All

Apache is functioning normally

On Instagram last month, reality television personality Tarek El Moussa posted a video of himself strolling a street in North Hollywood to tell his 1.3 million followers about his new big plans.

El Moussa co-hosts a real estate show on HGTV called “The Flipping El Moussas” with his wife, Heather, who is also a cast member on Netflix’s “Selling Sunset.” El Moussa shared that he had just finished walking the nearby property where the couple is developing a “super cool, super modern” 138-unit apartment complex with a rooftop pool.

“We got so lucky to find this land,” El Moussa said. “Because finding land like this in North Hollywood, it’s literally impossible.”

Advertisement

El Moussa left out of the video why a lot like this was available in the first place. Just a week before, the current property owner was convicted in federal court of hiring someone to set fire to vacant units on the site, an arson that tenants say was part of a years-long illegal harassment campaign to force them to leave.

Now the El Moussas are evicting the five remaining tenants, who all are in rent-controlled units. The residents worry about their future in L.A.’s sky-high rental market and believe they should be compensated for the turmoil they’ve gone through.

“It’s been my home for 40 years,” said Cathy Livas, 77, who pays $824 a month to live in a dingbat unit with her 56-year-old son with special needs. “Why would I want to live anywhere else? Do you know the price of rents?”

Livas and other tenants said they’d be willing to negotiate a buyout but believe it should be far in excess of the up to $25,000 required under the law given that their outgoing landlord, Arthur Aslanian, tried to burn them out of their homes and otherwise illegally force them to go.

In a presentation to investors, the El Moussas project that after five years they’ll be able to sell the apartment complex for $26 million more than what it costs to acquire the property and build the development.

Advertisement

“Pay us to leave,” said Clare Letmon, 32, who lives in a bungalow with her husband, Jonpaul Rodriguez, 35. “But pay us an amount of money that’s dignified and recognizes the profit they’re set to make off of everything that was done to us.”

Clare Letmon looks at a bungalow across from hers that was badly damaged in an arson.

(Mel Melcon / Los Angeles Times)

Neither Tarek nor Heather El Moussa could be reached for comment. In an emailed statement, Eda Kalkay, the El Moussas’ public relations representative, said that the El Moussas recognize the property owner is involved in “several serious legal matters” but that the couple and other development partners will have no affiliation with them once the sale of the property is finished.

“The goal is to work closely and respectfully with the current tenants by providing proper move-out compensation and constructing a safe and pristine new apartment complex that will also include 14 low-income units,” the statement said.

The property, made up of multiple lots, currently houses 10 bungalows, five dingbat apartments, a single-family home and 6-foot-tall weeds growing next to the burned-out structures.

The horrors of living there began years ago when tenants said Aslanian started ripping out the walls of their units, exposing them to asbestos, mold and vermin and retaliated against them when they complained or pushed for repairs.

In February 2022, Aslanian promised to pay someone $2,000 to set fire to the property, federal prosecutors said. Using a borrowed gas canister and a hotplate, only the outside of a building was scorched. The next month, a second fire, prosecutors said, was started by another co-conspirator, burning two of the vacant bungalow units.

Prosecutors said Aslanian’s arson campaign was designed to force the tenants out, and most of the residents have left the property. Aslanian secured approval for the new 138-unit project within months of the fires.

“Those permits exist because of everything Arthur did,” Letmon said. “The building was almost vacant because of everything Arthur did.”

Aslanian was convicted of three charges related to the fires last month in addition to multiple charges for conspiring with his employee to hire a hitman to kill two men — one who opposed him in litigation and the other who represented one of his companies in bankruptcy.

Arthur Aslanian stands outside an apartment complex he owns during a fire in 2022.

(Hartsook Tenant Assn.)

Letmon and Rodriguez’s rent is $1,650 a month, but they’ve stopped paying, saying they refuse to give money to a landlord who set their home on fire.

Some previous tenants sued Aslanian over conditions at the property and have received a settlement for an undisclosed amount. The current tenants have a pending lawsuit against him.

But conditions at the property remain dire. The burnt-out bungalows are boarded up, and tenants say they’re still unsafe. Vacant units in the dingbat have broken windows. A tree next to Livas’ unit is overgrown.

A new development group called NoHo 138, which includes the El Moussas, took over the project earlier this year. Representatives of the developers, though not the El Moussas, met with tenants in the winter. The El Moussas began to advertise the apartment plan to investors.

In a video posted to YouTube in May, Tarek El Moussa, whose first real estate reality show was called “Flip or Flop,” stood outside the property touting it as “my biggest flip ever.”

“I am more excited about this thing than anything I’ve ever done in my life,” El Moussa said.

The tenants received their eviction notices in late June. They have become even more alarmed as the El Moussas ramped up their investment campaign.

On Instagram, the El Moussas promoted the development opportunity using a fire emoji, something Letmon and Rodriguez said was insensitive given the arson. Tarek El Moussa said that they planned to break ground “in a few months.” Under the law, tenants 62 or older can remain in their apartments for a year before getting evicted.

