financial

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

6 in 10 Americans have a FICO score above 700. [Source: Experian]

A good credit score can potentially help you save money on your mortgage, car insurance, credit cards and many other things. Alternatively, a bad credit score could increase costs in these same areas.

Many of life’s biggest purchases (like a house, a car or college tuition) are things that can affect your credit. Most people don’t have enough disposable money to pay for these large expenses up front.

How much damage can a bad credit score really cause? A 2020 survey suggested that individuals who take out an auto loan of $25,346 with a “fair” credit score could pay up to $3,847 more interest than a person with a “very good” credit score taking out the same loan.

Similarly, someone with a “fair” credit score may pay $8,640 in interest for a student loan, but another student with a “very good” score might only pay $3,933 interest for the same loan.

It can be helpful to know credit score statistics to understand your eligibility and trustworthiness in comparison to other Americans for making large purchases and paying back your loans on time. We’ve compiled a list of the most important credit score statistics you should know. This information could help you make critical decisions regarding your score and may help you improve your credit score.

Note: we reference the most updated data available, but sometimes that information is from many years ago—check each individual source for specifics.

General credit score statistics

According to recent research, millions of Americans are credit invisible, while others have a credit history that is insufficient. Here are some general credit score statistics that highlight credit reports, average monthly credit scores and other current data.

  • Nearly 28 million Americans are credit invisible, meaning they have no credit history with a nationwide consumer reporting agency. (Source: Oliver Wyman, 3)
  • 21 million Americans had credit history that has gone stale or is insufficient to produce a score under the most common scoring models. (Source: Oliver Wyman, 3)
  • 38 percent of adults ages 18 to 24 say they never check their credit scores. (Source: Javelin)
  • 27 percent of adults say they check their credit score monthly. (Source: Javelin)
  • 1 in 3 adults are unable to obtain a credit score from conventional models. (Source: VantageScore)
  • More than half a million Credit Karma members achieved an average first score of 639 after not having an initial TransUnion score when they checked their credit scores for the first time. (Source: Credit Karma)
  • Average credit score from 2012 to 2021: (Source: Experian)

FICO score statistics

When considering how Americans are doing financially, especially by each generation, FICO scores allow us to analyze changes in stability and creditworthiness. Here are some of the most recent FICO statistics.

  • The average FICO score hit 716 in April 2022. (Source: FICO)
  • 23.3 percent of Americans have a FICO score between 800 and 850. (Source: FICO)
  • 9 percent of Experian customers have a FICO score below 550. (Source: Experian)
  • From 2020 to 2021, the average subprime consumers’ FICO score increased by eight points, from 578 to 586. (Source: Experian)
  • Nearly 60 percent of Americans have a FICO score above 700. (Source: Experian)
  • The Villages, an adult community in Florida, had the highest average FICO score of American cities at 785. (Source: Experian)
  • California cities Los Altos (777) and Saratoga (776) took second and third place for the cities with the highest average FICO score. (Source: Experian)

VantageScore statistics

Since 2006, VantageScore has encompassed 2,500 users between 2,200 financial institutions. Average VantageScore statistics of 2021 show generational disparities and contrasts.

  • The average VantageScore credit score in January and February of 2022 was 696. (Source: VantageScore)
  • Generation Z had a median VantageScore of 661 in 2021. (Source: Experian)
  • Millennials had a median VantageScore of 667 in 2021. (Source: Experian)
  • Generation X had a median VantageScore of 685 in 2021. (Source: Experian)
  • The baby boomer generation had a median VantageScore of 724 in 2021. (Source: Experian)
  • VantageScore is able to score about 96 percent of all consumers in the United States who are 18 or older. (Source: VantageScore)
  • Approximately 14.5 percent of adults nationwide are newly scorable. (Source: VantageScore)
  • In 2021, 1 in 3 adults were unable to obtain a credit score from conventional models. (Source: VantageScore)
  • States with the highest average VantageScores in March 2022: (Source: VantageScore)
    • Minnesota: 726
    • New Hampshire: 722
    • Vermont: 721
    • Massachusetts: 719
    • Washington: 718
  • States with the lowest average VantageScore in March 2022: (Source: VantageScore)
    • Mississippi: 662
    • Louisiana: 670
    • Alabama: 673
    • Arkansas: 673
    • Oklahoma: 674

Credit score demographics

Credit scores vary across different age groups and demographics. Listed below are 2021’s VantageScores separated by age group, income bracket and data change over the past year.

