report Archives - Page 129 of 201

Apache is functioning normally

December 5, 2023 by Brett Tams

In adjusting to new case-mix systems under the Patient Driven Payment Model (PDPM), the changes to reimbursement rates might be more widespread and large-scale than anticipated, posing financing threats to the nursing home sector because lenders are basing loans on rate projections that are expected to be scaled back.

The goal of budget neutrality – in which reimbursements should cancel out costs associated with care – especially when it comes to Medicaid rates, may come back to bite providers and investors in the nursing home space who are currently securing deals based on higher reimbursement projections.

That’s according to Marc Zimmet, CEO of Zimmet Healthcare Services Group. While budget adjustment factors are not a new phenomenon, what will be new is the scale to which states will be clawing back money after adjusting to new case-mix systems under PDPM.

What’s more, expectations of Medicaid rate increases are driving transaction volume, with banks underwriting loans based on a formula for state Medicaid reimbursement under PDPM. However, such projections aren’t expected to stay in place, Zimmet said, as states aim for budget neutrality.

Learning from Medicare adjustment

When CMS transitioned to PDPM, they looked at scores from assessments that were done when there was no PDPM – and providers weren’t “optimizing,” he said. Now, after the switch, providers are indeed trying to optimize reimbursement. Efforts to better capture depression is a good example, with assessment scores coming in much higher than Medicare had anticipated.

This resulted in 5% in overspending for the first year of PDPM, or $1.7 billion more than under RUGs, short for Resource Utilization Groups.

The Centers for Medicare & Medicaid Services (CMS) had intended to spend the same amount of Medicare money on nursing home care through PDPM as it had under the system it replaced.

“[CMS] comes in and says, we’re doing a recalibration, we’re taking the money back because it was supposed to be budget neutral. That happens all the time with Medicaid. When Medicaid does a transition, they model it based on old assessments,” said Zimmet.

What changes with the transition is provider behavior, he continued, as they start capturing everything that drives reimbursement.

“So then the [initial] rates don’t come in at $200, they come in at $250. The nursing homes are all psyched. [They think] they ‘re getting a windfall,” Zimmet said, using hypothetical numbers. But, just like what happens with Medicare rate adjustments, states notice that nursing homes are spending above budget and, because the transition is supposed to be budget neutral, they now “claw back the money,” said Zimmet, explaining the process by which the reductions to reimbursements are made on the state level.

The difference now, he said, is that this claw back is happening in dozens of states.

He calls it the “great transition,” since there are a large number of states changing their payment model. History tells us that when there’s a change of payment model, provider behavior changes, he said.

On paper, it’s going to look like facilities are getting big Medicaid rate increases, but history also tells us that states don’t come up with all that money. A budget adjustment factor, or recalibration, will pare back any reimbursement beyond what was accounted for in the state budget.

In the end, Zimmet expects the same operators that were good at optimizing under RUGS will continue to be good at optimizing under PDPM moving forward – net results will be the same.

Implications for dealmaking

As industry leaders keep track of Medicaid rate changes and budget adjustment proceeds at the state level, Zimmet said this will affect dealmaking as well – and already has.

He’s getting calls from banks who do underwriting for nursing home loans. They’re buying facilities and seeing that rates have gone up, and are now basing loans on these increased rate projections.

“The state is not all of a sudden going to come up with another $100 million dollars. There’s going to be a budget adjustment,” he said. “It’s a bubble. These loans are going to be made, are being made, and the rates are not going to be what they think they’re going to be on paper, they will be clawed back; you’re going to have [something] like the housing crisis.”

This scenario is unfolding in multiple states, he said, as banks are lending based on reimbursements that aren’t going to stay in place – they’re going to get clawed back.

State example

Some states have already started addressing the change between RUGS and PDPM in terms of Medicaid rates, Zimmet said, pointing to Pennsylvania and Colorado in particular.

For Colorado’s Medicaid nursing home rate, statewide average rates increased 10% starting in July, and another increase of 3% is anticipated for July 2024 and then no less than 1.5% in July 2025, according to Doug Farmer, president and CEO of the Colorado Health Care Association.

“Between now and July 1, 2025, there will be a process to determine the structure of our [Medicaid] rates moving forward. That rate methodology will be taking into account the interest of stabilizing the profession, ensuring access and working to address the increases in behavioral health needs in long term care settings,” Farmer said in an email to Skilled Nursing News.

Colorado moved away from RUGS and began using PDPM on July 1 2023, he said.

“For this first year, the state enacted a ‘hold harmless’ in rate setting, which ensured that no provider saw a rate decrease as a result of the change,” said Farmer. “That ‘hold harmless’ was used because providers did not have time to begin coding under the new PDPM-based requirement prior to the shift in methodology.”

Pennsylvania won a significant 17% increase in its Medicaid rate in 2022 after no increases for a decade. This year, the state approved a $16 million increase in Medicaid rates, about $10 million short of what associations had advocated for.

Looking ahead, there’s much volatility in the state when it comes to Medicaid rates, especially as new staffing requirements take effect requiring one nurse aide for every 12 residents during day shifts, according to a report from the Philadelphia Inquirer.

State lawmakers still have to agree on a budget for fiscal 2024, but Medicaid regulators warn that Pennsylvania nursing homes – nearly twice as many as last year – may face a 5% cut to their daily Medicaid rate, according to a report from the Philadelphia Inquirer in June.

To make matters even more confusing, less than half as many as last year could see their Medicaid rates go up 5% or more in the state.

Source: skillednursingnews.com

Apache is functioning normally

December 5, 2023 by Brett Tams

TPO, Subservicing, Marketing, CRA Products; Training and Webinars; Podcast Interview with Dr. Elliot Eisenberg

This website requires Javascrip to run properly.

TPO, Subservicing, Marketing, CRA Products; Training and Webinars; Podcast Interview with Dr. Elliot Eisenberg

By:
Rob Chrisman

Mon, Dec 4 2023, 10:43 AM

“People would learn more from their mistakes if they weren’t so busy denying them.” Here’s a little trivia for the compliance folks in the coffee room: The CFPB handles 20,000 consumer complaints per week, and given that financing a home, and then servicing the loan, is the largest financial transaction most individuals go through, you gotta figure a chunk of the 20,000 involve mortgages. While we’re on the CFPB, Director Chopra addressed issues related to refinancing in a hearing on Capitol Hill last Thursday. But the headlines have been grabbed by interest rate improvements in our free market economy, and the economics calendar this week will be highlighted by the U.S. jobs report on Friday, arriving just five days before the Federal Reserve’s December 13 meeting. (Expect payrolls growth will rise to 200K in November from 150k job additions in October, and the unemployment rate to stay steady at 3.9 percent.) Today’s podcast can be found here, and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process. Today’s has a wide-ranging interview with economist Elliot Eisenberg on government spending, the Fed’s balance sheet, and “Eisenbergian Economics.”

Lender and Broker Products, and Services

Servicing transfers are complicated, so it is critically important that you nail down the prep work beforehand. If you don’t, and the servicing transfer goes awry, it’s not only servicers who suffer, their customers do, too. The professional services team at ICE Mortgage Technology break down exactly what’s on the line, and what happens when poorly handled servicing transfers leave customers in a lurch. Read its new blog here to learn just how “high stakes” loan transfers can be, and the steps servicers can take to avoid borrower confusion, retention concerns, and even reputational risk, before they become a problem.

Exclusive data: Maxwell Q3 2023 Mortgage Lending Report reveals trends in interest rates, loan volume, and borrower demographics. Q3 brought continued challenges for home buyers and lenders. Despite 11 Fed rate hikes over the past year and a half, interest rates averaged 7.2 percent in Q3, the highest Maxwell data has recorded within the current market cycle. Still, Maxwell’s new report, which derives insights across more than 300 lenders and $290B in loan volume, shows signs of stabilization in Q3. Motivated borrower groups found creative paths to homeownership despite adversity, flocking to remaining pockets of affordability (hint: West Virginia). For insightful market data along with actionable advice from Maxwell experts on how to form a strong 2024 strategy, click here to get your free copy of Maxwell’s Q3 2023 Mortgage Lending Report.

Community Reinvestment Act (CRA) Final Rule: Preparing Your Bank for CRA Modernization! After years of discussions and false starts, the Federal Reserve, FDIC, and OCC issued their final rule modernizing the Community Reinvestment Act (CRA) in October. The almost 1,500-page final rule will take effect on April 1st, 2024. This means banks must comply with all the rule’s provisions by January 1, 2026 (aside from certain requirements taking effect January 1, 2027). How will CRA modernization impact your bank? What do regulators hope to achieve? What are they looking for from banks? What should your bank do to prepare? In this new article, experts from Ncontracts discuss this and more, plus offer insights on how the right resources can ease these regulatory burdens. Read the full article for more information.

