single-family

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Guild Mortgage is one name you may have come across lately while searching for a mortgage.

They’re a rapidly growing independent mortgage banker with over 300 physical branches nationwide.

Those branches are located in 49 states nationwide, with their employee headcount around 4,000 at last glance. New York seems to be the one state missing.

They also recently beat out Rocket Mortgage (formerly Quicken Loans) for the number one spot in customer satisfaction for primary mortgage originations by J.D. Power, which is a very big deal given Quicken’s hold on the top spot.

Let’s learn more about this privately held company to determine if they might be a good choice for your home loan needs.

Guild Mortgage Started in San Diego

  • Founded in 1960, originally known as Guardian Mortgage
  • Initially offered FHA loans and financing for homes built by American Housing Guild
  • Now a top-30 mortgage lender nationwide that offers all types of home loans including mortgage refinances and renovation loans
  • A publicly traded company under the symbol NYSE: GHLD

Originally known as Guardian Mortgage, the company began in 1960 in San Diego, California, founded by Martin Gleich.

In the beginning, they offered FHA loans to first-time home buyers and home purchase loans to buyers of homes built by American Housing Guild.

Today, they are a top-10 mortgage lender by purchase loan volume that offers everything from conventional loan programs to USDA loans and jumbo loans, and everything in between.

They are also a correspondent mortgage lender with banking relationships in 47 states, and a major home loan servicer with a loan portfolio worth nearly $40 billion.

In 2021, the non-bank mortgage lender originated $34+ billion in loan volume, and now services more than 200,000 mortgage loans. That means they keep many of the loans they fund.

Guild recently had the best year in their history, with a record $14.6 billion funded in just the first half of 2020.

Guild Mortgage Co. has grown a staggering 27X from 2007, making them one of the fastest growing mortgage companies around.

They’ve also acquired smaller companies along the way, with the most recent Cherry Creek Mortgage, and previously Wisconsin-based Inlanta Mortgage and Cornerstone Mortgage out of St. Louis, Missouri.

Guild is one of the top mortgage lenders in the Northwest, including Portland and Seattle, and also has a growing presence in places like Austin, Texas, Columbia, South Carolina, and Reno and Las Vegas, Nevada.

In 2021, Guild Mortgage acquired Portland, Maine-based Residential Mortgage Services (RMS) to expand their footprint in the Northeast.

Guild Mortgage Quick Facts

  • Retail direct mortgage lender headquartered in San Diego, CA
  • Has 4,000+ employees and 300+ retail branches in 49 states and D.C.
  • Appear to be licensed in all states except New York
  • Recorded $34.2 billion in total loan volume in 2021 (top-30 overall)
  • Did a near-equal split of mortgage refinance and home purchase loans
  • Operates a correspondent banking division with credit unions and community banks in 43 states
  • Services more than 237,000 home loans throughout the nation

What Guild Mortgage Offers

  • Conforming loans
  • Conventional loans
  • Jumbo loans
  • FHA loans
  • VA loans
  • USDA loans
  • Reverse mortgages
  • 1% down loans
  • Renovation loans
  • FHA Solar
  • Manufactured home loans (via Fannie Mae MH Advantage)
  • Doctor mortgages
  • Bridge loans
  • Buydowns

Guild Mortgage offers all types of home loans, including government and non-government mortgages, along with both fixed-rate and adjustable-rate mortgages.

You can get a purchase loan, or a refinance loan, including a rate and term refinance or cash out refinance, and also streamline refinances.

You can apply for a home loan online or visit a local branch, of which there are many (338 at last count).

In the fixed-rate loan department, you can get anything from a 10-year fixed mortgage to a 30-year fixed up to 97% LTV. And they also let you choose your own loan term if you’re looking to refinance without extending the term of your mortgage.

They also offer a 1% down mortgage via their 3-for-1 equity program whereby Guild provides a 2% grant.

When it comes to ARMs, you can choose between 3-, 5-, 7- and 10-year adjustable terms, up to 95% LTV.

If a conforming loan amount isn’t large enough to suit your needs, you can also get a jumbo loan from Guild, including a loan amount as high as $850,000 with just 5% down payment known as the Guild Mortgage Elite Jumbo Program.

They also offer the full spread of government loans, including FHA loans, USDA loans, and VA loans, the latter two of which offer no down payment mortgages.

And while many of these loan options allow for very low credit scores, Guild seems to require higher scores than most competitors.

For example, they want a minimum credit score of 600 for a VA loan, though they allow loan amounts as high as $1 million. Their minimum score for a USDA loan is 620.

You can also get an FHA 203k renovation loan via Guild if you’re buying a fixer-upper.

Guild Mortgage recently launched a loan program called “FHA Solar” that allows borrowers to finance their home and solar panels in one transaction.

Like normal FHA loans, the minimum down payment is 3.5%, which is based on the purchase price of the home before the panels are added to the total cost of the mortgage.

If you’re looking to finance something other than a single-family home, it might be possible to get a mortgage on a non-warrantable condo, something not all lenders offer.

And if you’re a medical professional, their doctor mortgage program allows you to exclude student loan debt and get a mortgage with no money down.

Their most recent offering is a buydown loan that provides a lender-paid 1% interest rate reduction the first year, known as Payment Advantage.

Lastly, Guild offers the Unison HomeBuyer program, which allows home buyers to borrow a down payment in exchange for future home price appreciation. It is available for properties in Arizona, California, Oregon, and Washington.

Guild 3-2-1 Home Program

  • They also offer a special for first-time home buyers known as the 3-2-1 Home program
  • It requires just a 3% down payment to purchase a home
  • And provides a $2,000 Home Depot gift card
  • Lastly it features a grant ranging from $1,000 to $2,500 to offset closing costs or increase down payment

Guild Mortgage recently launched its “3-2-1 Home Program” to help more first-time buyers get their hands on some house keys, even if the property needs a little bit of work.

It allows home buyers to bring in just three percent down payment (which can be funded with a gift) and only requires a minimum 620 credit score.

Additionally, eligible borrowers will receive a $2,000 gift card to The Home Depot and another $1,000 to $2,500 in grant money that can be applied toward closing costs.

The property has to be located within 100 percent of the area median income for the family size of the borrower, unless it’s in an underserved area.

Guild Mortgage CashPass

The lender recently launched “CashPass,” which is their take on the quasi-all-cash offers many mortgage companies have rolled out in recent years.

The way it works is fairly straightforward. When obtaining your mortgage pre-approval, Guild goes a step further by providing a fully underwritten credit approval and a so-called “CashPass Certificate.”

This allows you to shop for a home and then make an offer with no appraisal or financing contingencies.

Guild will then work to close your loan with a traditional home loan before the close of escrow.

If financing isn’t in place by the escrow closing date, Guild or one of its affiliates will guarantee to pay cash for the property and provide permanent financing thereafter.

Simply put, CashPass enables home buyers to compete against other all-cash bidders and/or multiple offer situations.

CashPass is available on primary residences, second homes, and investment properties.

A minimum credit score of 680 is required and it must be a conventional loan.