  • Average credit score per age group, as of 2021: (Source: Experian)
    • 18-24 years old: 679
    • 25-40 years old: 686
    • 41-56 years old: 705
    • 57-75 years old: 740
    • 76+ years old: 760
  • Average credit score per income bracket: (Source: Federal Reserve Bank of New York)
    • Low income: 658
    • Moderate income: 692
    • Middle income: 735
    • Upper income: 774

Understanding credit score statistics isn’t as complex as you may think. Maintaining a strong credit score is crucial to financial stability and can help you get approved for loans and credit cards. Not sure how to look at or take care of your credit score? There are many great resources available to help you view and build credit, including credit repair sites and other financial assistance.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Reviewed By

Nature Lewis

Associate Attorney

Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.

Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!

Source: lexingtonlaw.com

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The former CEO of embattled mortgage lender Countrywide, Angelo Mozilo, has been charged with securities fraud by the SEC.

The ex-Countrywide boss, along with former chief operating officer and president David Sambol and former chief financial officer Eric Sieracki, was charged “for deliberately misleading investors about the significant credit risks being taken in efforts to build and maintain the company’s market share.”

“This is the tale of two companies,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards. But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk.”

“Angelo Mozilo privately described one Countrywide product as ‘toxic,’ and said another’s performance was so uncertain that Countrywide was ‘flying blind.’”

The ex-boss was also accused of insider trading, related to his dumping of Countrywide stock just before the mortgage crisis went into full swing.

After the collapse of his company in late 2007, Mozilo agreed to forego his $37.5 million in severance pay in light of public criticism, but that seemed more for show than anything else.

Between 2002 and 2007, he raked in hundreds of millions of dollars in salary and stock options, curiously accelerating share sales as the housing market worsened.

Despite the outright failure of his company and its infamous role in the ongoing crisis, Mozilo has admitted to no wrongdoing.

Instead, he has defended risky loan programs like adjustable-rate mortgages and option arms, claiming they opened the doors to homeownership.

“The SEC’s complaint alleges that Mozilo believed that the risk was so high that he repeatedly urged that Countrywide sell its entire portfolio of Pay-Option loans.”

Early last month, Florida Attorney General Bill McCollum said he had obtained a federal court order remanding his lawsuit against Mozilo back to Broward County Circuit Court.

That suit alleges Countrywide put borrowers in misleading or unaffordable loans (of which Mozilo should have been aware), among other things.

It’ll be interesting to see if Mozilo (and friends) can wriggle out of this one…

Source: thetruthaboutmortgage.com

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Student loan interest rates change on a regular basis and are determined by different factors. You may have student loans taken out in different years and/or from various lenders — each with a different interest rate. But why? Who makes these decisions and when were they made? Here’s an in-depth look at what goes into the determination of student loan interest rates.

How Did We Get Here?

Federal student aid programs are enacted and authorized by Congress. There have been a few different programs over the years, aimed at students with various financial needs and educational goals:

•   The first such program was the GI Bill, implemented in 1944 to assist veterans who had served during wartime. The idea behind the GI Bill was that the veterans needed a chance to catch up to their peers who did not have their lives interrupted by military service and had been able to go to college.

•   In 1958, spurred on by the Soviet launch of Sputnik, Congress enacted the National Defense Education Act (NDEA), which provided financial aid to students in certain fields of study. The NDEA provided low-cost loans for undergraduate students, with the opportunity for debt cancellation for students who became teachers after graduation. It also established graduate fellowships for students studying in fields with national security relevance, such as science, mathematics, and engineering. Scholarships or grants that were outright need-based were not included in the NDEA, however.

•   The first sweeping legislation to offer educational financial aid came in the form of the Higher Education Act (HEA) of 1965. Title IV of the HEA focused on the needs of students who did not have the financial means to afford a college education, with the introduction of Educational Opportunity Grants. This section of the act also introduced College Work-Study and the Guaranteed Student Loan (GSL) program.

Congress has enacted comprehensive reauthorization of the HEA eight times during successive presidential administrations. The HEA and student financial aid programs that today’s system is centered around came about with the 1972 reauthorization of the act. Changes included:

•   Financial support to students in programs other than four-year baccalaureate programs: career and vocational programs, community colleges, and trade schools, as well as to students in part-time programs.

•   Educational Opportunity Grants, College Work-Study, and the GSL program were replaced by Basic Grants (renamed Pell Grants in 1978).

•   State Student Incentive Grants, which provided federal matching funds to states that enacted or expanded their own need-based programs, were introduced.