Variety is the spice of life, which is why ICE maintains an ever-growing library of multimedia marketing content with its Surefire℠ CRM and Mortgage Marketing Engine. Intelligently automated Blueprints for Success give lenders a leg up with effective marketing workflows without the hassles of A/B testing and complex configuration. Whether a lender launches our Blueprints for Success out-of-the-box or configures them to meet unique goals, these automated campaigns help nurture relationships, improve pull-through and power sales across the entire homeownership lifecycle. Explore how Surefire can power your sales strategy in 2024 and schedule a demo with the ICE team today.

Delinquencies have remained statistically low, but recent market data indicates an uptick in early-stage delinquencies, unemployment, and more Americans relying on credit to make ends meet, so that rate may continue to rise. Computershare Loan Services (CLS) is a highly rated subservicer that can take the heavy lifting of managing high-risk loans off your shoulders. All its services (originations fulfillment, co-issue MSR acquisition, subservicing, and its mortgage cooperative) help keep lenders one step ahead. In this industry, you deserve a partner that has it all. Contact CLS to find out how they can help you reach your goals, in any market.

Broker and Correspondent Programs

Give Your Pipeline a Boost this December with LoanStream’s Winter Specials on Non-QM and Prime! Purchase, Rate/Term & Refi Cash-Out on both. Non-QM, 50bps >65% to <= 75% LTV & 720+ FICO, 75bps >55% to <= 65% LTV & 720+ FICO, 100bps <= 55% LTV & 720+ FICO. These are only here for a limited time so take advantage and Contact your Account Executive for details. For loans locked 12/1/2023 through 12/31/2023. Restrictions apply. Interested in getting approved? Visit our Get Approved page now: Get Approved LoanStream Wholesale – Wholesale Mortgage Lending.

With the holiday season underway, Rocket Pro TPO is kicking off its December to Remember campaign by introducing a series of exciting and valuable wins throughout the month of December to celebrate and support Rocket Pro’s broker partners. On Friday, the first win was introduced: a 25 bps LLPA on 30-year fixed rate conforming VA loans that will be available all month. Check out this video message from EVP Mike Fawaz. And, today, Rocket Pro’s highly popular Fast 15 Loan Guarantee is back now through January 31st! This special offer for brokers guarantees that all eligible loans will be clear to close in 15 business days or they will pay your client $2,500. For correspondent partners, they guarantee that eligible loans will be clear to close in 15 business days, or they will waive the $999 acquisition fee. Requirements and rules apply. Partners are encouraged to watch their inboxes and Rocket Pro TPO’s social media channels for more wins to come. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

Events, Training, and Webinars in December

TOP CEOs DISCUSS WINNING STRATEGIES FOR THE 2024-25 MORTGAGE CYCLE. Tomorrow, 12/5, at 2 PM ET, tune into HousingWire as Sagent CEO Dan Sogorka digs into this topic with industry leader Mark O’Donovan (Chase), moderated by Julian Hebron of The Basis Point. These 3 mortgage experts will uncover how lenders can thrive through 2025 and beyond, discussing vital topics such as navigating homebuyer affordability, lender priorities, FHFA, CFPB insights, and more. Don’t miss this powerhouse session! Register here to refine your strategies for the upcoming year or catch the recording if you can’t attend live.

A good place for longer term conference planning is to start is here, and click on “events” for conferences in the future.

Tomorrow, 12/5, is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman. Tune in every Tuesday at 1PM ET to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode. This week’s guest is Kayla Gatmaitan, and education-focused LO for first time homebuyers.

If business is slow and you’re looking for new opportunities, register for MBA Eastern Pennsylvania’s upcoming free session with Freddie Mac on Tuesday, December 5 at 11:00 a.m. One of the challenges homebuyers face in today’s market is saving for the down payment. In this session, the benefits and differences between two low down-payment offerings, Home Possible® and HomeOne® will be explored. Additionally, the session will cover Freddie Mac BorrowSmart AccessSM, a program that offers up to $3,000 in down payment and closing cost assistance to help your clients reach homeownership.

The title industry faces many challenges going into 2024 and October Research wants to help you prepare your business. Orrick Partner Sherry-Maria Safchuk and CATIC SVP and National Agency Manager Kyle Rank will share their expertise and address critical issues such as consumer protection, cybersecurity trends, remote online notarizations, updates on the 1033 rule and more on the latest Industry and Regulatory Outlook webinar Dec. 5th. Stay ahead of the competition and start the new year strong. Register today at DoddFrankUpdate.com.

2023 Financial Institutions Professionals Webinar Series, presented by the Bonadio Group, December 5th, 6th, and 7th at 8:00 PST. During this complimentary event, industry experts will discuss emerging issues, impacts, insights, & more. Create your own personal agenda by choosing from several sessions, each designed as a roadmap to help you navigate what’s to come in the ever-changing financial services landscape. Each session offers 1 (one) credit of CPE.

Wednesday the 6th, looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. This week’s guest is Mark Jones, President of Union Home Mortgage and Chairman of the MBA.

Join MBA St. Louis at St. Charles Realtors, Wednesday, December 6th, 8:00 am – 10:30 am, and test your knowledge on Conventional Loans. This engaging and interactive course led by Trainer MaryKay Scully, Enact MI’s Director of Customer Education will review the key areas of Credit, Income, Collateral, Liabilities, Assets, HomeReady and Home Possible. It will inform and engage participants. Assessing knowledge, while reviewing Fannie Mae and Freddie Mac guidelines, as well as Desktop Underwriter and Loan Product Adviser. Cost: $20 (covers light snacks and room rental).

Freddie Mac added enhancements to its HFA Advantage® mortgage offering, providing a competitive solution for housing professionals to consider for first-time and repeat homebuyers. In a free webinar, Thursday, December 7th, 2 p.m. – 3:30 p.m. ET, you’ll learn more about HFA Advantage’s features and benefits, eligibility and homebuyer education requirements and new product enhancements.

With a residential real estate market that continues to change and evolve, WMBA has gathered industry professionals that offer different perspectives to give real insight into “Build for Rent” model, an increasing popular approach to residential new construction being built and held as rental properties. Join WMBA for the Income Property Luncheons on Thursday, December 7th, In Person Attendees: 11:30-1:00pm, Virtual Attendees: 12:00pm-1:00pm.

Join Angel Oak Mortgage on Thursday, December 7 at 10:00 PST for a webinar detailing its Investor Cash Flow (DSCR) programs and cover the top 20 broker questions. Learn how easily these loans close and help add to the bottom line.

Success leaves clues. Not surprisingly, many of the traits shared by high achievers are common sense in theory, but not necessarily common practice (otherwise, everyone would be a high achiever, right?). Discover the keys to having your best year ever, the most important (yet often missing) part of the formula for success and disciplines you often don’t think about. Join Hannah J. Barton and Blaine Rada, CSP, to discover these habits and incorporate them into your own life. TMBA Webinar, Habits of High Achievers, Thursday, December 7 at 11:00 am – 12:00 pm.

Join LSEG Academy session Central Bank & Bond market outlook – Insight from IFR Markets,

Thursday, December 7th | 8:00 PST., as industry experts examine recent benchmark interest rate increases and likely changes to the direction of central banks’ monetary policies. They will also look at the commentary and insight provided by IFR Markets and showcase how benchmark rates have been impacting the bond and rates markets utilizing LSEG Workspace tools. The discussion will include expectations for interest rate moves in 2024 and provide an opportunity to ask questions to industry experts.

Friday, December 8, is the next episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. Listen to Rich Kuegler with Stewart Title!

Capital Markets

As mortgage rates dropped for the fifth consecutive week last week, Federal Reserve Chair Powell said that any speculation of potential rate cuts is still “premature.” Yes, inflation is easing, and the U.S. economy is cooling with Fed policy now well into restrictive territory. The full effect of higher rates is still working its way through the economy and the central bank has noted progress against inflation over the past six months. The hiking cycle is likely over, but the Fed is reluctant to admit as much or discuss any sort of rate cuts.

Economic data over the last week continued to show the U.S. economy is still expanding while inflation trends lower. Real GDP was revised up to 5.2 percent in the second update from 4.9 percent in the advance update. Consumer spending on services increased 0.2 percent in October and spending on nondurable goods increased 0.3 percent. The October PCE deflator was unchanged in October and showed prices were 3.0 percent higher than twelve months ago; the lowest annual reading since March 2021. While prices are still rising faster than the Fed’s preferred rate, the pace continues to slow and bodes well for a soft landing for the U.S. economy.

