June 27, 2017
- Ben Carson’s fellow Republicans are pleading with him to revisit HUD’s 2017-2018 budget. 23 Republican Congressmen claim there is not enough funding for homeless citizens across the country. Additionally, they urge Carson to revisit the Obama’s “Housing First” program because it eliminated a great deal of homelessness issues.
- The Federal Housing and Finance Agency released its foreclosure prevention report for the first quarter of 2017. So far, Fannie Mae and Freddie Mac participated in approximately 50,000 foreclosure prevention actions with homeowners across the U.S. Additionally, over 2 million homeowners in the U.S. have successfully had their loans modified.
June 26, 2017
The Federal Housing Finance Agency released its 2016 report to Congress. Of particular note are its legislative recommendations. The first is one that I and every other housing policy analyst has been saying for years. The second two are very technical, but also very important to the long term health of the mortgage market.
Housing Finance Reform
The Enterprises have been in conservatorships since September 2008. These conservatorships are unprecedented in duration and scope. While a number of important reforms have been made to the Enterprises during conservatorship, FHFA continues to believe that conservatorship is not sustainable and that Congress needs to undertake the important work of housing finance reform.
Barriers to Investor Participation in Credit Risk Transfer Transactions
Under FHFA’s annual conservatorship scorecards, the Enterprises are working to transfer to the private sector a substantial amount of the credit risk they assume in targeted loan acquisitions. This credit risk transfer market is relatively new and evolving and relies on ongoing investor interest and ability to purchase the credit risk. FHFA has previously identified several statutory impediments which, if addressed, could avoid unintended consequences for some types of investors and thus help to expand investor participation in Enterprise credit risk transfer transactions. FHFA continues to believe that these statutory impediments should be removed.
Examination of Regulated Entity
Counterparties FHFA’s regulated entities contract with third parties to provide critical services supporting the secondary mortgage market, including nonbank mortgage servicers for the Enterprises. While oversight of these counterparties is important to safety and soundness of FHFA’s regulated entities, it is currently exercised only through contractual provisions where possible. In contrast, other federal safety and soundness regulators have statutory authority to examine companies that provide services to depository institutions through the Bank Service Company Act. The Government Accountability Office has recommended granting FHFA the authority to examine third parties that do business with the Enterprises.37 The Financial Stability Oversight Council also made a similar recommendation in its 2016 Annual Report. FHFA concurs with these recommendations. (63)
- The United States Supreme Court recently clarified a rule within the issue of eminent domain. In a 5-3 decision, the court determined two adjacent properties were considered one in order to properly calculate loss cost. States are using the decision as strong guidance.
- Genworth Financial Inc. agreed to pay a 20 million dollar settlement in a suit for their alleged misguided advice during a public offering of a company. The class of plaintiffs include investors whom believed the Austrian financial market to be sound; however, the state of the market was poor at the time of Genworth Austrian subsidiary’s IPO.
- A California judge decertified a class of residents in Los Angeles. The class alleges they received unwanted, faxed solicitation ads from SoCal Better Homes. This decision makes further litigation unlikely, as the case will have disproportionate costs and needs for a person filing suit on their own.
June 23, 2017
Realtor.com quoted me in Mortgage Pre-Qualification vs. Pre-Approval: What’s the Difference? It opens,
When buying a home, cash is king, but most folks don’t have hundreds of thousands of dollars lying in the bank. Of course, that’s why obtaining a mortgage is such a crucial part of the process. And securing mortgage pre-qualification and pre-approval are important steps, assuring lenders that you’ll be able to afford payments.
However, pre-qualification and pre-approval are vastly different. How different? Some mortgage professionals believe one is virtually useless.
“I tell most people they can take that pre-qualification letter and throw it in the trash,” says Patty Arvielo, a mortgage banker and president and founder of New American Funding, in Tustin, CA. “It doesn’t mean much.”
What is mortgage pre-qualification?
Pre-qualification means that a lender has evaluated your creditworthiness and has decided that you probably will be eligible for a loan up to a certain amount.
But here’s the rub: Most often, the pre-qualification letter is an approximation—not a promise—based solely on the information you give the lender and its evaluation of your financial prospects.
“The analysis is based on the information that you have provided,” says David Reiss, a professor at the Brooklyn Law School and a real estate law expert. “It may not take into account your current credit report, and it does not look past the statements you have made about your income, assets, and liabilities.”
A pre-qualification is merely a financial snapshot that gives you an idea of the mortgage you might qualify for.
“It can be helpful if you are completely unaware what your current financial position will support regarding a mortgage amount,” says Kyle Winkfield, managing partner of O’Dell, Winkfield, Roseman, and Shipp, in Washington, DC. “It certainly helps if you are just beginning the process of looking to buy a house.”
Orrin Hatch, the Committee Chairman of the U.S. Senate Finance Committee, asked the nation for its input regarding tax reforms. It seems as if Hatch would like for tax stakeholders to share innovative thoughts, suggestions and feedback. Both Democrats and Republicans agree that the current tax system, as is, has many drawbacks. Furthermore, it lacks methods to alleviate burdens on taxpayers and grow the economy. If one is interested in providing their thoughts, they may do so at email@example.com.
The Federal Housing Finance Agency (FHFA) released a report detailing the increase in housing prices over the past year and month. The report explains how prices increased .07% in April which marked a 6.8% increase for the year. Since 2012, the prices of homes are in a steady upward trend.
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency recently determined which banks were eligible for the Community Reinvestment Act for designated activities. Banks in “distressed or underserved non-metropolitan areas” were chosen based upon factors including economic conditions, employment status, socio-economic status, and shifts within the population.
- Buyers are hungry for a home. Their hunger have caused sellers to control pricing and possess high demands on the buyers. In fact, the sale of existing homes increased in May. Despite seller control, buyers have not given up and have found ways to “cut a deal” given the low inventory of existing homes.
- This time last year the median price for an existing home was 5.8% lower than the price of a home now. On the surface, it seems like many more Americans are purchasing homes at a reasonable price. However, a closer look at the average shows that many homes were sold at a much higher price. When the lower priced homes sold and the higher price sold homes are averaged together, the median price of homes sold is $252,800. This seems great; however, it shows a lack of sell of reasonably price homes.
- Beginning July 1, 2017, the Big 3 Credit Reporting Agencies (CRAs) are changing their reporting practices. When the shift occurs, many consumers may experience an increase in their credit score. This increase will likely affect consumers with pending or current tax liens and/or civil judgments.