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Apache is functioning normally

September 9, 2023 by Brett Tams

Diluted earnings per share (EPS) is a measure of earnings per share that includes a company’s convertible securities. Convertible, or dilutive, securities are stocks or bonds that could potentially become common shares. Basic earnings per share only considers existing common shares.

Diluted EPS, then, includes in its calculation the factor of convertible bondholders, convertible preferred stockholders, and options holders potentially deciding to turn their securities into common shares. If this were to happen, the number of shares outstanding would increase, with earnings staying the same, resulting in lower earnings per share. Diluted EPS will therefore tend to be lower than basic EPS.

Basic vs. Diluted EPS

What is diluted earnings per share, and how does it differ from basic EPS? Simply put, basic EPS tends to be a higher number than diluted EPS. Basic EPS doesn’t factor in the existence of convertible securities of the impact if they were to be converted into common shares.

Instead, the most basic calculation of earnings per share only takes a company’s net income minus any preferred stock dividends and divides that number by the number of shares outstanding. Convertible securities aren’t factored into the equation.

Because of this, sometimes it’s beneficial to look at a calculation of earnings per share that assumes all possible common shares have been brought into being through existing convertible securities. Doing so gives investors a more realistic view of earnings while assuring no future surprises.

Imagine an investor doing all their homework on the fundamental analysis of a company using only basic earnings per share. EPS, which measures the value that a company delivers to individual shareholders, might look high and the stock pays a good dividend, so the investor might decide the stock is a good one to buy.

But then she learns that the company has been issuing convertible bonds to raise capital and giving new employees stock options to make working there more attractive.

All of a sudden, for some reason, bondholders decide to convert their bonds to common shares, and employees decide to exercise their stock options.

Now this investor’s shares have been diluted, since a bunch of new shares have popped into existence practically overnight. As a result, earnings per share have decreased, and dividends likely have done the same (because the same dividends now have to be paid out to additional shareholders).

If our imaginary investor had used diluted EPS in her calculations, she could have prepared for this kind of scenario at some point. But because this make-believe company created the potential for its stock to be diluted by issuing convertible securities, basic EPS did not provide the full picture.
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How to Calculate Diluted EPS

The formula for diluted EPS is a company’s net income minus any preferred stock dividends, divided by the company’s average outstanding shares minus its dilutive shares. Or:

Diluted EPS = (Net Income – Preferred Stock Dividends)/(Average Outstanding Shares – Dilutive Shares)

The diluted EPS formula is calculating the amount of earnings per share there would be if dilutive shares were to become common shares. The formula is exactly the same as that of calculating basic EPS, but with one important extra step – adding the number of dilutive shares to the number of average outstanding shares (in the bottom half of the equation).

The sum of both existing common shares and the possible dilutive shares creates a larger number on the bottom half of the equation, while the top half remains the same.

Therefore, diluted EPS tends to be lower than basic EPS, as the company’s net income (minus preferred stock dividends) is being divided by a larger number of shares.

For example, let’s say a company makes $1,000,000 in net income and pays no dividend. There are 800,000 common shares outstanding, 100,000 call options, and 100,000 convertible preferred shares.

The diluted EPS formula would yield a result of $1.00 per share in this example, as we would be dividing 1,000,000 dollars in net income by 1,000,000 total potential shares.

Basic EPS, on the other hand, would be calculated as $1,000,000 divided by the 800,000 current shares, yielding a result of $1.25 per share.

While it’s not difficult to calculate EPS and diluted EPS, many companies share the figures with investors in their earnings reports.

Recommended: What You Should Know About Earnings Calls

Why Is Diluted EPS Important?

Diluted EPS reveals what a company’s earnings per share could look like if holders of convertible securities were to decide to exercise their right to hold common shares, and it’s an important consideration during an investor’s analysis of a stock.

Since companies often issue convertible securities like stock options, convertible bonds, convertible preferred shares, a company’s earnings per share could appear higher than reality when not factoring in the potential for dilution.

Convertible securities might be held by people inside or outside of the company, and they may not be turned into shares anytime soon. But what happens when everyone decides to turn in their convertible securities for shares?

For example, if a company’s stock were to rise in price suddenly, and the company had paid several of its employees bonuses in the form of stock options, those employees might choose to exercise those options.

Now there are more common shares than before, but earnings have not increased. Therefore, in a theoretical example like this, earnings per share will have decreased.

A company issuing employee stock options isn’t always a negative thing, however. If the options keep high-quality employees, the result could be positive for the company over the long run. Using options also reduces expenses that come from paying employee salaries, which could free up capital to help the company grow.

Diluted EPS provides a more conservative earnings per share number since it shows what EPS would be in the event of more new shares coming into existence. Basic EPS could appear to be deceivingly high because it doesn’t calculate for this possibility, so it could be a less reliable indicator of when to buy, sell, or hold a stock.

Of course, there might also be times when diluted EPS is unnecessary. Young companies that are still small and growing might not have had the chance to issue any convertible securities yet, so earnings per share might look the same either way.

The Takeaway

Diluted EPS is a measurement of earnings per share that factors in the potential stock dilution that occurs when convertible securities are converted to common shares. Understanding diluted EPS is important so that investors don’t get caught off guard in the event of new common shares being created through the conversion of securities such as stock options, stock warrants, convertible bonds and convertible preferred shares.

When this happens, earnings per share decline, and those who had only been looking at basic EPS in an attempt to determine the profitability of a company will find they made a miscalculation. In some cases, the difference between basic and diluted EPS might not be that different. If a company hasn’t issued convertible securities, or has issued very few convertible securities, then not much dilution would be possible.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

Photo credit: iStock/Morsa Images

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

September 8, 2023 by Brett Tams

By Aarthi Swaminathan

Financial considerations and interest rates are a key reason some homeowners are choosing to rent their homes rather than sell

A majority of homeowners would consider renting out their current home on a short-term basis rather than selling it in the current market.

That’s according to a survey released Thursday by Realtor.com and CensusWide, which included responses from 2,000 homeowners. They found that 60% of respondents would consider renting their current home versus selling if or when they decide to buy or rent a home somewhere else. The survey was conducted online in July 2023.

Some 23% of respondents had rented out their home before or planned to rent out part of their home out in the future. An additional 16% of respondents said they would consider doing that.

With the 30-year mortgage rate at over 7%, many homeowners are reluctant to sell. Short-term rentals are a way of earning extra cash and, for those who can afford it, of holding onto their home should they decide to move to a new place.

The company released the survey in conjunction with the launch of a new tool on Realtor.com that allows users to see estimates of short-term-rental income from Airbnb (ABNB).

Homeowners can look at potential earnings estimates for hosting their whole house or even one room. The estimated earnings for a seven-day rental are based on Airbnb data from similar listings in the same zip code, Realtor.com said.