“My year isn’t up until June next year, so I don’t know how they’re going to build with me here,” Livas said.

Kalkay, the El Moussas’ spokesperson, said Tarek filmed the video that promised an early groundbreaking before he knew the full context of the tenants’ situation with Aslanian, and the developers will follow all provisions of eviction law. She added that El Moussa meant no offense with the fire emoji.

Home renovation specialist Tarek El Moussa inspects a property on one of his reality TV shows.

(HGTV)

“Anyone that follows Tarek would know that he is a fan of using emojis on social media,” Kalkay said in response to emailed questions from The Times. “By no means was he making any insinuation or mockery of the tenants’ past experience with the seller.”

Letmon and Rodriguez have tried to track the El Moussas’ promotion for the development. They said it’s been difficult to watch the couple talk about their expensive vacations and advertise that their investors will get invitations to exclusive yacht parties with them.

“It’s an insult when I know he’s spending his summer in the Hamptons and in Cabo and he can’t make time for tenants whose displacement is enabling ‘the biggest flip of his life,’” Letmon said.

Letmon and Rodriguez also have begun posting about their plight on social media, tagging El Moussa on Instagram and asking to meet with him in person.

“Real smart…Keep offending someone that is trying to help you,” El Moussa responded in a July 12 direct message Rodriguez shared with The Times.

Kalkay said that El Moussa is the one being harassed.

“Regardless of the alarming personal attacks sent to Tarek El Moussa and his family via social media DM, he continues to remain sensitive to the situation of the tenants,” she said.

Kalkay added that other development partners plan to continue contacting the tenants and have already reached out to the tenants’ attorney in the hopes of continuing negotiations over their departure.

“As just one of the partners that make up NoHo 138, Tarek’s role is to work on other areas of this deal, but the appropriate people managing this area intend to meet with all tenants,” Kalkay said.

Times staff writers Noah Goldberg and Salvador Hernandez contributed to this report.

Source: latimes.com

Apache is functioning normally

Fuel prices have been hovering at record levels around the United States for the past few weeks. Now is a good time to review the best ways to improve your gas mileage and save money at the tank. I scoured dozens of websites and read hundreds of tips — these are the best of the bunch.

Save Money With Your Vehicle

Purchase a fuel-efficient car
The best way to save money on gas is to drive a fuel-efficient car. It’s probably impractical to replace your current car for something that costs less to run, but if you’re in the market for a new vehicle, keep fuel economy in mind. Consumer Reports has several lists of fuel-efficient vehicles:

  • A list of the most fuel-efficient cars they’ve tested (CR loves the Toyota Prius)
  • A list of fuel-efficient SUVs
  • A list of cars that combine fuel efficiency and performance

This calculator from fueleconomy.gov allows you to compare the cost difference between two vehicles based on their MPG.

Keep your vehicle well maintained
A car in poor running condition will use more gas than one that has been tuned up. According to this checklist at Advance Auto Parts, a dirty air filter can reduce gas mileage up to 20%. They also note that spark plugs in poor condition can reduce gas mileage up to 12%.

Be wary of gas-saving products
The U.S. Federal Trade Commission warns that most gas-saving products are bogus: “Be wary of any gas-saving claims for automotive devices or oil and gas additives. Even for the few gas-saving products that have been found to work, the savings have been small.” Consumer Reports says, “Don’t waste your money.”

Keep tires properly inflated
Underinflated tires aren’t just dangerous — they devour fuel economy by as much as 25%! (I know this from experience — whenever I notice a drop in MPG, my tires are usually low.) Overinflated tires aren’t efficient, either. Also keep your tires balanced and in alignment.

Save Money by Thinking Ahead

Find the best prices
Use the web to research the lowest prices in your neighborhood. For example, GasBuddy.com is “a network of more than 179+ gas price information websites that help you find low gasoline prices.”

Buy gas from a wholesale club
Some Costco or Sam’s Club stores offer their members discounts of up to ten cents per gallon on fuel. Our local Safeway store gives us a three-cent discount on gas after we spend a certain amount on groceries. (Though we’d have to drive 25 miles to find a place to use it!)

Alter your commute time
If possible, schedule your trips and errands for times when traffic is lighter. In an insanely detailed article, Omninerd found that commute times varied widely depending on the time the author left the house. If your company allows it, try coming in earlier or later in order to avoid rush hour.

Optimize your travel
Consolidate trips: If you know you have to buy groceries, take your clothes to the dry cleaner at the same time, and then drop little Johnny at soccer practice. Combine multiple trips into one.