This can also be seen in housing prices which rose 0.7 percent in September and 3.9 percent from one year ago, according to the S&P CoreLogic Case-Shiller Home Price Index. While elevated mortgage rates helped the slowdown, limited available for sale inventory has kept prices from outright declines. As a result of the continued progress on inflation and recent Fed comments around being well into restrictive territory, the markets expect the Fed is done hiking and will begin to cut rates in 2024.

This week’s economic calendar contains several higher tiered releases including the November payrolls report and preliminary December consumer sentiment on Friday. Between now and then, we will receive ISM Services for November, some labor market indicators, wholesale trade, and consumer credit. The week kicks off with just factory orders for October, due out later this morning. We begin Monday with Agency MBS prices roughly unchanged from Friday evening, the 10-year yielding 4.25 after closing last week at 4.23 percent, and the 2-year at 4.61.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

December 5, 2023 by Brett Tams

Anyone eyeing mortgage rates, which reached above 8% in October, can be excused for longing for the pandemic lows of sub-3% mortgages. But it’s unlikely those rock-bottom rates will return anytime soon, according to Mark Zandi, chief economist at Moody’s Analytics. Instead, the veteran market watcher expects rates to hover at roughly double that level in the near future.

“Everybody should get used to 5.50% to 6%, because that’s where mortgage rates are going to settle in, [in the] long run,” Zandi told CNBC on Monday. Mortgage rates tend to trail the 10-year Treasury yield, which he suspects will hover around 4% to 4.50%; that generally puts mortgage rates at that 5.5% to 6% he’s expecting.

Asked to predict the magic mortgage rate that will have inventory flooding back into the housing market, Zandi said that obviously a 5% rate is better than 6%, but the long-term number will likely be somewhere in between.

In recent weeks, mortgage rates have fallen from their October highs, with the average 30-year fixed rate currently at 7.30%. But in today’s somewhat frozen housing market, that’s barely a start. With a 6% mortgage rate, things start to thaw as would-be buyers and sellers enter the market, but Zandi doesn’t think home sales will get back anywhere near levels seen during the pandemic, before the Federal Reserve began its interest rate hike cycle to lower inflation. Getting closer to that 5% mortgage rate would trigger more activity, he added.

“The other thing that’s got to happen here, obviously, is we do need to see some weakness in house prices,” Zandi added. “If house prices don’t come [down] to any degree, we’re going to have to see even lower mortgage rates to get sales up.”

Some forecasts, like that of Goldman Sachs, suggest home prices will continue to increase next year. So far, prices aren’t letting up; the national S&P Case-Shiller house price index increased 3.9% on an annual basis in September, according to figures released on Tuesday.

Meanwhile, existing home sales are at their slowest pace since 2010, when the housing market was reeling in the aftermath of the Great Financial Crisis. That’s largely because of the so-called lock-in effect, which keeps homeowners with low mortgage rates from selling their homes—constraining both buyers and sellers. New home sales, on the other hand, have outperformed existing home sales because homebuilders can offer incentives, like mortgage rate buydowns. Still, higher mortgage rates are curbing demand even there, with new home sales falling more than expected in October.

“Most of the weakness in sales is on the existing side,” Zandi explained. “Homeowners are much more reluctant to cut prices … Builders are doing what it takes to move those homes.”

There is some relief pushing its way through the housing market, and that’s on the rental side.

“Rents have gone flat to down, particularly at the high end of the market,” he said. “These big multifamily towers are going up in the big urban centers in the Northeast, Chicago, on the West Coast, and that’s putting downward pressure on rent—and, I think, is having some impact on new house prices, and at the high end of single-family housing markets.”

Realtor.com’s October rental report released on Tuesday showed median rent for studios and one- and two-bedrooms across the top 50 metro areas in the U.S. continues to trail its 2022 levels, experiencing a year-over-year decline for the sixth month in a row. As Zandi mentioned, a lot of that has to do with supply. There was a substantial increase in new multifamily construction in 2022, and that resulted in an uptick in new multifamily completions in 2023, “which significantly augmented the rental supply and exerted downward pressure on rental prices” this year, the report found.

Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up for free.

Source: fortune.com

Apache is functioning normally

December 5, 2023 by Brett Tams

VantageScore Credit Score Ranges	Americans With Credit Scores in This Range
Very poor (300 – 499)	5%
Poor (500 – 600)	21%
Fair (601 – 660)	13%
Good (661 – 780)	38%
Excellent (781 – 850)	23%

While FICO and VantageScore take some of the same factors into account, VantageScore determines your credit score based on six different factors. Let’s look at how VantageScore weighs each factor:

Payment history (41%): Your past ability to pay bills on time.
Depth of credit (20%): The ages and types of credit accounts you have.
Credit utilization (20%): How much of your credit limit you’re using.
Recent credit (11%): The number of hard inquiries on your credit report.
Balances (6%): The total balances on your credit accounts.
Available credit (2%): The amount of credit you have available to you.

What Kind of Loan Can I Get With a 720 Credit Score?

As mentioned above, a good credit score can help you qualify for better rates and terms for loans. However, it’s important to keep in mind that your credit score isn’t the only factor that lenders look at when reviewing your loan application. Your income, employment, credit history, and debt-to-income ratio are also taken into consideration during the approval process.

With that in mind, here’s a look into the loans you can generally expect to qualify for with a 720 credit score. Assuming you also qualify for income thresholds as well.

Mortgages

Generally, mortgage lenders require a minimum credit score of 620, so you should have no problem qualifying for a mortgage with a 720 credit score. You’ll also likely qualify for low interest rates, although you might not get the best rate available. Borrowers who qualify for the lowest interest rates typically have a 760 credit score or higher.

Additionally, how much of a down payment you put down may influence your interest rates. A larger down payment provides less risk to the lender because you have additional stake in the house.

Auto Loans

A 720 credit score will allow you to qualify for an auto loan. When looking at the average car loan interest rates, borrowers with credit scores between 661 and 780 qualify for an average used car APR of 7.83% and an average new car APR of 5.82%. However, if you bring your score to 781 or above, you can expect a 1.84% lower interest rate for used cars and a 1.07% lower interest rate for new cars, on average.

Personal Loans

With a 720 credit score, you’ll have many options for personal loans, so you should shop around for the best rates. Personal loan interest rates can range from 6% to 36%, although a good credit score should allow you to qualify for rates on the lower end of that spectrum. According to recent personal loan statistics, the average interest rate is 11.2%.

Student Loans

While federal student loans don’t have credit score requirements, private student loan lenders typically require a good credit score. With a 720 score, you’ll likely get approved by most lenders and may even qualify for the best interest rates.

Credit Cards

Most credit card issuers will approve borrowers with a 720 credit score and potentially offer the lowest interest rates. You can likely even get approved for a 0% APR card. Keep in mind that certain prestigious credit cards that provide luxurious perks require excellent credit to qualify plus additional requirements. Therefore, you may need to improve your credit score before applying for an exclusive credit card.

How to Further Improve Your 720 Credit Score

If you have a good credit score but want to reach the very good or excellent range, here are some tips for how to make your good credit score even better:

Pay your bills on time: Since 720 is a high credit score, a single late payment can cause a significant drop in points. Make sure to continue paying your bills on time to further improve your credit.
Make payments more frequently: Making multiple payments on your credit card bill each month can help keep your credit utilization low.
Request a credit limit increase: Another way to lower your credit utilization is to increase your credit limit.
Leave credit accounts open: Avoid closing old credit accounts to maintain the length of your credit history.
Space out new credit applications: Wait six months between credit card applications to limit the number of hard inquiries on your credit report.
Get credit for rent and utility payments: If you regularly pay your bills on time, a rent and utility reporting service can report your payments to the credit bureaus, which may help improve your credit.
Dispute any errors: Check your credit report at least once a year and challenge any inaccurate information you find.

While a 720 credit score is considered good, there’s still room for you to stay on top of your credit—that’s where ExtraCredit® comes in. ExtraCredit is a credit management product that helps you check your FICO® scores, view your credit reports from all three credit bureaus, report rent and utilities, and more. Start your free trial* today.

*Your 7-day trial will begin after agreeing to these terms and submitting your ExtraCredit® sign-up. After your trial period, your subscription will automatically continue on the same day every month as the day you started your trial membership. The free trial is available for new ExtraCredit customers only. The credit card you provided will be charged $24.99 (plus any applicable tax) on the next business day and monthly; after your trial period unless you cancel. You may cancel at any time by downgrading your service level in your settings or by contacting us at [email protected]. Dishonored payments will result in an automatic downgrade to the free credit.com product.

Source: credit.com

Apache is functioning normally

December 5, 2023 by Brett Tams

Renting after eviction may seem daunting, but it’s not impossible. Yes, getting evicted is a terrible experience to deal with and a frustrating process to handle afterward. It’s something everyone fears and when it happens, you’re left wondering what the process of renting after an eviction is like.