Realtor.com is operated by News Corp (NWSA) subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.

Cities like New York are tightening short-term rental laws

Recent legislation may complicate homeowners’ plans to try their hand at short-term renting, however. In New York, a new ordinance that went into effect Sept. 5 requires all short-term-rental hosts to be registered with the city, live in the place they are renting, be present when renters are staying and have a maximum of two guests.

The new rules will likely eliminate many Airbnb listings in New York. Airbnb filed a lawsuit against the city in June, calling the rules a “de facto ban against short-term rentals in New York City,” per court documents. A judge dismissed the case in August.

Airbnb called the new rules “extreme and oppressive.” In a statement released to Associated Press, the company said the city’s new rules “appear intended to drive the short-term rental trade out of New York City once and for all.”

The total number of Airbnb listings in the city could fall by 70%, according to an estimate from Skift.

Other cities, including San Francisco and Seattle, have limits on how many properties one person may rent out on a short-term basis. In Los Angeles, hosts may only rent their primary residence on a short-term basis, and only for up to 120 days per calendar year.

Financial considerations for renting rather than selling

Financial considerations were a key reason homeowners told Realtor.com they would choose to rent out their homes instead of selling them, with 21% saying they would like to earn extra income from renting and 19% saying they would rather rent their home out in order to maintain the equity they had built.

And since many homeowners either purchased their home at an ultralow interest rate or refinanced to a very low rate, they might consider renting as an way to make money while holding on to that home.

Homeowners also had specific plans for that extra income: A third said they wanted to pursue the short-term rental route to earn extra income that they would save toward buying another home with a higher mortgage rate; 29% said they wanted to be prepared in the event that their adjustable-rate mortgage payments increased in the future; and 21% said they wanted the income to help pay for their current mortgage.

-Aarthi Swaminathan

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-08-23 0935ET

Source: morningstar.com

Apache is functioning normally

September 8, 2023 by Brett Tams

In the US, no one really talks about their money. It’s taboo—impolite, embarrassing, rude. No one wants to sit at the dinner table comparing salaries and tax brackets.

But when the time comes to buy a house, money talk is a necessary evil. Such conversations are critical to getting on the same page financially as your partner. In fact, financial disparities between partners is a leading cause of divorce when not handled properly.

Fortunately, we have some tips about having this delicate conversation on money with your partner, and coming out of it with a better idea of what you two can afford in the housing market.

Planning Before the Conversation.

Before anything, it is important to plan your conversation ahead of time. Write down questions and responses you would like to have ready when you have the talk with your partner. If you don’t already know what their yearly earnings are, it is time to find out.

Additionally, it may be helpful to brainstorm some financial management strategies to cut down on existing costs. Do you really need that magazine subscription or the deluxe package of cable channels? If you are coming into this conversation from a position of power (i.e. you earn more than your partner) take time to carefully word your conversation to avoid gridlock and tension. Some good opening lines include:

“We might benefit from meeting a financial coach together.”
“We should spend the night going over our budget together. Would you help me get a sense of our spending for each month?”
Where do you think we should start our housing search in terms of pricing? What is financial stable for you?

Where to Start.

The first step of the money talk is perhaps the most difficult step. It is important that you and your partner talk about relationship goals. You don’t necessarily have to ask the clichéd question, “Where do you see yourself in 5 years?” but you should have a good forecast of where you will be in a year or two.

Further, where do you see this relationship going? Sometimes, a house is more than a purchase, but the next step in a relationship. If marriage or kids are on the horizon, that will certainly effect the size and location of your real estate search.

Next up, it is important to assess your current financial situation. Where are you both in terms of income and expenses, assets, debts, and credit ratings? Will your financial profile be strong enough to earn a favorable mortgage interest rate? Or will you have to plan to take on a little more debt? Alongside this conversation, it would be a good idea to think about ways to reduce any debts you have faster. This is where you and your partner should be getting into the nitty-gritty of financial transparency. Talk about retirement savings and compare credit scores; factor in family planning costs if that’s where your relationship is heading.

Once you have sussed out where you are presently in terms of money, it is time to look toward the future and discuss potential changes to how, where, and why you spend money. Budgeting together is the best way to start this conversation, identifying where each other can stand to shave off a few dimes.

Communication is key, especially if the money being put toward a home will come more from one partner than the other. That extra financial burden should be recognized and discussed. It is also time to compromise. Commonly, partners will have to find ways to balance the splurging problems of one partner with the intense frugality of the other.

Where to End Up.

Your conversation on financial planning should really culminate in a place of mutual understanding. You and your partner have a future ahead of you that requires, by necessity, time and money. Even if your financial situation changes in the next month or year, getting on the same financial page as your partner will give you a road map to fiscal solvency, and the ability to plan for your future years together.

With that knowledge in mind, you can come into the real estate market from a position of power, brokering deals that will suit you and your partner and provide a strong head start to a future together.

Source: totalmortgage.com

Apache is functioning normally

September 8, 2023 by Brett Tams

A shell company, also called a shell corporation, refers to any legally structured corporation that has no meaningful assets or business operations. In popular culture, they’re often used to conceal illegal businesses, or to conceal the owners of a business from law enforcement, the public, or both. However, shell companies themselves are not illegal, and they do have some legitimate uses.

As business entities, shell companies exist to protect, and sometimes to conceal (or at least misrepresent) the assets of the shell company’s owner. But there’s nothing necessarily illegal about shell corporations themselves. It’s important to not only understand the definition of a shell company, but also to recognize how and why they’re used by businesses and people.

How Are Shell Companies Created?

There is more than one way to create a shell company. Most often, the people or corporations that launch new shell corporations use a registered agent in the country where the company will have its legal headquarters. So, in the United States, shell companies would need to register with the Securities and Exchange Commission.

In most countries, the agent must register his or her name, and the name of an owner or a shareholder director. The cost of creating and legally registering a corporation will vary from country to country, from as little as a few thousand dollars to as much as several hundred thousand dollars.

Being “hollow,” by definition, shell companies can do many things. They can open bank and brokerage accounts. They can transfer funds in and out of their home country. They can buy and sell real estate or other companies. And own copyrights and earn royalties on those copyrights.
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3 Uses of Shell Companies

People and corporations use shell companies in a wide range of legitimate businesses for legitimate reasons. Those might be used as a vehicle to raise funds, as a legal entity to attempt to take over another business via a reverse merger, or as a legal entity to give form to a company that intends to go public.

1. Tax Benefits of Shell Companies

Many shell corporations operate in a legal gray area, and it’s possible that corporations and wealthy individuals may use them to avoid taxes.

Many companies have found ways to move their profits to offshore shell corporations to take advantage of less expensive, or more permissive tax regimes in other countries (similar to how some states may be more tax-friendly than others). American corporations might set up shell companies in countries with inexpensive labor, where they have already begun to outsource some of their operations.