It’s currently available in the states of AZ, CA, CO, MA MO, NV, OR, PA, SC, TX, and WA.

There is a $1,350 participation fee, which is not charged in the state of Washington.

It can also be combined with Guild’s proprietary bridge loan offering so you can buy before you sell.

Guild Mortgage Rates

  • Guild mortgage rates aren’t publicized online
  • Unlike some of the other major banks out there that do openly share them
  • Hard to know if they’re good, bad, or average without getting a quote and comparing it to other lenders
  • Also be sure to pay attention to any lender fees charged to determine APR

In terms of mortgage rates, it’s hard to say what their current rates are because they don’t advertise them on their website, nor do they have a ratesheet available to the public.

This counters other major lenders like Wells Fargo and Chase, which both advertise their daily mortgage rates on their respective websites.

Of course, advertised mortgage rates make a lot of assumptions, and aren’t necessarily the rates you’d receive anyway. To that end, it might not matter.

My guess is they’re probably on par with or close to what other major home loan lenders offer, though I can’t be sure without seeing them.

As always, take the time to shop around with other lenders to see how they match up. And factor in the closing costs as well when you do.

Mortgage rates aren’t everything (customer service and the ability to close loans also matter a great deal), but they’re certainly very important.

Guild Mortgage eClose Option

The lender recently launched a so-called “eClose option” that allows customers to electronically sign most of their loan documents and substantially reduce the typical paperwork burden seen at loan signing.

Aside from saving more than 250 trees per year, the eClose option comes with enhanced security protections to ensure only those who are authenticated have access to the documents.

The eClose process, which is powered by DocuSign, seems to be a hybrid of sorts with not all documents available for e-signing. Some will still require an ink signature at closing, at least for now.

However, another perk is that loan documents can be viewed as soon as they are released by Guild, meaning customers can review them at any time they desire to avoid feeling rushed at the closing table.

This means they can go into the closing appointment feeling confident and also reduce the time spent there to just minutes instead of potentially hours.

Guild Mortgage Reviews

Guild Mortgage has a 4.96-star rating out of 5 on Zillow based on roughly 7,300 customer reviews.

That near-perfection aside, many past customers indicated that the interest rate they received was lower than expected.

When searching the reviews on Zillow, you can see who the customer worked with, then click that loan officer’s name to see all their personal reviews.

Handy if you’re trying to determine who you want to work with at Guild Mortgage.

On Google, they have a perfect 5-star rating from nearly 2,000 customer reviews, which is pretty impressive given the volume.

Guild Mortgage currently has an A+ BBB rating and has been an accredited business since 2016. Their BBB customer reviews aren’t great, but they often aren’t for any company.

As noted, they also frequently top the J.D. Power mortgage originator rankings, so you should be good in terms of customer service.

Why Choose Guild Mortgage?

  • The number one reason seems to be customer satisfaction
  • They recently matched Quicken atop the J.D. Power rankings
  • Guild also offers lots of different home loan options to choose from
  • And their loan officers may be better educated than the competition thanks to GuildU
  • Also boast an A+ BBB rating and is an accredited business
  • Can get started online via a digital mortgage application in minutes

There are lots of options when it comes to obtaining a mortgage. So why choose Guild Mortgage?

Well, as noted, they’ve got a variety of home loan programs available, including some unique offerings, so they’ve probably got you covered in most situations.

This is especially true if you have little or nothing in the way of a down payment, though they may require higher credit scores than other lenders.

They are also one of the top rated mortgage companies in terms of customer satisfaction, matching Quicken Loans in the most recent rankings from J.D. Power.

That doesn’t guarantee a good loan experience, but it means something compared to other large lenders that rank below them.

Part of that might have to do with their GuildU corporate university that educates its loan officers in an effort to make them more knowledgeable than the competition.

But loan officer quality can vary within a single company, especially at a large one with thousands of employees.

Guild Mortgage also has a helpful website, complete with tips and a variety of mortgage calculators to help guide your decisions.

All in all, they’re certainly worth including in your home loan search seeing how popular and large they’re becoming. My guess is they’ll be a household name in the near future.

Lastly, because Guild Mortgage is a major home loan servicer, they may not sell off your loan to another company, which can be nice to avoid any confusion in making future monthly payments.

(photo: Sean O’Neill)

Source: thetruthaboutmortgage.com

Apache is functioning normally

The Joint Center for Housing Studies of Harvard University released the 2015 edition of The State of the Nation’s Housing report this week and it wasn’t pretty.

The report basically highlighted the fact that the homeownership rate has dropped to the lowest level in recent history, while renting has simultaneously surged.

Last year, the U.S. homeownership rate fell to 64.5%, which essentially erases all of the gains realized over the past two decades.

We’ve basically returned to 1993 levels, as seen in the chart below.

It has since continued to fall, dipping to 63.7% during the first quarter of 2015.

All Generations Affected

Harvard noted that the fallout has been widespread, with all generations affected, especially generation X (born 1965-1984).

Put simply, young gen-Xers picked a terrible time to be born, succeed financially, and then buy their first home. Because as we all know, home prices were grossly inflated about 10 years ago, and have yet to recover after falling back down to Earth.

In fact, homeownership rates among those aged 35-44 and 45-54 have suffered the most, and now stand at rates 4-5% below those seen 20 years ago.

The only group that hasn’t really seen a major hit is the 65 and over cohort, which despite a recent dip, has a homeownership that remains about 2% above 1993 levels.

What’s the Rental Market Like?

If there are far fewer homeowners, there must be a lot more renters, right? Right.

From 2004 to 2013, renter household growth has averaged 770,000 annually, making it the best 10-year period for renter growth since the late 1980s.

During this period, 3.2 million single-family detached homes made their way into the rental market to accommodate demand. Developers have also added 1.2 million apartment starts since 2010.

Despite this, the national vacancy rate fell to 7.6% in 2014, the lowest point in nearly two decades.

The result has been steadily increasing rents, which rose 3.2% last year, twice the pace of inflation.

The problem is that the little more than one million housing units started last year was still close to the lowest total in the past half-century.

So while it sounds like a lot of new supply, it’s not enough to keep up with demand, especially as household growth seems to be in an uptrend.

Part of this can be attributed to Millennials growing up and making the move out of mom and dad’s house. Wage growth also contributes to that trend.

Unfortunately, there aren’t many entry-level homes available for purchase because a lot of the current owners are underwater or lack the equity to sell and use the proceeds (for down payment) to buy up.

Turnover is also going to be limited as baby boomers age and hunker down in their existing properties for the next decade.

However, 2025 may be a turning point as the oldest band of that population ages and has more trouble living independently.

Still, it doesn’t solve the problem now, which is unaffordable rent and a lack of housing inventory.

The Housing Outlook Is Cloudy

Harvard seems to be cautiously optimistic (at best) in their outlook, calling on looser mortgage lending to help more renters transition to homeownership.

Ironically, we might be in a situation that calls for creative financing, such as an increased reliance on ARMs (especially as mortgage rates rise) and more 97% LTV lending.

Rates will need to rise as the economy improves, which is generally okay as long as wages also increase. This shouldn’t dampen home prices either because a good economy goes a long way.