•   Sallie Mae (“Student Loan Marketing Association”) was established to administer funds in the GSL program.

Later reauthorizations of the HEA saw further changes to student financial aid programs. Some of these changes included:

•   Expansion of student financial aid to the middle class.

•   Widening eligibility for Pell Grants.

•   Availability of subsidized guaranteed loans to students regardless of income or financial need.

•   Introduction of an unsubsidized federal student loan option that doesn’t take financial need into account at all.

•   Increasing the borrowing limits for federal student loans.

All of those various pieces of legislation introduced the concept of financial aid and programs that administered them. Some components of student financial aid, such as scholarships and grants, typically don’t have to be repaid, but student loans do have to be repaid — with interest.

After a three-year pause, interest accrual on federal student loans will resume on Sept. 1, 2023, and payments will be due starting in October 2023.

3 Factors Affecting Your Student Loan Interest Rates

There are a lot of moving pieces in the puzzle that is higher education funding. And affording a college education can be quite puzzling to students and parents. If you’re considering applying for a federal or private student loan, there are a few main factors to learn about that might help you make a decision:

1. How Legislation Affects Student Loan Interest Rates

One of the main factors affecting federal student loans in general and their interest rates is legislation. Rates set by private lenders are not governed by legislation.

Until 1979, banks’ rate of return for GSLs was capped by the rate set by a group of government officials. But that year, Congress passed an amendment to the HEA that assured banks a favorable rate of return on GSLs by tying their subsidies directly to changes in Treasury bill rates. Before this amendment, federal grants and work-study made up about 50% of student financial aid and federal student loans made up about 25%.

During the 1980s and 1990s, student loan volume skyrocketed and those percentages essentially flip-flopped — loans made up about 60% of student aid, and grants and work-study made up only about 35%. But the low Treasury rates of the 1960s and early 1970s, which the banks’ subsidies had been based on, rose dramatically from the late 1970s though the mid-1980s, and didn’t return to the early-1970s rates until 1992, and they didn’t stay there for long.

The Student Loan Reform Act of 1993 was introduced to address the problems student loan borrowers were having repaying those debts. The Act implemented flexible repayment plans and began phasing in the Federal Direct Student Loan program, which still exists today, to replace previous loan programs.

Prior to 2006, federal student loan interest rates were variable, based on the 91-day Treasury bill rate plus varying percentage rates depending on the type of loan, and were capped at 8.25% for Stafford Subsidized and Unsubsidized Loans, and 9% for PLUS Loans.

From 2006 to 2012, rates were fixed at 6.8% for Stafford Subsidized and Unsubsidized Loans, and 7.9% for Direct PLUS loans for graduate students and parents. During this time range, subsidized Stafford Loan interest rates were reduced incrementally based on the distribution date.

The 2013 passage of the Student Loan Certainty Act changed the way interest rates on federal student loans were calculated. This Act established the interest rate calculation as based on the 10-year Treasury bill rate. New rates are set every year on July 1, and are applied to loans disbursed from July 1 through June 30 of the following year. In other words, as prevailing interest rates change from year to year, rates on newly disbursed Direct Loans do, too.

How Does This Affect Your Rates?

If you are a federal student loan borrower, your loan’s interest rate was set according to the calculation used when it was disbursed. Consolidation can be an option for some borrowers with multiple loans that have different interest rates. Any loans that have variable rates can be switched to a fixed interest rate through consolidation. There are pros and cons to consolidating loans, though, so it’s important to consider your financial situation before deciding if it’s the right option for you.

2. How the Type of Loan Affects Student Loan Interest Rates

The kind of student loan you have dictates the interest rate you’ll be charged.

•   For current undergraduate borrowers , there are two types of federal student loans available:

◦   Direct Subsidized Loans for student borrowers with financial need.

◦   Direct Unsubsidized Loans, which don’t have a financial need requirement.

◦   The applicant’s credit history is not a consideration for either of these types of loans.

•   Current graduate and professional borrowers also have two federal student loan options:

◦   Direct Unsubsidized Loans, which don’t have a financial need requirement.

◦   Direct PLUS Loans , which are commonly referred to as Grad PLUS Loans when taken out by graduate students.

▪   Federal Direct PLUS Loans do require a credit check to determine eligibility, but this does not affect the interest rate, as it is fixed by federal law.

•   Parents of dependent, undergraduate students have the option of borrowing under the federal Direct PLUS Loan Program.

◦   Commonly referred to as Parent PLUS Loans when taken out by parents, a credit check is required for qualification, but since the interest rate is fixed by federal law, the applicant’s credit history does not affect the interest rate.