While starting to find a new apartment after getting an eviction notice is a daunting process, it’s not impossible. With the right knowledge and preparedness, renting after eviction will be much easier. Don’t let an eviction weigh you down — we’ve got you covered with useful information so you’ll be renting after an eviction in no time.

Things to do if you’ve been evicted

If you’ve been evicted and are now ready to begin searching for a new space to rent, there are some things you should consider that will help make the process easier. Here are 10 tips for renting after an eviction.

1. Work on your credit score before renting after eviction

Your credit and legal history are two separate records, but when applying for a new place to rent, they become intertwined. An eviction won’t show up on a credit report itself but it will show up on a background check. Almost all landlords or apartment complexes will require a background check as part of the rental application process. So, if you have a past eviction, the landlord will almost certainly see it on your background check.

So how does that impact your credit score? We mentioned an eviction won’t show up on the credit report, but, if a previous landlord sent unpaid rent information to a collection agency or if your landlord sued you in court and won, this will all negatively impact your credit score. If you’ve been evicted, you need to work to improve your credit score so you can use a high score to advocate for yourself when going to rent a new property.

Start by paying off outstanding debts and paying future bills on time. A good credit score can make or break your ability to rent an apartment in the future.

2. Be honest

When people say “honesty is the best policy,” they mean it. It’s always best to share upfront with a possible future landlord about your past eviction notice — honesty is the best policy. Renting after an eviction is already hard enough and you don’t want to make it harder by having your future landlord find out you lied or withheld the truth. If they ask about your previous eviction you can simply explain the situation that led to your eviction.

Sometimes, the landlord will be more willing to work with you after hearing your side of the story.

3. Look at renting from a private party

Renting from a private owner as opposed to an apartment complex is always an option for those with eviction notices on their records. Because they’re renting the space privately they don’t have to work within the guidelines and restrictions that a regular apartment complex does. Because of this, they might be more willing to work with you and your situation. As mentioned above, be as open and honest with them as possible so they can fully understand your situation.

4. Pay more upfront

There are two ways to really get a person to help you out — buy them food or give them money. When looking for a place to rent, try and offer more money upfront. If you have the means, offer to pay a higher security deposit or two months’ rent upfront. This way the landlord knows you’re serious about renting and paying on time.

5. Get a co-signer

Getting a co-signer is another idea to explore while trying to rent after an eviction. If you know someone who is willing to and has good credit, ask if they’ll co-sign. Doing this might make the landlord more inclined to rent to you. But, keep in mind that if you don’t pay, your co-signer will have to.

6. Try and clear your record

An eviction stays on your record for seven years. That being said, there are some ways to clear your record sooner. If you’ve paid off any outstanding rent debts, reach out to your previous landlord and ask them to remove the eviction from your record.

If you haven’t yet been able to pay off an outstanding rent debt, still talk to your previous landlord. Ask them if you are able to pay off your rent if they’ll consider removing your eviction.

7. Refine your search renting after eviction

When searching for an apartment, refine your search and filter for apartments that either don’t do background checks or that accept applicants with previous evictions. By doing this you won’t waste your time looking at places guaranteed to turn you down.

8. Find the right references

Because renting after eviction is a tough road, you should have a lot of references ready before applying to rent an apartment. Because evictions are sometimes seen as a character flaw, you’ll want a reference to point out your good character traits.

Get friends, employers or colleagues to write letters speaking to your character and what a great tenant you’ll make. Submit these letters along with your rental application so that the landlord can read them and get a better sense of who you are and how you’ll be as a potential tenant.

9. Get a letter of credit when renting after eviction

Your goal when renting after an eviction is to get the landlord to understand what happened and still rent to you. Writing a letter of credit is a great start on this process. Write up your previous credit history and how you’ve changed. Tell them if you’ve gotten a new job or how you’re planning on doing things differently this time around.

10. Make a good first impression

First impressions last for a long time. When meeting with the landlord, dress nice and wear something that says you’re a reliable renter. Be polite and positively engage with them whilst speaking. You want to leave with them thinking you’re the best person to rent to. By doing this, they might be more willing to work with you and your situation.

Home sweet home

Being evicted is an extremely difficult moment to go through. And then on top of that, renting after eviction is a hard task. It takes time, effort and energy, but fear not it can be done. Using the knowledge and tips listed above you’ll be able to better prepare yourself for this daunting task.

Make sure to gather all the appropriate documents and references with you when going to meet with your potential new landlord. Tell them your story and appeal to their hearts. While it may seem like your past is still haunting you, there is hope that you’ll be able to find a new place to call home.

Ashley Singleton is a writer who loves following and writing about current lifestyle, DIY and home improvement trends. You can read some of her other work on the Lady Spike Media website. In her spare time, she performs stand-up comedy in Los Angeles.

Source: rent.com

Apache is functioning normally

December 5, 2023 by Brett Tams

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations.

If you’re interested in investing in a new vehicle, it’s not always easy to know what’s in your price range. Understanding your options and learning how to calculate your budget can determine what you can afford.

Discover how auto loans can enhance your ability to afford a range of vehicles, from brand-new cars to those with some mileage.

How to Calculate How Much Car You Can Afford

Calculating how much you can afford for your new car is a helpful step in saving money when you’re ready to make the purchase. Follow the next steps to calculate your budget effectively.

1. Calculate Your Car Payment Budget

There are two main expenses to consider when calculating your car payment budget: your down payment and your monthly payment.

Above is an example of how to calculate your monthly payment calculation. Let’s say you have a net monthly income of $4,500. Multiply your income by 0.10, or take 10% of your income. This number will be your estimated monthly payment. In this example, it would be $450.

Get matched with a personal
loan that’s right for you today.

Learn
more

Monthly payment: We recommend spending no more than 10% of your monthly net (take-home) income on your monthly car payment. This doesn’t include other expenses like gas and maintenance. Round up to 15% to include all vehicle expenses.
Down payment: If you plan on purchasing a car, we recommend putting around 20% of the vehicle’s purchase price toward your down payment. The more you put down, the lower your auto loan will be.

2. Determine Which Auto Loan You Qualify For

You now have a better idea of how much you can potentially borrow based on your budget.

Several determining factors affect how much you can borrow, including:

Credit score: This will influence the annual percentage rate (APR) of the loan. Higher FICO® credit scores between 661 and 850 can lower your auto loan interest rate.
New vs. used: Auto loans for new cars typically come with reduced APRs.
Loan term: This is how long you’ll be repaying your auto loan. The average car loan term ranges between five and six years.

If you already have an auto loan, you can refinance and customize your loan with Credit.com. Try out our Auto Loan Calculator to simulate your current payment and find out what savings you can earn today.

3. Estimate Auto Insurance Cost

You should also factor in car insurance when considering purchasing a new vehicle. Factors like the make and model of the car, your driving history, and where you live can impact your insurance costs. Reach out to several insurance companies for quotes and get a clearer picture of what you’ll likely need to budget for insurance.

4. Calculate Your Purchase Price

It’s important to note your auto loan isn’t the total price you’re going to pay for your vehicle. There are other hidden costs you should be aware of beyond the number on the price sticker. Take note of these common additional costs:

Sales tax: This can be around 5% to 10% and may include local, county, and state taxes. However, not all states have sales tax, such as Montana and Oregon.
Documentation fees: These can range from $100 to $400, depending on your state.
Registration fees: These can range from $8 to $225, depending on the state.

What Car Options Do You Have?

You never want to put yourself in a financially vulnerable position if you can avoid it. That’s why it’s important to consider all of your purchasing options. Keep reading to understand how buying versus leasing can help you afford a car.

New Vehicle

Everyone wants a shiny new car, but it’s not always affordable. If there’s a particular type of vehicle you want, do some research to determine the vehicle’s current market value. That way, you’ll know exactly how much that car is worth and avoid purchasing a vehicle with an inflated price tag.

Used Vehicle

Purchasing a used vehicle can be the best route for those with a lower budget. Used vehicles tend to have considerably reduced prices compared to brand-new cars, leading to more affordable monthly payments. Additionally, used cars typically have lower car insurance costs.

Leased Vehicle

Leasing a car can be a great option for those who want a brand-new car, but would prefer lower monthly payments. There are drawbacks to this option, however, as the payments that go toward the vehicle don’t provide value and there are mileage limits. But if you don’t mind those drawbacks and like to try out different cars every couple of years, leasing is worth considering.

FAQ

Here are answers to some frequently asked questions about car affordability and monthly payments.

How Much Car Can I Afford Based on My Salary?

Determining your car affordability based on your net income is one way of estimating how much car you can afford. You should put 10% or less of your monthly income toward your car payments.

