Category Archive: Mortgages

2016
01/07

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Mortgages

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Another big win for reverse mortgages

In the vast universe of consumer borrowing, reverse mortgages get little respect. They cause the same kind of eyebrow lift as pawn tickets, car title loans, rent-to-own TV sets and leased car tires. When I write about them, the next days mail has chiding notes suggesting that I failed to tell the gruesome downside of reverse mortgages.

I plead guilty. So let me make a promise: In 2016 there will be a column about the downside of reverse mortgages.

2016
01/02

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Mortgages

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Bank of America to continue outsourcing Merrill Lynch mortgages to PHH

Under the terms of a new agreement between PHH Corp. and Bank of America, PHH will continue to provide mortgage origination services to Merrill Lynch clients.

The agreement, which wasannounced Thursday, renews a deal between PHH and Bank of America that outsources the origination of Merrill Lynchs mortgages to PHH.

2015
12/31

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Mortgages

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It’s another big win for reverse mortgages

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Its another big win for reverse mortgages – Houston Chronicle












2015
12/31

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Mortgages

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OSFI Publishes Letter on Plans to Update Capital Requirements for Residential …

On December 11, 2015 the Office of the Superintendent of Financial Institutions Canada (OSFI) released a letter notifying stakeholders that it is planning to update the regulatory capital requirements for residential mortgages and home equity lines of credit. It is one component of the broader attempt on the part of the government to mitigate risks associated with rapid rise in house prices and high ratio of debt to income borrowing. The letter was released on the same day that Minister of Finance, Bill Morneau, announced rules that increase the minimum down payment for newly insured mortgages from 5% to 10% on the portion of house prices above $500,000 and Canada Mortgage and Housing Corporation (CMHC) announced changes to its securitization programs.

The regulatory capital requirements are in place to mitigate the risk that federally regulated financial institutions face in loss scenarios. Currently, in recognition of the government backstop on mortgages, federally regulated deposit-taking institutions are subject to very low capital holding requirements on mortgages.

The planned changes will affect the deposit-taking institutions using internal models for mortgage default risk, which include Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, HSBC Canada, National Bank of Canada, Royal Bank of Canada, and Toronto-Dominion Bank. For these banks, OSFI plans to implement a risk-sensitive floor for losses in the event of default that will be tied to increases in local property prices and/or to house prices that are high relative to borrower income.

The planned changes will also affect private mortgage insurers, Canada Guaranty Mortgage Insurance Company and Genworth Financial Mortgage Insurance Company of Canada, using standardized capital requirements. For these insurers, a new standardized approach that updates the capital requirements for mortgage guarantee insurance risk will be introduced. Both planned changes are devised to provide increased protection to depositors, policyholders, and unsecured creditors.

OSFI has not yet released any guidelines in this respect, but expects to have final rules in place no later than 2017. Prior to any such changes and keeping with usual practice, OSFI will engage the federally regulated financial institutions and other stakeholders in a directed consultation followed by a broader public consultation in 2016.

2015
12/30

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Mortgages

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Mortgages inch upward as Fed enacts rate increase

Mortgage rates rose this week as the Federal Reserve finally raised the federal funds rate from its near-zero level, where it had been for exactly 7 years.

Fed funds rate gets boost

The central banks Federal Open Market Committee increased the benchmark interest rate from a target range of 0%-0.25% to 0.25%-0.5%. However, the committee didnt outline any subsequent rate hikes.

The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate, the committees statement reads. The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.

Theres a prevailing thought that since the Fed has now implemented a rate hike that mortgage rates may fall, rather than rise, says John Stearns, senior mortgage banker at American Fidelity Mortgage Services in Milwaukee.

It will be interesting to see what happens, he says.

A look at this weeks rates

  • The benchmark 30-year fixed-rate mortgage rose to 4.09% from 4.06%, according to Bankrates Dec. 16 survey of large lenders. A year ago, it was 3.94%. Four weeks ago, the rate was 4.09%. The mortgages in this weeks survey had an average total of 0.26 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 3.98%. This weeks rate is 0.11 percentage points higher than the 52-week average.
  • The benchmark 15-year fixed-rate mortgage rose to 3.34% from 3.27%.
  • The benchmark 30-year fixed-rate jumbo mortgage rose to 4.03% from 4.01%.
  • The benchmark 5/1 adjustable-rate mortgage rose to 3.42% from 3.4%.