Lighten your load
Carry only the bare necessities — don’t haul things in your trunk. “For every extra 250 pounds your engine hauls, the car loses about one mile per gallon in fuel economy.” [via Bankrate]

Reduce drag
About half of your vehicle’s energy is expended overcoming air resistance. (The other half is expended in acceleration.) Reduce your car’s workload — remove anything that might cause drag: luggage racks, bike racks, ski racks, etc,

Save Money at the Pump

Buy gas on Wednesdays
“Gas prices are statistically the cheapest on Wednesdays, but this is only true over a large number of days. It won’t be true every week.” Gas prices often jump before holidays, too. [via WikiHow]

Don’t go out of your way to save a few pennies on gas
If it’s convenient to shop at a cheaper place, do so. If not, don’t. On a ten-gallon fill-up, saving five cents a gallon only nets you fifty cents. My car costs about 36 cents per mile to operate. It doesn’t make sense for me to go a mile out of my way to find cheaper gas.

Buy gas during the coolest times of the day
“During these times gasoline is densest. Keep in mind – gas pumps measure volumes of gasoline, not densities of fuel concentration. You are charged according to ‘volume of measurement’.” [via HowToAdvice.com]

Use the right octane level for your car
Using premium gasoline in an engine designed to run on regular doesn’t improve performance. Even some vehicles that call for higher octane fuels can run on regular unleaded, though with some loss of performance. (Check your owner’s manual.) You can save money by using the lowest octane rated gasoline that your car will tolerate.

Don’t top off your tank
Trust the auto-shutoff. Overfilling can lead to wasted gas.

Be sure your gas cap is tight
“Improperly seated gas caps allow 147 million gallons of fuel to vaporize every year in the U.S.” [via Advance Auto Parts]

Use a gas credit card
I don’t like credit cards, but the best gas rewards credit cards can be a good way to save a few cents per gallon. Just be sure to pay off your balance at the end of the month!

The Nut Behind the Wheel

Drive at a constant moderate speed
Edmunds.com found that the best way to improve fuel efficiency was to accelerate slowly and to brake over a longer distance. Aside from purchasing a new vehicle, this is the single most effective step you can take to reduce your costs. According to fueleconomy.gov: “As a rule of thumb, you can assume that each 5 mph you drive over 60 mph is like paying an additional $0.20 per gallon for gas.”

Use cruise control
If you’re like me, your driving speed tends to fluctuate. Cruise control takes the human element out of the equation and keeps driving speeds steady. It’s the easy way to drive at a constant moderate pace.

Don’t idle
Turn off your engine if you’ll be idling for more than thirty seconds. Starting your vehicle does use a burst of fuel, but not as much as allowing the engine to idle too long.

Anticipate stop signs and lights
Plan ahead. The less you have to stop, the better your gas mileage. Make it a game to catch all of the green lights. Laugh at the other guy as he sprints from red to red.

Keep your cool
Most people claim that it makes more sense to use air conditioning on the highway and to roll down the windows in city traffic. It’s commonly claimed that either method is going to reduce your fuel economy by about 10%. But according to research performed by found, there’s no real difference between driving with the windows down or using the air conditioner. Consumer Reports obtained similar results:

Air conditioning uses about 1 mpg, but safety (and comfort) increase with use. Opening windows made no significant difference in our gas mileage.

Do what works for you. (But please: don’t run your air conditioner with the windows open.)

Drive less!!!
Walk. Ride your bike. Take public transit. Carpool. Combine errands. It’s obvious, but easy to forget: the less you drive, the less you’ll spend on gas.

Additional Resources

For more information on fuel economy, check out the following sites:

What are your favorite tips and tricks for saving money on gas?

Source: getrichslowly.org

Apache is functioning normally

If you’ve been paying attention to the housing market at all this year, you know that home prices have been heading up, up, up.

Take the latest report from the National Association of Realtors which showed that the median sales price of existing homes rose to $253,800 in May. That’s up 5.8% year-over-year and the highest reading since last June ($247,000).

Given the steady climb in home prices, it’s only natural to wonder what the underlying cause is.

What Causes Home Prices to Rise

Supply and Demand

When it comes to home prices and what causes them to rise or fall, it all comes back to the basic economic principle of supply and demand.

When we’re talking about the housing market, demand refers to the amount of homes desired by buyers, while supply refers to the amount of homes available on the market.

When demand rises and supply shrinks, that’s going to cause home prices to shoot up, as it breeds fierce competition among buyers.

As Debbie Drummond, a seasoned Las Vegas Realtor, points out:

“A recent Zillow report had Las Vegas’ median home price 10.2% higher than last year which beats the national average of a 7.4% increase. Our prices are being driven up by a lack of inventory. Current listings in the MLS are less than a two month supply of homes. Homes that are in good condition, in desirable neighborhoods, and priced right are selling quick.”

That’s a story that’s being repeated around many parts of the United States right now. In economics, the current situation is what is called “excess demand”.

Unfortunately for buyers, without an increase in the amount of homes for sale, home prices are destined to keep moving higher.

How high can they go, exactly?

Depending on what region you’re talking about, home prices could still have plenty of room to run. As Drummond told us:

“While our home values are appreciating we’re still 20-30% lower than our peak prices. Our economy is rebounding with unemployment at 4.8% in April. We have $15 Billion in major construction projects planned. This includes the new Football Stadium for the Raiders to occupy in 2020. With a vibrant economy and growing population, Las Vegas is likely to return to peak prices over the next 2-3 years.”