Harvard believes the housing recovery may continue this year, but only if employment growth lifts household incomes that are clearly lacking.

There’s a general belief that renters have a willingness to own, but they question whether renters have the means. As mentioned earlier this week, owning a home requires $10,000 outside the mortgage.

The report pointed out recent moves by Fannie, Freddie and the FHA, including lower down payment and credit score requirements, but questioned whether such changes would be meaningful.

In the meantime, renters are stuck between a rock and a hard place, with rents becoming unaffordable and homeownership unattainable.

It’s become so ridiculous that unaffordable rent may be the sole reason to buy. But it’s hard to save money for a down payment when you’re barely getting by.

Harvard ultimately believes the goal should be affordable housing for all, though they don’t seem to offer any solution to that problem.

Source: thetruthaboutmortgage.com

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Months of high mortgage rates and low existing inventory led to another annual increase in new home purchases in June. Mortgage applications for new home purchases jumped 26.1% in June from the same period last year, according to the Mortgage Bankers Association builder application survey. Compared with the prior month, applications dropped by 5%. 

MBA estimates that about 687,000 new single-family homes were sold in June at a seasonally adjusted annual rate. It’s a decline of 9% from the May pace of 755,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in June 2023, a 6.3% decrease from 64,000 new home sales in May. 

“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” said Joel Kan, MBA’s vice president and deputy chief economist. “With existing inventory still held back by homeowners, prospective buyers have turned to newly built homes instead. Rising mortgage rates in June likely caused some pullback in purchases over the month, as the 30-year fixed rate averaged close to 6.8%. However, applications for new home purchases have now shown annual increases for five consecutive months.”  

Purchase mortgage rates this week averaged 6.78%, the biggest weekly decline since mid-March, according to the latest Freddie Mac PMMS.

Homebuilders constructed an annualized rate of 1.434 million houses in June, down 8% from May and 8.1% from June 2022, according to the U.S. Census Bureau. Single-family home constructions saw a 7% month-over-month decrease to rate of 935,000 in June. 

The average loan size decreased from $403,581 in May to $400,281 in June. Conventional loans accounted for 65.5% of loan applications. Federal Housing Administration (FHA) loans composed 24.1%, Veterans Affairs (VA) loans took up 10% of total applications and Rural Housing Service (RHS) and United States Department of Agriculture (USDA) loans consisted of 0.3%. 

The survey tracks application volume from mortgage subsidiaries of homebuilders across the country. Using this data, MBA provides an early estimate of new home sales volumes at the national, state and metro level. 

Source: housingwire.com

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Real estate investors are great for repeat and referral business—if you’re the right type of real estate agent. Hear how to be an investor-friendly agent on this podcast with James Dainard. James is a co-host on BiggerPockets’ On the Market podcast, and he’s been in this industry for over a decade. On today’s show, James shares what Realtors can do to service investors, where to find investment opportunities right now, and why all agents should niche down for more deals.

Listen to today’s show and learn:

  • James Dainard’s start in real estate [3:04]
  • Starting a real estate business in a very bad market [4:52]
  • About Heaton Dainard Real Estate [7:36]
  • Some of the best real estate clients: real estate investors [9:01]
  • The Austin real estate market and opportunities for agents [11:04]
  • How to start working with investor clients [12:05]
  • Why market adjustments have such a major impact on land values [17:10]
  • Real estate trends in Oregon and Washington [18:17]
  • Buyer clients chasing affordability [21:07]
  • Paying attention to the economy to find better business opportunities [24:15]
  • James’ recent real estate investments [27:47]
  • Educating your buyer clients [31:11]
  • How to find prospective sellers in a shifting market [33:03]
  • Why you should write your own real estate scripts [36:58]
  • Advice for brokers and real estate business owners [40:40]
  • Niching down for more deals [41:37]
  • About BiggerPockets’ On the Market Podcast [45:02]

James Dainard

As a Managing Principal of Heaton Dainard Real Estate, James is responsible for the development and execution of corporate strategies, marketing, and property acquisitions.

James has been actively investing in multifamily and single-family units in the Puget Sound region for over 12 years and has lead his team to over 3,000 transactions. His over a decade of experience investing in multi-family and single-family units in the Puget Sound region has guided Heaton Dainard to more than 131 million in sales volume from 265 transactions in 2021. James has received multiple awards and recognition for his role in growing Heaton Dainard into one of Washington’s Fastest Growing Private Companies for 2013, 2014, 2015, and 2016. Puget Sound Business Journal also recognized James as a 40 under 40 honoree.

Related Links and Resources:

Thank You Rockstars!

It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.

-Aaron Amuchastegui

Source: realestaterockstarsnetwork.com

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Newly constructed home sales and loan applications ticked down in June as buyers balked at higher mortgage rates, but activity remained above last year’s, according to the Mortgage Bankers Association.

Loan volume slowed slightly this month, reporting a 5% decrease since May, according to the MBA’s Builder Application Survey. But new home lending is holding strong year-over-year — applications are up 26.1% from last June.

Sales in this segment followed the same pattern: the BAS seasonally adjusted new single-family sales rate was 687,000 units this month, a 9% monthly decrease, but a 10.8% yearly increase. Unadjusted new home sales reached 60,000 in June, compared to 64,000 in May. 

“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” Joel Kan, MBA’s vice president and deputy chief economist, said in a press release. “Rising mortgage rates in June likely caused some pullback in purchases over the month.”

The average 30-year fixed mortgage rate hovered around 6.7% throughout June, according to Freddie Mac.

These rates have the biggest impact on the existing home market, where they are likely scaring away would-be sellers from listing, furthering the industry’s housing inventory problem. This June, there were 13.8% fewer homes for sale and 29.1% fewer newly listed homes than last year, according to Redfin data.

But the new home market has been stronger than expected, Doug Duncan, Fannie Mae’s chief economist, noted in his latest economic report.

Builder sentiment, on the other hand, is up this month according to the National Association of Home Builders/Wells Fargo Housing Market Index. It’s at its highest since last July. 

“The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers,” Robert Dietz, the chief economist at NAHB, said in an article about the index. 

At the same time, Dietz says builders are worried about high mortgage rates and supply-side challenges despite recent cost stabilizations. New home construction rates soared in May, then shrunk back slightly in June.

The BAS said June’s average loan size was $400,281, marginally less than May’s average of $403,581. Conventional loans remain the most popular, making up 65.5% of all loans. Federal Housing Administration loans follow at 24.1%. FHA loans made up slightly more of the total loan pool in June, gaining some ground from conventional loans.

Both Department of Veterans Affairs and Department of Agriculture loan proportions remained unchanged, making up 10% and 0.3% respectively.

