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Homebuyers prefer permanent buydowns rather than temps

2023-02-06T21:47:06+00:00

Permanent mortgage rate buydowns are the tool of choice for most homebuyers to combat unaffordability, with relatively few turning to the temporary offerings that are now in vogue, Black Knight said.In the third week of January, 57% of home buyers that locked in that week paid at least 0.5 points or more to reduce their mortgage rate; a mere 3% used a temporary buydown program, Black Knight's latest Mortgage Monitor reported. Of those that took a permanent buydown, 44% paid a full point and nearly one-quarter paid two or more points.Purchases made up 81% of rate locks during that week with an average payment for a rate lock buydown of 1.16 points. At the same time, cash-out refinance borrowers paid an average of 2.06 points."If that seems high, consider that back in September and October of last year, as many as 71% borrowers paid points with 43% paying two or more points," said Ben Graboske, Black Knight data & analytics president in a press release. "Prior to the pandemic-era housing boom, borrowers in 2018-2020 paid 0.5 points with a corresponding cost of around $1,500 — as compared to $4,300 today and as high as $6,900 last fall."The uptick in the use of permanent buydowns mirrors activity in 2018 and 2019, another time when affordability was challenged, but that was a blip compared with their use today, said Andy Walden, Black Knight's vice president of enterprise research."The simple reason is the magnitude of the impact of rising home prices and interest rates in 2022, which pushed affordability to a more than 35-year low," Walden said. "Permanent buydown activity has eased modestly alongside rates and home prices in recent months but remains a popular option in today's market."While temporary buydowns have been used in the past, recently they were all but nonexistent until the second half of last year, Walden added.As mortgage rates topped 7% in November, more lenders publicized temporary buydown offerings to bring in customers, including United Wholesale Mortgage and Rocket, or other programs that lowered interest rates for a short period of time, such as Newfi's graduated payment non-qualified mortgage product.More recently, UWM brought out a promotion that allows the mortgage broker at its discretion to drop the interest rate by up to 40 basis points on an individual loan. The broker has the capability to use that tool up to a total of 125 basis points across their entire UWM pipeline."Such products may offer an opportunity for prospective homebuyers to temporarily sidestep today's affordability challenges for those who anticipate increased incomes and/or easing of rates in the future, in any case," Walden explained.Analysts at Bank of America Securities also looked at the Black Knight Optimal Blue lock data and found that on Jan. 31, a wide range existed for the rate borrowers received, ranging from a low of 4.5% to a high of 7.75%, with a median of 6%. That is slightly below the latest Freddie Mac Primary Mortgage Market Survey 30-year fixed rate average of 6.09%."We continue to believe peak mortgage rates are behind us and survey rate will drop to at least 5.25% by year-end 2023; risk is drop occurs sooner and deeper, down to 4.5%-5.0% range, in 2023," the B of A Securities report by Chris Flanagan and Henry Navarrete Brooks said.That means affordability for those getting a rate below 6% is better than the National Association of Realtors index."Borrowers with a combination of higher than median income and lower than median rate are doubly advantaged relative to the broad affordability metric, making them more likely to transact than the median borrower," Flanagan and Brooks said. "Key takeaway: due to distribution effects on mortgage rates, income, and wealth, housing activity has potential to surprise to the upside."They currently predict 0% home price appreciation for 2023, but with mortgage rates falling, the risk to that outlook is to the upside.While the 10-year Treasury initially dropped in reaction to the 25 basis point increase in the Fed Funds rate, the yields have risen back above 3.6% as of Monday morning due to the stronger-than-expected jobs report.Zillow's rate tracker put the 30-year fixed at 5.99% as of Monday morning, up 5 basis points from Friday and 29 basis points from Thursday morning.Purchase rate lock activity increased 64% in the fourth week of January from the first week, Graboske pointed out. "On the surface, it may seem the market has been stirred by a full point decline in interest rates and home prices coming off their peaks — but it's not that simple."Home prices are down 5.3% from their June 2022 peak."But affordability still has a stranglehold on much of the market, with the monthly mortgage payment on the average-priced home more than 40% higher than it was this time last year," said Graboske. "While up, purchase locks were still running roughly 13% below pre-pandemic levels for the last full week of the month."