2015
12/29

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Mortgages

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Mortgage rates respond unevenly to Fed rate hike

Interest rates on mortgages mostly nudged higher this week, as the effects of the Federal Reserves initial increase of the federal funds rate seem to be fairly low-key.

Rates have virtually stayed where they were before the rate hike, says Bryan Sullivan, executive vice president and chief financial officer at loanDepot in Foothill Ranch, California.

I think part of it is driven by everybody anticipating December being the month when the (federal funds rate) was going to increase from its (near) 0 level, he says.

Brett Sinnott, vice president of capital markets at CMG Financial in San Ramon, California, agrees: Everybody did a really good job of building that into their models.

The Fed is expected to raise the federal funds rate by 25 basis points once every quarter throughout 2016, Sinnott adds.

A look at this weeks rates

  • The benchmark 30-year fixed-rate mortgage rose to 4.12% from 4.09%, according to Bankrates Dec. 22 survey of large lenders. A year ago, the rate was 3.96%. Four weeks ago it was 4.07%. The mortgages in this weeks survey had an average total of 0.22 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 3.99%. This weeks rate is 0.13 percentage points higher than the 52-week average.
  • The benchmark 15-year fixed-rate mortgage fell to 3.33% from 3.34%.
  • The benchmark 30-year fixed-rate jumbo mortgage stayed at 4.03%.
  • The benchmark 5/1 adjustable-rate mortgage rose to 3.44% from 3.42%.

2015
12/28

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Mortgages

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Zillow Mortgages (Z) Reports 5 bps W/W Drop in 30-Year Fixed Rate to 3.75%

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The 30-year fixed mortgage rate on Zillow Mortgages is currently 3.75 percent, down five basis points from this time last week. The 30-year fixed mortgage fell throughout the week before settling at the current rate.

“Mortgage rates fell last week despite the Fed’s decision to raise short-term lending rates,” said Erin Lantz, vice president of mortgages at Zillow. “The announcement, which had largely been priced in, contained few surprises and signaled a slow upward path for rates moving forward. This week we expect rates to be flat as markets will be quiet for the end-of-week holiday.”

Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.

The rate for a 15-year fixed home loan is currently 2.95 percent, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 3.00 percent.

Below are current rates for 30-year fixed mortgages by state. Additional states’ rates are available at: http://www.zillow.com/mortgage-rates.

2015
12/28

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Mortgages

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Feds to back bigger mortgages in Sonoma, Napa counties


Rising home prices in Sonoma and Napa counties are triggering a change in federal housing rules that will help home buyers in both counties obtain larger mortgages and make smaller down payments.

The Federal Housing Finance Agency is raising conforming loan limits in both counties on Jan. 1, which will allow entities like Fannie Mae and Freddie Mac to buy or guarantee bigger mortgages in both counties.

Loan officers and real estate officials characterized the increase as a modest but positive step that will reduce the cost of buying homes in Sonoma and Napa counties.

“It certainly is going to help,” said Leslie Appleton-Young, chief economist for the California Association of Realtors. “It’s not a huge increase, but every little bit helps.”

Higher-income buyers will benefit the most from the changes. Appleton-Young said the increased loan limits could prove a factor in roughly 6 percent of local housing sales, or nearly 300 of the more than 4,700 single-family homes expected to be sold in Sonoma County this year.

In Sonoma County, the conforming loan limit will increase by 4.5 percent to $554,300. In Napa, the limit will climb 1.7 percent to $625,500, the maximum allowed and the same amount as in pricey markets such as San Francisco.

Along with the increase in loan amounts, borrowers next year will be able to qualify with only a 5 percent down payment, significantly less than the previous minimum of 10 percent.

Increasing the size of loans that can be backed by Fannie Mae and Freddie Mac will make them more affordable. Loans that exceed the conforming loan limit typically come with higher interest rates and stricter underwriting standards because they are not backed by the federal government.

