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Tuesday, December 30, 2014
Monday, December 29, 2014
Mortgage Lenders Roll
Out 3 Percent-Down Loans at Breakneck Pace
The quickness with which lenders have adopted 3 percent down-payment mortgages has been a nice holiday gift for the mortgage industry as well as home buyers. Lenders are able to get the product out there faster because larger numbers of them are selling loans directly to Fannie Mae and Freddie Mac instead of to aggregators or wholesale lenders that then attach their own extra guidelines -- called overlays -- to loan requirements. Also, the qualified mortgage rule has made it easier for lenders to assess quality control, underwriting, and decisions to bring products to market. Still, the mortgage industry will need to make consumers aware that low-down-payment loan products are available in order to take full advantage of the opportunity. "If you want to push it, market it, and get it out there, I think you should absolutely be able to increase your business if you market it to your clients and real estate agents and everybody else," says Michael Deery, president of San Diego-based mortgage brokerage Citywide Financial.
From "Mortgage Lenders Roll Out 3 Percent-Down Loans at Breakneck Pace"
American Banker (12/26/14) Finkelstein, Brad
The quickness with which lenders have adopted 3 percent down-payment mortgages has been a nice holiday gift for the mortgage industry as well as home buyers. Lenders are able to get the product out there faster because larger numbers of them are selling loans directly to Fannie Mae and Freddie Mac instead of to aggregators or wholesale lenders that then attach their own extra guidelines -- called overlays -- to loan requirements. Also, the qualified mortgage rule has made it easier for lenders to assess quality control, underwriting, and decisions to bring products to market. Still, the mortgage industry will need to make consumers aware that low-down-payment loan products are available in order to take full advantage of the opportunity. "If you want to push it, market it, and get it out there, I think you should absolutely be able to increase your business if you market it to your clients and real estate agents and everybody else," says Michael Deery, president of San Diego-based mortgage brokerage Citywide Financial.
From "Mortgage Lenders Roll Out 3 Percent-Down Loans at Breakneck Pace"
American Banker (12/26/14) Finkelstein, Brad
Monday, December 22, 2014
Friday, December 19, 2014
ABA, ABIA Seek Lender Discretion on Insuring Detached
Structures
While ABA and its American Bankers Insurance Association subsidiary welcomed recent legislative and regulatory clarification that flood insurance is not required for garages, sheds and other detached, non-residential structures, they said yesterday that lenders should not be constrained by the loan’s purpose and should retain “broad discretion” to require insurance -- for high-value detached structures, for example.
“Congress clearly sought to address a common complaint of borrowers who use residential property to secure a loan: the requirement to purchase a separate policy to insure garden sheds and detached garages against flood loss,” the associations said in a comment letter. “We encourage the agencies to avoid issuing ‘clarifications’ and definitions that will limit unnecessarily the ability of customers to benefit from this provision.”
ABA and ABIA also sought additional clarifications and changes to the proposed rules on mandatory escrow “to ensure that escrow requirements do not inadvertently increase the cost of credit -- without advancing the congressional goal of ensuring that borrowers maintain flood insurance over the life of their loan.
While ABA and its American Bankers Insurance Association subsidiary welcomed recent legislative and regulatory clarification that flood insurance is not required for garages, sheds and other detached, non-residential structures, they said yesterday that lenders should not be constrained by the loan’s purpose and should retain “broad discretion” to require insurance -- for high-value detached structures, for example.
“Congress clearly sought to address a common complaint of borrowers who use residential property to secure a loan: the requirement to purchase a separate policy to insure garden sheds and detached garages against flood loss,” the associations said in a comment letter. “We encourage the agencies to avoid issuing ‘clarifications’ and definitions that will limit unnecessarily the ability of customers to benefit from this provision.”
ABA and ABIA also sought additional clarifications and changes to the proposed rules on mandatory escrow “to ensure that escrow requirements do not inadvertently increase the cost of credit -- without advancing the congressional goal of ensuring that borrowers maintain flood insurance over the life of their loan.
Tuesday, December 16, 2014
Shiller Sees Risk in
New Push for First-Time Homebuyers
Ultralow down payment programs sound risky to Nobel Prize-winning economist Robert Shiller. Fannie Mae and Freddie Mac plan to offer new programs that will guarantee loans with down payments of as little as 3 percent, but Shiller says this would be risky for the lender and the mortgage insurer. He doubts that the initiatives would be the best course of action. "Because it's only a 3 percent margin, if somebody defaults and they have to sell the house, they might not get all the money back." Most first-time home buyers have remained on the sidelines of the housing market as banks tightened lending standards. The National Association of Realtors recently reported that first-time home buyers account for just 33 percent of all home purchases, the lowest level in nearly three decades.