Corporations aren’t the only ones that use shell companies to avoid paying taxes. Wealthy individuals around the world may also use shell corporations, domiciled all over the world, to hide their earnings and their wealth from the governments of the countries in which they prosper.

2. Less Risk, More Opportunity

Tax avoidance isn’t the only reason a corporation would set up a shell corporation. It might create a shell company to operate in a country, while protecting its other operations from the legal, political, and financial risks related to that country. That way, if something goes wrong in the country where it operates, the parent company can limit its exposure by existing — at least on paper — offshore.

A corporation may also set up a shell corporation in another country to gain a window into new regions. A business might set up a shell company in Panama or Switzerland to gain access to the local business community, in order to generate contacts and information that would lead it to business opportunities in Latin America or Western Europe.

3. SPACs

While shell companies come up in the news in relation to questionable tax-avoidance schemes, in recent years, they’ve also been mentioned alongside special purpose acquisition companies, or SPACs.

At any given time, there may be hundreds of shell companies that qualify as SPACs — which may be a reason that SPACS were so popular for a couple of years in 2020 and 2021. These are companies formed exclusively to raise capital via an initial public offering (IPO), which will then purchase a company already in operation. SPACs are a type of “blank check company.”

These companies issue an IPO, then hold the money in a trust, until the SPAC management team chooses a company and buys it. And if the SPAC doesn’t find a company to buy, or can’t buy the company or companies it likes within a pre-set deadline — often two years — then the managers promise to liquidate the SPAC and give investors their money back.

Recommended: What Is A Backdoor Listing?

Example Shell Companies

An example of a shell company could be as follows.

Say there’s an entrepreneur that’s looking to raise money before they officially launch a startup — maybe the next big emerging growth company. They may create an LLC, which is a business entity, that doesn’t have any assets or employees. It only exists on paper. But the business entity — a shell company — can be used to store the money being raised for the startup prior to its launch.

In effect, the company itself is merely a shell used to hold cash until it’s ready for use. It’s not really a functional business in the traditional sense.

Shell Companies and Shady Dealings

While there are many legitimate uses for shell companies, as outlined, bad actors also might use them to shield their operations and their assets from authorities. And as different jurisdictions compete for business, new loopholes emerge on a regular basis. In Panama, the British Virgin Islands, Nevada and Delaware, to name only a few, there are strong laws that prevent the government from revealing the beneficial owner of a given shell corporation.

And for creative financiers, there are always new ways to add layers of anonymity, such as phony company directors, who agree to sign their names for a few dollars. Among professionals who specialize in such things, there are ways to find would-be board members, and for countries and states with convenient tax and privacy laws.

Are Shell Companies Legal?

Yes, shell companies are legal, and are most often used for perfectly legal purposes. While they can be used for illegal purposes, a shell company is generally used for a more or less boring or run of the mill business purpose — as discussed in the previous example above.

Shell Companies vs Holding Companies

Though there may be some superficial similarities, shell companies and holding companies are not the same thing. As discussed, shell companies may be formed to serve as empty entities that may be used to take advantage of different taxation regulations, for example. A holding company, on the other hand, is a parent company — holding companies holds or owns other companies within it, like an umbrella. It allows its owners to control numerous businesses without necessarily actively managing any of them.
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The Takeaway

Shell companies are legal business entities that are often used for perfectly legal reasons, and often to reduce tax liabilities or store funds. Shell companies can be used for illegal purposes, too, which is what they’re often associated with.

Most investors wouldn’t use shell companies in their day-to-day trading, but they might consider allocating part of their portfolios to a SPAC. It’s important to remember that these are speculative, risky investments, so they don’t make sense for every portfolio.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

Is a shell company legal?

Yes, shell companies are legal, and are generally used for perfectly legal purposes. A shell company is simply a business entity that has no assets or employers, or engages in much or any meaningful business operations.

What is an example of a shell company?

An example of a shell company could be an LLC formed by an entrepreneur planning to launch a startup. The entrepreneur files the paperwork to create the LLC, and then uses it simply to store funds until the startup launches, rather than have the LLC engage in any business itself.

What is the difference between a holding company and a shell company?

Holding companies are parent companies, or umbrella organizations, that often have multiple businesses running underneath or within them. Shell companies do not have assets or employees, or any meaningful business operations.

Photo credit: iStock/akinbostanci

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

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3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

September 7, 2023 by Brett Tams

While tax planning is a year-round task, real estate agents can take some specific actions before the New Year to significantly cut their taxable income. Use these seven strategies to avoid overpaying taxes, save money, and better manage your business.

1. Identify business deductions

Every business has ordinary and necessary costs, such as office equipment, marketing, accounting, and insurance, that are tax-deductible. If you don’t flag them throughout the year, take the time to identify them now so you’ll have less work to do later.

Run reports to double-check that you’ve categorized costs correctly and adjust if needed. Note that tax-deductible business expenses can change from year to year. So, familiarize yourself with the list of allowable deductions in Publication 535, Business Expenses.

2. Claim the home office deduction

In addition to deductible business expenses, you can claim the home office deduction if you primarily run your business from a dedicated home office. Many entrepreneurs don’t realize that even if you have a day job and run a part-time business from home, you qualify to claim the deduction whether you’re a homeowner or renter.

Your home office doesn’t have to be the only place you work or meet customers to qualify for the deduction. For instance, you might also work at a coffee shop, co-working space, and meet clients in their homes.

Direct expenses for your office area, such as flooring, furniture, window treatments, or an additional phone line, are 100% deductible. However, exterior improvements, such as landscaping or installing a pool, typically aren’t deductible.

You may also deduct a portion of expenses for your home, such as rent, mortgage interest, property taxes, insurance, cleaning, and utilities, known as indirect office expenses. They’re partially deductible based on your home office size and calculation method.

The standard method requires you to calculate the size of your office as a percentage of your home and apply it to your expenses. For example, if your office is 10% of your home, you can attribute 10% of qualifying expenses (such as your homeowners insurance and power bill) to business use.

Or, you might choose the simplified method, which allows you to claim $5 per square foot of your office area, up to 300 square feet. It eliminates having to keep detailed records but won’t give you the largest deduction if your office exceeds 300 square feet.

If you’re eligible to claim the home office deduction, it’s a terrific way to make certain personal expenses partially deductible. Use Form 8829, Expenses for Business Use of Your Home, to determine the allowable costs and enter them on Schedule C, Profit or Loss From Business, when you file taxes. See Publication 587, Business Use of Your Home, for more details.

3. Claim business vehicle use

Most real estate professionals use their personal vehicle for business, allowing you to deduct expenses based on mileage. That means keeping detailed records to allocate business versus personal miles driven. However, if your vehicle is used exclusively for business, you can deduct all its costs.

