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Many people claim real estate investors cause homelessness by owning rentals and charging rent, however, they can play a significant role in preventing homelessness by implementing various strategies that promote affordable housing, stability, and supportive services. Real estate investors also provide rentals which are the next step from homelessness as most people in a dire housing situation are not able to buy for various reasons. Here are some key ways real estate investors can contribute to preventing homelessness:

Did landlords cause real estate prices to increase?

There is a growing trend stating that landlords are not needed and the world would be better off without them. This stance is backed up by many statements that tend to be grossly exaggerated or simply false. I am a landlord and of course, I am biased but I have been an investor, agent, author, and influencer in the real estate space for 20 years. I have seen what happens in the real world and know a thing or two about real estate. Many of the opinions about landlords and real estate investors stem from Facebook pages, politicians, or even educators who have zero experience with real estate.

Landlords do not push up prices because they are buying all the houses. In fact, the owner-occupied rate has increased from 62 percent to 66 percent from 2016 to 2023. There are 11 million more owner-occupied units in 2023 compared to 2016 and about the same amount of rental units. The truth is real estate investors have been selling much more than buying.

Rents have been rising because there are fewer rentals available due to landlords selling. That is simple supply and demand. Some people claim landlords buying all the houses is causing rents to go up, but that is the opposite of what happens in the economy when supply increases. The real cause of prices going up is the cost to build, replacement costs, and development costs.

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How are landlords needed?

Some hypothesize that if landlords were eliminated (yes some advocate violence) housing would be more affordable and more people could buy. The problem with this theory is that not everyone can or wants to buy. Some people have bad credit or no job history which prevents them from getting a loan. Some want to travel or simply don’t want to buy a house. The theory that all landlords should disappear ignores these people and just assumes they will magically be able to buy a house because prices will be cheaper without landlords.

The theory that housing will be cheaper without landlords comes from the idea that a bunch of housing will be available to buy. However, that housing has occupants and renters living in the homes. There will not be a lot of housing to buy unless you kick those renters out. Sure some renters may be able to buy the house they are currently living in but there still won’t be a massive influx of supply unless there are millions of homeless renters. These theories also assume everyone will get a loan after the laws are all changed eliminating credit and other loan requirements. We saw what happened with loosened lending guidelines in 2008.

Without landlords, there will be massive amounts of homeless because the step from homelessness to housing is a rental not buying. Some people might say more social housing is needed. I can see that argument but landlords are not stopping more social housing from being created, in fact, they help create the social housing that exists.

How do landlords prevent homelessness?

The United States has many programs for those in need including Section 8 housing vouchers, local city and state programs, and affordable housing grants and tax benefits. Most social housing is not built or run by the government, it is run by investors. The government encourages affordable housing projects to be built and redeveloped but they are not the ones doing the work. It is real estate investors who build and create these properties. The US is not alone in this either. Many people point to Austria as having massive social housing programs. They fail to realize that private investors own most of that social housing. Section 8 vouchers are used on properties owned by investors, not the government.

House flippers also buy properties that are unlivable and make them livable again creating more houses which helps reduce homelessness and increases the housing supply as well. I have brought many single-family and multifamily properties up to livable standards after buying them vacant. Do I make money when I do this? Hopefully! If investors do not take on these projects, no one will and there will be less housing and more expensive housing because of supply and demand principles.

Real estate investors also build housing. They build apartments and even single-family homes. Do these turn into rentals? Yes, but that still adds inventory to the market which means more choices for buyers or renters. More inventory means a more stable housing market and fewer opportunities for out-of-control price increases.

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Should real estate investors be restricted on what they can buy or build?

There are many people, including people in the real estate industry who feel real estate investors should be restricted on what they can buy or build. The government is trying to restrict investors from buying properties as well. Many of these programs are aimed at huge institutional investors but they are a tiny part of the real estate market. They own less than 1 percent of housing.

As I stated before there is a shortage of rentals on the market. That is why rents have been increasing so much.

<img loading="lazy" decoding="async" width="1024" height="423" data-attachment-id="79888" data-permalink="https://investfourmore.com/how-many-houses-are-landlords-and-real-estate-investors-buying/attachment/324234/#main" data-orig-file="https://investfourmore.com/wp-content/uploads/324234.jpg" data-orig-size="1160,479" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"" data-image-title="Owner occupied vs rental units" data-image-description data-image-caption="

Owner occupied vs rental units

” data-medium-file=”https://investfourmore.com/wp-content/uploads/324234-300×124.jpg” data-large-file=”https://investfourmore.com/wp-content/uploads/324234-1024×423.jpg” src=”http://investfourmore.com/wp-content/uploads/324234-1024×423.jpg” alt=”Owner occupied vs rental units ” class=”wp-image-79888″ srcset=”https://investfourmore.com/wp-content/uploads/324234-1024×423.jpg 1024w, https://investfourmore.com/wp-content/uploads/324234-300×124.jpg 300w, https://investfourmore.com/wp-content/uploads/324234-768×317.jpg 768w, https://investfourmore.com/wp-content/uploads/324234.jpg 1160w” sizes=”(max-width: 1024px) 100vw, 1024px”>

Owner occupied vs rental units

The best way to increase rents and increase housing prices is to limit supply which is exactly what more restrictions on investors will do. The most expensive markets in the country have the most restrictions. Many large institutional investors are building houses as well when we desperately need more houses to be built! I can’t believe some of the people saying this is bad and must be stopped.

Conclusion

Without real estate investors there would be less housing, more homelessness, higher prices, and pretty much a disaster. Investors create affordable housing and putting more restrictions on them will discourage them from doing so and create less affordable housing.