Las Vegas isn’t the only area with home prices that could see a sustained rise for many more months.

Take this recent article from the Orange County Register, which interviewed several economists and all of them stated that home prices haven another two or more years left to rise.

A quick google search reveals that this pattern repeats itself over and over again in Nevada, Nebraska, Texas, New Hampshire, and New York, just to name a few.

What Rising Prices Mean for Homeowners and Homebuyers

Find out what’s happening in your local housing market

It’s important to note that housing markets vary drastically from region to region. While home prices have been rising on average nationally, there are varying degrees of increases and even some places where home prices have fallen.

Figuring out what the situation is in your local housing market is a crucial first step in deciding what kind of action you should take.

NPR recently published an article with an interactive map that lets users see how home prices have fared in different parts of the United States. Take a look at the map to easily get an idea of what has been happening in your neck of the woods.

In all likelihood, home prices in your housing market have gone up and are poised to go even higher. With prices rising and inventory down, we’re seeing that many homeowners think right now is a great time to sell.

In fact, just last week the Fannie Mae Home Purchase Sentiment index for June came in at 88.3, which matches the all-time high set in February. According to the report, 39% of Americans said that right now is a good time to sell a home (a new record high) and 30% said that right now is a good time to buy.

Selling your home

So if you’re planning on selling your home right now, it’s very likely that you will have no problem find a buyer. Just make sure to be on the hunt for a house to move to before you list because it’s possible you’ll be done with the sale sooner than you think.

Buying a home

For anyone planning on buying a home, it you will probably get a better deal if you act sooner rather than later. Not only are home prices continuing to move higher, but mortgage rates are also rising.

Comments from the European Central Bank President triggered a massive global bond selloff a couple weeks ago and we’ve seen rates move up over ten basis points (one basis point = 0.01).

While the upward momentum is definitely there, the good news is that mortgage rates are climbing off of 2017 lows and are still at the lower end of the spectrum this year.

If you want to find out what your custom rate would be, you can fill out our online form here, or you can always call one of our experienced loan officers who can walk you through the same process.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally

Rohit Chopra, director of the Consumer Financial Protection Bureau, has said the bureau is “no stranger” to litigation challenging the agency’s constitutionality. The Supreme Court is poised to hear oral argument on another such case this fall that could hold much of the agency’s rulemaking agenda in the balance.

Bloomberg News

The Consumer Financial Protection Bureau has a jam-packed agenda ahead with final rules coming soon that would cut credit card late fees to $8, create a registry of corporate “bad actors,” and require nonbanks to disclose terms waiving consumers’ rights to arbitration.

But the CFPB is operating under a cloud of uncertainty with the Supreme Court scheduled to hear oral arguments in October in a case challenging whether the bureau’s funding is constitutional. The legal and regulatory uncertainty will continue until the high court rules on the case by June 2024 at the latest. CFPB Director Rohit Chopra has been clear that the bureau is “not holding back” on rulemaking or enforcement.

“The CFPB is certainly no stranger to these types of challenges,” Chopra told American Banker in a recent interview. 

But the CFPB got hit with further legal turbulence this week when a federal judge in Texas temporarily blocked implementation of the bureau’s small business data collection rule until the Supreme Court case is decided. Bankers have since urged the bureau to halt all bank data collection under the rule until after the outcome of the Supreme Court’s decision.

The ruling could change the calculus for the CFPB’s regulatory agenda going forward, potentially holding off several rules from going into effect. The judge granted a preliminary injunction to members of two bank trade groups and a private bank that had sued the CFPB, setting the stage for other trade groups to follow suit. 

“This creates the precedent that fundamentally alters the CFPB’s agenda for the next year,” said Ed Mills, managing director at Raymond James. “The biggest development in favor of the industry is the most recent ruling and that there is a judge that says the CFPB can’t do anything until the Supreme Court has decided.”

The big question for banks, consumers and investors is not whether industry trade groups will sue the CFPB to block any final rules from going into effect but when and where they will sue. Trade groups have already threatened to sue the CFPB over the credit card late fee proposal, with the choice of venue likely in Texas, where Republican jurists dominate the U.S. Court of Appeals for the Fifth Circuit.

The CFPB “is going to get sued for everything and part of the reason why they get sued is because a number of the lawsuits have been successful,” added Mills.  

The industry’s playbook for how to successfully gut a CFPB rule — and challenge the constitutionality of the bureau — is the years-long litigation over the payday lending rule. The bureau issued the payday rule in 2017 and was sued in 2018 by two Texas payday groups. Last year, a three-judge panel on the Fifth Circuit ruled that the CFPB was unconstitutionally funded through the Federal Reserve System and invalidated the payday rule. The CFPB appealed that ruling last year, teeing up the current constitutionality case before the Supreme Court. 

In the case this week that temporarily halted the small business data collection rule for banks, the two bank trade groups also had appealed to the Fifth Circuit. 