Your deduction depends on your chosen calculation method, using actual expenses or a standard mileage rate. Generally, the more expensive your vehicle is to operate, the higher your deduction will be using the actual cost method.

For 2023, the rate for business use is 65.5 cents per mile. For instance, if you drove 1,000 miles annually for business purposes, your vehicle deduction would be $655 (1,000 x $0.655). You may come out ahead for more economical cars using the standard mileage deduction.

Check out Publication 463, Travel, Entertainment, Gift, and Car Expenses, for more information on vehicle deductions.

4. Contribute to a retirement account

If you haven’t opened a retirement account, such as an IRA, SEP-IRA, or solo 401(k), don’t miss the opportunity to cut taxes and start building wealth before year-end. The benefit depends on how much you contribute and your account type.

For 2023, the maximum IRA contribution is $6,500 or $7,500 if you’re over 50. If you contribute $6,500 to a traditional IRA by your tax filing deadline (mid-April or mid-October if you file an extension), you reduce your taxable income by that amount.

Self-employed retirement accounts, such as a SEP-IRA and solo 401(k), allow contributions of up to 25% of your net business earnings up to $66,000. That gives you a much larger potential tax deduction.

5. Max out a health savings account (HSA)

If you have a high deductible, HSA-qualified health plan purchased on your own or through your or a spouse’s employer, you can open an HSA. Like a traditional IRA, HSA contributions made by your tax filing deadline are deductible for the current year.

What’s terrific about an HSA is that your funds can be invested for tax-free growth. Plus, when you spend it on qualified healthcare costs, your withdrawals are entirely tax-free. That significantly cuts the long list of medical expenses you’ll find in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.

6. Buy business equipment

If you’ve been considering buying equipment for your business, such as a computer, machinery, or vehicle, consider doing it before the end of the year. In some cases, you may be able to deduct the entire cost this year instead of depreciating it over several years.

Review Publication 946, How to Depreciate Property, and consult with a certified tax accountant if you purchased business assets or are considering them.

7. Time your business income and expenses

Timing your income and expenses involves legitimately moving them from one year to another to pay the least in taxes. For instance, if you defer business income until January, you reduce earnings in the current year.

To reduce your taxable income, you might accelerate or prepay certain business expenses before the New Year–such as real estate continuing education, memberships, and auto insurance. If you mail payments or make credit card charges in the current year, you can deduct them.

A wise strategy for cutting taxes before the year-end is getting guidance from a certified tax professional. Their advice can pay off in the long run if it helps you get organized and reduce your taxable income for the year. It’s up to you (and your tax pro) to make smart moves now to avoid potential tax mistakes and save as much money as possible.

Laura Adams is the author and host of the Money Girl podcast.

This content should not be considered accounting or legal advice. You should consult your local tax or legal professional in your state for appropriate strategies.

This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.

To contact the author of this story:
Laura Adams at [email protected]

To contact the editor responsible for this story:
Tracey Velt at [email protected]

Source: housingwire.com

Apache is functioning normally

September 7, 2023 by Brett Tams

A popular state grant program to help low- and moderate-income California homeowners build accessory dwelling units may end up with $25 million in new funding following a tussle over dollars in the state budget.

The California Housing Finance Agency’s ADU Grant Program offered up to $40,000 to qualified homeowners to cover pre-construction costs of an ADU, including planning and permit fees for the structure. The program exhausted its initial $100 million months ago, and since then, Gov. Gavin Newsom and lawmakers have gone back and forth over $50 million in additional funding for ADU financing that had been included in a previous year’s budget.

For the record:

12:21 p.m. Sept. 5, 2023An earlier version of this story stated that the $50 million in last year’s budget for ADUs was for the grants program. It was for ADU financing, with grants as one of several possible uses.

In July, lawmakers approved and Newsom signed a budget bill that would restore the $50 million for the grants. On Aug. 30, the Assembly Budget Committee advanced a budget bill for fiscal years 2022 and 2023 that would take back the $50 million. Now, however, Chairman Phil Ting (D-San Francisco) says an amendment will put half of the money for ADUs back, specifically to restart the grants program, before the bill moves on this month.

The ADU money is in flux because of a disagreement between lawmakers and CalHFA over how to use it.

In an interview Friday, Ting said one of the hurdles for ADU construction has been the reluctance of California lenders, and particularly major banks, to develop attractive ADU loans. So two years ago, he said, lawmakers provided $50 million to CalHFA to create a loan loss reserve fund that would backstop ADU loans from private lenders.

The goal was to bring about systemic change in the industry, rather than just provide more grants for individual ADUs, Ting said. But after CalHFA studied the issue, “there was still a significant amount of hesitancy” at the agency to start a loan loss reserve program, he said.

Meanwhile, as homeowners built more ADUs, more lenders took an interest in the field. So after initially agreeing to redirect all $50 million to other programs, Ting said, he’s proposing to put $25 million into the existing ADU grant program and redirect the remainder.

Under the current income limits for borrowers, homeowners earning up to $194,000 in Los Angeles County would qualify for a grant. Ting said he may propose a lower limit to make sure the grant program is “much more targeted” on lower-income Californians who could not otherwise afford to build ADUs.

Supporters of the grant program argue that it does, in fact, direct help to borrowers who need it. For example, a joint letter from the California Community Economic Development Assn. and Homeplex, which helped the association distribute ADU grants for the state, notes that more than 60% of the recipients they’ve helped have been low-income households making less than 80% of the median income in their area.

“Many of these homeowners would not have been able to move forward with their ADU to build financial security for their families, if not for the support of the State Legislators and your support,” their letter to Ting and Senate Budget Committee Chair Nancy Skinner (D-Berkeley) stated. “These projects employ hundreds of workers and provide affordable rental housing for the local communities we serve. ADUs are the least expensive and quickest housing to build in the State.”

More aid for first-time home buyers

Ting’s latest proposal would steer $20 million of the $50 million to the California Dream for All Shared Appreciation Loan program. The Legislature initially provided $500 million for the popular program, which provides no-interest loans to first-time home buyers, but Newsom put $200 million of that on hold to help manage the state government’s budget crunch. Lawmakers and Newsom agreed to restore the $200 million in July.

The extra funding hasn’t translated yet into new loans, however.

The California Dream for All Shared program launched in late March, offering qualified first-time home buyers loans worth up to 20% of the purchase price of a house or condominium. The loans were especially attractive because they carried no interest and required no monthly payments.

If it sounded too good to be true, it was — but only because the program hit its application limit (and the number of people it could help, an estimated 2,300) in only two weeks and was effectively halted.

In the initial rollout, the loans were available only to households with earnings below CalHFA’s income limit for low- and moderate-income borrowers.