Build a Rental Property Empire

Categories Real Estate

Source: investfourmore.com

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MBS Outperform Ahead of CPI

By:
Matthew Graham

Mon, Nov 13 2023, 4:51 PM

MBS Outperform Ahead of CPI

Monday had very little to offer in terms of calendar events or meaningful headlines to inspire bond market momentum for better or worse.  The result is unsurprising if you ask Treasuries: 10yr yields are drifting very close to unchanged on the day after early selling and a late morning bounce.  If there’s a development that’s worth mentioning, it would be the MBS outperformance.  Case in point, 6.0 UMBS are ending the day in line with Friday’s 11am levels while 10yr yields are more than 4bps higher versus the same baseline.  As interesting as that may be, all bets are off after 8:30am tomorrow (CPI).

09:44 AM

MBS down almost a quarter point.  10yr up 4bps at 4.686.

12:31 PM

Bouncing back into the noon hour.  MBS roughly unchanged.  10yr up only 0.2bps at 4.648.

03:29 PM

MBS at best levels, up almost 3/4ths.  10yr down 1bp at 4.636.

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.

Source: mortgagenewsdaily.com

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When Caleb Pepperday and his wife secured a 2.75% mortgage rate on their home in Pittsburgh in 2021, the young couple couldn’t believe their luck. Buying when interest rates were at historically low levels in the U.S., the Pepperdays received one of the most enviable loans in home ownership.

Just two years later, the couple sold to move to Montana—losing the rate and becoming renters again in the process. “We thought we were going to stay in that house for a long time,” Pepperday, 27, tells Fortune. “But things change.”

While he and wife don’t regret the move one bit—they and their entire generation are wishing there was a way to turn back the clock to the glory days of low mortgage rates. Right now the 30-year fixed rate hovers around 7.7%, which is not historically high, as many members of older generations are quick to point out. But when coupled with the outrageous price of the median home, now standing at over $412,000, many would-be homebuyers feel locked out of the market. In fact, affordability hit a 38-year low in September.

Millennials were late to home ownership for myriad reasons, including higher student debt burdens, wedding later in life, and rapidly rising rents. When rates dropped, it felt like a once-in-a-lifetime opportunity for some to finally get into the market and buy their dream home. Now that rates have doubled, that dream is fading once again: One in five millennials now says they will never own a home, according to real estate brokerage Redfin.

But Pepperday, a certified financial planner (CFP), encourages his fellow millennials who believe they lost their last shot at home ownership to reframe their thinking.

“The mindset of, if you don’t buy now you’ll miss out forever, I don’t think that’s true,” he says. “Interest rates are simply out of your control, so fretting about them doesn’t really do you much good. It’s easy to second-guess yourself and say what could have been, but focus on what you can control.”

Here’s the advice he and other financial experts have for millennials who feel they missed out on a golden housing opportunity.

1. Take your time

There’s likely a good reason you didn’t buy when rates were low, even if you had the funds to do so, says Sean Williams, a Maryland-based CFP. You might not have known where you wanted to live, or you couldn’t find the right space, especially given the tight inventory.

Remember those reasons. It’s a mistake to compare yourself to others, rush into making one of the biggest financial decisions of your life, and potentially force something that could put you in a huge long-term financial bind, he says.

Don’t get caught up in the should-haves or would-haves and make a rash decision—do what makes sense for your household. If you need a cautionary tale, Fortune previously reported upwards of 40% of recent buyers regret their decision, but feel locked in due to their low mortgage rate. (And that low rate doesn’t preclude you from shelling out for a ton of other unexpected costs you wouldn’t have renting.)

“Patience isn’t fun, but it can yield great dividends,” Williams says. “Something greater could await you, and you’ll miss it if you keep looking back.”

2. Use this time to prepare

Those are set on buying shouldn’t be dissuaded by higher rates, Williams says. Though inventory is low, housing hopefuls can use this time to build their credit, scope out mortgage lenders, explore neighborhoods, and better understand what they want in a home and what they can afford.

“Take the time to understand the transaction,” Williams says. “It won’t be a waste of time if you’re incrementally bettering your position for when the time is right.”

And remember all that regret? While owners may not want to sell now, they won’t hold out forever if they aren’t happy in their home, no matter how low their interest rate, Williams says. That will open up more inventory, which buyers can snap up—if they’re prepared.

“Home values can move. And so can interest rates,” he says. “It’s sort of like investing in the market. You can look back and say, ‘Oh, I could have timed it.’ But it really makes sense to put yourself in the best financial position possible no matter the season.”

3. Look into alternatives

Though a 30-year mortgage is the most traditional option—and typically the headline figure—Dottie Herman, vice chair and former CEO of Douglas Elliman Real Estate, advises homebuyers to look into alternatives, such as five-year ARMs, which can offer lower introductory interest rates than conventional loans, or other forms of “creative financing.”

“I tell so many young people, it’s kind of a cliché that people use 30-year mortgages, because people don’t live in houses for 30 years anymore,” Herman says. “Go sit with your mortgage broker or banker and educate yourself on the different mortgages available.”

There are also grants and first-time homebuying programs that can make the process easier and more affordable. And Herman says to remember that you can always refinance in the future. If you find a home you like now that you can afford, it can still make sense to buy. You won’t get a sub-3% rate, but that doesn’t mean it’s not a worthwhile purchase. There will never be a perfect time.

Higher rates “would not stop me from buying a home. If you’re looking, you should not stop looking,” she says. “No one can time the market, so you just have to wait for a time that you can refinance.”