Homebuyers prefer permanent buydowns rather than temps2023-02-06T21:47:06+00:00

HMDA reporting requirement extends to more banks

2023-02-06T20:48:20+00:00

The Office of the Comptroller of the Currency informed banks, which it oversees, that changes have been made to Home Mortgage Disclosure Act reporting requirements.Going forward, the loan volume reporting threshold is set at 25 closed-end mortgage loans originated in each of the two preceding calendar years, according to a bulletin published on the agency's website in early February. The changes were first announced by the Consumer Financial Protection Bureau in mid-December.This marks a sharp change from the 100-loan threshold set previously by a contested 2020 HMDA rule. Going forward, more depository institutions will have to file HMDA data. The Home Mortgage Disclosure Act requires lenders to report mortgage application and origination activity on an annual basis and is one of the main tools used by regulators to uncover Fair Housing Act lending violations.The modifications to the rule, which were made following a court decision last year, revert the reporting requirements to the original 2015 CFPB regulation that established loan volume thresholds. It has been changed at least four times since 2015, with the frequent alterations prompted by banks arguing that the provisions set forth by the government watchdog have been financially "burdensome." Critics against the 2020 version of the rule, which raised the reporting obligation for banks, argued that it created an exception to HMDA's collection and reporting requirements for a class of up to 40% otherwise covered financial institutions, resulting in a loss of data.The lawsuit that upended the 2020 regulation was lodged by the National Community Reinvestment Coalition, several fair-housing organizations, and the City of Toledo.The coalition challenged the CFPB's 2020 rule as being arbitrary and capricious, contrary to the law, and exceeding the CFPB's statutory authority under the Administrative Procedure Act. Specifically, the lawsuit argued that data the CFPB relied on to justify the change to its reporting threshold was faulty. In mid-2022, a federal judge partially sided with the plaintiffs and stated that the CFPB acted unlawfully in issuing a 2020 rule exempting many mortgage lenders from reporting HMDA data.Following the decision, the NCRC issued a statement that "public data on home mortgage lending is crucial to combating modern-day redlining and other forms of illegal discrimination.""This ruling partially overturns a Trump-era rule that blocked a significant portion of the mortgage industry from reporting information about who they were approving and denying for loans," said Jesse Van Tol, president of NCRC, in a written statement. "By recognizing that the prior administration had been arbitrary and capricious, and bringing sunlight back into mortgage lending data, the court helps to vindicate the federal government's longstanding efforts to deliver equality of opportunity."In announcing the reversal, the OCC said it doesn't intend to assess penalties for failures to report closed-end mortgage loan data on reportable transactions conducted from 2020 to 2022 for affected banks that meet Regulation C requirements.The OCC in its bulletin also added that examinations conducted in affected banks regarding HMDA reportable transactions from 2022, 2021, or 2020 "will be diagnostic to help banks identify compliance weaknesses" and that collection and submission of 2023 HMDA data "will provide affected banks with an opportunity to identify gaps in and make improvements to their HMDA compliance management systems."

HMDA reporting requirement extends to more banks2023-02-06T20:48:20+00:00

Judge dismisses CFPB's redlining lawsuit over 'marketing discrimination' in home loans

