The number of contracts signed to buy homes in February eased slightly from January but posted another strong gain from a year ago—the latest sign that demand for homes is up from the depressed levels of the previous 18 months.
A report Monday by the National Association of Realtors showed the index of pending home sales, reflecting deals that have gone into contract but haven't yet closed, rose 9.2% last month from a year earlier, continuing a rise largely fueled by investors' purchases of foreclosed properties. The index fell by 0.5% from January.
http://online.wsj.com/article_email/SB10001424052702303404704577305461007087888-lMyQjAxMTAyMDIwNzEyNDcyWj.html?mod=wsj_share_email_bot
Tuesday, March 27, 2012
Thursday, March 22, 2012
Sunday, March 18, 2012
Quicken Loans Supreme Court Case - Borrowers' Beware!
With the Supreme Court considering the Freeman versus Quicken Loan case, and Quicken's public statement regarding its policies, "Quicken has never charged unearned fees?" I think the verbiage will be the issue. My bet is that it collects more in origination than it should. For a broker, if you charge points (which are fees that buy the interest rate down) you cannot get any YSP (credit for the interest rate chosen) - that makes sense. Quicken does not have disclose YSP, therefore, it can charge points and still collect the YSP with the rate it says has points. In the past the big builders that operated their own mortgage banking companies got away with horrible abuse. They would tell the buyer they would get $1,000 from the builder toward closing costs. So, they simply said the buyer was getting a rate and the charge for the rate was 2% (points), actually that rate had a 2% YSP. So, the buyer got $1,000 toward closing costs and the builder collected 2 points from the buyer and got 2 points YSP. Pretty slick!
As a licensed mortgage advisor/broker, I am held by law to a higher standard than today's on-line lenders and retail banks. With the passing and implementation of the 2009 Dodd-Frank Financial Reform Act, as a mortgage broker, I am required to annually take over 30 hours of coursework in areas of real estate law, ethics, and contract law. In addition, I am required to pass a California state exam and national mortgage practices and ethics exam, be finger printed with the FBI and registered in a federal data base to track and audit my loan origination activity (called the NMLS Registry), maintain an active real estate/broker’s license, and be subject to annual credit report pull to ensure I am financially responsible with my own personal finances.
Retail banks and internet lenders are only required by the Dodd-Frank bill to be registered in the NMLS registry system, without being licensed, need for annual continued education or required to take a state and national exam on lending ethics and law, and a credit report review.
As a mortgage broker, my company must fully disclose all earned commissions up front, to enable the borrower to shop for the best rate and fees. In addition, my earnings percentage are capped and must be the same for all my clients, whereas with banks or on-line lenders they are not required to disclose their profits to the borrower.
So borrowers beware.....use a mortgage professional that is licensed and provides not only competitive programs, but will offer you experience, service and choice.
Saturday, March 17, 2012
Mortgage Brokers are Held to a Higher Standard than Banks and On-Line Lenders Like Quicken Loan
With the Supreme Court considering the Freeman versus Quicken Loan case, and Quicken's public statement regarding its policies, "Quicken has never charged unearned fees? I think the verbiage will be the issue. My bet is that it collects more in origination than it should. For a broker, if you charge points (which are fees that buy the interest rate down) you cannot get any YSP (credit for the interest rate chosen) - that makes sense. Quicken does not have disclose YSP, therefore, it can charge points and still collect the YSP with the rate it says has points. In the past the big builders that operated their own mortgage banking companies got away with horrible abuse. They would tell the buyer they would get $1,000 from the builder toward closing costs. So, they simply said the buyer was getting a rate and the charge for the rate was 2% (points), actually that rate had a 2% YSP. So, the buyer got $1,000 toward closing costs and the builder collected 2 points from the buyer and got 2 points YSP. Pretty slick.