Finally, Pepperday says to consider whether home ownership is right for you at all, or if you just want to buy because it seems like the socially acceptable thing to do. Yes, it can help build wealth—but so can plenty of other financial moves, he says. Don’t put your life on hold for one financial choice.

“We are spending less on housing costs as a renter than when we owned,” Pepperday says. “Of course over time we’re not building any equity, but we have additional cash flow that we can use to put toward other investments that have more flexibility to get to the money than what a home has.”

The worst thing you can do, according to Pepperday, is stretch yourself to buy a home you can’t afford, just because you think it’s something you “should” do. “Don’t make yourself house-poor.”

Source: fortune.com

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In the spring of 2019, “Zillow Home Loans” was launched by its parent company Zillow.

You probably know them best for their popular Zestimates, which are quick and dirty home value estimates.

Given their strong engagement with prospective home buyers and existing homeowners, they eventually decided to launch their own mortgage division.

The goal was to become “more of an end-to-end provider for housing-related services” like the many other companies out there trying to do it all.

For you as the customer, it’s yet another mortgage lender to consider when seeking financing. Read on to learn more about them.

Zillow Home Loans Fast Facts

  • Direct-to-consumer mortgage lender
  • Offers home purchase and refinance loans
  • Founded in 2019, headquartered in Overland Park, Kansas
  • Parent company is publicly-traded Zillow Group
  • Licensed to do business in 49 states and the District of Columbia
  • Funded about $1.5 billion in home loans last year
  • Most active in California, Florida, Georgia, and Texas

Zillow Home Loans, LLC is a subsidiary of Zillow Group (NYSE:Z).

The company was officially launched in April 2019 after acquiring Mortgage Lenders of America in the fourth quarter of 2018.

This gave them a quick in to the mortgage business, instead of having to start from the ground up.

They continue to operate out of Mortgage Lenders of America’s former headquarters in Overland Park, Kansas. And also have offices in Irvine, CA and Seattle, WA.

Mortgage Lenders of America was founded in the year 2000 and had approximately 300 employees when Zillow bought them out.

It’s unclear how many remain and what the company’s workforce looks like now. But per the NMLS, they have about 230 licensed mortgage loan originators (MLOs) on staff today.

The original plan was to streamline the home buying process for consumers who used their iBuying service known as Zillow Offers.

But that division was shuttered in November 2021 because they couldn’t accurately forecast future home prices.

They also operated a title insurance and settlement division called Zillow Closing Services, which was also shut down.

Despite this, they pivoted into a full-service mortgage lender that now offers both home purchase loans and refinances to consumers in 49 states and D.C. They are not licensed in New York state.

Last year, Zillow Home Loans funded roughly $1.5 billion in home loans, with a near-50/50 split between purchases and mortgage refinances.

They are most active in the state of California, along with Florida, Georgia, Texas, and Washington.

How to Apply with Zillow

To get started, you can visit their website and click on “Purchase a home” or “Refinance my home.”

The online forms appear to be a sales funnel that require your contact information at the end, so calling might be faster.

To skip the form, you can call the phone number listed to speak with one of their loan officers one-on-on.

Assuming you like what you hear and are ready to proceed, they say a pre-qual takes as little as 3 minutes online and won’t impact your credit score.

What’s nice is if you have an existing Zillow account, you don’t need to sign up a second time.

You can also generate a verified pre-approval letter if you complete a hard credit check and submit supporting documents.

Like many other lenders, they offer a digital mortgage application that allows you complete much of the process electronically.

This includes the application itself, linking bank accounts, uploading documents securely, and eSigning disclosures.

At the same time, they have a human lending team consisting of loan officers and loan processors that can guide you throughout the process.

Once your loan is submitted, you can visit the Dashboard to check on loan status, satisfying outstanding conditions, or message your loan officer 24/7.

Loan Programs Offered

  • Home purchase loans
  • Refinance loans: Rate and term, cash out, streamline
  • Conforming loans backed by Fannie/Freddie
  • FHA loans
  • VA loans
  • Jumbo loans
  • 1% down mortgages
  • Fixed-rate and adjustable-rate options available

Zillow Home Loans offers a wide range of loan options to satisfy most home buyers and existing homeowners.

This includes both purchase loans and refinance loans, including rate and term refis, cash out refis, and streamline refis.

You can get a conforming loan backed by Fannie Mae or Freddie Mac, or a jumbo loan that exceeds the conforming loan limits.

They offer both FHA loans and VA loans, but not offer USDA loans at this time.

However, you can get a 1% down mortgage in select areas, where they provide a grant for 2% of the purchase price.

Both fixed-rate and adjustable-rate options are available, including the popular 30-year fixed, 20-year fixed, 15-year fixed, and 7/6 ARM.

Zillow Home Loans provides financing on single family homes, townhomes, and condominiums, including vacation homes and investment properties.

They do not lend on mobile or manufactured homes, investment property condominiums, construction/land, or co-ops.

Zillow Home Loans Rates and Fees

Unfortunately, Zillow Home Loans does not list their daily mortgage rates online, nor do they have a list of lender fees readily available.

As a result, it’s unclear how competitive they are compared to other banks, lenders, credit unions, mortgage brokers, and so on.

When you do speak with a loan officer, be sure to inquire about both the interest rate and any lender fees charged, such as an application fee or loan origination fee.

While you won’t see rates on their website, you might see them if you compare rates on the Zillow Mortgage Marketplace, which also includes third-party lenders.

Either way, be sure to gather quotes from multiple lenders to ensure you don’t miss out on a better offer.

If you have other mortgage rate quotes in hand, you might also be able to better negotiate with Zillow.

My guess is their pricing is competitive with other online lenders, and perhaps cheaper than brick-and-mortar banks. But don’t make assumptions, get quotes.