For the 2023-2024 school year, the interest rate on Direct Subsidized or Unsubsidized loans for undergraduates is 5.50%, the rate on Direct Unsubsidized loans for graduate and professional students is 7.05%, and the rate on Direct PLUS loans for graduate students, professional students, and parents is 8.05%. The interest rates on federal student loans are fixed and are set annually by Congress.

Private student loans may be another option for some borrowers. After exhausting all federal student loan options, seeking out scholarships and grants, and using as much accumulated savings as you feel comfortable using, a private student loan can help fill in any gaps in educational funding that might be left. Here are some details about private student loans that might help you as you consider financial options:

•   Private student loans are administered by the lender, not the federal government.

•   The borrower’s credit score and credit history will be used to determine the interest rate they might qualify for.

•   Recent high school graduates may not be able to qualify on their own, so might need a cosigner.

•   Interest rates can be higher with private student loans than federal student loans.

A borrower might end up with a combination of several types of loans to repay and want to make that repayment as simple and financially feasible as possible. Federal student loans come with consolidation options and repayment plans that aren’t generally offered by private lenders. If there is a need to reduce your monthly student loan payment on federal student loans, it’s best to try all federal options — forbearance, deferment, or income-driven repayment (IDR) — before looking at student loan refinancing options with a private lender.

The White House in June 2023 announced a new IDR Plan — the Saving on a Valuable Education (SAVE) Plan — that replaces the existing Revised Pay As You Earn (REPAYE) Plan. Borrowers with undergraduate loans may see their monthly payments cut in half under the SAVE Plan, and some borrowers may qualify for $0 monthly payments based on income, according to the White House.

How Does This Affect Your Rates?

Federal student loan interest rates are fixed by federal law, so your rate will only be affected by the date of disbursement. If you have more than one federal student loan, you will likely have different interest rates on each of them.

Private student loan interest rates are set by the lender. Some private lenders will offer the choice of a variable- or fixed-rate loan. A variable rate loan usually offers a lower initial interest rate than a fixed-rate student loan, but because the rate can fluctuate over time, it also presents a greater risk. If interest rates go up, so do your interest payments. A fixed rate loan’s interest will be the same amount each month, which can make it easier to budget.

3. How You Can Affect Your Student Loan Interest Rates

The choices and decisions you feel comfortable making will affect how much you pay for a student loan.

Opting for a federal student loan means your interest rate will be fixed for the term of the loan. Your personal credit history does not have an effect on the interest rate.

Opting for a private loan means your credit history will be taken into account when determining eligibility and the interest rate offered. This means that financial decisions you’ve made in the past may determine how much you pay for your student loan in the future.

Auto-pay is an option that may reduce your student loan interest rate by a certain percentage. Federal loans offer this option, and some private lenders do, too. Check with your loan servicer to ask about auto-pay options.

If college graduation is but a fond memory, and your credit history is better established and more positive than it may have been in the past, you might consider negotiating your private student loan interest rate. There is no guarantee that the lender will agree to a lower rate, but it’s worth asking.

How Does This Impact Your Rates?

The bottom line with this factor is that you can choose the option that you think works best for your financial situation and personal comfort level. If you want the fixed-rate steadiness and other benefits that a federal student loan comes with, then choosing that may be right for you. If you’re comfortable with the potential of an interest rate increase with a variable-rate private student loan, then this is another option you may choose.

The Takeaway

For first-time borrowers, federal student loans can be the way to go — after all, most undergrads haven’t had time to build up a history of responsibly (or irresponsibly) using credit. However, graduate and professional school borrowers, or nontraditional student borrowers with clear financial pictures, may have more options than the one-size-fits-all approach. Remember, private student loans may not have the same protections and benefits that come with federal student loans and usually are not considered until all other financial aid options have been exhausted.

If a student loan fits your financial needs, consider looking at private student loan online options offered by SoFi. With undergraduate, graduate, professional, and parent student loans, SoFi Private Student Loans can be used at any point in a student’s college career. Borrowers pay no fees and have flexible repayment options.

See if there’s a SoFi Private Student Loan option that works for you.


We’ve Got You Covered

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

SoFi Student Loan Refinance
NOTICE: The debt ceiling legislation passed on June 2, 2023, codifies into law that federal student loan borrowers will be reentering repayment. The US Department of Education or your student loan servicer, or lender if you have FFEL loans, will notify you directly when your payments will resume For more information, please go to https://docs.house.gov/billsthisweek/20230529/BILLS-118hrPIH-fiscalresponsibility.pdf https://studentaid.gov/announcements-events/covid-19

If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income based repayment plans or extended repayment plans.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

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 .

