Rate locks continue to be a source of frustration for many borrowers. They sound like a good idea. Lock your rate for 30 days and any change in interest rates doesn’t affect you. Some lenders may offer a rate lock of 45 days or even 60 days. The loan officer may ask if you want to lock the rate at […]
If you have some regrets about buying your home, you have a lot of company. Prior studies and surveys published by multiple companies arrived at similar regret statistics. Bankrate breaks this down further to reflect that millennials voice regrets in greater numbers than other population groups. According to Bankrate, nearly two-thirds of millennials expressed at least one regret. Less than […]
One of the common complaints voiced by home buyers results from a property tax surprise. These come in a few different flavors. However, the most common surprise results from a change in valuation by the taxing jurisdictions. This may occur in the year of purchase. But more commonly, it arises in the year after purchase. Many real estate agents rely […]
The average price of homes sold reportedly jumped to about $375,000 by the end of April 2021. This represents a 22% gain over the prior 12 months. But this doesn’t mean that the average home increased in price by 22%. In fact, the average price gain comes from the fact that a greater share of homes sold were luxury homes […]
Fannie Mae and Freddie Mac control the residential mortgage market as the two largest buyers of mortgages in the US. Each holds a portfolio of more than $2 trillion and buys around $50 billion more every month. Both effectively went bankrupt in 2008 in the prior housing crisis. Because they operated as GSEs (Government Sponsored Enterprises), Fannie Mae and Freddie […]
How much of a problem is the renter free rider problem? If you’ve never heard of the free rider problem, it affects many aspects of pricing issues and partially derives from many government actions. Forbearance partially falls within the free rider definition, but for the most part the end game separates it from a true free rider problem. Forbearance end […]
Many thought processing times for loans in 2020 were slow. Lenders were caught unprepared for the tidal wave of refinance applications driven by a plunge in interest rates. Many lenders couldn’t find enough people to process and underwrite loans. A significant number of individuals changed jobs and entered the mortgage world for the first time. The hot market lured new […]
Reverse mortgages have become more popular in the last decade. Are you looking at a reverse mortgage? As the statistics and performance of a large number of reverse mortgage come in, they have become more acceptable. A greater number of lenders and loan officers have become familiar with them and now originate them. FHA continues to be the dominant force […]
New Fannie Mae and Freddie Mac restrictions are already affecting lenders. The Mortgage Bankers Association special bulletin noted that FNMA and FHLMC have begun to implement the investor/2nd home caps. The MBA has seen the market for these loans deteriorate significantly. Investors have raised rate penalties by imposing loan level price adjustments. These adjustments seek to avoid getting an excessive volume […]
New Fannie Mae and Freddie Mac rules on lending are here and go into effect soon. These may have a sweeping impact limiting loans or driving up interest rates. Your lender may not be able to honor a pre-approval letter even if you would otherwise qualify for the financing. It may impact the ability to close a loan at the […]
The end of forbearance may be panicking borrowers. In a just released report, the Consumer Finance Protection Bureau (CFPB) noted that March 2021 had the most complaints since April 2018. Those complaints overwhelmingly focus on mentions of forbearance and related terms. The number of mortgage borrowers who reported struggling to make payments also rose. CFPB has been issuing conflicting information […]
Facing Default or in Default? There are many circumstances which cause a borrower to go into default or face the prospect of default. Our prior post on Disaster Declarations covered one such event. But more common reasons for default exist. As one would expect, job loss plays a substantial role in many defaults. Divorce and death also play primary roles […]