Zillow Home Loans Reviews

On the Zillow website (yes, their parent company), they have a 4.82/5-star rating from about 8,000 customer reviews. That is an excellent score, especially given the very large sample size.

You can browse the many reviews there to see what past customers thought of the interest rates and closing costs. And whether they closed on time if it was a home purchase loan.

Over at LendingTree, they’ve got another solid 4.5/5 rating from more than 950 reviews, along with a 94% recommended score.

At Bankrate, they have a 4.8-star rating from nearly 100 reviews, and a 3.8/5 on Consumer Affairs from about 120 reviews.

They’ve got a better 4.8/5 rating on BestCompany and a lower 3.7/5 over at Trustpilot.

In addition, they have a 3.6/5 rating at their Overland Park headquarters from 117 Google reviews. So there is no shortage of reviews to read.

The company also has an ‘A+’ rating on the Better Business Bureau (BBB) website and a 3.53/5-star rating from about 32 customer reviews.

To sum things up, Zillow Home Loans offers the latest technology, has thousands of excellent reviews, and might even be able to get you to the closing table faster than other lenders.

They noted that the average lender took 43 days to close a home purchase loan between March 2023 – May 2023, per an ICE Mortgage Technology survey.

Meanwhile, their average closing time was just 31 days, 12 days or 28% faster than the industry average.

They also say they offer best-in-class service and total transparency, along with local market expertise.

The only question mark is pricing, as they don’t publicize their rates or fees. But if you find them to be competitive relative to other options, they could be a worthy consideration.

Zillow Home Loans Pros and Cons

The Good

  • Can apply for a home loan online
  • Offer a digital mortgage application
  • Close loans 12 days faster than the average lender
  • Lots of loan programs to choose from including 1% down option
  • Thousands of excellent customer reviews
  • A+ BBB rating
  • Free mortgage calculators and online guides

The Maybe Not

  • No branch locations
  • Do not offer USDA loans
  • Not licensed in the state of New York
  • Do not list rates or fees online

Source: thetruthaboutmortgage.com

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The economic trifecta of rising interest rates, persistently high home prices and record undersupply is making homebuying increasingly challenging.

Every loan on your book matters more than ever; the next lead you have is your most important. The current business environment has left originators scratching their heads and trying new things.

Luckily, the mortgage industry is cyclical, so let’s take a look at how you can turn a negative into a positive and grab clients’ attention through effective marketing, ultimately growing your book while others’ shrink.

As a pioneer in the non-qualified mortgage space, Angel Oak has seen firsthand how some of the best originators market their business when prices rise and volumes drop. Below are a few ways originators can best present themselves to real estate agents and stand out in a saturated market. 

Recognize the value of lunch and learns

When every loan matters, the value of in-person meetings can’t be overstated. Right now, people are craving face time, so why not offer real estate agents and networking peers that opportunity?

Some of the most effective mortgage originators are differentiating themselves in the crowded market through “lunch and learn” sessions. These impactful one-hour gatherings leverage the intimate setting to provide a lot of value, both for your business and for your referral network.

Lunch and learns serve as more than just a networking event. They are also a chance to exchange knowledge and demonstrate innovative non-QM products, which can sometimes be a daunting experience for the uninitiated.

Through these roundtable discussions over lunch (or even dinner), you can help demystify non-QM products while also establishing your credibility in the industry. Think of the cost of the meal as an investment in deepening your relationships, fostering a sense of community and delivering valuable information to help your clients.

Meeting in person adds a level of trust and rapport that virtual meetings simply can’t match. Face-to-face interactions often lead to more open discussions, giving originators greater insight into real estate agents’ specific needs and challenges — and more opportunities to present valuable solutions that can help you stand out from the crowd.

While Facebook, X and Instagram remain staple platforms, branching out to newer social media avenues can yield impressive results.

TikTok, for example, has rapidly emerged as a powerful tool for businesses and presents the opportunity to connect with a massive audience of younger generations eager to learn about home buying.

Crafting engaging video content and putting your brand in front of an audience of real estate agents shows that you are adaptive to a changing client demographic (yes, “Realtortok” is a thing). A short, lively, well-executed video can quickly demonstrate an originator’s know-how and present complex information in a digestible way, making it an excellent way to stand out.

LinkedIn is still an excellent way to connect with Realtors and other real estate industry professionals through targeted, thoughtful posts and outreach. It is the most efficient way for mortgage originators to expand their network and target their message to a very specific audience.

Being active and engaged on LinkedIn allows you to share insightful articles, market trends and expert analyses to position yourself as an authority in the mortgage space. If you’re willing to invest a bit more in your educational posts, you can even develop marketing campaigns directly targeted at professionals in your specific territory, ensuring that you’re highly visible to the right audience. 

Prioritize — and personalize — educational content

Starting a blog or contributing to an existing platform can further solidify your position in the industry as a professional educator and resource for real estate agents. A well-researched blog post can resonate with those who seek insights on the latest trends and products, serving their needs while also making you a go-to source of information.

Real estate agents may repost an originator’s content piece that can help them market more effectively to clients, which means just a little writing from you can go a long way.

In this difficult mortgage landscape, originators must prioritize building strong relationships with real estate agents. Meanwhile, the increasing use of generative AI means content is quickly becoming depersonalized and bland, so it’s important to zig when others are zagging.

Going beyond the high-level stories already covered in the press and digging deeper to focus on a specific niche or geography lets you cater to the unique needs of agents in different areas, with content that is more relevant and actionable. Effective marketing strategies that lean into the people connection and personalized content are essential in order to generate traction with your audience.