The loans, which can be used for down payments and closing costs, are structured as a second mortgage, which means they aren’t repaid month by month. Nor do they accrue interest the way an ordinary loan does. Instead, when the mortgage is refinanced or the house is sold again, the borrower pays back the original amount of the loan plus 20% of the increase in the home’s value.

If the home is ultimately sold for the same amount it was purchased for or less, the buyer won’t need to pay the additional 20%.

To receive a loan, borrowers must complete a home buyer education and counseling course (there are options for online and in-person classes on the CalHFA site) and a free online course specifically for shared appreciation loans.

The agency said it will provide an update on the Dream for All Shared Appreciation Loans program this fall that will include a timeline for applications. It’ll do so through email updates and newsletters you can sign up for.

Source: latimes.com

Apache is functioning normally

September 6, 2023 by Brett Tams

The ICE — Black Knight merger creates the first end-to-end digital infrastructure that will reorder incentives and change how housing markets operate. New competitive pressures on long-protected positions will force many to rethink delivery systems and reinvent organizations. The digital future is unknowable, but we do know that information power moves to consumers, value resides in networks and data rights are the new currency. These principles of digitization will test the adaptive capacity of every element in this diverse ecosystem.

The most likely outcomes include:

Lenders: Fewer than 50 mortgage lenders will transition to a federated model that enforces the controls necessary for secure cross-industry interoperability. The cost and benefits of migrating to network centric production will be substantial. The ERP projects of other manufacturers offer examples of the change management challenges lenders will face. Networks that have earliest visibility at the consumer points of intention will capture the data to win loans, provide servicing, create content and build a loyal audience.
GSEs: The concentration of lenders will lead to new systems that may reach deeper into the primary market. Lenders will align with marketing and services partners to gain pricing power. New methods, metrics and marketplaces will emerge from the non-QM segment that challenge conforming orthodoxy. Investor expectations will change, and government entities will attempt to coordinate their response. Any future exit from conservatorship will confront issues beyond capitalization such as data monetization, risk parameters, secondary market design, FHA execution and the pricing of mortgage guarantees.
Portals: These destinations become marketplaces that integrate the supply chain and allow consumers and their advisors to choose and close within minutes – not months. Portals will authenticate identity, validate content, facilitate standard agreements, and ensure timely payments between buyers and sellers of homes and service providers. Audience assets will be valued based on transaction volumes and bundles of listings, lending, loan sales and servicing and trading content. Consumer profiles will describe the interests, intentions and preferences that signal future purchases for the platforms that dominate the homeownership supply chain. Google, Amazon and their networks want to know when buying patterns are about to change.
Title: Title may be best positioned to implement the “trust model” that defines the responsibilities of all parties to a complex transaction. Beyond reps and warrants this structure would assure the range of “soft” components required for digital transactions such as – interoperability compliance, security standards, credential criteria, data quality, payments reconciliation, sales and repurchase terms, limits of liability and audit requirements. These essential tools require a collective commitment. Will providers like MasterCard, that recently acquired Finicity, capture the opportunity to bring digital trust to the largest asset class?
Insurance: How will PMI and P&C firms address the opportunities as electronic marketplaces lower the cost of customer acquisition across a rapidly changing competitive landscape? Every ancillary service will rely on a deeper understanding of local environmental and credit conditions. Access and affordability may be dictated by the regulatory actions of higher risk states and the cost of increasingly ESG sensitive capital.
Brokers: Digitization puts middlemen in every industry at risk. Real estate and mortgage brokers will be marginalized as friction is removed. Advisory services based on relationships and unique insights will command price premiums in every metro, submarket and product niche. Effective local and national advocacy could allow agents to monetize their data and personal networks that extend across the entire homeownership cycle. MLSs must evolve from listing repositories that extend offers of compensation to become “Metro Property Networks” that serve the broader real estate interests of every major job center.

Housing can finally be rewired to make the leap to a smarter, safer, connected system. Networks that create richer data will change the game and control the trajectory of an AI powered future. Digital infrastructure arrives as earnings erode and liquidity risk forces change upon an unstable structure. Every leader in the ecosystem will be on a shared journey to a connected mindset. Thinking differently about digital will matter more than any technology.

Stuart McFarland is the former EVP Operations and CFO at Fannie Mae, EVP General Manager at GE Capital Mortgage Services, and CEO at GE Capital Asset Management.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Stuart McFarland at [email protected]

To contact the editor responsible for this story:
Tracey Velt at [email protected]

Source: housingwire.com

Apache is functioning normally

September 3, 2023 by Brett Tams

Though money is a very important aspect of life, the topic of personal finance (or financial literacy) isn’t part of most people’s education, neither in school nor at home.

Not knowing financial basics can leave you to wing it when it comes to your money management, meaning you might wind up living paycheck to paycheck, having too much debt, or not saving enough for retirement.

To help you avoid those situations, read up on personal finance basics — the smart and simple steps to budgeting wisely, saving well, and spending sensibly.

These 10 personal finance basics can put you on the path to taking control of your cash and achieving your money goals.

Personal Finance Definition

Personal finance is a term that involves managing your money and planning for your future. It encompasses spending, saving, investing, insurance, mortgages, banking, taxes, and retirement planning.

Personal finance is also about reaching personal financial goals, whether that’s having enough for short-term wants like going on a vacation or buying a car, or for the longer term, like saving enough for your child’s college education and retirement.

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.50% APY, with no minimum balance required.

Top 10 Basics of Personal Finance

Here, learn about 10 of the most important foundations of mastering personal finance.

1. Budgeting Is Your Friend

Budgeting and learning how to balance your bank account can be key to making sure what’s going out of your account each month isn’t exceeding what’s coming in. Winging it — and simply hoping it all works out at the end of the month — can lead to bank fees and credit card debt, and keep you from achieving your savings goals.

You can get a quick handle on your finances by going through your statements for the past several months and making a list of your average monthly income (after taxes), as well as your average monthly spending.

It can be helpful to break spending down into categories that include basic needs (e.g., rent, utilities, groceries) and discretionary spending (e.g., shopping, travel, Netflix). To get a real handle on where your money is going every day, you may want to track your spending for a month or so, either with a diary or an app on your phone.

Once you know everything that typically comes in and goes each month, you can see if you’re going backward, staying even, or ideally, getting ahead by putting money into savings each month.

If you aren’t living within your means, or you’d like to free up more cash for saving, a good first step is to go through your budget and look for ways to cut back discretionary spending. Can you cook more instead of going out? Buy less clothing? Cut out cable? Quit the gym and work out at home?

You can also consider ways to bring in more income, such as asking for a raise or starting a side hustle from home.

2. Building an Emergency Fund

You can’t predict when your car will break down or when you’ll have to make an emergency trip to the dentist. If you don’t have money saved up for what life throws at you, you can risk racking up high-interest credit card debt or defaulting on your bills.