SOSL0723023

Source: sofi.com

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For many individuals and families, owning a home is a lifelong dream. However, with rising real estate prices, some may find themselves seeking financing beyond the conforming loan limit. This is where jumbo loans come into play.

What is a jumbo loan?

What exactly is a jumbo loan in New Mexico? A jumbo loan is a specialized type of mortgage that comes into play when you’re seeking financing for a home that surpasses the conforming loan limits (CLL) established by the Federal Housing Finance Agency (FHFA). Typically, this type of loan is necessary for upscale, luxurious properties or those situated in pricey housing markets like Santa Fe.

If the home you’re purchasing will require you to borrow more than the CLL, you’ll need to apply for a jumbo loan. Because of the larger loan amounts, jumbo loans typically carry stricter requirements and higher interest rates than conforming loans. Lenders may require a higher down payment, a lower debt-to-income ratio, and a stronger credit score to qualify for a jumbo loan in New Mexico.

What is the jumbo loan limit in New Mexico?

In New Mexico, the conforming loan limit is $726,200 across all counties. So, for example, if you’re buying a home in Santa Fe County , where the median sale price is $622,000, a loan limit exceeding $726,200 would be considered a jumbo loan.

As a reminder, the amount being borrowed is what determines whether or not you’ll need a jumbo loan, not the home price. So, if you were to put $50,000 down on a $750,000 home in Albuquerque, the mortgage would be $700,000, which is under the conforming loan limit for this area. In this case, your loan wouldn’t be considered a jumbo loan.

For more information on the conforming loan limit in your county, use the FHFA map. 

What are the requirements for a jumbo loan in New Mexico?

Borrowers must meet stricter requirements to qualify for a jumbo loan than they would for a conforming loan. The specific requirements can vary from lender to lender, but below are the typical requirements for borrowers seeking a jumbo loan in New Mexico.

Higher credit score: In order to have your loan application approved for a jumbo loan, most lenders will require a credit score of 720 or higher. While some lenders may be more lenient and accept a score as low as 660, a score below this is generally not accepted. In contrast, a credit score as low as 620 could suffice for a conforming loan with some lenders.

Larger down payment: Obtaining a jumbo loan in New Mexico typically requires a larger down payment compared to a conventional loan. Lenders may require a down payment of 10% to 20% or more, depending on the specific loan program and the borrower’s financial situation. If you’re approved with a down payment less than 20%, keep in mind you’ll most likely be required to purchase private mortgage insurance (PMI).

More assets: During the asset review process, lenders typically request that jumbo loan borrowers provide evidence of sufficient liquid assets or savings to cover the equivalent of one year’s worth of loan payments.

Lower debt-to-income ratio (DTI): Lenders typically require a debt-to-income ratio (DTI) of under 43% for jumbo loan borrowers, although a DTI closer to 36% is preferred. This ratio is calculated by dividing the sum of all monthly debt payments by the borrower’s gross monthly income. A lower DTI indicates a stronger ability to repay the loan and can help borrowers secure more favorable terms and rates. It’s important for New Mexico borrowers seeking a jumbo mortgage to have a clear understanding of their DTI and take steps to improve it if necessary.

Additional home appraisals: When you buy a home in New Mexico, your lender will require a home appraisal to confirm that the property’s value is equal to or higher than the loan amount. In some cases, a lender may require an additional appraisal for a jumbo loan. In housing markets with very few comparable property sales, the cost of the appraisal may be higher than in cities with more frequent sales.

Source: redfin.com

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If you are represented by an agent, this is not a solicitation of your business. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any agency or service mentioned will meet their needs. Learn more about our
Editorial Guidelines here.

Source: redfin.com

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SmartAsset Advisors, LLC (“SmartAsset”), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. SmartAsset’s services are limited to referring users to third party registered investment advisers and/or investment adviser representatives (“RIA/IARs”) that have elected to participate in our matching platform based on information … [Read more…]

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Doma sold additional pieces of its retail title production business as part of the company’s reorganization as it struggles to become profitable.

Near North Title, a Chicago-area title agency, is the new owner of Doma’s Midwest retail offices. The Texas offices were sold to Capital Title of Texas, a part of the Shaddock Title Cos.

This is Near North’s second significant transaction this year, following the purchase of another Chicago-based agency, O’Connor Title Guaranty. In this deal it picked up locations in Illinois, Indiana, Minnesota and Wisconsin.