Annual Income	Monthly Car Payment Maximum
$30,000	$250
$40,000	$334
$50,000	$416
$60,000	$500
$70,000	$584
$80,000	$667
$90,000	$750
$100,000	$833

However, this doesn’t include costs such as fuel, parking, and maintenance. You can plan on dedicating about 15% of your monthly income to total vehicle expenses.

How Much Should My Monthly Car Payment Be?

Your monthly car payment will depend on a few factors, such as your auto loan interest rate, loan term, and how much you put toward your down payment. Your choice of vehicle and where you purchase it can also affect interest rates.

However, your monthly car payment should be around 10% or less of your monthly take-home pay. You can always choose to pay more every month to pay your auto loan quicker and save money on interest.

Shop for Auto Loans With Credit.com

Take your first step toward vehicle ownership by learning more about credit scores with Credit.com. Get your free credit report card today.

Source: credit.com

Apache is functioning normally

December 4, 2023 by Brett Tams

Rising home prices have pushed the third quarter’s tappable home equity amount near its 2022 peak, but interest rates are making homeowners reluctant to extract that wealth.

Mortgage holders withdrew a mere 0.41% of tappable equity in Q3, about 55% below the average withdrawal rate seen in the 12 years leading up to the Federal Reserve’s most recent tightening cycle, according to the latest ICE Mortgage Technology‘s mortgage monitor report.

“Indeed, in recent quarters, equity withdrawal rates have been running at less than half their long-run averages. That’s equivalent to $54 billion – $250 billion over the last 18 months – in ‘missing’ withdrawals that might have otherwise stimulated the broader economy,” said Andy Walden, vice president of enterprise research at ICE Mortgage Technology.

Rising equity levels are also contributing to low default and foreclosure activity.

Foreclosures starts rose to 33,000 in October – the highest level in 18 months – but still remained 35% below COVID-19 pandemic norms. Loans in active foreclosure inched up to 217,000, but remained more than 25% below pre-pandemic levels.

About 70% of loans currently three or more payments past due are protected from foreclosure by ongoing loss mitigation efforts. In addition, about 58% of these seriously delinquent mortgage holders hold more than 20% equity stakes in their homes.

“Strong equity cushions not only provide borrowers incentive to work with their servicers to return to making mortgage payments, they also open up other options, such as salvaging earned equity with a traditional home sale rather than going through foreclosure. The more the industry can do to educate, and update, borrowers as to their equity positions, the better,” Walden said.

Mortgage originations

Purchase lending dominated the market overall, driving 86% of all first-lien lending in the third quarter. In 2024, roughly 75% of originations expected to come from purchase loans.

Despite compressed volumes, cash-out refinance loans fueled what is left of the refinance market accounting for 92% of the third quarter activity. Borrowers withdrew a record $104,000 on average.

Rising mortgage rates continued to put pressure on homebuyers, with the average debt-to-income (DTI) ratio on purchase loans hitting 40.5% in October, a series high dating back to January 2018.

The average DTI among conventional mortgages reached 37.8% in October, also a series high, while the average among FHA and VA loans hit 45.5% and 44.4%, respectively. These figures are both up sharply from recent months, but slightly below last year’s high of 45.7% for FHA loans and 44.5% for VA loans.

Lenders have responded by tightening credit requirements and the average credit score among conventional, FHA and VA loans.

Average credit scores for FHA loans rose 14 points in October over the past 12 months while VA loans climbed 13 points.

Apache is functioning normally

December 3, 2023 by Brett Tams

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.

Bankruptcy is a legal process that individuals and businesses can undertake to eliminate their debts under the oversight of a bankruptcy court.

Bankruptcy is a legal process that individuals and businesses can undertake to eliminate all or part of their debts under the oversight of a bankruptcy court. For individuals who have amassed debt beyond what they can reasonably pay, bankruptcy is a potential path toward a clean slate.

There are different types of bankruptcy, important terms to know and significant consequences to watch out for. If you’re wondering, “What is bankruptcy?” or you’re considering it for yourself, read on to get an overview, or you can use the links below to jump to a specific question.

How does bankruptcy work?

Bankruptcy is a complicated legal process that involves several steps:

A debtor files a legal petition for bankruptcy in federal bankruptcy court.
The court appoints a trustee to oversee the case.
The trustee examines the debtor’s assets and liabilities and determines if they have any assets which can be administered by the trustee.

While it’s technically possible to file for bankruptcy on your own, working with a qualified attorney is recommended, as the amount of legal knowledge required is beyond what the average person possesses.

During the creditor’s meeting the trustee will examine the debtor and the case and file a report. What happens next depends on whether you filed for Chapter 7 or Chapter 13. In both cases, your debt can be discharged, but the process for achieving that end varies.

What are the different types of bankruptcy?

For individuals, the two most common forms of bankruptcy are Chapter 7 and Chapter 13. Businesses and local governments can also file for bankruptcy, but we won’t cover those types of bankruptcy in detail in this article.

Chapter 7

Chapter 7 bankruptcy is the most straightforward approach to filing for bankruptcy. Chapter 7 bankruptcy, also called liquidation bankruptcy or fresh start bankruptcy, sometimes involves the sale of assets to pay off debt. In most cases a debtor’s assets are exempt and no assets need be sold. This is best for debtors who have no way to repay their debt.

When a debtor files for Chapter 7 bankruptcy, the following process takes place:

The debtor provides the trustee with tax returns and other financial documents relevant to the case, plus a list of all their assets.
The trustee evaluates the assets to determine which assets, if any, are nonexempt.
The trustee sells all nonexempt assets to pay off creditors. Debtors can keep exempt property, which varies by state law. For example, in New York, a debtor can keep their car if they own it outright and it is worth $4,000 or less.
The debtor meets with their trustee and creditors at a Meeting of Creditors, also called a 341 Hearing, to verify the information they’ve filed in their bankruptcy petition is accurate.
The trustee might pay some of the debt using the proceeds from liquidating the debtor’s nonexempt assets. However, this is rare.
Any remaining debt is discharged. However, Chapter 7 does not eliminate all debt—debtors are still responsible for paying court-order alimony and child support, student loans and certain taxes.

The Chapter 7 process typically takes about four to five months from filing to final discharge of debt.

While Chapter 7 bankruptcy has powerful effects on debt, it also has consequences. The negative item from bankruptcy can remain on a credit report for 10 years.

A debtor can only file for this kind of bankruptcy once every eight years. For that reason, a condition of bankruptcy is always credit counseling and personal finance courses, which are aimed at supporting people to prevent them from ending up in the same financial situation again.

Chapter 13

Chapter 13 bankruptcy still leads to debt elimination, but it involves a debt payment plan. In Chapter 13 bankruptcy, debtors keep their property and pay debts over an agreed-upon period, usually three to five years. To qualify, a debtor must prove they have regular income. During the payment period, creditors are legally prohibited from collection efforts against the debtor. This type of bankruptcy is best for debtors who have steady income but still can’t afford to pay their debts in full.

If a debtor files a petition for Chapter 13 bankruptcy, the following will occur:

The court reviews the repayment plan. Typically, repayment plans last three to five years and may repay some or all of the debt owed. The debtor prepares and files the plan and creditors have a chance to comment on it, the trustee comments on it and the court makes a final determination as to whether to approve the plan.
A court-appointed trustee collects your payments. Over the course of repayment, a trustee will collect funds and disburse them to creditors.
After repayment, the bankruptcy is discharged. After the specified repayment period, the debtor becomes eligible for a discharge. If the debtor has complied with the trustee’s requests, has paid all required payments and takes a financial management course, then the remaining balance on debt (if any) is forgiven.

The entire Chapter 13 bankruptcy process can take up to five years from the filing date to the end of repayment.

While Chapter 13 bankruptcy also has detrimental consequences for credit and general financial health, it tends to be less detrimental than Chapter 7 bankruptcy.

Additionally, Chapter 13 bankruptcy remains on a credit report for just seven years, and the process can be repeated more often if necessary. Having debt discharged or reorganized can be a vital financial tool.

Other types of bankruptcy

While individuals file Chapter 7 and Chapter 13 depending on their circumstances, there are other types of bankruptcy that farmers and fishermen, businesses and city governments can use in difficult financial situations.

Here’s a quick overview of other forms of bankruptcy:

Chapter 9 focuses on local governments and school districts that need to restructure debt in the wake of financial troubles. Similarly to Chapter 13, Chapter 9 utilizes a debt repayment plan.
Chapter 11 enables businesses to create a debt repayment plan in conjunction with a revised business plan that is aimed at increasing profitability.
Chapter 12 is a narrowly focused form of bankruptcy that is exclusive to family farmers and fishers hoping to avoid liquidation.
Chapter 15 is an international provision that helps mediate bankruptcy proceedings that involve the United States and at least one other country.

While all of these forms of bankruptcy are useful, only Chapter 7, Chapter 11 and Chapter 13 typically directly affect individuals in financial distress.