To avoid this, you may want to start putting some money aside every month to build an emergency fund. A common rule of thumb is to keep three to six months of basic living expenses set aside in a separate savings account.

It can be a good idea to choose an account where the money can earn interest, but you can easily access it if you need it. Good options include: a high-yield savings account, online savings account, or a no-fee bank account.

3. Avoiding a Credit Card Balance

When you have a credit card at your disposal, it can be tempting to charge more than you can afford. But carrying a balance from month to month makes those purchases considerably more expensive than they started.

The reason is that credit cards have some of the highest interest rates out there, often over 20%. That means a small charge carried over several months can quickly balloon into a much larger sum. The same is true for other high interest debt, such as some private or payday loans.

If you already have high-interest debt, however, you don’t need to panic. There are ways to pay off that debt.

The avalanche method, for example, requires paying the minimums to all your creditors and putting any extra money toward the debt with the highest interest rate first. Once that’s paid off, the borrower puts their extra cash toward the debt with the next highest rate, and so on.

4. Paying Your Bills on Time

If you miss bill payments or make late payments, your creditors might impose late payment penalties. If you delay payment for a prolonged period, your account could go into delinquency or be sent to collections.

Late payments can also affect your credit score — the number lenders use to help judge whether to give you loans and credit.

Your payment history accounts for 35% of your credit score, so a history of late and missed bill payments can be a major strike against your score. A poor credit score can make it difficult for you to get loans, and the loans you do get are likely to have higher interest rates.

To make sure you never miss a due date, it can be helpful to make a list of your bills and their due dates, set up auto payments when possible, and sign up for reminders.

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Open a SoFi Checking and Savings Account and start earning up to 4.50% APY on your cash!

5. Starting Early to Save for Retirement

When you’re young, retirement can feel far away. But putting money away as early as possible means you’ll have more years to save, spreading the savings across your life rather than racing to catch up.

Perhaps the biggest reason to start as early as you can, however, is the power of compound interest.

Because you earn interest not only on your contributions, but also on accumulated interest, small amounts can grow over time. If you have an employer-sponsored plan, such as a 401(k), you may want to consider contributing, especially if your employer offers to match your contributions.

Depending on your situation, you may be able to open a traditional IRA, Roth IRA, or SEP IRA, as well.

6. Investing

Saving for retirement may not be enough for you to have what you need to live comfortably after you stop working. Plus, there may be things you want to be able to afford later in life but before you reach retirement age.

If you have children, for example, you may want to start a 529 plan to help you invest for their college educations.

For other long-term savings goals, you may want to invest additional money, keeping in mind that all investments have some level of risk and the market is volatile, meaning it moves up and down over time.

To get started with investing, you can choose a financial firm you want to work with and then open a standard brokerage account. From there, you can put your money in a mutual fund or an exchange-traded fund (which bundle different types of investments together), or, if you’re prepared to do a fair amount of research, pick and choose your own stocks and bonds.

7. Getting Insured

When it comes to insurance, sometimes it’s best to prepare for the worst. That means making sure you have health insurance and car insurance (which is required by law). You also may want to consider renters or homeowners insurance to protect your home and belongings.

If you have children or other people who are dependent on you financially, it can be a good idea to get long-term disability insurance and term life insurance. Many people can purchase health and disability insurance through their employers. If you don’t have that option, it’s possible to go through an insurance agent, broker, or the insurance company directly.

8. Taking Advantage of Credit Card Rewards

If you have a decent credit score, you can look into getting a credit card with rewards that may give you travel miles or cash back on your purchases. If travel is your priority, you may want to look for a flexible travel rewards credit card, meaning their rewards can be applied to many different airlines and hotels.

You may want to look for a card that not only offers rewards but also offers a nice signup bonus for spending a certain amount within the first few months. One with no annual fee would be ideal, too.

Whichever card you pick, it’s a good idea to familiarize yourself with its rewards program: the value of its rewards units (points, miles or cash back), how to redeem them, whether your rewards expire, and any minimum redemption amounts.

You may also want to keep in mind that credit card interest rates are typically a lot higher than credit card rewards rates. So, to avoid seeing your earnings swallowed up by finance charges, it can be wise to make sure to pay your full statement balance by the due date every month.

9. Checking Your Credit Reports Regularly

You can request a credit report for free each year from the three main credit reporting agencies — Equifax, Experian, and TransUnion — at AnnualCreditReport.com.

It can be a good idea to periodically order a copy of your report and then scan it for any errors or signs of fraudulent activity. If you see anything that isn’t right, it’s wise to contact the credit reporting agency or the account provider as soon as possible and file a formal dispute if needed.

Checking your report can help you spot — and quickly address — identify theft. It can also help you make sure there aren’t any errors on the report that could negatively affect your credit score. If you ever want to obtain a lease, mortgage, or any other type of financing, then you’ll likely need a solid credit report.

10. Choosing Your Bank Wisely

There are lots of financial institutions out there, so it can be a good idea to shop around and make sure you find a place that really suits your financial needs. Choices include:

A Traditional Bank. These typically have physical locations throughout the country and offer a wide range of financial products and services. If you want to know you can have an in-person chat about your money, this option might work well for you.

Credit Union. These are non-profit organizations owned by the members of the union. They’re similar to a traditional bank, but membership is required to join, and they’re often smaller in scale and have fewer in-person locations. However, they may have lower fees and higher interest rates than a traditional bank.

Online Bank. These institutions don’t usually have any in-person locations — everything happens online. Because of this, they often have very competitive fees and interest rates. If you don’t necessarily need in-person money talk and would prefer to handle your money at home (or on the go), an online bank could be a great option.

When making a bank choice, it can be a good idea to make sure the bank you choose has a user-friendly website and app, as well as conveniently located ATMs that won’t charge you a fee for accessing your money.

💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.

3 Personal Finance Rules to Know

Once you’ve established some fundamental procedures, you can start thinking about some overarching rules that can help you make better money decisions. Three rules you may want to keep in mind include:

• Keep your goals in mind. Without a clear set of goals, it can be difficult to do the hard work of budgeting and saving. Defining a few specific goals — whether it’s buying a home in five years or being able to retire at 50 — gives you a picture of what personal financial success looks like to you, and can keep you motivated.

• Learn to distinguish wants from needs. Merging these two concepts can wreak havoc on your personal finances. Needs generally include food, clothing, shelter, healthcare, reliable transportation, and minimum debt payments. Everything else is likely a want. This doesn’t mean you can’t have wants, but it can be important not to trade financial security in pursuit of these things.

• Always pay yourself first. This means taking some money out of each paycheck right off the bat and putting it towards your future goals. Setting aside money in a savings account, IRA, or 401K plan via automatic payroll deductions helps reduce the temptation to spend first and save later.

The Takeaway

Being good with your money requires a set of basic skills that many of were never actually taught in school. Fortunately, It’s never too late to educate yourself about personal money management.