Source: nationalmortgagenews.com

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Correspondent Programs; STRATMOR and Customer Service; Credit Products and News; Training and Webinars

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Correspondent Programs; STRATMOR and Customer Service; Credit Products and News; Training and Webinars

By:
Rob Chrisman

Thu, Jul 20 2023, 10:16 AM

Ever see the movie “Cocoon”? Is there an X-rated version? Seven of the 10 fastest-growing metro areas over the past year are in Florida. The Census Bureau tells us there was population growth for about two-thirds of U.S. metro areas during this time, but The Villages, Florida, had the greatest percent increase at 7.5 percent. (Yes, as in the “STD Capital of America” Villages!) The metro area of Myrtle Beach-Conway-North Myrtle Beach, South Carolina-North Carolina came in second and saw population climb by 5.0 percent. The metro area of Dallas experienced the largest numerical population increase, seeing its population climb by 170,396 or by 2.2 percent from July 1, 2021, to July 1, 2022. The metro area of Houma, Louisiana, had the greatest percent decline over this time range, and two other metro areas in Louisiana were among the 10 fastest-shrinking metros. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. To experience how Richey May can help you transform your mortgage business, visit richeymay.com. Hear an interview with NAR’s Jessica Lautz on the latest inflation figures and the Fed’s calculus moving forward.)

TPO Channel Products

Now is the time to become an approved Newrez Correspondent partner. A partnership with Newrez Correspondent provides access to an extensive product menu, delegated/non-delegated underwriting, multiple delivery methods, and professional experience needed to ensure success in an ever-changing market. With exciting enhancements such as the recently added Bulk AOT and soon to be released Appraisal Alternatives, there is no better time than now to become a Newrez Partner. Every week new lenders are joining the Newrez family of nearly 1000 approved correspondent clients, and are enjoying the many benefits of partnering with a top Correspondent Investor when efficiency, cost reduction, and profitability are critical. Newrez Correspondent understands the importance of personalized service and strives to exceed our client’s expectations at every turn. Contact us today to schedule a meeting at the Western Secondary Conference August 21st to 23rd for an in-person discussion on how a Newrez Correspondent Partnership can optimize your business.

Planet Home Lending’s Correspondent division is built on an unwavering commitment to Correspondent lending and the belief that strong partnerships are the cornerstone of success. Our continually refined product lineup ensures you have the right products to build volume in any market cycle. Go beyond government and conventional loans and move into profitable niche products, like renovation, manufactured homes, and buydowns. Get in touch with Planet’s SVP Correspondent Sales Jim Loving (414-270-0027) to learn more or click here to download the latest version of our Product Highlights flyer, then put Planet to work for you!

STRATMOR and Customer Service

Lenders have struggled for years trying to build customer-centric cultures. According to data from STRATMOR Group’s MortgageCX program (more than one million borrower surveys and counting), the number one frustration in the pursuit of Customer Experience (CX) excellence is the transition from collecting customer feedback to creating internal behavioral change. In his July Customer Experience Tip, MortgageCX Director Mike Seminari shares four motivational strategies for lenders that can help drive the change needed. For inspiration on motivation, read, “Motivate Your Mortgage Team to CX Excellence.”

Credit Products and News

Attention Mortgage Lenders: Empower Millennial and Gen Z Homebuyers! Download The Ultimate Credit Scoring Playbook, your go-to resource for conquering unique buyer pool challenges with Millennial and Gen Z homebuyers. Gain comprehensive insights, strategies, and expert tips to guide these tech-savvy generations to their dream homes and establish yourself as a trusted advisor by mastering credit score management. Understand market conditions, interest rates, regulations, and preferences that will affect these generations in their homebuying journeys. Shape your success in the mortgage industry and drive unprecedented growth. Don’t miss out on this opportunity to elevate your expertise. Download The Ultimate Credit Scoring Playbook for Millennials and Gen Z eBook for free now! Follow Birchwood Credit Services to gain access to a plethora of industry-related news and informative content that will aid you in closing loans at lightning speed!

Lenders are keenly aware of the 3 Ds of lending: divorce, death, and da money. This is an answer to the 5 Cs of lending, and credit is very important to lenders. Evaluating a borrower’s credit is always important, especially with the ATR (ability to repay) requirements. Anyone who is thinking we’re heading for foreclosures shooting higher had better take a look at the equity that current homeowners have, and the credit quality of the current crop of borrowers.

Huh? Now SoFi will “underwrite” your loan for you?

VantageScore Solutions was launched in 2006 and is owned by America’s three national credit reporting companies (CRCs) – Equifax, Experian, and TransUnion.

Lenders are still talking about Equifax’s shift last year where it eliminated order options in October, resulting in the need for double orders, and then raising prices on Jan 1st for those double orders. So most will say that competition is good, and the Transunion Truework news last month on income and employment verification is being watched to see how it plays out.

I bring all of this up because yesterday Experian® announced consumers can now choose to share information directly from their employers’ payroll service through Experian Verify™ when applying for credit, including mortgages, auto loans and personal loans. “The enhancement introduces Experian’s automated income and employment verification waterfall and helps lenders easily leverage both instant and permissioned technology with consumer consent to verify income and employment for over 85% of the U.S. workforce… A multi-step approach is needed to help reduce dependencies on complex and costly manual verification processes. Lenders who use a multi-step approach can keep consumers engaged while verifying income and employment information faster and more efficiently.”

Training and Events Next Week

Keep a finger on the pulse of borrower demand and incentive with Black Knight’s complimentary Mortgage Monitor webinar, which provides insights into the mortgage market you can’t get anywhere else. Our experts analyze the most current information from Black Knight’s vast mortgage, housing, and property data assets to deliver a clear view of the market. We also include the latest rate lock data, so we’re able to dig deep into origination trends and provide information that can help you market and allocate resources more effectively. Register now.

Do you have questions about CDFIs? Are you wondering how CDFI’s QM exception and FHLB access work? Falcon Capital Advisors is hosting a webinar with its CDFI experts to share an overview of these primarily non-bank entities and how recent changes in CDFI rules could advantage lenders who are seeking to serve minority borrowers, deeper credit FHA borrowers, participate in state HFA programs and lower their own costs of capital for all of those loans. Register for the webinar on 7/27/2023 at 2pm EST using this link. For more information on Falcon’s CDFI advisory services drop an email.

On Thursday, July 27th at 2pm ET Tabrasa’s Bill Bodnar will be hosting a webinar entitled “Reading the Markets – The Back Nine”. With half the year (or round) over, join Bill for a fast-paced presentation on what Mortgage Market Guide is seeing in the back half of 2023 for the economy, Fed, rates, housing and more.

In Hawai’i, join MBAH for an exciting event on July 26th, 8:30 – 10:30am at Dave & Buster’s Honolulu, Pa’ina Hale, 2nd Floor. Bring together the top real estate experts to share best practices for today’s market.

PRMG’s non-QM Investor Solution product which provides an option for Debt Service Coverage Ratio (DSCR) and No Ratio qualifying on investment properties, Wednesday, July 26.

Angel Oak Mortgage Solutions Part 2 of 2, A Non-QM Webinar on Bank Statement Loans, is all about Angel Oak Mortgage Solutions innovative Bank Statement Program aimed specifically for self-employed borrowers. This webinar on Wednesday, July 26th, 1:00 PM EST | 10:00 AM PST, will take a deep dive into program details, highlight how they determine income and discuss how to market to these borrowers.