In a high-stakes environment, building credibility and deepening relationships can go a long way toward supporting your marketing efforts. Try incorporating the ideas described above as you plan your 2024 marketing strategy.

By mastering these tactics, you will be able to navigate the current market challenges, foster genuine partnerships and differentiate yourself from the competition to ensure long-term success.

Tom Hutchens is the executive vice president of Production for Angel Oak Mortgage Solutions.

Source: housingwire.com

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MOUNT PLEASANT — A large East Cooper home decor store plans to turn out the lights about 16 months after opening in a former farm-to-table food emporium.

Heavens Marketplace is set to close by Dec. 15, darkening a 10,000-square-foot shop at 2521 Highway 17 where the former Boone Hall Farms Market once operated, according to co-owner Sonya Pacera.

“It’s pretty devastating,” she said. “I guess we will regroup.” 

Pacera noted sales were good last fall after the store opened in September, but they dropped off during the winter and never picked back with the arrival of warm weather this year.

She attributed the decision to close to people having less money because of inflation, the location that doesn’t allow left turns onto Highway 17 to exit the site and the size of the building.

“It’s just too large,” she said, pointing out she and her husband, Frank, tried to sublease part of the building to other parties in recent months but were unsuccessful.

The shop offers home decor, ladies fashions, accessories, faith-based products and some furniture that doubles as display tables. Items are marked down 25 percent to 80 percent throughout the store.

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Heavens Marketplace opened last year after the Paceras decided to expand the business down the coast from their Myrtle Beach locations, then at Tanger Outlets but now at Barefoot Landing.

They had originally planned to open in a 4,500-square-foot space in Tanger Outlets in North Charleston, but were told in February 2022 the space would be temporarily unavailable.

The couple began looking elsewhere and walked through the former Boone Hall retail store in March 2022.

At the time, Pacera thought the cavernous building with exposed wooden pillars was too large and expensive, but he said it had “a farm-homey-type feel to it” and his wife liked it.

The Paceras also ran into a snag when they decided to move to the Charleston area. Their business in Myrtle Beach was originally called Haven’s.

Another Haven’s home furnishings store already exists in Mount Pleasant, so they formally changed the name to Heavens, brought in some religious items and functions and played Christian music throughout the store.

The former building occupant, Boone Hall Farms Market, closed in January 2020 after 14 years of operating a short distance up Highway 17 from its expansive farming operation in the heart of Mount Pleasant. The farm recently opened Willie’s Roadside Market, an open-air, barn-like structure named for the late Boone Hall owner Willie McRae.

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Our twice-weekly newsletter features all the business stories shaping Charleston and South Carolina. Get ahead with us – it’s free.

Source: postandcourier.com

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Wholesaler Wanted; PPE, DSCR, Marketing, AVM Products; FHA, Ginnie News; Listings on the Rise!

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Wholesaler Wanted; PPE, DSCR, Marketing, AVM Products; FHA, Ginnie News; Listings on the Rise!

By:
Rob Chrisman

Tue, Nov 14 2023, 10:32 AM

This morning I head to Kansas, greeted by the news that Southwest is raising drink fees for the holidays. Has the “Let’s circle back after the holidays” season officially begun in your office or in your meetings with vendors? Chortles aside, one of the discussion topics in KC will certainly be the impending move in credit prices as lenders everywhere move toward charging borrowers up front. Whether the cost change is driven by Fair Isacc or the credit bureaus, and then being passed along by the CRAs, it doesn’t matter. It’s coming, and the jungle drums are saying the price changes will impact soft credit pulls, which (or course) many lenders implemented to reduce their costs with the amount of credit reports run as it’s cheaper than the full hard credit pull. Some lenders may use Freddie or Fannie AUS. (Today’s podcast can be found here, sponsored by LoanCare, the mortgage subservicer known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with Polunsky Beitel Green’s Peter Idziak on the direction of mortgage interest rates in the months and year ahead, and what to make of the NAR case verdict’s impact on the home buying process.)

Lender and Broker Software, Products, and Services

Housing authorities rolled out 54 down payment assistance (DPA) programs in Q3 and are funding buydowns, and certain loan fees to offset the home affordability crisis. That’s according to Down Payment Resource’s (DPR) Q3 2023 HPI Report. In fact, 50 new agencies began offering programs last quarter alone. Prospective homebuyers are being hammered with news about affordability being in the dumps, but what they aren’t hearing is that there are thousands of DPA programs to help. With DPR, you can be the bearer of good news, while using DPA to salvage DTI ratios as interest rates go up. As the industry authority on DPA solutions, DPR tracks the eligibility, benefit, and guideline data of the nation’s 2,200+ assistance programs. Learn how DPR’s integrated toolset makes it easy to operationalize DPA across departments and geographies. Schedule a demo today.

Strength, stability, and proven performance are essential in the mortgage space. Flagstar Bank has been checking all the boxes for 35 years, leading the way with more than $111 billion in assets, diverse product offerings, and consistently delivering excellent service. As the nation’s second largest warehouse lender with a team of a dozen dedicated relationship managers, you can count on Flagstar to handle your business with care. They warehouse most loan types, including conventional, non-QM, and construction, with a platform designed for quick and easy funding solutions for their 400 warehouse clients. Flagstar’s expertise also covers MSR, servicer advance, and EBO financing solutions, all of which they can tailor to meet your business needs. Their specialized mortgage banking team can even help streamline your operations and maximize the value of your cash balances. Flagstar is the ultimate one-stop-mortgage shop for lenders of all sizes. Contact Patti Robins or Jeff Neufeld today to learn firsthand why Flagstar should be your top choice.