Learning personal finance basics like how to choose a bank, set up a budget, save for retirement, monitor your credit, avoid (and deal with) high-interest debt, and invest your money are key to reaching your goals and building wealth over time.

One simple way to become more organized with your money is to open the right bank account.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with up to 4.50% APY on SoFi Checking and Savings.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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Source: sofi.com

Apache is functioning normally

September 2, 2023 by Brett Tams

Two mortgage companies this week joined the list of financial institutions and other businesses with customers exposed to massive data breaches in software that vendor Sovos Compliance used.

RoundPoint Mortgage and Pennymac’s loan services affiliate said in government filings based on a template from Sovos that the vendor had recently notified the housing finance firms that some of their clients were among those impacted.

Customers affected receive information about what type of data the unauthorized third-party involved downloaded and access to two years of credit monitoring and identity restoration from Kroll Information Assurance, according to the filings.

“Pennymac has taken swift action to ensure that any individuals directly impacted were contacted. No Pennymac systems were compromised and we continue to monitor the remediation efforts,” that company said in an emailed statement.

RoundPoint is in the midst of an acquisition and at the time its buyer reported second quarter earnings the deal had not yet closed due to pending state approvals.

None of the companies involved in the pending acquisition had provided additional or updated information about the deal’s status or the data breach at deadline, outside of what RoundPoint filed with California about the latter.

The Golden State, which has particularly strict legal protections related to consumer privacy, requires businesses or state agencies to notify any resident if an authorized person is considered likely to have seen their unencrypted personal information.

If entities need to notify more than 500 California residents of a data breach, they must file a generic sample copy of the notices they are sending out with the state.

Neither RoundPoint nor Pennymac specified how many of their customers the breach affected, but the latter company noted that overall, the security issue impacted over 1,000 organizations and 60 million people globally.

Pennymac said it is continuing to monitor impacts of the breach of a file management program called MOVEit created by Progress Software that Sovos used.

“We remain diligent in maintaining the safety and security of non-public personal information,” Pennymac said, adding that the commitment it has to this “extends past this particular incident.”

In response to an inquiry, Progress emailed a statement attributed to a spokesperson for MOVEit, characterizing the breach as stemming from “a sophisticated multi-stage attack” on the file management program and related cloud technology.

“We worked quickly to provide initial mitigation strategies,” the spokesperson said in an email.

Immediate responses to the attack included a patch that fixed the issue and notification to clients so they could protect their systems.

“We are committed to playing a collaborative role in the industry-wide effort to combat cybercriminals intent on maliciously exploiting vulnerabilities in widely used software products,” the spokesperson added.

Other mortgage servicers such as Cornerstone Capital Bank have also reported data breaches from separate security incidents recently.

Source: nationalmortgagenews.com

Apache is functioning normally

September 1, 2023 by Brett Tams

LO Jobs; Jumbo and Non-Agency News; Bond Market Digests Higher Unemployment Rate

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LO Jobs; Jumbo and Non-Agency News; Bond Market Digests Higher Unemployment Rate

By:
Rob Chrisman

3 Hours, 47 Min ago

Some things in life are fleeting, like a frosty glass of rose, enemy troops singing Christmas carols in the trenches during WWI, or the time when lenders couldn’t hire people fast enough because rates were at 3 percent. I mention this because Krispy Kreme’s Strawberry Glazed Donuts, a flavor not seen in two years, is back today but only through Monday, in participating Krispy Kreme shops nationwide. Fleeting for donut aficionados. (Who says this commentary never has anything newsworthy?) Also fleeting are some astronomical events. Some will tell you that NASA doesn’t have much else going on besides coming up with the names of moons every month or two. Along those lines, thank you to Eric D. who pointed out that the common definition of a “blue moon” (the second full moon in any month) is wrong. It is the third full moon in a season that has four full moons per NASA. (Today’s podcast can be found here and this week’s is sponsored by Black Knight. Black Knight is an award-winning software, data and analytics company that drives innovation in the mortgage and real-estate industries, and the capital and secondary markets. Listen to an interview with Canopy Mortgage’s Tim Davis on why he signed on with an emerging fin-tech mortgage company and the role innovation and technology will play in shaping the mortgage industry’s future.)

Non-Agency and High LTV Products

Most lenders offer programs besides conventional conforming and government loan types. Of course, the cost of originating loans has been challenging for the jumbo and non-QM segment, where it takes more effort to underwrite a mortgage. Many programs don’t have industry-standard underwriting automation tools like Fannie Mae’s Desktop Underwriter and Freddie Mac’s Loan Prospector, which increases the cost of doing business. Meanwhile, on the demand side of the equation, banks and credit unions have pulled back on TPO platforms and products, exiting mortgage and warehousing, which creates an opportunity for LOs and brokers to take share from the banks who follow the puck to where it’s going and get in front of these changes.

Verus Mortgage Capital (VMC), a correspondent investor specializing in residential non-QM and investor rental programs, is now offering a Closed End Second Lien Mortgage Program so lenders can capitalize on the growing home equity market. The Closed End Second Lien Mortgage Program allows borrowers to access their home equity without impacting the interest rate on their first mortgage. The maximum loan amount of up to $500,000 comes with a fixed interest rate and monthly payment, and the program’s features also include a maximum CLTV of 90%, a minimum credit score of 680, standard income documentation (two years), occupancy – primary residence, and stand-alone transactions.

Loan Stream Mortgage MaxONE and MaxONE Plus are 100% CLTV FHA DPA programs that may help you qualify more borrowers and expand your market reach. A few features of MaxONE: FHA DPA, Purchase Only, Min FICO 600 – DU Approve/Eligible (no manual underwriting), No First Time Home Buyer Requirement, Non-occupied Co-borrowers allowed per FHA guides. MaxONE Plus features: 100% CLTV FHA Loan (Combines 1st and Subordinate Lien), 2nd lien with an interest rate 2% greater than 1st lien, Payment amortized over 10 years, Monthly payments required, 600 Minimum FICO.

Citi Correspondent Lending expanded non-Agency CRA premiums, effective with Best Effort locks completed on/after Friday, August 11, 2023. View Citi Correspondent complete announcement, which includes details around new MSAs added and changes to LMIHH and LMICT segments.

PRMG announced the release of the new Expanded Access Elite Prime Connect product and Investor Solution Elite DSCR product options within the existing Expanded Access and Investor Solution products. These new product options are designed to allow better pricing options within this suite of products. For both products max LTV is 75% and the minimum credit score is 680. For the Investor Solution option, the minimum DSCR is 1.15. View more information in PRMG Product Update 23-40: New Elite Non-QM Product Options and Product Profile Updates.