Addressing Appraisal Bias and Explore potential solutions to mitigate appraisal bias. California MBA’s Mortgage Quality and Compliance Committee new webinar on July 27th at 11 AM PST. Join and discuss appraisal bias and investigate potential solutions to combat it.

There are many unique characteristics and benefits of the reverse mortgage program that are often misunderstood by potential senior prospects. Join Plaza Home Mortgage® for a free webinar, Thursday, July 27 | 11:00 AM PT / 2:00 PM ET, designed to help you “organize” loan benefits, risks, and loan figures in a way that will help borrowers better understand how a reverse mortgage loan works, and what it means for the future equity and ownership of the borrower’s home.

The 2023 CMLA Convention is back in Vail on August 2-4 at The Hythe. Register today and join us for compelling speaker sessions, ample networking opportunities, and the annual golf tournament. Please find this year’s agenda below – it has been reimagined to provide increased value for our attendees and sponsors, as well as a better event flow. Come and celebrate CMLA and the mortgage industry’s resilience.

FAMP! Florida Association of Mortgage Professionals 2023 Annual Convention & Trade show, “A Grand Affair”, is August 2-5, 2023, at Signia by Hilton Orlando Bonnet Creek. For Over 60 years, this is the annual event that attracts Florida’s top mortgage professionals, and this year is no different. Exhibitors from all over the country will be exhibiting current mortgage products and industry tools for all originators. Do not miss this opportunity to network with mortgage brokers and lenders from across Florida and the United States.

MBA Education is bringing the best-in-class training to Seattle, WA., August 8-11. Begin advancing your career by enrolling in the School of Mortgage Banking I: An Introduction to the Real Estate Finance Industry provides a foundation in residential loan production, underwriting, secondary marketing, regulatory compliance, warehousing and servicing.

In Michigan, the MMLA Annual Lending Conference is 8/9-8/11 is in Mt. Pleasant. “Our event brings attendees from all of the state and country to hear our nationally renowned speakers give expert advice on how you can grow your business even in these challenging times!

“What do David Stevens, CMB, Mitch Kider, and Rob Chrisman all have in common? They’ll be at NAMMBA CONNECT 23, September 14 – 16 at the JW Marriott Bonnet Creek in Orlando, FL as the opening session. NAMMBA CONNECT 23 is the largest conference in the mortgage and real estate industry focused on connecting lenders to the multicultural marketplace. This year has been a tough year for our industry. That’s why we are providing 100 complimentary conference registrations in addition to the first night’s room stay for any Sales, Operations, Marketing or HR Executive who would like to attend the conference. This is our way of giving back to the industry. This offer is on a first come, first serve basis. To reserve your space click here. To see the agenda click here.

Capital Markets

Of course, anyone can sue anyone, right? But capital markets folks took note of this article on how Go Mortgage is suing its former capital markets director for corporate sabotage!

But back to rates! With signs that central banks around the globe are making progress in their fight against inflation, global bond yields have fallen as of late, and Treasury yields across the curve rallied once again yesterday on the heels of the UK CPI cooling more than expected. That move was also aided by the release of a below-consensus Housing Starts report for June that fell 8 percent on both a month-over-month and year-over-year basis (actual 1.434 million, expected 1.475 million, prior 1.559 million). Building Permits were not much better (actual 1.440 million, expected 1.472 million, prior 1.496 million). The drop was broad-based, with both single-family and multi-family production pulling back during the month. This month’s numbers showed a striking shift away from multi-family towards single-family.

The lack of housing inventory continues to help the homebuilder community despite higher mortgage rates. Signs continue to point to a clearing of previous backlogs caused by material and labor shortages, and demand remains sufficient given the ongoing lack of existing homes available for sale. Accordingly, builders are cutting back on sales incentives with just 22 percent reporting that they cut pricing in July, down from 25 percent in June and 27 percent in May. The number of multi-family units under construction is at record levels, while single family units under construction are in the middle of its historical range.

Today’s economic calendar is under way with weekly jobless claims (228k, lower than expected; 1.754 million continuing claims) and Philadelphia Fed manufacturing (-13.5, little changed from last month’s -13.7). Later: leading indicators and existing home sales, both for June, and month-end supply consisting of 2-, 5- and 7-year notes and $24 billion 2-year FRNs, a Treasury auction of $17 billion 10-year TIPS, and Freddie Mac’s Primary Mortgage Markets Survey. We begin the day with Agency MBS prices worse .125-.250, the 10-year yielding 3.79 after closing yesterday at 3.74 percent, and the 2-year is 4.84: the 2-10 yield curve inversion is as steep as ever.

Employment and Transitions

“Foundation Mortgage Corporation, a Full-service wholesale Lender based in Miami Beach, FL, is one of the fastest growing NonQM Lenders in the industry. Foundation is currently accepting applications for experienced, NonQM Account Executives to join our team. (AZ, CA, TX, CO, WA, FL). We are also proud to announce the addition of Ann DiCola, Senior Account Executive. Ann is an industry veteran joining Foundation after 12 years with Axos Bank. Reach out to Dean Ayres, Senior Vice President- Sales to learn more about how Foundation Mortgage can help you build your NonQM business.”

Are you interested in changing our industry for the better? Do you have what it takes to join the top-rated client service team in mortgage technology? Apply to become MCT’s Senior Capital Markets Technology Advisor. While many technology providers are cutting staff and reducing service levels, MCT is continuing to invest in making sure clients succeed. Led by Paul Yarbrough since its formation in 2019, MCT’s Client Success Group (CSG) has revolutionized the client experience by providing fast and effective onboarding, intimate support levels, and deep subject-matter expertise. Through a combination of firsthand capital markets experience, active listening to client feedback, and direct engagement in the technology development process, the CSG is finding new efficiencies and improving execution for mortgage lenders. If you have the drive and experience to match this team at the senior level, apply to join MCT in pushing the secondary market forward.

California’s Summit Funding, Inc., a privately held nationwide mortgage banker and servicer, announced it has expanded its East Coast footprint by hiring three divisional leaders based in North Carolina: Deran Pennington, Chris Shelton, and Matt Schoolfield. They bring more than half a century of experience recruiting and building highly successful mortgage sales teams.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

In August 2020, Taylor Lopez and her husband Joseph bought their home for $180,000 in the fast-growing city of Anna.

They bought the three-bedroom house built in 1966 with a loan carrying a 3.8% mortgage rate. “From an investment standpoint, it felt like a good choice,” said Lopez, 36, a real estate manager for restaurant chain Wingstop.

Dallas-Fort Worth home sales, prices only take slight hit from higher mortgage rates

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After more than two years in the home, they’ve been thinking about selling. Joseph works in Lewisville and Taylor works in Addison, so they would like to find a place offering a shorter commute.

D-FW Real Estate News

Get the latest news from Steve Brown and the business staff.

But, like many other would-be upsizers in Dallas-Fort Worth, the couple feels locked into their current home.

Although they could get a good return on a sale, they would have to shop in a dramatically more expensive housing market than when they first purchased and sacrifice their current loan for a new one at a much higher rate.

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After a wave of low-rate homebuying and refinancing from 2020 to 2022, more than half of outstanding Texas mortgages have rates of less than 4%, according to Federal Housing Finance Agency data.