What does it mean when bankruptcy is discharged?

A bankruptcy discharge means a debtor is no longer personally responsible for certain debts. Regardless of the remaining balance of a previous debt, once a bankruptcy discharge is entered, creditors can no longer collect on the debt.

With Chapter 7 bankruptcy, discharge usually occurs after the creditor’s meeting. There is typically a 60-day window after the meeting of creditors for creditors to file complaints, after which the discharge may take effect.
With Chapter 13 bankruptcy, discharge typically takes place after the repayment plan is completed.

However, not all debts are eligible for bankruptcy discharge. Depending on the type of bankruptcy filed, the following debts may not be discharged:

Alimony
Child support
Tax liens
Some federal, state and local taxes (depending on the age of the debt)
Student Loans.
Debts for willful and malicious injury to a person or property
Debts for death or personal injury caused by the debtor driving while under the influence of alcohol or drugs
Any debt not listed in the bankruptcy filing

In general, a discharged bankruptcy is permanent, meaning creditors no longer have any claim to previous debt. In some cases, however, a bankruptcy discharge could be revoked if the party proves to the court that the initial petition was made fraudulently. The time period for taking an action in this way is limited to one year after discharge.

What is the benefit of filing for bankruptcy?

There are advantages to filing for bankruptcy for individuals who can no longer deal with overwhelming debt.

Some of the most important benefits of bankruptcy include:

The elimination of many types of debt
A fresh start with finances
An end to calls and letters from collection agencies
Relief from wage garnishment, foreclosure or repossession
Protection of certain kinds of property

Bankruptcy courts exist for a reason, and bankruptcy serves an important financial function for many individuals whose debts significantly exceed their ability to repay. For those who have no other good options, bankruptcy provides important benefits and the chance for relief and a second chance at financial security.

How does bankruptcy affect your credit score?

Bankruptcy has a serious detrimental effect on your credit, though it is possible to rebuild credit after bankruptcy.

The negative item from bankruptcy will remain on your report for seven to ten years, depending on the type of bankruptcy. Any time you apply for credit, that negative item will be visible to creditors, who will factor it in when deciding whether to approve your application.

For those looking to rebuild credit after bankruptcy, a secured credit card is often the best starting point. A secured credit card is backed by a deposit, so creditors are usually willing to provide it even to those who have a bankruptcy on their record. Responsibly using the card and making payments on time can slowly lead to improved credit in the future.

Additionally, many people who have gone through bankruptcy choose to work with a credit repair company, which may be able to support the process of rebuilding credit.

What is bankruptcy fraud?

Bankruptcy fraud occurs when an individual withholds information about debts or assets from the federal bankruptcy court. In both Chapter 7 and Chapter 13 bankruptcy, information about your finances determines how your debt is handled, so providing false or misleading information could lead to a revocation of your bankruptcy discharge or criminal charges.

Here are some examples of bankruptcy fraud:

Hiding assets. During bankruptcy, you are forced to disclose all of your assets, which may be sold in order to pay creditors. Withholding information about your assets to try to protect them is not allowed.
Running up debt prior to discharge. If you use credit to purchase property or items with no intention of repayment simply because you believe the debt will be discharged, you are likely committing bankruptcy fraud.
Falsifying documents. Providing false information about property transfers, debts, assets or any other necessary information is forbidden during bankruptcy proceedings.

The consequences of bankruptcy fraud can be serious, especially if a party proves to the court that your efforts were intended to deceive creditors and prevent them from receiving their just payment. You could be denied a bankruptcy discharge. Fines and even prison time are possible outcomes for bankruptcy fraud, so it’s important to be truthful throughout the entire process.

Bankruptcy terms you should know

A bankruptcy score is used by financial institutions to predict the likelihood that an individual will file for bankruptcy within a certain period of time. Similar to credit scores, bankruptcy scores are calculated using a wide variety of factors. Unlike credit scores, however, bankruptcy scores are not available to consumers, so you can’t know your own score or make efforts to improve it directly.

Still, regardless of your bankruptcy score, the same financial habits that support a strong credit score are also likely to help prevent you from needing to file for bankruptcy:

Create and maintain a budget. Spending within your means and prioritizing essential expenses is an excellent way to maintain financial health.
Make full and on-time debt payments. Make timely payments for loans and credit cards, and avoid keeping a credit card balance from month to month.
Avoid unnecessary lines of credit. While credit is a valuable tool, it’s important to avoid opening too many lines of credit and letting debt become overwhelming.

Bankruptcy scores are important tools for financial institutions making lending decisions, but they are largely unimportant to consumers. As long as you are making wise financial decisions over time, creditors will continue to recognize your efforts and your risk of bankruptcy will remain low.

Bankruptcy terms you should know

As you navigate bankruptcy, you’ll come across a variety of terms that may be unfamiliar. Understanding all of these terms makes navigating the process of bankruptcy much easier, and fortunately, none of them are difficult to understand.

Here’s a list of terms that you should know if you’re trying to understand bankruptcy better.

Assets and liabilities: An asset is anything you own, whereas a liability is anything you owe.
Chapter: A chapter is simply the specific type of bankruptcy being declared under Title 11 of the United States Federal Bankruptcy Code.
Discharge: A discharge means the associated dischargeable debts no longer need to be paid.
Lien: A lien is a claim against a piece of property from a creditor who is owed a debt, such as a mortgage lender or a car creditor.
Liquidation: Liquidation is the process of selling assets, usually to pay debts—for instance after filing Chapter 7.
Means test: The means test is used to determine who is eligible to file for Chapter 7 by accounting for income and debt.
Repayment plan: An approved repayment plan is a court-authorized plan to give creditors back some or all of what they are owed. At the completion of a repayment plan under Chapter 13, remaining dischargeable debt is typically forgiven.
Secured and unsecured debt: A secured debt has some sort of valuable property as collateral—for instance, an auto loan is secured by the car itself. An unsecured debt has no associated collateral—for instance, a credit card is unsecured.
Trustee: Appointed by the court, the trustee is responsible for reviewing the debtor’s financial situation and documentation relation thereto, conducting the meeting of creditors and collecting and liquidating non-exempt assets or ensuring payments are made according to the repayment plan.

Armed with knowledge of these terms, you’ll have a much greater understanding of bankruptcy moving forward.

What does it cost to file for bankruptcy?

The cost to file bankruptcy can be broken down into two parts: court fees and attorney fees. According to the U.S. Court, you’ll pay a $78 administrative fee and a $15 trustee fee to file for Chapter 7 or Chapter 13 bankruptcy, plus any additional relevant fees. The total filing cost is generally under $500.

If a debtor cannot pay the fees associated with filing for bankruptcy, the court may break the fee payment into up to four installments or waive them altogether. Debtors who wish to have the fee waived must submit Form 103B. Bankruptcy filing fees are not typically waived, even for the most destitute.

That said, most people will also require an attorney for bankruptcy proceedings, and fees can vary significantly. According to All Law, fees for Chapter 7 typically range from $1,000 to $3,500, whereas fees for Chapter 13 are a bit higher, ranging from $2,500 to $6,000. Depending on your location, fees may be lower or higher, so you’ll want to consult a local lawyer to determine a more accurate cost before proceeding.

Should you declare bankruptcy?

Deciding whether or not to declare bankruptcy can be difficult, so make sure you think about all of the alternatives first. People often consider bankruptcy due to unexpected or overwhelming debt—like a medical bill that has ballooned through interest or a handful of loans that have become unmanageable.

There may be ways to deal with these debts before resorting to bankruptcy. For example:

Negotiate with your creditors. Ultimately, creditors are looking for you to repay your debt. By contacting your creditors, you may be able to work out a favorable payment plan or have some of your debt erased in order to make it more manageable.
Get a debt consolidation loan. A debt consolidation loan enables you to simplify and often reduce your debt payments by lowering your interest rate or extending your payment timeline.
Work with a credit counselor. A credit counselor may be able to help you evaluate your entire financial picture and create an action plan to make debt more approachable.

Still, even after these alternatives, there are some people for whom bankruptcy is the best available option. If you have no means to pay back your debts and you’ve exhausted other options, contact a bankruptcy attorney to determine your best next steps.

Overall, bankruptcy exists to protect individuals from long-term financial ruin. Though the credit consequences of bankruptcy are long-lasting, the benefits of freedom from debt are absolutely essential in some cases.

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

Vince R. Mayr

Supervising Attorney of Bankruptcies

Vince has considerable expertise in the field of bankruptcy law.

He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.

Source: lexingtonlaw.com

Apache is functioning normally

December 3, 2023 by Brett Tams

Purchase application data

Hello, early Christmas present! Mortgage rates have fallen by almost 1% in a short time, and it has created four straight weeks of positive purchase application data. I recently covered this noteworthy topic on the HousingWire Daily podcast because we need to add some reality checks with this positive data, but we also stress that people can’t make the same mistake as last year of ignoring the positive forward-looking data.