Terms of both transactions were not disclosed.

In May, Doma sold 22 Northern and Central California offices to Williston Financial Group in a transaction valued at $24.5 million. That followed a disclosure in its first quarter earnings call that the company was evaluating its organizational structure. Doma has yet to turn a GAAP net profit since it went public in 2021 with big ambitions in title and adjacent businesses.

“These strategic transactions are aligned with our mission-driven go-forward strategy and refined focus on our core underwriting and technology business,” said Max Simkoff, Doma CEO, in a press release. “We believe we have found optimal homes for our Local team members in the branches we have sold.”

Houlihan Lokey was Doma’s financial advisor and Mayer Brown was legal counsel for these transactions.

At the end of June, Doma conducted a one-for-25 reverse stock split that brought its price back up from pre-split levels well below the $1 per share minimum listing price to a close of $7.81 per share on July 19. As it started trading after its special purpose acquisition company merger, Doma closed at $6.84 per share.

The reverse split, however, did not stop the New York Stock Exchange from starting delisting proceedings for Doma’s warrants. In anticipation, the NYSE has halted trading in the warrants, which would have allowed holders to exchange 25 of them for one share of Doma stock at a price of $287.50 per share, according to a Securities and Exchange Commission filing.

Doma will announce its second quarter results on Aug. 8.

In the first quarter, Doma reported a net loss of $42.1 million, an improvement over the fourth quarter loss of $109.4 million and the year ago loss of $50 million.

Source: nationalmortgagenews.com

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Mortgage rates dropped to 6.78% this week, the biggest weekly decline since mid-March, as investors digested a raft of mixed incoming economic data.

Freddie Mac’s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year fixed rate averaged 6.78% as of July 20, down from last week’s 6.96%. By contrast, the 30-year was at 5.54% a year ago at this time. 

“As inflation slows, mortgage rates decreased this week,” said Sam Khater, Freddie Mac’s chief economist in a statement. “Still, the ongoing shortage of previously owned homes for sale has been a detriment to homebuyers looking to take advantage of declining rates. On the other hand, homebuilders have an edge in today’s market, and incoming data shows that homebuilder sentiment continues to rise.”

Homebuilder sentiment rose for the seventh consecutive month and new construction activity slightly pulled back as the cost of materials picked up. Simultaneously, retail sales improved modestly and industrial production declined on waning demand.

Other mortgage rate indexes showed mixed results: 

HousingWire’s Mortgage Rates Center showed Optimal Blue’s 30-year fixed rate for conventional loans at 6.74% on Wednesday, compared to 6.85% the previous week. However, the 30-year fixed rate for conventional loans was at 7% at Mortgage News Daily on Thursday, up 13 basis points from the previous week.

After June’s relatively positive inflation data, the market’s attention has turned to the upcoming FOMC meeting.

“Though inflation has slowed, the level remains well above the 2% target and investors expect the Fed to hike interest rates in pursuit of this target,” said Hannah Jones, economist at Realtor.com, in a statement. “While the Federal Funds rate does not directly impact mortgage rates, it installs a floor beneath the cost of borrowing, meaning mortgage rates are likely to remain elevated for the time being.”

George Ratiu, chief economist at Keeping Current Matters, on the other hand, stressed that the spread between the 30-year fixed-rate mortgage and the 10-year Treasury remains north of 300 basis points. To Ratiu, it is a clear signal that investors are still pricing a premium for the higher macro risk.

This ongoing uncertainty permeating financial markets has a direct impact on mortgage rates.

As expected from the traditional vacation season, consumers are more focused on services and travel experiences this summer rather than buying products, added Ratiu.

At today’s rate, the mortgage payment for a median-priced home is about $2,300, a 13% premium compared to last year’s peak-price period. Ironically, the elevated mortgage rates are not making a dent on home prices, which remain high because of a depleted inventory. Hence, the lower mortgage rates bring little relief to hopeful homebuyers. 

“Many home owners feel ‘locked-in’ by their current mortgage rate and are therefore choosing to hold off on listing their home for sale,” said Realtor.com’s Jones. “As a result, after more than a year of new listings lagging behind the previous year’s pace, the number of homes for sale has tracked lower than last year’s levels for the past four weeks. In light of limited home inventory, buyers are turning to new construction and builders are picking up the pace of construction to fill the gap.”

Economists largely agreed that current market dynamics are likely to persist until affordability and inventory gains are made.

Source: housingwire.com