Since last fall, the average rate for a 30-year, fixed-rate mortgage has been hovering between 6% and 7%.

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“There are people that want to sell, but that is what is keeping them there at their house,” said Misty Michael, a real estate agent in the Sachse and Plano area.

The Lopez family said any home they would want to buy, in school districts they want to be in and that wouldn’t require a lot of work, would start in the $400,000 range.

“It doesn’t make sense when you weigh out all the pros and cons, so we’re continuing to drive about an hour each way to work,” Lopez said. “We could always purchase a home at a higher interest rate, then refinance it if the interest rates go down, but that’s an if and when situation.

“When you’re playing with that much money, it doesn’t seem like a risk I’m willing to take right now.”

Joseph (left) and Taylor Lopez purchased their home in Anna in 2020 for less than $200,000 with lower mortgage rates and are now waiting out higher rates and prices as they look to sell. (Liesbeth Powers / Special Contributor)

Changing math

Since the start of 2020, the median price of a single-family home in Dallas-Fort Worth has risen more than 50%, according to North Texas Real Estate Information Systems and the Texas Real Estate Research Center at Texas A&M University.

On top of that, the Federal Reserve has aggressively increased its federal funds rate for more than a year, indirectly driving up mortgage rates. Freddie Mac recorded an average 30-year mortgage rate of 6.96% on July 13.

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The result: The monthly principal and interest payment for a median-priced Dallas-Fort Worth home at the average rate with a 20% down payment, before insurance or property taxes, was about $980 in January 2020. In June, it was more than $2,100.

For buyers who purchased a $300,000 home at the record low of 2.65% in January 2021, just buying a house at the same price again at today’s average rate would add almost $900 to their monthly payments before taxes and insurance.

Purchasing a bigger or nicer home would add significantly more to that already-elevated payment, so people with job promotions or babies on the way looking to upgrade to bigger homes may not find a good enough deal to justify it financially.

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“It now is significantly more expensive to make these marginal changes that you might have been planning,” said Texas A&M economist Adam Perdue. He and his wife are expecting a baby soon and have considered getting a bigger home, but they too have a low rate on their home in Brazos County and don’t want to take on higher monthly payments.

While prices are declining slightly year to year, Texas A&M economists don’t expect them to return to where they were at the beginning of 2020. Rates are also expected to decline, but not back down to the record lows. Mortgage Bankers Association forecasts rates in the 5% range by 2024.

Still buying and selling

As mortgage rates rose and sellers held back, new single-family home listings in Dallas-Fort Worth dropped 22% between June 2022 to June 2023, limiting options for people looking to buy.

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Buyers with an immediate need to move are still purchasing homes, and people continue to move to Texas from other parts of the country. Local home sales recorded in June were down only slightly from a year before.

“We have a ton of buyers that are wanting to buy a home,” Michael said, adding that buyers may choose to refinance later. “You have people getting married, having babies, kids going to college.”

More casual buyers without an immediate need to move may no longer be shopping, said Drew Kayes, who heads up homebuying company Opendoor’s operations in Dallas-Fort Worth and Houston.

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“A lot of those folks right now are not in the market because they’re locked into a sub-4% rate, and that’s more of a luxury move than a necessity move,” Kayes said.

An open house sign beckons buyers outside of a home in Plano. (Shafkat Anowar / Staff Photographer)

Jason Dickson, co-owner of North Texas-based Nuwave Lending, said while it may be hard for homeowners to leave their current home, it may be worth it for them to tap into equity they’ve built up during the pandemic to pay off credit card debt or auto loans.

“They’ll gladly sign up for the higher interest rate in the new house if they have the benefit of taking that equity and improving their overall financial position,” he said.

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A silver lining

Nipun Gadhok, development manager for the Nehemiah Company, is looking to move from Fort Worth to buy a home in Mesquite next year.(Liesbeth Powers / Special Contributor)

Nipun Gadhok, 31, doesn’t want to lose his 3% rate but hopes to purchase a new home for him and his girlfriend next year.

Gadhok, a development manager for the Nehemiah Co., a local firm behind residential communities throughout Dallas-Fort Worth, purchased his five-bedroom home in Fort Worth’s Augusta Meadows neighborhood in 2021.

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He’s looking to buy a home along the outskirts of the metro area, potentially in one of his company’s developments on the east end of Mesquite. Knowing he has a rate he may never get again, he’s not planning to sell his Fort Worth house.

He intends to keep it as a rental property and is already renting out rooms to four other tenants. With mortgage rates causing many people to rent, that’s turning out to be a good side hustle.

“People are choosing to rent, they are not as much inclined to buy,” Gadhok said. “The rates really helped me out in the way that I’m not having problems with finding tenants.”

Read more stories about the D-FW housing market
Here’s how much profit Dallas-Fort Worth home sellers are making

Home sellers in North Texas are pocketing some of the highest gains on record, even though profit is down from last summer’s peak.
Apartments set to start construction this fall on Plano’s Haggard farm

Developers of Plano’s legacy Haggard farmland on the Dallas North Tollway are disclosing more details of a $70 million, four-story, 569,000 square-foot apartment project.
Dallas-Fort Worth tops Texas with a quarter of statewide home sales

Dallas-Fort Worth leads Texas in home sales with more than 27,000 properties trading in the second quarter.

Source: dallasnews.com

Apache is functioning normally

With elevated mortgage rates sidelining both home buyers and sellers, existing home sales fell in June, according to the latest report from the National Association of Realtors (NAR). Sales were also down significantly from a year prior.

Total existing home sales slipped 3.3% in June from the prior month to a seasonally adjusted annual rate of 4.16 million. Year-over-year, sales dropped 18.9% from 5.13 million in June 2022.

“The first half of the year was a downer for sure with sales lower by 23%,” said Lawrence Yun, NAR’s chief economist. “Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably.”

The median existing-home price in June for all housing types – which includes single-family homes, condos and townhouses – was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. The monthly median price surpassed $400,000 for the third time, joining June 2022 and May 2022 ($408,600). Also noteworthy, prices rose in the Northeast and Midwest but waned in the South and West.

We’ve seen home sales drop on an annual basis since the Federal Reserve began hiking the benchmark rate in spring of 2022. Mortgage rates have settled into the 6% to 7% range over the last three months, depressing existing home sales.

Total housing inventory recorded at the end of June was 1.08 million units, unchanged from May, but down 13.6% from June 2022 (1.25 million). Meanwhile, unsold inventory sits at a 3.1-month supply at the current sales pace, up slightly from 3.0 months in May and 2.9 months in June 2022, NAR said.

“Home sales fell but home prices have held firm in most parts of the country,” NAR’s Yun added. “The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month.”

Although all four regions experienced year-over-year sales declines, the Northeast fared better while the Midwest held steady, and the South and West posted decreases.