Last week, purchase apps were up 5% over the previous week, making the year-to-date count 22 positive prints versus 23 negative prints and one flat week. We have a few weeks left for the year and with mortgage rates falling as much as they have, we might end up positive on the year-to-date count.

Mortgage rates and the 10-year yield

We are back! The 10-year yield closed below 4.25% again and mortgage rates ended the week at 7.09%. For my 2023 forecast, my range for the 10-year yield was 3.21%-4.25%, which meant mortgage rates between 5.75%-7.25%. I said the 10-year yield would only break below 3.37% if the labor market breaks — this level is the “Gandalf line” I have used all year.

Now, in order to get above 4.25% on the 10-year yield, we needed the economy to outperform. In Q3, the U.S. economy grew above 5%, and jobless claims headed lower. That economic growth and lower jobless claims data, on top of the Fed being hawkish at their Fed meeting, sent the 10-year yield over 5% making the Fed policy very restrictive. This is not what they wanted after all their rate hikes.

However, those are over for now. Mortgage rates went from 7.32% to end the week at 7.09%. If the spread between the 30-year mortgage rate and 10-year yield were behaving normally we would be talking about mortgage rates under 6% today!

Weekly housing inventory data

It’s December, which means the seasonal decline in housing inventory is well underway, which means in 2023, I have batted a whopping zero on how much I predicted weekly inventory would grow with higher mortgage rates. The call was that if mortgage rates rose above 7.25%, we would see more inventory growth — between 11,000-17,000 weekly. That hasn’t happened once this year. The closest we got to this level was when inventory grew for a few weeks by about 9,000 and it did grow faster with higher rates late in the year, but it never hit my target, so I got this wrong. Now, we see the seasonal inventory decline.

Last year, according to Altos Research, the seasonal peak for housing inventory was Oct. 28. It appears that the seasonal peak this year was Nov. 17.

Weekly inventory change (Nov. 24-Dec. 1): Inventory fell from 565,875 to 555,717
Same week last year (Nov. 11-Nov. 18): Inventory fell from 564,571 to 550,302
The inventory bottom for 2022 was 240,194
The inventory peak for 2023 so far is 569,898
For context, active listings for this week in 2015 were 1,081,712

The one positive inventory story in 2023 is that we formed a bottom in the new listings data! One concern with higher mortgage rates was that more sellers — who are traditional buyers — would not list their homes. This didn’t happen at all this year, even with mortgage rates heading toward 8%. I talked about growth in the new listings data on CNBC as it appeared to me we were forming a bottom months ago.

New listings data for this week over the last several years:

2023: 28,297
2022: 28,471
2021 32,018

Traditionally, one-third of all homes take price cuts before they sell. When mortgage rates rise and demand decreases, the percentage of homes with price cuts usually increases. However, even with mortgage rates reaching 8% this year, we trended 4% below 2022 levels of price cuts. This explains why home prices are more firm in the second half of 2023 versus the same period in 2022.

Price cut percentages this week over the last few years:

2023: 39%
2022: 43%
2021: 27%

The week ahead: Jobs week!

Yes, it’s that time of the month again: Jobs week! We have had a big move in bond yields already, and we are staring at four labor data reports this week: job openings, ADP, jobless claims, and jobs Friday. We should get a slight boost in the jobs report from the labor strikes being over. However, it will be interesting to see how the bond market reacts to each labor report.

Source: housingwire.com

Apache is functioning normally

December 3, 2023 by Brett Tams

Are you considering refinancing your mortgage, but hesitant about the high cost of closing? A no-closing-cost refinance may be the solution for you.

In this article, we’ll explain what a no-closing-cost refinance is, how it works, and the benefits and drawbacks of this type of mortgage refinance. We’ll also go over the qualifications and the process of getting a no-closing-cost refinance, so you can decide if it’s the right choice for you.

What is a no-closing-cost refinance?

In short, it’s a mortgage loan that offers homeowners the option to refinance their mortgage without having to pay initial fees to lenders.

Closing costs usually pay for lender fees as well as loan origination fees, third-party expenditures, appraisal fees, and underwriting and processing costs. Refinance lenders also take on costs that originate from third parties, including escrow and title costs.

With a no-closing-cost refinance, you potentially save money on closing costs, lower your monthly payment, and build equity in your home faster.

It’s certainly tempting and may be the right choice for certain types of borrowers. However, those closing costs saved are costs added to the loan amount that you’ll eventually have to pay back.

How does a no-closing-cost refinance work?

The application process for a no-closing-cost refinance is similar to that of a traditional refinance. You’ll need to provide financial information and documentation to the lender, and they will run a credit check. Once the mortgage lender approves your application, the refinance process can begin.

You may be wondering how the lender makes money on a no-closing-cost refinance. The lender recoups their costs by charging a slightly higher interest rate on the loan. This way, they can potentially make more money in the long run, even though you don’t pay any closing costs up front.

Pros and Cons of No Closing Costs

Having no upfront closing costs comes with a range of both advantages and disadvantages. The idea of skipping the closing costs and fees upfront may be appealing, or even right for you.

However, it’s still important to consider the various ways it may affect your financial situation next month, next year, and next decade. Here are some pros and cons:

Pros

Upfront savings: The most immediate benefit of a no-closing-cost refinance is the elimination of substantial upfront fees. This can be particularly advantageous for homeowners who may not have the liquid assets to cover these costs at the time of refinancing. It allows for the conservation of cash that could be used for other pressing financial needs or opportunities.
Simplified financing: This type of refinance simplifies the financial burden for homeowners. It removes the hurdle of saving for and managing large, one-time closing costs. This is especially helpful for those with limited disposable income or those facing unexpected financial challenges.
Quicker break-even point: For homeowners planning to move or refinance again in the short term, a no-closing-cost refinance can be financially advantageous. By not paying closing costs upfront, they can reach a break-even point more quickly, especially if they sell the home or refinance before the added costs accrue significantly.

Cons

Increased long-term cost: While there’s an immediate saving on closing costs, this type of refinance often results in a higher interest rate or a larger loan balance. Over time, this can lead to significantly higher interest payments. Homeowners should carefully consider the long-term financial implications, such as how the increased loan balance or rate will impact the total interest paid over the life of the no-closing-cost loan.
Higher monthly payments: Due to the higher interest rate associated with a no-closing-cost refinance, homeowners might face higher monthly payments. This increase can strain monthly budgets, especially for those who are already managing tight finances.
Reduced home equity: Rolling closing costs into the loan balance can reduce the amount of equity a homeowner has in their property. This is a critical consideration for those who may need to leverage home equity in the future for other financial goals or emergencies.

How to Qualify for a No-Closing-Cost Refinance

When it comes to qualifying for a no-closing-cost refinance, the eligibility requirements are similar to those of a traditional refinance. Your lender will look at your credit score, income, and debt-to-income ratio to determine if you qualify.

To improve your chances of being approved for a no-closing-cost refinance, and potentially lower your monthly payment, it’s a good idea to make sure your credit score is as high as possible. You should also have a solid income and a low debt-to-income ratio, which lenders assess to determine your ability to manage the monthly payment. Additionally, having a good track record of paying your bills on time can also help.

Once you have determined that you are eligible for a no-closing-cost refinance, you need to compare different options to determine which one will be the most cost-effective for you in the long run. Be sure to consider the interest rate, fees, and overall costs of each option before making a decision.

Finding Lenders Offering No Closing Cost Refinance

When considering a no-closing-cost refinance, finding the right lender is a crucial step. Different lenders offer varying terms and rates, so it’s important to conduct thorough research to find the best option for your financial situation. Here’s a guide on how to find and compare lenders for a no-closing-cost refinance:

Start with your current lender: Your existing mortgage lender is a good starting point. They may offer competitive refinance options to retain your business. Ask about their no-closing-cost refinance options and compare these with what you might find elsewhere.
Research online: Many lenders provide details of their refinance products online. Use mortgage comparison websites to gather information on various lenders’ offerings. These platforms often allow you to compare rates, terms, and fees side by side.
Check with local banks and credit unions: Local financial institutions sometimes offer better terms to members or local residents. Visit or call your local banks and credit unions to inquire about their no-closing-cost refinance options.
Consult mortgage brokers: Mortgage brokers have access to various lending sources and can often find deals that may not be widely advertised. They can help you navigate through different offers and identify the most cost-effective option.
Consider online lenders: Online mortgage lenders can be a viable option as they often have lower overhead costs, potentially translating to better terms or lower rates. However, ensure you research their reputation and customer service record.