Don’t let inaccurate home values harm your customer experience! When Hitch, a digital HELOC provider, found that the AVM it used to assess the value of a client’s home and deliver an estimated HELOC limit was off by up to $100,000, it sought a better solution. Hitch upgraded to a lending-grade, industry-leading AVM and boosted valuation accuracy, enhanced customer experience, and approved 30 percent more loans. Discover how Hitch transformed their HELOC lending operation to improve customer experience and internal efficiencies with ClearAVM™. Read the full case study to learn more.

“Maximize your efficiency and lower costs with Richey May’s RM Analyze. Our business intelligence solution will show you where you can make improvements and save money. Stay ahead of the competition by operating leaner and smarter. For the cost of half a full-time employee, you’ll gain access to a team of experts with a wealth of experience in the mortgage industry and a wide range of reports, including up-to-the-minute benchmarking data. With this valuable knowledge, you can make informed decisions that will propel your business forward. Don’t just survive… Thrive by learning how to operate leaner with Richey May.”

Equity is an untapped $18T (yes, trillion!) opportunity for mortgage lenders. That’s because most homeowners aren’t actively monitoring their equity level or making plans for how to use it. And, until now, the challenge for lenders has been identifying equity-rich contacts and engaging them with personalized communications that help them understand their options. Total Expert Customer Intelligence creates enriched contact profiles so loan officers can help homeowners understand their options for leveraging home equity and provide the guidance and support they need to reach their financial goals. Download our Equity Enrichment Guide to learn more.

In mortgage lending, speed matters. Consumers are more likely to buy from the company that responds to their inquiry first. ICE helps lenders answer the demand for instant availability with Surefire℠ CRM and Mortgage Marketing Engine Power Messaging. The feature sets LOs up to win by instantly responding to any lead, from any source, via text message. Here’s another stat for you: text messages enjoy a whopping 97 percent open rate within 15 minutes of being delivered, far surpassing the performance of email marketing. To discover how Surefire automated multichannel marketing campaigns can help you convert more leads to closed loans, schedule a demo with the ICE team today.

“Expiring Soon! Earn Up to 125bps bonus on DSCR loans! LendingOne is offering a Volume Incentive Bonus for Mortgage Brokers available until December 31st, 2023. Join the Preferred Broker Pricing Program and have access to Bronze, Silver, and Gold tiers with volume incentive bonuses based on funded loan production or number of loans funded. Earn 50bps, 100bps, or 125bps at each production level on DSCR Loans. LendingOne’s Third-Party Originations Channel is committed to providing mortgage brokers opportunities to increase their revenue and grow their bottom line in the DSCR market. Call us today to learn more: 866-794-0937 or visit our website.”

Reflecting on her decision to adopt Polly’s cloud-native, high-performance PPE, Kristin Ankeny Bickenbach, SVP of Secondary Marketing at New American Funding, said: “Back in the second half of last year, we knew the mortgage industry was in for a challenging 2023. I was asking myself: ‘How can we maximize our responsiveness? How can we be creative and position ourselves for success in an incredibly challenging market?’ As a sales-focused organization, I knew we needed a sharp PPE to enable us to act decisively and with precision, which is ultimately what led me to Polly.” NAF partnered with Polly as they sought to navigate the complexities of an increasingly dynamic market using a modern and proven engine that would grant access to the most sophisticated data science and machine learning tools available. Click here to read the press release. Looking for even more detail?! Request the NAF case study: [email protected].

Listings!

Want some good news? Altos Research reports that as of November 10th, inventory was at 567,000. Meanwhile, the St. Louis Fed, the source of some great information, pegs the active listing count at 737,000 and it is rising. This is still only about 7 listings for every real estate brokerage firm out there. I am too lazy to figure out the difference between the two stats.

Government Program Updates

FHA Press Release, HUD No. 23-257, describes FHA’s proposal to allow assignment of the HECM when its due and payable status is based on the death of all borrowers and non-borrowing spouses. HECMs that are due and payable are not eligible for assignment to the Secretary unless there is a non-borrowing spouse in a deferral period. FHA posted a draft Mortgagee Letter (ML), Updates to Home Equity Conversion Mortgage (HECM) Assignment Eligibility, on its Single-Family Housing Drafting Table (Drafting Table) web page for public feedback.

On October 16, 2023, FHA published Mortgagee Letter (ML) 2023-17, Revisions to Rental Income Policies, Property Eligibility, and Appraisal Protocols for Accessory Dwelling Units, which provided expanded financing options for borrowers seeking to purchase properties with an existing accessory dwelling unit (ADU), rehabilitate existing structures to add ADUs, or construct new homes with ADUs. To support changes announced in the ML, FHA is enhancing its FHA Connection (FHAC) system.

FHA published extensions to its temporary regulatory waiver and related Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) waiver, which allow mortgagees to utilize alternative methods for conducting meetings with borrowers in accordance with FHA’s early default intervention requirements. These alternatives provide practical and useful methods for conducting non-contact interviews with borrowers while ensuring they still receive needed information directly from their mortgage servicer. FHA initially published temporary partial waivers of these requirements on March 13, 2020, and previously extended them through December 31, 2023. FHA is now extending the waivers through May 31, 2024. For the details, read the temporary regulatory waiver and Handbook 4000.1 waiver.

Ginnie Mae’s APM 23-12 provides information on the December 1, 2023 deadline for the complete transition of all Single Family and Manufactured Housing Program pooling to the new Single Family Pool Delivery Module (SFPDM) and the establishment of SFPDM as the sole application for this type of pooling going forward, As part of this transition and further modernization of the Mortgage-Backed Securities (MBS) programs, the APM also outlines the discontinuation of paper pooling options for Single Family and Manufactured Housing Issuers. The MBS Guide has been revised to incorporate these updated policies and operational requirements.