Zooming in on the Northeast, existing-home sales there grew 2.0% from May to an annual rate of 510,000 in June, down 21.5% from June 2022. The median price was $475,300, up 4.9% from the prior year. In the Midwest, existing-home sales remained unchanged from one month ago at an annual rate of 990,000 in June, decreasing 19.5% from one year ago. The median price there was $311,800, up 2.1% from June 2022. In the South, existing home sales disappointed as they faded 5.4% from May to an annual rate of 1.91 million in June, a decrease of 16.2% from the previous year. The median price was $366,600, down 1.2% from June 2022. Lastly, in the West, existing-home sales declined 5.1% from the previous month to an annual rate of 750,000 in June, down 22.7% from one year ago. The median price was $606,500, down 3.4% from the same period last year.

The good news is that the housing recession that was predicted by some economists has not materialized, noted Lisa Sturtevant, chief economist for Bright MLS. 

”With positive inflation news and a strong labor market, the possibility that the Fed will be able to bring the economy in for a “soft landing” is improving. As the economy normalizes, however, we are still in the midst of a very unusual housing market, with so much inventory locked down as a result of the low pandemic mortgage rates,” said Bright MLS’s Sturtevant.

Properties in June on average remained on the market for 18 days, identical to May but up from 14 days in June 2022. Conversely, 76% of homes sold in June were on the market for less than a month. First-time buyers were responsible for just 27% of sales in June, down from 28% in May and 30% in June 2022, illustrating the affordability crisis at play.

For transaction types, all-cash sales accounted for 26% of purchases in June, up from 25% in both May 2023 and June 2022. Meanwhile, individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year.

Distressed sales, which include foreclosures and short sales, represented only 2% of sales in June, virtually unchanged from last month and the prior year.

In this market, the lack supply remains the main constraint but new housing construction should help alleviate some of the supply pressures, according to Sturtevant. As a result, homebuilders kept capitalizing on a lack of competition and injected supply into the marketplace. However, inventory will still be sparse and prices “will have nowhere to go but up in the second half of 2023.”

“Existing home sales will continue to remain suppressed while both sides of this market are feeling the heat of affordability constraints, and we will likely continue to see buyers turning their eyes towards the new construction market – which can offer incentives to tip the scales in favor of buyers’ budgets as well as offer more available inventory,” added Nicole Bachaud, a senior economist at Zillow.

Source: housingwire.com

Apache is functioning normally

Yes, we’ve all heard it. Buying a home today might seem like the most unaffordable, and therefore impossible, it’s ever been. Home prices are near record levels, pushed up by bidding wars erupting on anything well-situated and move-in ready. Plus, mortgage rates are nearing 7%.

But here’s the thing: The baby boomers had it worse.

In May of this year, the typical buyer spent just under a third of their household income, about 32.8%, on housing. As uncomfortable as that might be, it’s not even close to how much buyers plunked down in the early 1980s.

In 1981, the same year the AIDS virus was identified, the Iran hostage crisis came to an end, and “Raiders of the Lost Ark” topped the box office charts, homebuyers that September and October spent 51.3% of their household income on their mortgage payments.

Let that sink in for a moment.

Furthermore, that percentage doesn’t even include what they paid for utilities, property taxes, insurance costs, and homeowners association fees.

Buying a home is “not as unaffordable as it’s ever been,” says Realtor.com® Chief Economist Danielle Hale. But, “in the grand scheme of things, housing is pretty unaffordable right now.”

To figure out how affordable buying a home has been over the past 50 years, the Realtor.com data team analyzed data going back to 1973. We looked at monthly existing single-family home prices from the National Association of Realtors®, weekly mortgage interest rates for 30-year fixed loans from Freddie Mac, and median annual household income from the U.S. Census Bureau. Then we calculated the typical mortgage payment of a buyer taking out a loan on the median-priced home and what percentage of their household income that would eat up.

The analysis doesn’t factor in regional price differences, new construction, or the percentage of income that individual buyers spent on homes.

“If you go back in history, you can find a period where housing is more unaffordable than it is now,” says Hale. “But you have to go back almost 40 years.”

Why today’s buyers wouldn’t want to purchase a home in 1981

In the fall of 1981, homes were cheap by today’s standards.

The typical single-family home cost just $66,125—about six times less than the cost this past May, according to the most recent data from NAR.

However, the typical household was bringing in only about $19,074 in 1981, according to U.S. Census Bureau data. And mortgage rates topped 18% that fall. (And you thought 7% was rough.)

Those turbo-sized rates meant that 99.5% of a buyer’s first year of mortgage payments was going toward just the towering amount of interest on the loan. The buyer didn’t pay down 10% on the principal of the balance until the 18th year of the loan, assuming the buyer didn’t refinance—which most buyers did. (This calculation includes a 20% down payment.)

Today’s average family is earning about $73,505 a year. But in May, they were contending with median existing-home prices of $410,100 and mortgage rates hovering in the mid-6% range and which have since risen to the high 6% territory. About 85% of their first year’s mortgage payments is going to interest.

One important difference is that instead of waiting nearly two decades to have 10% of their principal paid off, they achieve that milestone by year seven.

“Mortgage rates play a really substantial role in how affordable housing is at any time, especially since so many buyers buy with a mortgage,” says Hale.

Uncomfortable similarities between 1981 and 2023

There are a few similarities between then and now. Inflation was soaring in the early ’80s, causing the U.S. Federal Reserve to hike interest rates. (Sound familiar?) The nation was also in a full-blown recession in 1981. Fast-forward 42 years, and the nation appears to be flirting with another downturn.

The number of home sales slowed in the early 1980s as well as in this post-pandemic housing market as fewer folks can afford to buy due to higher mortgage rates.

Then, as now, most of those purchasing homes earn more than the median income—unless they had very generous family members, stock options, or trust funds. Or they’re existing homeowners who can put the equity they built in their last home into their new one.

“Boomers have been saying things were harder when we were young for a long time. And in some respects, they are right,” says Hale. “But in other respects, they don’t have the same amount of student loan debt and child care costs that young people have today.”

Plus, once mortgage rates fell, most folks who purchased homes in the early 1980s had refinanced their loans to lock in the new rates and “drastically” lower their monthly mortgage payments. By 1986, rates had fallen back down to the single digits.

Recessions and pandemics may be good times to buy homes

As counterintuitive as this may seem, recessions may be financially advantageous for buyers to purchase homes—if they remain employed and have the funds to do so. That’s because interest rates usually (but not always, as the early 1980s demonstrated) fall during economic downturns. That makes homebuying more affordable.

Over the past 50 years, homes were the most affordable as the country climbed out of the Great Recession. In early 2012 and 2013, buyers were spending about 14%—or less—of their income on a home. That’s because mortgage rates were below 4%.

The same thing happened in the early days of the pandemic. The economy ground to a halt as stay-at-home orders proliferated and mass layoffs ensued. To stimulate the economy, the Fed cut interest rates and mortgage rates fell below 3%—for the first time ever.

Those low rates triggered the big run-up in prices and offset those gains. Since buyers were spending less on interest, they could afford to purchase more house. The result? In spring 2020, buyers were spending just under 18% of their income on housing.

“Affordability is one of the factors that kicked off the buying frenzy that we saw in the early part of the pandemic,” says Hale.