Higher costs, in turn, make homes less affordable and shrink the pool of potential buyers.

In Sonoma County, buyers next year who obtain the maximum loan amount with 5 percent down would need an annual income of nearly $120,000 a year in order to qualify, said Kris Anderson, a senior loan consultant for Allstate Mortgage in Santa Rosa. Their monthly payment, including taxes and insurance, would total nearly $3,800.

Under the new rules, such buyers would need about $30,000 less for their down payments, Anderson said. That means they could more quickly become home buyers.

2015
12/26

Category:
Mortgages

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More may opt for mortgages tied to fixed deposit rates

The threat of rising interest rates is prompting more home owners to re-finance their mortgages by tying them to fixed deposit rates. PHOTO: LIM YAOHUI FOR THE STRAITS TIMES

2015
12/24

Category:
Mortgages

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States With Highest Percentage of Indians Shorted on Mortgages

American Indians in the two states with Native populations of more than 10 percent continued to get a much lower percentage of mortgages than their representation in those states in 2014.

In New Mexico, where the Census Bureau in 2012 estimated more than 10 percent of the population to be Native, just 1.4 percent of mortgage dollars went to Indians, federal data show.

Indians in New Mexico were extended $74 million in home loan finance during 2014, according to data lenders filed under the Home Mortgage Disclosure Act. A total of $5.5 billion in mortgages was made in the state by lenders with more than $43 million in assets (financial institutions with lower assets than that are exempt from filing). An additional $12 million went to Native Hawaiians.

Only 36 percent of total Indian applications of $205 million were funded. About 39 percent were denied and the rest went unfunded for reasons like incomplete application or application withdrawn.

The average loan to New Mexico Indians on first liens was $147,000, while for subordinate liens (such as home equity) it was $31,000. Not many Indians got loans for more than the “conforming” (eligible to be bought by agencies Freddie Mac and Fannie Mae) limit of $417,000. Just $3.2 million (4.3 percent) went for “jumbo” mortgages higher than $417,000.

Manufactured housing loans counted for 13 percent of mortgage lending to New Mexico Indians in 2014, the data show. The rest went for one- to-four-family mortgages. There was no finance extended to buildings with more than four residential units.

Bank of Oklahoma, which has a New Mexican subsidiary, Bank of Albuquerque, was the lead lender to Indians in the state in 2014, at $5.5 million. A pair of mortgage firms come in second and third, MidAmerica Mortgage at $4.4 million and 21st Mortgage Corp. at $4.2 million.

In Alaska, which is about 15 percent Native according to the Census Bureau, Native Americans (Indians and Alaska Natives) got $181 million or 5.33 percent of mortgage dollars extended in 2014. Native Hawaiians received an additional $23 million in mortgages.

Alaska Natives had a much higher rate of approvals than in New Mexico, some 63 percent of the $290 million they applied for. Just 13 percent of application dollars applied for were denied.

Mortgages insured by the Federal Housing Administration made up 60 percent of loans to Alaska Natives. The next highest category, non-government loans, accounted for 27 percent of volume while loans insured by the Department of Veterans Affairs were at 11 percent.

Three quarters of the finance went to purchase homes, with the rest for refinancings and home improvements. Almost all mortgages made to Natives in Alaska last year were for under $417,000, and almost all went for one-to-four family homes.

First-lien loan amounts were higher for Natives in higher-cost Alaska than in New Mexico, with an average mortgage of $239,000. Subordinate lien loans averaged $24,000.

Alaska USA Mortgage Co. was first in Native mortgage lending in the state, at $73 million, while Residential Mortgage was second at $45 million, and Wells Fargo third at $20 million.

The data was collected under the Home Mortgage Disclosure Act and analyzed for Indian Country Today Media Network by LendingPatterns.com, a software developed by the McLean, Virginia-based ComplianceTech.

According to the Census Bureau, there are two other states that have just under 10 percent Indian population, Oklahoma and South Dakota, at about nine percent apiece. Hawaii has 10 percent Native Hawaiian population.