PRMG Product Update 23-41: Clarifications on Onyx Jumbo product regarding Borrower documented two-year history of managing investment property via the Borrowers federal tax returns, terms for Deferred DPA, WI WHEDA Advantage FHA and Conventional eligibility of PUDs and warrantable condos.

Capital Markets

Ahead of this morning’s release of the jobs report for August, bond yields were pressured to their lowest closing levels in three weeks yesterday in reaction to the Personal Income/Outlays report for July. The report showed a smaller than expected increase in income (actual 0.2 percent, expected 0.3 percent) and a bigger than expected increase in spending (actual 0.8 percent, expected 0.7 percent).

The strength of consumer spending is presenting fresh concern for policymakers hoping to return inflation to the 2 percent annual target. That strength in spending, coupled with an uptick in the PCE Price Index to 3.3 percent year-over-year from 3.0 percent, gives the Fed an argument to keep rates in restrictive territory. The question for investors is less about when (or if) a downturn might occur, but more specifically when the Fed might start to reverse course on rates. Keep in mind that any fast rate cuts would take the economy nose diving precipitously.

This morning brings the August payrolls situation. The economy added 187k jobs in August versus 175k expectations and versus a revised 157k jobs in July. The unemployment rate rose to 3.8 percent when it was expected to remain at 3.5 percent and average hourly earnings increased +.2 percent, lower than expected (0.3 percent) and 0.4 percent previously. Later this morning brings final August S&P Global manufacturing PMI, ISM manufacturing PMI for August, and July construction spending. Two Fed speakers are scheduled, Atlanta President Bostic and Cleveland President Mester. Before traders head for early exits, despite no early close ahead of the long Labor Day weekend, we begin the day with Agency MBS prices better by roughly .125, the 10-year yielding 4.06 after closing yesterday at 4.09 percent, and the 2-year at 4.77.

Loan Officer Jobs

Canopy Mortgage executes a strategic maneuver as it introduces Tim Davis, the mind behind “The Originators Guide” and the author of “The Circle of Referrals,” as its new Chief Growth Officer (CGO). This dynamic decision not only underscores Canopy’s dedication to enhancing the mortgage journey through its exceptionally effective in-house LOS but also highlights the company’s unwavering support for empowering its loan officers to enhance their individual effectiveness. Canopy is expanding its nationwide footprint seeking to onboard producing LOs who express interest in their highly competitive P&L model. Questions? Reach out to McKay Shoell or call 888-696-9076.

“Equity Resources is a privately owned mortgage banker that is very pleased to continue with its growth and expansion. We are seeking career-focused (self-sourced) loan officers in all our markets. Equity is proudly celebrating our 30th anniversary and we are excited about our future! The average tenure of our LO team is 10+ years, with many LO’s celebrating their 15th, 20th and 25th anniversaries with us! We are an agency direct lender currently licensed in 19 states along the east coast and mid-west. We offer a stellar marketing team that includes a social media director, a video production team, and a media team to support our loan officers. We help our loan officers develop a sustainable plan to assist them in growing their business with their referral partners. In addition, Equity offers a full suite of products (including several specialty lending programs.) For confidential inquiries to join our award- winning team, please contact Tom Piecenski, Executive Vice President of Sales at 614.327.5353.”

In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.

“At Planet, we’re hiring Branch Managers and empowering them with the resources to build extraordinary teams. Bring your team to the only Top 10 mortgage company with positive year-over-year production growth for the first 6 months of the year. Reach out today for a confidential discussion with Brian Miller, Planet’s SVP Talent Acquisition, at 214-223-9986, or Peter Briggs, VP Talent Acquisition, at 949-202-8213. When you’re here, you’re home.”

“At Fairway Independent Mortgage Corporation, customer service is a way of life. #FairwayNation mortgage loan officers are dedicated to finding great rates and loan options for our customers while offering some of the fastest turn times in the industry. Our goal is to act as a trusted mortgage advisor, providing highly personalized service and helping you through every step of the loan process, from application to closing and beyond.”

As a mortgage sales professional have you ever thought, “What if I could focus on only the things that actually grow my business, flipping the hourglass and spending 80 percent of my time on what I do best: building relationships?” Or “What if I could surround myself with sales support that is truly team inspired, results driven marketing and customer obsessed headache-free process?” Welcome to radius financial group! They started radius with one main focus: to offer a better value proposition than any other bank or mortgage company in the country for you, your borrowers and your referral partners. radius can help you grow your business, have a better quality of life, and make more money. For confidential inquires please contact Carla Herrera.

Atlanta-based Highland Mortgage continues to grow and is searching for branches and loan officers throughout the Southeast, Delaware, Arizona, and Colorado. Contact Mickey Schilling, CMB®, its VP of National Sales. Now in its fourth year, Fannie Mae-approved Highland Mortgage is well-positioned to expand its footprint nationwide under Mickey’s guidance. Here are Mickey’s top reasons why Highland is the right destination for you.

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Source: mortgagenewsdaily.com

Hanover Mortgages

The Refined Mortgage Lending Company & Home Loan Lenders

earnings

Apache is functioning normally

Apache is functioning normally

Apache is functioning normally

1. Identify business deductions

2. Claim the home office deduction

3. Claim business vehicle use

4. Contribute to a retirement account

5. Max out a health savings account (HSA)

6. Buy business equipment

7. Time your business income and expenses

Apache is functioning normally

More aid for first-time home buyers

Apache is functioning normally

Apache is functioning normally

LO Jobs; Jumbo and Non-Agency News; Bond Market Digests Higher Unemployment Rate

Basic vs. Diluted EPS

How to Calculate Diluted EPS

Why Is Diluted EPS Important?

The Takeaway

How Are Shell Companies Created?

3 Uses of Shell Companies

1. Tax Benefits of Shell Companies

2. Less Risk, More Opportunity

3. SPACs

Example Shell Companies

Shell Companies and Shady Dealings

Are Shell Companies Legal?

Shell Companies vs Holding Companies

The Takeaway

FAQ

Is a shell company legal?

What is an example of a shell company?

What is the difference between a holding company and a shell company?

1. Identify business deductions

2. Claim the home office deduction

3. Claim business vehicle use

4. Contribute to a retirement account

5. Max out a health savings account (HSA)

6. Buy business equipment

7. Time your business income and expenses

More aid for first-time home buyers

Personal Finance Definition

Top 10 Basics of Personal Finance

1. Budgeting Is Your Friend

2. Building an Emergency Fund

3. Avoiding a Credit Card Balance

4. Paying Your Bills on Time

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5. Starting Early to Save for Retirement

6. Investing

7. Getting Insured

8. Taking Advantage of Credit Card Rewards

9. Checking Your Credit Reports Regularly

10. Choosing Your Bank Wisely

3 Personal Finance Rules to Know

The Takeaway

LO Jobs; Jumbo and Non-Agency News; Bond Market Digests Higher Unemployment Rate

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