It wasn’t until mortgage rates climbed above 4% in March 2022 that buyers began to get priced out. That month they spent just under 25% of their income on housing. As rates ticked up and affordability worsened, more buyers left the market and fewer homes went up for sale (as sellers didn’t want to give up their low rates).

The situation has only gotten worse, with buyers spending nearly a third of their income on housing in May.

“When housing is unaffordable, it’s very tempting to stretch your budget,” says Hale. But with inflation, rising property taxes, and high energy bills, “now’s probably not a good time to do that.”

Source: realtor.com

Apache is functioning normally

If you haven’t heard of PNC Mortgage before, you probably will in the near future.

They’re a rapidly growing depository bank and mortgage lender with 2,600 branches across 19 states nationwide.

PNC is also one of the top 10 largest banks in the United States based on total assets. However, most of their retail operations tend to be in the Midwest and Northeast regions of the country.

But you can still apply for a home loan with the company from just about anywhere in the United States because they let you apply online, by phone, or in person at a branch.

Let’s learn more about PNC to see if they should be included in your home loan search.

Who Is PNC Bank?

  • A depository bank and mortgage lender with roots in Pittsburgh
  • The name is based on two former predecessors (Pittsburgh National Corporation and Provident National Corporation)
  • They acquired National City Mortgage during the housing crisis in 2008 to become a major mortgage player
  • A top-25 mortgage lender nationally that funded about $36 billion in home loans during 2021

The history of PNC Bank can be traced all the way back to the mid-1800s, though it’s unclear when they first began offering mortgages on residential properties.

But one thing is certain – they’ve been around a while and look to be growing larger as time goes on, especially in the home lending space.

One major catalyst in their growth story had to do with their timely acquisition of National City Mortgage, which was a major home loan lender until the housing crisis hit in the early 2000s.

PNC Mortgage basically reinvented itself with the merger thanks to National City’s large mortgage presence. They were a top-10 mortgage lender up until the crisis.

However, PNC has yet to crack the top-10 lender list themselves, though it’s probably a matter of time if they continue on the same course.

What Does PNC Mortgage Offer?

  • They offer both fixed and adjustable-rate loan options
  • Conforming and jumbo loans
  • FHA loans and VA loans
  • And home equity loans and lines of credit

PNC Mortgage offers a variety of home loan programs, including typical fixed-rate options like the popular 30-year fixed and 15-year fixed.

Additionally, you can get your hands on three different types of ARMs, including a 5/1 ARM, 7/1 ARM, and a 10/1 ARM.

If you happen to live in a more expensive region of the country, or have plans to buy a mega-mansion, know that they accept jumbo loan amounts up to $5 million. This should satisfy most borrowers out there.

Conventional loan options aside, they offer government home loans as well, including FHA loans and VA loans.

Both government loan options come in 30-year fixed and 5/1 ARM varieties.

PNC also offers three different types of home equity options, including a HELOC, a home equity loan, and a so-called “Home Equity Rapid Refinance.”

All three include a 0.25% interest rate discount when you set up and maintain automatic monthly payments via a linked PNC checking account.

The Home Equity Rapid Refinance is referred to as a “lower cost solution than a traditional fixed rate mortgage,” though they also say you can enjoy fixed payments for up to 30 years.

It’s somewhat unclear what it actually is, though it sounds kind of like a cash out refinance with limited closing costs. One twist is it seems to be a home equity loan that is in the first position (not subordinate), an important detail if you were to get foreclosed upon.

Anyway, a home appraisal fee isn’t required in many cases, and they allow LTVs as high as 84.9% with no private mortgage insurance. It sounds like a weird take on a home equity loan.

PNC Mortgage Rates Seem Competitive

  • PNC Mortgage openly advertises its mortgage rates
  • Which not all home loan lenders tend to do
  • They appear to be quite competitive relative to other lenders
  • But note that they often assume a 70-80% LTV ratio among other things

Speaking of interest rates, let’s talk about the rates at PNC Mortgage. First off, kudos to them for advertising their mortgage rates. Not all mortgage companies do.

My first impression – they’re quite competitive, but as always, we have to consider the assumptions they make. And they make some pretty big ones.

For conforming loan amounts, they assume you’re putting down 20% of the home purchase price, or that you have 20% equity in your home. Plenty of homeowners put down less when buying and/or have less equity.

They also expect you to have excellent credit, defined as a 740-credit score, and presume the property is a one-unit single-family home.

When it comes to jumbo loans, they make the same assumptions but base pricing on a 30% down payment, or 70% LTV.

While this isn’t uncommon (most lenders do this), you do have to pay attention to the assumptions to ensure you aren’t disappointed when you receive your actual rate quote.

Also take note of the lock period, which might be 30 or 60 days. If you accept a lower lock period you might be able to obtain an even lower mortgage rate.

PNC Mortgage Reviews

  • If their mortgage rates and closing costs are competitive by all means consider them
  • They also recently launched a digital home loan process powered by Blend
  • And they offer a free biweekly payment service and relationship discounts
  • But their reviews are a bit mixed so be sure to do your research

It’s hard to get super excited about going to a big, old bank to get a home loan.

But PNC Mortgage recently launched a revamped digital mortgage process backed by fintech company Blend in September 2022.

They also offer relationship discounts on their mortgage rates and home equity offerings, along with a free biweekly mortgage payment service.

However, they’re a little late to the party seeing that other major players, such as Rocket Mortgage from Quicken, and the digital offerings provided by the likes of Bank of America and Chase, have been around for years.

Maybe PNC can offer lower mortgage rates than the competition, which is certainly enough to choose them over another lender, but there doesn’t seem to be much else to talk about here.

They have their “Home Insight Planner,” which features some mortgage calculators and lets you generate home affordability scenarios, but it seems a bit clunky and not all that revolutionary.

They do service a lot of mortgages, so it’s possible you might actually be making your mortgage payments out to PNC if you get your home loan with them. This can be a plus if you’re sick of your mortgage loan being sold and transferred over and over.

But until PNC Mortgage does more to separate themselves from the crowd, they likely won’t attract many clients outside their existing customer base, especially as more disruptors emerge to shake up the scene.

Lastly, while they do have an ‘A+’ rating from the Better Business Bureau (BBB), many of their reviews are pretty low.

For example, they’ve got a 1.12/5 rating on the BBB website from reviews, a 1.3/5 on Trustpilot, and a 3.7/5 on WalletHub.

The one bright spot is Zillow, where they enjoy a 4.95/5, with most reviews likely more aligned with their home loan business than overall banking services.

If that’s the case, PNC could be a good choice among other mortgage companies out there.

PNC Mortgage Pros and Cons

The Good Stuff

  • Offer a digital mortgage process powered by Blend
  • Can apply for a home loan online, in-person, or by phone
  • Openly advertise their mortgage rates online
  • Relationship discounts for existing customers
  • Lots of loan programs to choose from including jumbos and home equity loans/lines
  • Licensed to do business nationwide
  • They service their own loans
  • A+ BBB rating

The Maybe Not

  • As a big bank they might be overly bureaucratic/slow
  • Mixed customer reviews across ratings websites

Source: thetruthaboutmortgage.com