our family rented. And then there was this one afternoon where my mother — our mother — called my sister Maya and me in. We were in high school at the time. And she called us into the kitchen, and she showed us this photograph. And it was a picture of a one-story, dark grey house with a shingled roof and a beautiful lawn. And mommy, which is what we called her, was telling us that after her years of saving, she was ready to become a homeowner,” said the vice president.
The opportunity to live in their own home was a life-changing event.
The time for speech-making and haphazard pricing policies from the government lending sources needs to stop. This problem is so severe, and getting worse, that it demands presidential focus, policy leadership, and agency coordination if we are ever really going to change this retreat from opportunity that we are seeing today.
There is a desperate need to provide executive leadership and focus on housing in America today and time is running out. But we have a model for this. In 2009, when I was in the Obama administration, the “Housing Team” was formed. It consisted of “principals” and “deputies.”
The principals were all cabinet-level direct reports to the president. They included people like Larry Summers (NEC Director), Shaun Donovan (HUD Secretary), Tim Geithner (Treasury Secretary), and Austan Goolsbee (CEA), and so many others. And meetings would often be complemented with the addition of the OMB director, the chief of staff to the president, and a variety of senior staff members.
The deputies reported to the Principals and included the assistant secretaries of the respective agencies that were relevant at the time and other senior staff. I was part of this group, but it included many key government leaders today, including Michael Barr, now vice chair of the Federal Reserve for supervision, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, Jim Parrott of the Urban Institute, and so many others.
The deputies met several times per week, especially a core group of us, to discuss efforts to resolve the housing crisis that threatened the nation at that time. I remember times when a few of us would get a call from Secretary Geithner’s office that he wanted to meet. We would drop whatever we were doing and head to Treasury to discuss the current concern or issue.
Preparation of policy to determine what and how to present recommendations to the president took a great deal of time and focus. And all of this was about housing and mortgage policy. And we executed — we implemented.
My point? In the Obama administration, housing issues were a top executive priority all the way up to the president of the United States. Issues were not decided upon randomly or independently. We worked hard to decide on the best way to address housing and mortgage challenges in a macro, multi-agency environment.
Rather than what appears to be a somewhat arbitrary and likely less effective set of policy moves as we are seeing today this administration should provide the level of focus in a similar way that the housing team operated during the Obama administration.
This year’s study from Harvard is an almost indictment to the state of housing policy and its effectiveness. And yet the problems facing this nation are clear and include:
1. Setting the priority for this nation with urgency that housing is a bedrock for family security and inter-generational wealth-building in this nation that has been eroding with the wealth gap only widening and with the low housing supply and lack of implementable policy ideas to move the dial.
2. The need to rebuild neighborhoods to support new homeownership opportunities, particularly in urban centers such as those that exist in the “Rust Belt” inner cities.
3. Meaningful solutions to improve affordability with creative financing vehicles to include concepts such as equity sharing, scalable down payment assistance, and interest rate subsidies (buy-downs) to make payments affordable.
4. Making affordable housing supply a priority and transitioning from talking points in speeches to executable plans that actually build units at a record pace.
5. A national focus on financial literacy training for young people, especially those living in underserved communities to prepare them for a future of homeownership.
This lack of effectiveness of policy today is not intentional. But I strongly recommend that this administration embrace some key business leaders to join them in this effort. While we have some great policy leaders who have hovered inside the beltway of Washington D.C. for decades recommending housing policy to political leadership, it was always clear to me during my time working in D.C. that having an administration that also recruited those who understood the industry and how it operated versus only having those who had thoughtful ideas about creating change for consumers was critically important.
Between skill sets and executive focus from the top, this administration is ignoring an ever-widening dearth of opportunity for those that do not have access to homeownership today. Focus, priority, skill sets: the administration needs to show that it is serious about housing – the challenges today are as large and looming as this nation has seen in decades. This is a real crisis and the JCHS at Harvard just made this crystal clear.
David Stevens has held various positions in real estate finance, including serving as senior vice president of single family at Freddie Mac, executive vice president at Wells Fargo Home Mortgage, assistant secretary of Housing and FHA Commissioner, and CEO of the Mortgage Bankers Association.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Dave Stevens at [email protected]
To contact the editor responsible for this story: Sarah Wheeler at [email protected]