From "Shiller Sees Risk in New Push for First-Time Homebuyers"
CNBC.com (12/14/14) Gillies, Trent
Ultralow down payment programs sound risky to Nobel Prize-winning economist Robert Shiller. Fannie Mae and Freddie Mac plan to offer new programs that will guarantee loans with down payments of as little as 3 percent, but Shiller says this would be risky for the lender and the mortgage insurer. He doubts that the initiatives would be the best course of action. "Because it's only a 3 percent margin, if somebody defaults and they have to sell the house, they might not get all the money back." Most first-time home buyers have remained on the sidelines of the housing market as banks tightened lending standards. The National Association of Realtors recently reported that first-time home buyers account for just 33 percent of all home purchases, the lowest level in nearly three decades.
From "Shiller Sees Risk in New Push for First-Time Homebuyers"
CNBC.com (12/14/14) Gillies, Trent
Friday, December 12, 2014
Friday Rate Update
Mortgage Rates Rise
The rate for a 30-year fixed-rate mortgage averaged 3.93 percent this week, up from last week’s 3.89 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.42 percent. This week’s 15-year FRM rate averaged 3.2 percent, up from last week’s 3.1 percent rate. A year ago, the 15-year FRM rate averaged 3.43 percent
The rate for a 30-year fixed-rate mortgage averaged 3.93 percent this week, up from last week’s 3.89 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.42 percent. This week’s 15-year FRM rate averaged 3.2 percent, up from last week’s 3.1 percent rate. A year ago, the 15-year FRM rate averaged 3.43 percent
Wednesday, December 10, 2014
Mortgage Firms Detail
Aid Programs
Fannie Mae and Freddie Mac plan to offer new low-down-payment initiatives targeting first-time home buyers, lower-income borrowers, and people who have not owned a home for at least a few years. The companies will back mortgages with down payments of as little as 3 percent. The programs could be available to borrowers with credit scores of as low as 620, the companies' current minimum for other loans. Borrowers would have to meet criteria that offset the increased risk, such as high reserves or lower debt-to-income ratios. Still, the new loans will offer borrowers an alternative to pricey mortgages backed by the Federal Housing Administration. The Fannie Mae program will be available almost immediately, while Freddie Mac expects to roll out its offering by March.
From "Mortgage Firms Detail Aid Programs"
Wall Street Journal (12/09/14) P. A2 Light, Joe
Fannie Mae and Freddie Mac plan to offer new low-down-payment initiatives targeting first-time home buyers, lower-income borrowers, and people who have not owned a home for at least a few years. The companies will back mortgages with down payments of as little as 3 percent. The programs could be available to borrowers with credit scores of as low as 620, the companies' current minimum for other loans. Borrowers would have to meet criteria that offset the increased risk, such as high reserves or lower debt-to-income ratios. Still, the new loans will offer borrowers an alternative to pricey mortgages backed by the Federal Housing Administration. The Fannie Mae program will be available almost immediately, while Freddie Mac expects to roll out its offering by March.
From "Mortgage Firms Detail Aid Programs"
Wall Street Journal (12/09/14) P. A2 Light, Joe
Monday, December 8, 2014
Mortgage Rates Continue to Fall
The rate for a 30-year fixed-rate mortgage averaged 3.89 percent this week, down from last week’s 3.97 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.46 percent. This week’s 15-year FRM averaged 3.1 percent, down from last week’s 3.17 percent rate. A year ago, the 15-year FRM averaged 3.47 percent.
--ABA Daily Newsbytes
The rate for a 30-year fixed-rate mortgage averaged 3.89 percent this week, down from last week’s 3.97 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.46 percent. This week’s 15-year FRM averaged 3.1 percent, down from last week’s 3.17 percent rate. A year ago, the 15-year FRM averaged 3.47 percent.
--ABA Daily Newsbytes
Monday, December 1, 2014
HARP Refinances Continue Dropping
Fannie Mae and Freddie Mac mortgage refinances rebounded in
the third quarter, while refinances through the GSEs’ Home Affordable Refinance
Program continued to slide, the Federal Housing Finance Agency said on
Wednesday -- an indication that housing market distress is easing.
Mortgage Rates Remain Low
The rate for a 30-year fixed-rate mortgage averaged 3.97
percent last week, slightly down from the previous week’s 3.99 percent, Freddie
Mac said on Thursday. At this time last year, the 30-year FRM rate averaged
4.29 percent. Last week’s 15-year FRM was unchanged at 3.17 percent. A year
ago, the 15-year FRM averaged 3.3 percent
--ABA Daily Newsbytes
--ABA Daily Newsbytes
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