2023-02-06T18:47:02+00:00

A federal judge dismissed a redlining lawsuit filed by the Consumer Financial Protection Bureau against a Chicago mortgage lender, calling the case "flawed," and rejecting the bureau's argument that discrimination in home loans applies to prospective applicants. On Friday, Judge Franklin U. Valderrama of the U.S. District Court for the Northern District of Illinois, ruled that the lawsuit against Townstone Financial Inc., must be dismissed because the language in the Equal Credit Opportunity Act applies only to home loan applicants, not to prospective applicants. The distinction is important because it could limit the CFPB's authority to file redlining cases, experts said. Judge Valderrama rejected the CFPB's allegations that Townstone's President and CEO Barry Sturner's remarks on a radio show had discouraged prospective applicants in Chicago from applying for home loans."The Bureau seeks to improperly expand the reach of ECOA to reach 'prospective applicants,' to regulate behavior before a 'credit transaction' even begins, and to create affirmative advertising and hiring requirements, which cannot be squared with the unambiguous language of the statute," the judge wrote.  Rohit Chopra, director of the Consumer Financial Protection Bureau. Photographer: Ting Shen/BloombergTing Shen/Bloomberg The judge also ruled that the comments amounted to free speech. "Contrary to the First Amendment of the United States Constitution, the Bureau seeks to regulate the content and viewpoint of protected speech and does so in a way that is unconstitutionally overbroad and vague both as applied to Townstone and facially," Valderrama wrote. Still, the dismissal of the CFPB's case may have a limited impact because the Department of Justice and the Department of Housing and Urban Development are the two main federal agencies, along with the CFPB, that typically file redlining cases under both ECOA and the Fair Housing Act, some experts said. The CFPB declined to comment on whether it plans to appeal. The case was dismissed with prejudice, meaning the CFPB cannot file the same case again. Lawyers for Townstone said the ruling could have a more far-reaching impact than just fair lending cases. Steve Simpson, senior attorney at Pacific Legal Foundation, said the district court did not give deference to the CFPB's allegations that lenders can be liable for discriminating in marketing to potential borrowers."It kind of drives a truck through the centerpiece of what the CFPB — and by extension the DOJ — have used in a lot of their fair-lending cases, which we call "marketing discrimination," because it's a ridiculous legal theory," Simpson said. "But even beyond that, the case has implications for administrative law and separation of powers cases going on across the country, even outside the fair-lending context."Judge Valderrama, a Trump appointee, specifically pushed back against the issue of "Chevron deference," a doctrine borne of a 1984 U.S. Supreme Court case that granted federal agencies a wide berth in interpreting ambiguous congressional statutes. Chevron deference has come under significant scrutiny by several justices on the Supreme Court that have expressed skepticism of administrative agencies. In dismissing the case, Judge Valderrama wrote: "The scope of liability created by an expansion of ECOA to include 'prospective applicants' is unreasonable and unworkable. When a statute is unambiguous, agency regulations, or statutory interpretations are not entitled to deference. To the extent [Regulation B] and/or the Bureau attempt to regulate behavior relating to 'prospective applicants,' no deference should be given to Reg. B or the Bureau's interpretation."The CFPB's investigation of Townstone began in 2017 and the company was forced to downsize from a mortgage lender to a mortgage broker because of the cost of five years of defending itself, lawyers said. "It took so many resources to fight this government overreach," said Richard Horn, co-managing partner at Garris Horn LLP. "The power to investigate is the power to destroy and government overreach has a huge impact on companies."

Judge dismisses CFPB's redlining lawsuit over 'marketing discrimination' in home loans2023-02-06T18:47:02+00:00