CFPB Director Rohit Chopra is poised to issue four final rules by year-end that could be challenged. A rule on credit card late fees is expected to be finalized in September or October and go into effect early next year. The rule is a priority for Chopra and many experts think the CFPB will not change its proposal to drop late fees to $8 from between $30 to $41 currently. 

“Chopra has the authority to issue the rule on credit card late fees, and trade groups likely will look to file a lawsuit in Texas to get before the Fifth Circuit,” said Dan Smith, president and CEO at the Consumer Data Industry Association and a former CFPB assistant director.

Todd Zywicki, a law professor at the Antonin Scalia Law School at George Mason University, said the credit card late fee rule “does seem more likely to get the chopping block if the final rule resembles the proposal.”

Two more final rules expected by year end on nonbank registries — one for so-called “bad actors,” and the other that is a workaround of the CFPB’s invalidated arbitration rule  — are also expected to be challenged. The CFPB proposed a rule in December that would create a public database of corporate lawbreakers, requiring nonbanks to report any state and local court orders or judgments involving consumer financial products. A second registry proposed in January would require nonbanks to register contract terms waiving consumers’ rights to arbitration. 

“The bad actors’ registry just puts a bull’s eye on the industry,” said Eric Johnson, a partner at Hudson Cook. “I can see somebody challenging both of those rules while we’re waiting for the Supremes to act, especially now that two banking associations have had success before a judge.” 

Finally, a much-anticipated proposal on open banking that would give consumers control over their personal financial data is expected to be finalized in 2024. 

Chopra is mindful of the timeframe and deadlines for getting rules from the proposal stage through the public notice-and-comment process, and to the final rule stage before enactment. If the CFPB waits too long, there is always a threat — albeit a minor one, experts say — that a rule could be repealed by Republicans, assuming they take control of the Senate and Presidency and retain the House in 2024. Republicans used an obscure legislative process called the Congressional Review Act to overturn the CFPB’s arbitration rule in 2017 by a vote of 51-50. 

The Congressional Review Act is one of the reasons the CFPB is moving quickly to propose other rules and get them finalized next year before the election. Proposed rules are coming in 2024 on overdraft fees, nonsufficient funds fees and credit reporting.

By halting compliance with a rule, industry hopes to stall or at least put off enactment until another day. 

“The delay is really important for the industry because it opens up other avenues,” said Mills. “If there is an effective delay, could industry be saved by a Supreme Court decision and by the 2024 presidential election?”

The CFPB is moving quickly on rules to appear as though it is “business as usual,” despite the threat of the Supreme Court case, experts said. 

“I can see where Chopra has sped up the bureau’s activities because they are trying to show all the good they think they’re doing for consumers to justify their existence and prove their worth to Congress,” said Johnson.

Source: nationalmortgagenews.com

Apache is functioning normally

In an effort to make homeownership more accessible, seeing that down payment is often the biggest hurdle, Fannie Mae and Freddie Mac have announced that they will now allow loan-to-value ratios as high as 97%.

Only 3% Down Needed to Qualify for a Mortgage

  • Fannie Mae and Freddie now only require 3% down payment
  • Which is slightly lower than the 5% minimum they used to require
  • More importantly it means conventional home loan financing
  • Requires a smaller down payment than government options like the FHA (3.5% minimum)

In other words, prospective home buyers can put down just 3% instead of the previous 5% down payment requirement that was in place for conforming mortgage loans. This should make it a little bit easier to qualify for a mortgage without going through the FHA.

Additionally, if you already have a mortgage that is owned by Fannie Mae or Freddie Mac, you’ll be able to get a rate and term refinance up to 97%, as opposed to just 95%, assuming you don’t qualify for HARP.

These new guidelines should make conventional loans a lot more popular than FHA loans, the latter of which require 3.5% down and come with very costly insurance premiums.

However, there are a few caveats to ensure loose lending doesn’t return just several years after the worst housing crisis in recent memory.

For one, both programs require the subject property to be owner-occupied. So investment properties and second homes won’t be eligible. But condos, co-ops, and PUDs are just fine.

Additionally, you can only get a fixed-rate mortgage via these new 97% LTV loan programs and the mortgage term is limited to 30 years. Shorter-term fixed mortgages are also permitted.

Though Fannie Mae and Freddie Mac are very similar, there are some differences between the two programs that I’ve highlighted below, most importantly the implementation date.

So if you were struggling to come up with a down payment, you might now be able to qualify for a mortgage thanks to these new programs. Take a look to see if you’re eligible and then contact banks/brokers to see if they’re available.

Most lenders that work with Fannie and Freddie will add these loan programs to their suite of offerings.

Fannie Mae’s 97% LTV Offering

Fannie Mae actually has two separate 97% LTV home loan programs available, one open to everyone and one only for borrowers in low-income census tracts or income-restricted in all other tracts.

The income-restricted program is known as “HomeReady” and comes with cheaper mortgage insurance coverage along with lower loan level pricing adjustments (LLPAs).