For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 520,000 first-time homebuyer loans. According to Ginnie Mae Press Releases post,

Ginnie Mae Mortgage-Backed Securities Portfolio reached $2.492 Trillion in October. For more information on monthly MBS issuance, Unpaid Principal Balance (UPB), real estate investment conduit (REMIC) monthly issuance, and global market analysis, visit Ginnie Mae Disclosure.

On October 16, 2023, FHA published ML-2023-17, establishing guidelines for consideration of rental income in underwriting and protocols for the Appraiser’s analysis and reporting of Accessory Dwelling Unit (ADU) market rent on appraisals. Applicability to AmeriHome requirements are posted in AmeriHome Mortgage Announcement Number: 20231101-CL.

Capital Markets

Recall that last week closed with investors digesting “hawkish” rhetoric from Fed Chair Powell, though MBS and Treasuries rebounded on Friday from Thursday’s auction-driven slide. Even with Fed Chair Powell once again dashing investor hopes of the Fed easing policy in the near term, stating that the FOMC would leave the door open for additional rate hikes should economic data show inflation remains elevated, it’s safe to say that the U.S. economy has entered a “wait-and-see” period.

Ahead of today’s highly anticipated October CPI report, the New York Fed’s Survey of Consumer Expectations yesterday showed a decline in one-year and five-year ahead inflation expectations, which conflicted with Friday’s UMich Sentiment Survey showing increasing inflation expectations amongst consumers. Regardless, Treasuries also digested a Moody’s downgrade of the U.S. credit outlook to negative from stable reasonably well. Moody’s on Friday cited the mounting debt and the rising cost of servicing that debt. With several Federal Reserve officials warning investors last week that additional rate hikes may lay ahead, investors opened the week looking ahead to today’s October CPI report, where analysts anticipated that the annualized headline reading would drop to 3.3 percent from 3.7 percent previously.

Today’s economic calendar kicked off with NFIB small business optimism for October before the all-important October CPI report. Headline CPI was flat, up 3.2 percent year over year. The core rate, ex food and energy, was up .2 percent for the month and +4.0 percent year over year. Several Fed speakers are also scheduled, including Vice Chair Jefferson, Vice Chair of Supervision Barr, Cleveland President Mester, and Chicago President Goolsbee. We begin the day with Agency MBS prices better from Friday by .250-.375 and the 10-year yielding 4.49 after closing Friday at 4.63 percent after a stellar CPI number.

Employment

GO Mortgage distinguishes itself in product, technology, and personal touch! GO has the full range of products including single close construction, non-QM, state housing, and more to ensure you capture every loan you can. Get the modern top-tier tech suite you need to build your personal brand, including Total Expert with Customer Intelligence for real-time database insights, online reputation management from Experience.com, and the SOCI platform for automated social media – all without any added costs. Plus, the personal touch of unmatched speed, adaptability, and direct access to underwriting and leadership. Let’s GO! Reach out to us or apply directly here.

Movement Mortgage has experienced a 300 percent year over year growth in reverse mortgage business in 2023! Earlier this year Movement brought in the most experienced reverse mortgage team in the nation who have dedicated their careers to reverse sales and operations. Plus, Movement has set its loan officers up for success with a reverse-eligible borrower dashboard in MORE, Movement’s new sales and marketing platform powered by Salesforce. Movement LOs can now identify reverse-eligible borrowers from their previous and current loans to offer this incredibly powerful product. Click here to learn more about reverse mortgages at Movement.

A veteran group of mortgage bankers is interested in purchasing a small wholesaler in good standing and that has its “tickets” with Fannie, Freddie, and Ginnie. Loan production volume is not a priority. Interested parties should send me a confidential note for forwarding.

Mobility Market Intelligence (MMI) announced Brian McKray has been promoted to Vice President of Product. DepthPR writes, “His efforts in spearheading the development and implementation of MMI’s user insights tool and custom dashboard hub have fueled this promotion. Using these customer insights, MMI is actively building improved in-app onboarding and support tools.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally


Washington, DC
CNN
 — 

US mortgage rates surged to their highest level in nearly 23 years this week as inflation pressures persisted.

The 30-year fixed-rate mortgage averaged 7.31% in the week ending September 28, up from 7.19% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 6.70%.

“The 30-year fixed-rate mortgage has hit the highest level since the year 2000,” said Sam Khater, Freddie Mac’s chief economist, in a statement. “However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

Mortgage rates have spiked during the Federal Reserve’s historic inflation-curbing campaign — and while a good deal of progress has been made since June 2022, when inflation hit 9.1%, Fed officials say there is still a ways to go.

The Fed’s preferred inflation measure, the core Personal Consumption Expenditures index, is currently 4.2%, which is more than double the Fed’s target of 2%. Economists expect it to drop to 3.9% when the latest reading is released on Friday.

Higher for longer

This week’s mortgage rate surge followed last week’s small move higher, as investors settled in for “higher-for-longer” interest rates after last week’s Fed policy meeting, said Danielle Hale, chief economist at Realtor.com.

Hale said the takeaway from the meeting was that the upward adjustments from the Fed haven’t ended.

“Revised economic projections show that another rate hike this year is definitely on the table, and the expected policy rate in 2024 and 2025 was also higher than previously forecast,” she said. “Market participants are still playing catchup.”

While the Fed does not set the interest rates that borrowers pay on mortgages directly, its actions influence them.

Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

The yield on 10-year Treasuries rose from 4.3% on September 20 to 4.6% as of September 27.