Many years ago builders were not allowed to own and operate a mortgage company. A controlled business agreement with a bank was allowed, but the contract was very explicit. Then anything and everything was allowed, and now, nothing is allowed, unless you are a bank or an online lender. Banks and online lenders don't have to disclose how they make their money, or how much they make - is that fair? Quicken Loans proved that the loan discount fee in each instance was not unearned at all, because the fee was a component of the loan terms and pricing structure. In Federal Court, the clients could not offer an explanation as to why they were claiming that the fees were entirely unearned, and the facts in this case indicate that the clients freely agreed to pay the loan discount fees after the charges were disclosed to them multiple times before closing. The fees were earned as a component of the price the clients willingly paid in order to obtain the reduced interest rate they wanted. The Supreme Court case focuses on the specific wording of RESPA.
Many years ago builders were not allowed to own and operate a mortgage company. A controlled business agreement with a bank was allowed, but the contract was very explicit. Then anything and everything was allowed, and now, nothing is allowed, unless you are a bank or an online lender. Banks and online lenders don't have to disclose how they make their money, or how much they make - is that fair? Quicken Loans proved that the loan discount fee in each instance was not unearned at all, because the fee was a component of the loan terms and pricing structure. In Federal Court, the clients could not offer an explanation as to why they were claiming that the fees were entirely unearned, and the facts in this case indicate that the clients freely agreed to pay the loan discount fees after the charges were disclosed to them multiple times before closing. The fees were earned as a component of the price the clients willingly paid in order to obtain the reduced interest rate they wanted. The Supreme Court case focuses on the specific wording of RESPA.
Thursday, March 15, 2012
Interest Rates the Highest Since Holloween!
Wednesday was not a good day for any borrower, broker, or LO who failed to lock earlier in the week. As the economy continues to show signs of picking up, thoughts of QE3, like those of a double dip recession, seem to be ebbing. All is relatively quiet in Europe, the Fed has indicated that the future looks a little rosier, U.S. economic numbers in some sectors are showing some strength, and suddenly we find our rates have shifted out of the range they've been in since Halloween. And when you throw in higher-than-normal selling by originators (almost double recent averages) hedging their pipelines, well, things can become ugly. The 10-yr T-note worsened by nearly 1.5 in price, closing around 2.27%, and "rate sheet" MBS pricing worsened by about 1.125.
Tuesday, March 13, 2012
Friday, March 9, 2012
Healthy Job Gains Continue
Healthy Job Gains Continue
Overall, the economic data came in pretty close to expectations this week, and Greece successfully reached a debt deal with private bondholders. With a lack of surprises in the economic news, mortgage rates ended the week with little change.
While it was stronger than expected, the important monthly Employment report had only a minor impact on mortgage rates. Against a consensus forecast of 200K, the economy added 227K jobs in February, and revisions to prior months added an additional 61K jobs. The Unemployment Rate remained at 8.3%, as expected. Average Hourly Earnings, a proxy for wage growth, increased at a 1.9% annual rate. With gains above 200K for the first three months of the year, the recent pickup in job growth and the decline in Jobless Claims reflect solid improvement in the labor market.
Greece took a necessary step along its path to receive a much needed financial aid package. Private bondholders agreed to the proposed Greek bond swap deal, which will help reduce its debt burden. Without the deal, Greece was at risk of a potentially disastrous full default on its debt. This may have forced Greece to leave the European Union, possibly disrupting financial markets around the world.
Thursday, March 8, 2012
Tuesday, March 6, 2012
Obama Reduces FHA Refinance Fees
The Obama administration on Tuesday announced another initiative to allow more homeowners to refinance, this time by dropping fees on federally insured mortgages that have prevented some borrowers from taking advantage of ultralow rates over the past year.
The latest changes will reduce fees to refinance loans backed by the Federal Housing Administration through what’s known as a “streamline” refinance. For more details go to:
http://blogs.wsj.com/developments/2012/03/06/white-house-reduces-fha-refi-fees/?blog_id=36&post_id=20806
The latest changes will reduce fees to refinance loans backed by the Federal Housing Administration through what’s known as a “streamline” refinance. For more details go to:
http://blogs.wsj.com/developments/2012/03/06/white-house-reduces-fha-refi-fees/?blog_id=36&post_id=20806
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