Understanding the Details of No-Closing-Cost Refinancing

Before you get excited about not paying anything upfront, sit down with your lender to discuss all the details. Be sure to keep an eye out for the following details:

Some loans are not actually “no cost”
Some loans solely cover lender fees, while others may cover all expenses, including third-party costs
Home loans differ from lender to lender, so it’s important to shop around
Lenders may pay different interest rates and costs on your behalf. Find out all the details before you commit.
Consider all the costs: title and appraisal, lender fees, credit report fees, escrow, home inspections, mortgage points and other third-party fees

Is a no-closing-cost refinance right for you?

Deciding on a no-closing-cost refinance requires weighing your immediate financial needs against the long-term effects on your mortgage. This option is attractive for its low initial fees, but understanding its overall impact is essential. For those planning to move or sell their home shortly, saving on upfront costs can offer immediate financial relief. It’s an appealing choice if staying in your current home isn’t part of your long-term plan.

However, a no-closing-cost refinance usually translates to a higher loan amount or increased interest rate, affecting the total cost over time. If you’re several years into your mortgage, like 10 years into a 30-year loan, the added expense from higher interest rates can surpass the benefits of initial savings.

Before deciding, it’s important to calculate how this choice will affect your monthly payment and compare the overall costs with those of a traditional refinance. Shopping around for the best deal is crucial to align this financial decision with your overall goals.

A Closer Look at No-Closing-Cost Mortgage Deals

Now that you understand the positives and negatives of selecting a no-closing-cost refinance, here’s an example of how these loans may play out in a lending setting:

For example, you may be charged $4,500 in closing costs, the average cost for homeowners today. If you choose to pay this out of pocket, the $4,500 cost will remain static as a one-time charge.

On the other hand, if you skip those fees, that sum will be rolled into your mortgage bills each month over the duration of that loan. Over 30 years at 4.125% interest, the borrower will eventually pay a total of $7,851.

Meanwhile, over the course of five years, the borrower will wind up paying $6,000 after initially skipping the $4,500 closing fee.

Whether this is worth it or not is entirely up to you. If you’re planning to sell your home within the next couple of years, the immediate savings may be worth it for you to pay a bit more over two years.

You can take that saved money to invest in repairs, remodels, realtor fees, and other associated costs that accompany selling a home. Moving a home quickly on and off the market can save you other costs that make this type of loan right for you.

How to Spot a Bad No-Closing-Cost Refinance Deal

No-closing-cost loans are each different from one lender to another. By seeking different opinions and home equity options, you can ensure that you’re getting a good deal. Here are a few warning signs to look out for:

The loan is called “no cost” but it turns out you’ll have to pay for appraisals, title fees, escrow, property taxes, insurance, and prepaid interest.
The loan is called a “no lenders fee loan,” which means the bank will only cover just that—lenders fees, and nothing else.
Carrying out a refinance through a mortgage broker, who then adds on a lender credit, further increases your interest rate.
A bank uses “bundles” that tack on closing costs on top of the cost of the loan. These bundles further increase the size of the loan, as well as the interest rate, leading to a higher monthly payment over time.

Be aware of potential red flags and take your time when considering any type of home loan. This is especially true if the terms of the loan are unclear, and you are feeling pressured to make a decision before fully understanding the details of the loan. It’s always better to be cautious and well-informed before making a commitment.

5 Tips for Negotiating No-Closing-Cost Refinances

Negotiating the terms of your no-closing-cost refinance is crucial in securing a favorable deal. Focus on these effective strategies:

Conduct thorough market research: Understand the current market rates and terms from various lenders. This knowledge positions you as an informed borrower, giving you an edge in negotiations.
Leverage your creditworthiness: If you have a strong credit history, use this as a bargaining chip. Lenders may offer better terms to borrowers who present lower credit risks.
Discuss customization options: Each borrower’s situation is unique. Talk to your lender about tailoring the refinance terms to suit your specific financial needs and goals, especially if you plan to stay in your home for a long time or move soon.
Be prepared to walk away: If the terms offered don’t align with your needs, be ready to explore other options. Showing your willingness to consider other lenders can motivate your current lender to offer better terms.
Review the final offer thoroughly: Ensure that all negotiated terms are clearly included in the final offer. A careful review before agreeing can save you from unexpected terms or conditions.

By applying these strategies, you can effectively negotiate and secure a no-closing-cost refinance that aligns with your financial objectives. Remember, your aim in negotiation is not just to lower costs, but to find a deal that supports your overall financial strategy.

Frequently Asked Questions

What are the average closing costs for a refinance?

The average closing costs for a refinance can vary depending on the location, property type, and loan type. Typically, closing costs for a refinance can range from 2% to 5% of the loan amount.

For example, on a $200,000 loan, the closing costs can be anywhere from $4,000 to $10,000. These costs include the loan origination fee, appraisal fee, title search and insurance, and other miscellaneous fees.

Can you negotiate closing costs on a refinance?

Yes, it is possible to negotiate closing costs on a refinance. While some costs, such as the appraisal fee or title search, are set by third-party providers and cannot be negotiated, other costs such as the origination fee or lender’s title insurance can be negotiated with your lender.

Here are a few strategies to negotiate closing costs on a refinance:

Shop around: Compare offers from multiple lenders and negotiate with them to see if they can lower or waive certain fees.
Timing: Closing costs tend to be lower during slow periods for the housing market.
Ask for a credit: Some lenders may offer a credit towards closing costs in exchange for a slightly higher interest rate.
Be prepared to walk away: If a lender is not willing to negotiate closing costs, it may be best to look for another lender that is more willing to work with you.

When would a no-closing-cost refinance be a bad idea?

A no-closing-cost refinance may not be the best idea in certain situations. Here are a few reasons why a no-closing-cost refinance may not be a good idea:

Short-term ownership: If you don’t plan to keep your home for a long time, you may not be in the house long enough to recoup the costs of the refinance.
Not enough equity: If you don’t have enough equity in your home, you may not be able to qualify for a no-closing-cost refinance.
Higher interest rate: If the interest rate is higher than the rate you already have, it typically does not make sense to refinance.
Limited budget: if you’re tight on budget, and the higher interest rate on the no-closing-cost refinance will put you in a difficult financial situation, then it’s not a good idea.

Source: crediful.com

Learning from Medicare adjustment

Implications for dealmaking

State example

TPO, Subservicing, Marketing, CRA Products; Training and Webinars; Podcast Interview with Dr. Elliot Eisenberg

Option 1: Copy and send this link

What Kind of Loan Can I Get With a 720 Credit Score?

Mortgages

Auto Loans

Personal Loans

Student Loans

Credit Cards

How to Further Improve Your 720 Credit Score

Things to do if you’ve been evicted

1. Work on your credit score before renting after eviction

2. Be honest

3. Look at renting from a private party

4. Pay more upfront

5. Get a co-signer

6. Try and clear your record

7. Refine your search renting after eviction

8. Find the right references

9. Get a letter of credit when renting after eviction

10. Make a good first impression

Home sweet home

How to Calculate How Much Car You Can Afford

1. Calculate Your Car Payment Budget

2. Determine Which Auto Loan You Qualify For

3. Estimate Auto Insurance Cost

4. Calculate Your Purchase Price

What Car Options Do You Have?

New Vehicle

Used Vehicle

Leased Vehicle

FAQ

How Much Car Can I Afford Based on My Salary?

How Much Should My Monthly Car Payment Be?

Shop for Auto Loans With Credit.com

Related

Bankruptcy is a legal process that individuals and businesses can undertake to eliminate their debts under the oversight of a bankruptcy court.

How does bankruptcy work?

What are the different types of bankruptcy?

Chapter 7

Chapter 13

Other types of bankruptcy

What does it mean when bankruptcy is discharged?

What is the benefit of filing for bankruptcy?

How does bankruptcy affect your credit score?

What is bankruptcy fraud?

Bankruptcy terms you should know

Bankruptcy terms you should know

What does it cost to file for bankruptcy?

Should you declare bankruptcy?

Vince R. Mayr

Purchase application data

Mortgage rates and the 10-year yield

Weekly housing inventory data

The week ahead: Jobs week!

What is a no-closing-cost refinance?

How does a no-closing-cost refinance work?

Pros and Cons of No Closing Costs

Pros

Cons

How to Qualify for a No-Closing-Cost Refinance

Finding Lenders Offering No Closing Cost Refinance

Understanding the Details of No-Closing-Cost Refinancing

Is a no-closing-cost refinance right for you?

A Closer Look at No-Closing-Cost Mortgage Deals

How to Spot a Bad No-Closing-Cost Refinance Deal

5 Tips for Negotiating No-Closing-Cost Refinances

Frequently Asked Questions

What are the average closing costs for a refinance?

Can you negotiate closing costs on a refinance?

When would a no-closing-cost refinance be a bad idea?