Those lower LLPAs mean borrowers can obtain lower mortgage interest rates, an important benefit for those with affordability concerns.

The LLPAs are waived for borrowers with LTVs above 80% and credit scores equal to or greater than 680, and capped at 1.50% for borrowers with attributes outside those parameters.

It also allows cash-on-hand as an eligible source of funds, but requires at least one borrower to take an online homeownership education course.

Here are the other rules that apply to both programs:

– Available on 1-unit principal residences only
– Maximum loan-to-value ratio 97%
– Down payment can come from gift, grant, or Community Second
– No minimum borrower contribution necessary
– Reserves may be gifted
– Only fixed-rate mortgages with terms up to 30 years are eligible
– No high-balance loans or adjustable-rate mortgages
– Manufactured housing not permitted
– Mortgage insurance is required
– Minimum 620 FICO score
– Must be underwritten through DU
– Available now

For the standard Fannie Mae 97% LTV program, there are no income limits and no discounts in the way of mortgage insurance or LLPAs.

And at least one borrower must be a first-time homeowner (no ownership interest in last 3 years). However, no pre-purchase home buyer counseling is required.

Freddie Mac’s Home Possible Advantage

– Available for low- and moderate-income borrowers
– Both first-time buyers and other borrowers with limited down payment savings can qualify
– First-time home buyers must participate in homeowner education program
– Maximum loan-to-value ratio 97%
– Loan options include 15, 20, and 30-year fixed mortgages
– Can be used to purchase a single-unit, primary residence
– Minimum 620 FICO score
– Manufactured housing not permitted
– Income limits vary by area (no limit in underserved areas)
– Lender-paid mortgage insurance permitted
– No reserves required
– Available March 23rd, 2015

For the record, there are already individual lenders offering loans with as little as 3% down that aren’t backed by Fannie or Freddie.  Examples include TD Bank’s Right Step program and various loan programs via credit unions nationwide.

However, the Fannie/Freddie guideline change will allow such loans to become widely available to many more borrowers.

(photo: Anna & Michal)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Mortgage Rates Near 23 Year Highs. Is There Any Hope?

Interest rates of all types have been under immense pressure since the beginning of 2022.  This resulted in the the highest mortgage rates in more than 2 decades in November of the same year.  A decent recovery followed, leading the average 30yr rate from the mid 7’s back to 6% by January, but rates have been grinding higher in a volatile pattern ever since then. 

As of today, many lenders are back in line with the high rates briefly seen at the beginning of last month.  Those rates are only a hair lower than those seen at the November 2022 peak.  

We’re fond of framing a mortgage rate index in the proper context.  It is a number that is best used to measure day over day changes relative to to points of reference in the past.  In other words, it’s less important that our index is at 7.2% today and more important that it’s only 0.1 lower than the 7.3% seen in Nov 2022.  Similarly, Freddie Mac’s weekly mark of 6.9 is getting close to its 7.08 level from 2022.  

Nonetheless, many mortgage lenders are definitely forced to be quoting rates in the mid 7’s right now.  Our 7.2% index represents a “top tier” scenario.  It means most lenders are at 7.25% since few originate loans at rates that don’t fall on .125% increments.  If the credit score is a bit lower, or if it’s a condo, or an investment property, or….  you could quickly be seeing something closer to 8%.

Many loan quotes still exist in the mid to upper 6’s because many companies are quoting rates with upfront discount points.  A discount point (1% of the loan balance) is still good for at least a 0.375% reduction in rate at most lenders.  Just be aware that 7.25% with no points is the exact same deal as 6.875% with one point.  Personal preference will dictate whether a borrower would rather pay now or pay more over time. 

Is there any hope for relief?  There’s always hope.  The only question is one of timing.  Timing will depend on economic data and inflation, among other things.  Part of today’s rate spike could indeed be due to anxiety over tomorrow’s big jobs report.  If it’s as strong as some of the other recent data, rates could continue higher.  But if it shows cracks in the labor market, it could mark a much needed turning point.

Source: mortgagenewsdaily.com

Apache is functioning normally

Companies using artificial intelligence in cybersecurity respond to data breaches faster and save over $1 million in incident responses compared to firms that don’t use AI, IBM reports.

Hacks cost financial firms on average $5.9 million in 2023, according to the tech giant’s new Cost of a Data Breach Report. The average global cost of a data breach was $4.45 million, an all-time high and slight increase from last year’s $4.35 million mark. 

The research, conducted by the Ponemon Institute and analyzed by IBM, polled 553 organizations worldwide which suffered cyber attacks between March 2022 and March 2023. It’s unclear if any of the 67 U.S. companies surveyed were real estate organizations. The industry however was hammered with attacks over the same period. 

Cybersecurity utilizing AI saved firms on average $1.76 million in incident responses compared to businesses that didn’t, the report found. The tech-savvy firms also contained breaches 108 days sooner than their non-AI counterparts.