Buyers bowing out

Mortgage applications continued to drop last week, according to the Mortgage Bankers Association, as mortgage rates went higher.

“Rates over 7% and low for-sale inventory continue to create affordability challenges for prospective buyers,” said Bob Broeksmit, MBA president and CEO. “Until rates start to come back down, we anticipate housing market activity will remain slow.”

Markets are experiencing an extraordinarily low number of homes for sale as homeowners stay put with ultra-low mortgage rates that are several percentage points lower than the current rate.

There has been a small uptick in newly listed homes coming to market over the past few weeks, according to Realtor.com, which is seasonally atypical, said Hale.

The first week in October tends to be an ideal week to buy a home, she said, since home prices tend to fall relative to summer highs, and fewer buyers contend for homes. Yet housing inventory remains higher than a typical week, Hale said.

But, she added, mortgage rates will continue to be a wild card, which could make it impossible for some buyers to get in the market now.

Even as demand is dropping, with so few homeowners selling, the market is pushing up prices as those few buyers who remain tussle over the handful of available houses, Hale said.

This combination of higher prices and higher mortgage rates contrasts with easing rents over the past few months. This may cause would-be first-time buyers to wait for home prices and mortgage rates to stabilize and rent instead.

“Buying a starter home is more expensive than renting in all but three major US markets [Realtor.com] studied,” said Hale, “which explains why buyer demand is likely to remain relatively low.”

Source: cnn.com

Apache is functioning normally

Gone are the days of the zero-down mortgage. At least for the typical home buyer.

Instead, the 2023 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) revealed that down payments haven’t been higher in decades.

This, despite the widespread availability of low-down and zero-down home loan options.

As for why, it could be because inventory remains low, which has kept competition lively in spite of much higher mortgage rates.

Another reason might be those high interest rates themselves, which make it less attractive to take out a large loan.

Median Down Payments Highest Since 1997 for First-Time Home Buyers

Per the NAR report, the typical down payment for a first-time home buyer was 8%, which might not sound like a lot.

But it is the highest figure since 1997, when it stood at 9%. If you look at the chart above, you’ll notice it dipped pretty close to zero in those bad years back in 2005-2006.

At that time, creative financing and lax underwriting (aka no underwriting at all) allowed home buyers to purchase a property with nothing down.

While that may have been risky on its own, they could also use stated income to qualify for the loan.

And they could choose a super toxic loan type, such as the now forgotten option ARM, or qualify via an interest-only payment.

That may explain why we experienced the worst mortgage crisis in recent history, followed by the nastiest housing market crash in generations.

So certainly some good news there, with down payments on the rise despite unaffordable conditions.

To that end, home buyers could be opting to put more down to get a more favorable mortgage rate, and/or to avoid mortgage insurance (PMI) and unnecessary pricing adjustments.

Back when mortgage rates were hovering around 3%, it made sense to put down as little as possible and enjoy the low fixed-rate financing for the next 30 years. Not so much today.

Another reason home buyers might be putting more money down is due to competition. While the housing market has certainly cooled this year, there is still a dearth of supply.

This means if and when something decent pops up on the market, there may still be multiple bids.

And those who are able to muster a larger down payment will generally be favored by the seller.

The one worrisome thing was how first-time buyers were securing their down payments recently.

They’ve had to increase “reliance on financial assets this year,” including the sale of stocks or bonds (11%), a 401k or pension (9%), an IRA (2%) or the sale of cryptocurrency (2%).

Always a bit questionable if selling retirement assets to purchase a home.

Typical Down Payment for Repeat Home Buyers Up to 19%

Meanwhile, the typical repeat buyer came in with a 19% down payment, which is the highest number since 2005 when it was 21%.

Down payments for repeat buyers also tanked prior to the early 2000s housing crisis because underwriting was so loose at the time.

There was really no reason to come in with a large down payment at the time given the wide availability of flexible loan products, and the notion that home prices would just keep on rising.

This explains why homeowners at the time also favored negative amortization and interest only home loans.

They all assumed (or were told) that the home would simply appreciate 10% in a year or two and they could refinance over and over again to better terms.

Today, it’s more in line with levels prior to that fast and loose era, and appears to be steadily climbing.

This could also have to do with a large number of all-cash home buyers, such as Boomers who are eschewing the 7% mortgage rates on offer.

But it is somewhat interesting that the median number was 19% and not higher.

After all, a 20% down payment on a home comes with the most perks, like lower mortgage rates and no private mortgage insurance requirement. But I digress.

Note that all the figures from the survey only apply to buyers of primary residences, and do not include investment properties or vacation homes.

How Much Do You Need to Put Down on a Home These Days?

As noted, low and no-down mortgages still exist, though they are typically reserved for select applicants, such as VA loans for veterans and USDA loans for rural home buyers.

However, you can still get a 3% down mortgage via Fannie Mae or Freddie Mac, which virtually every lender offers.

There are also FHA loans, which require a slightly higher 3.5% down payment, but lower credit score requirements.

On top of this, there are countless homebuyer assistance programs, including silent second mortgages that can cover the down payment and closing costs.

In other words, there is no shortage of affordable loan options today.

But there is an advantage to putting more down, such as eliminating the need for mortgage insurance and having a smaller outstanding loan balance.

With mortgage rates so high at the moment, the less you finance the better.

This could also make it easier to apply for a rate and term refinance if and when rates do fall, thanks to a lower LTV ratio.

Regardless, it’s good to see down payments rising as home prices become more expensive.

This contrasts the bubble years back in 2004-2006 when homeowners put less and less down as property values increased. It didn’t turn out well.

Source: thetruthaboutmortgage.com