“Examples include the use of AI, machine learning, automation and orchestration to augment or replace human intervention in detection and investigation of threats as well as the response and containment process,” the report said. 

Only 28% of firms surveyed said they extensively use AI and automation security tools in cybersecurity, while 40% rely solely on manual inputs. Although the mortgage industry has slowly embraced tech solutions, an Arizent survey last year found lenders lagging behind their financial services peers in deploying AI and machine learning in cybersecurity. 

Lenders, servicers and other real estate players have suffered attacks impacting as little as a few hundred customers to millions of consumers in the past two years. While some firms have yet to acknowledge widely-reported attacks, others are facing class-action lawsuits from borrowers whose personally identifiable information was compromised. 

Mortgage firms have been quick to identify hacks, discovering them typically within days, according to public disclosures. In a more severe lapse, a servicer in late 2021 didn’t identify a breach for 41 days before investigating. Those known response times are far quicker than IBM’s reported average of 204 days for companies to identify a breach and 73 days to contain it. 

Among the average damages for firms worldwide were lost business costs, which respondents put at an average of $1.3 million per firm in 2023. Those expenses include lost customers and revenue, and the cost of acquiring new clients. Audits, investigations and crisis management totalled on average $1.58 million. 

Notification costs to consumers, regulators and other third parties averaged $370,000, according to the report. The 37% of businesses surveyed that didn’t notify law enforcement of attacks paid on average $470,000 more than those who did. 

The overall costs don’t include ransoms paid. The FBI warns victims not to pay hackers to further enable them.

Ransomware accounted for nearly 25% of all attacks, followed by phishing at 16% and compromised access credentials at 15%, the report found. Only a third of breaches were identified by a firm’s own security team or tools, a lapse that could add an additional $1 million to a data breach. 

The report highlights the benefits of firms which use a managed security service provider, a vendor that provides around-the-clock monitoring. Companies using a security partner cut breach lifecycles by 21%. 

Mortgage companies in the past year have also been forced to reconcile soaring cybersecurity and cyber insurance costs with fading revenues. In the past three months alone, lenders have grappled with a ransomware gang, suffered wide-ranging cyber attacks and paid a seven-figure settlement to resolve the fallout of a data breach. 

Source: nationalmortgagenews.com

Apache is functioning normally

Aurora Acquisition Corp., the special purpose acquisition company planning to make public the digital nonbank lender Better.com, said on Thursday that the Securities and Exchange Commission (SEC) ended an investigation of the companies with no enforcement action. 

In July 2022, HousingWire reported that the SEC launched an inquiry into Aurora and Better to evaluate allegations of federal securities law violations, prompted by a former top executive’s lawsuit.

“On August 3, 2023, SEC staff informed Aurora and Better that they have concluded the investigation and that they do not intend to recommend an enforcement action against Aurora or Better,” Aurora’s SEC filing states. 

The lawsuit was filed by Sarah Pierce, former executive vice president for customer experience, sales and operations at Better.com. 

Pierce claimed the company and its CEO, Vishal Garg, violated securities and labor laws as the lender began working toward its public offering. Pierce alleges Garg told the board of directors that the firm would report a profit by the end of Q1 2022, despite Pierce and other senior leaders explicitly saying it was impossible.

The lawsuit is in the discovery phase, per court filings. 

Aurora and Better disclosed that the SEC’s enforcement division requested documents in the second quarter of 2022 regarding Better’s business and operations and Garg’s other business activities. The company said it collaborated with the SEC.  

Aurora’s shareholders will decide the merger’s fate next week, on August 11, about two years after the deal was announced and ahead of the extended deadline to complete the merger deal on September 30. 

If Aurora is unable to complete the merger with Better by September 30, or any other business combination, it will cease all operations.

Better has faced an arduous journey to its IPO, marked by surging mortgage rates and declining origination production. In the first quarter of 2023, the digital lender posted a net loss of $89.9 million, per Aurora’s filings. 

To navigate a challenging mortgage market, Better imposed massive layoffs, receiving bad press for the manner in which it handled the layoffs. The digital lender had about 950 team members as of June 8 — a 91% drop from its peak of approximately 10,400 employees in Q4 2021, SEC filings show. 

Better’s most recent business change was to shift its real estate strategy. The company will partner with outside agents as referral partners, pivoting from its in-house licensed professionals. Ultimately, Better laid off the agents in its real estate brokerage subsidiary, Better Real Estate LLC.

Better ranked as the 59th largest mortgage lender in the country in the first quarter, per Inside Mortgage Finance.

Source: housingwire.com

Apache is functioning normally

My friend Gillian called the other day — she’s been having money trouble and was looking for help. “I’m not really a financial advisor,” I told her. “I write about money, and I try to help people at my web site, but I’m not qualified to coach you one-on-one.” Still, she’s a friend, so I resolved to at least give her some advice. I asked her to explain the situation.

“Tom and I are working all the time, but we’re always broke. He just wrecked his car, but we don’t have money to get it repaired. We’ll have to use the credit cards again. We don’t have any other choice. There’s never anything left at the end of the month,” she said. “I need some help budgeting so that we don’t keep having this problem.”

“Well, let’s see what we can do. I guess the best place to start is with your monthly income and your monthly expenses. How much do you and Tom bring home each month?” I asked.

“About $4,000 after taxes.” That was about what I expected.

“How much do you spend?” I asked.

“All of it,” she said, laughing. I expected that, too.

“How much do you have saved?” I asked. “Do you have any savings at all?”

“No, we don’t,” she said. “There’s never been anything left over to save.”

They don’t have anything left to save because they’re very good at spending money. Gillian and Tom live well:

  • They have a nice custom-built home.
  • Each of them drives a late model SUV.
  • They have no kids.
  • They enjoy expensive hobbies.

I have friends who make half what Gillian and Tom do, but have built a nest egg because they maintain a frugal lifestyle. It should be easy for these two to reduce their spending to create a budget surplus. “Well, let’s see if we can find a way to free up some cash,” I said. “Let’s list your fixed monthly expenses.”

Gillian listed their bills one-by-one. I jotted them down, making note of anything that seemed particularly extravagant. “Okay, let’s see what we have,” I said. “You’re paying a housekeeper $50 a week. If you were to clean the house yourself, you’d save $200 a month.”

“But…” she began.

“I think you’d be surprised at how much difference $200 a month can make,” I said. “I know from experience that even a $50 positive cash flow can make the difference between feeling broke and feeling flush. A $200 difference is huge.”

“Yeah,” said Gillian, “but I don’t want to clean the house. It’s too much work.” I was puzzled. To me, this was a quick and obvious way to free up money. If I were in her shoes, the housekeeper would be the first thing to go — it would be worth some extra work on my part. I tried a different approach.

“You each have a cell phone,” I said. “Do you both need one?”

“Yes,” said Gillian. “I don’t know what I’d do without one. And Tom needs one for work. I need to be able to reach him.”

Her reasoning seemed thin, but I pressed on. “Well, what about the cable bill,” I said. “You’re paying $60 a month for that. That’s an easy one. What about cutting back to basic cable?”

“Oh, we can’t get rid of cable,” Gillian said. “We watch TV all the time.” I was silent. “Are you there?” she asked.

“I’m here,” I said. “I’m just trying to figure out what to do. In order for you to turn things around, you’re going to have to make some sacrifices.”

“Yeah,” she said, “but we can’t cut cable. Tom would have a fit.”

“Gillian,” I said, “this is a little frustrating. I thought you wanted to get out of your money situation.”

“I do,” she said, “but so far you’re just suggesting things for me to get rid of. Isn’t there something else we can do? Can’t we use a budget to get more money?”

“That’s what I’m talking about,” I said. “Cutting things like these is making a budget. I know it seems terrible to have to give things up, but you need to make sacrifices — at least in the short term — in order to get ahead. You don’t have any savings. Any disaster means you’re putting money on your credit card. You need to build up some savings. You need to pay off your existing debt. In order to do this, you need to spend less than you earn. Right now you’re spending exactly what you earn, and you’ll never get ahead that way. I know, because for years that’s how I operated. You’re going to have to tighten the belt, Gillian. It’s the only way.”

I paused, and then said, “You need to decide what’s important.”

It was obvious I wasn’t going to be able to help her. I hadn’t even explored the Big Ideas, like moving down to a smaller home or trading one of their SUVs for a used car. I had started with the medium-sized stuff — the obvious chaff. But Gillian wasn’t interested in making changes if it meant altering her lifestyle. I changed the subject.

We talked about summer. Gillian asked how our garden was. I described the knee-high corn, the ripe raspberries, and Kris’ monster tomatoes. “I’m jealous,” she said. “I don’t have time to garden. I did get a chance to go to the nursery last week, though. I was able to pick up five shrubs on sale for about $10 each.”

The shrubs were the final straw. There was nothing I could do to help her because she wasn’t ready to be helped. She wasn’t ready to listen. She said she wanted to change, but she didn’t really. She was looking for a magic pill, something that would make life easier without any effort on her part. That’s not how it works. Eventually Gillian will reach a place so bad that she’ll begin to see the need to take responsibility for improving her situation, but she’s not there yet.

Our conversation reminded me of an episode of This American Life I heard recently. The show profiled debt guru Dave Ramsey, and at one point the reporter played a segment in which Dave experienced similar frustration:

Tina calls Dave because she’s upside-down on her car loan. She recently wrecked the car, but rather than use the money to repair the vehicle, she spent it. “Ooooo-kay,” says Dave, obviously flustered. “I’m afraid what you’re looking at is probably a really good part-time job, about six or eight months of 80 hour weeks.”

“Eighty hour weeks?” says Tina. “That’s too much work.”

“I can’t help you, Tina,” says Dave.

And I can’t help you, Gillian.

This story is based on actual events. Names and situations have been changed to protect Gillian’s identity.

Source: getrichslowly.org