Figure Technologies CEO cuts its funding targets, mulls spin offs

2023-02-06T14:47:10+00:00

Mike Cagney, the former chief executive officer of lending giant SoFi, is searching for investors for his latest startup, Figure Technologies Inc. The company, which builds financial products on a blockchain, is also seeking to spin off some product lines as it navigates a dramatic industry downturn.Two years ago, when investors' fintech frenzy was at its peak, Cagney raised $200 million for Figure. The company at the time was valued at $3.2 billion, gaining it entrance into a rarified club of multibillion-dollar startups. The culture among employees was known to be hard-charging, and at least occasionally, hard-partying too. But recently, things have gotten tougher. In the last few months, several senior leaders have left Figure, including the president and chief financial officer; it scrapped an attempt to take its lending business public through a special purpose acquisition company; and executives slashed their targets on an ambitious fundraising effort.The company is currently seeking to raise $100 million, according to people familiar with the matter who asked not to be identified because the discussions were private. That's one-third the sum it initially planned. Figure is not in any serious deal talks at the moment, the people said, and the startup is likely to delay raising money rather than agree to a down round at a lower valuation."We're just dealing with a lot of headwinds in the industry right now," Cagney said in an interview. "It's a very hard market." Figure and Cagney declined to comment on the funding efforts, which have not been previously reported. Figure is one of countless once-hot startups now suddenly forced to contend with an icy environment for venture capital, particularly in the world of crypto. But the company is higher-profile and better funded than most.Cagney left Social Finance Inc. in 2017, under a cloud of allegations over a toxic and "sexually charged corporate culture" at the company, according to a lawsuit. Cagney also admitted that he had had consensual sexual relationships with female subordinates. Cagney said at the time he would not tolerate harassment at SoFi and said he resigned to avoid "distraction from the company's core mission." Despite the scandal, Cagney was quickly able to raise money for his next venture, and Figure brought in more than $400 million from investors including Peter Thiel's Mithril Capital and crypto firms like Digital Currency Group, according to PitchBook data. Figure builds lending, payment and other traditional financial products on Provenance, a blockchain it created, promising to offer faster and cheaper options than the status quo. The company said it gained traction with its lending product, and that it's also brought on big customers for other offerings. For example, Apollo Global Management is using Figure's blockchain to sell stakes in a fund. Last year, Figure appeared to be on track to raise $300 million, according to people familiar with the matter. But by September, as the market cooled on crypto, the startup was struggling to hit its fundraising goals. Figure cut its target by two-thirds. Last month, in another setback to Figure's endeavors to access more cash, the startup abandoned efforts to take its lending product public via a reverse merger with a mid-sized mortgage bank. The transaction was supposed to serve as a major milestone and strategic inflection point for the startup. Cagney said that the company is not currently planning layoffs. But he also said that if it's able to, Figure would complete a significant restructuring. "We are looking at spinning our markets business and potentially our payments business out from our lending business," he said. Cagney said that Figure was financially well-positioned: The startup was profitable on an adjusted basis during the third quarter of last year and lost about $1 million during the fourth quarter. Meanwhile, dozens of employees have left Figure over the last year, including the chief marketing officer and the vice president of communications. In December, President Asiff Hirji and Chief Financial Officer Sean Sievers also both quietly exited.Asked about his departure in an interview with Bloomberg, Hirji spoke highly of Figure. He described the startup as a holding company for blockchain businesses that "quite honestly shouldn't be together" but all represent what he thinks could be "trillion-dollar" opportunities. Hirji said high turnover was related to this diffuse structure because people, including himself, would often leave Figure once a product was built and their work on it was accomplished. "Lots of people have come in and out as the company has evolved," Hirji said. Figure is known among employees to have a high-pressure corporate culture. Some former staffers also complained about the at times high spending that went along with it. Last May, Figure co-founder June Ou, who is married to Cagney, led a company offsite for engineers to Las Vegas, flying out roughly 200 people for a long weekend packed with activities, company meetings at the Venetian hotel and a party at Tao nightclub, which Figure rented. While perhaps not unusual by previous eras' standards of crypto excess, a few former employees who did not attend took umbrage when their full bonuses didn't materialize that summer, said people familiar with the matter. The company declined to comment on the characterization of its culture, the offsite or the bonuses.

Figure Technologies CEO cuts its funding targets, mulls spin offs2023-02-06T14:47:10+00:00

5 housing markets where it's cheaper to buy than rent

2023-02-06T10:46:06+00:00

High home prices have driven many prospective borrowers to rent, but escalating monthly rates have evened the playing field in some of the nation's larger metros.Today it's cheaper to rent in 45 of the nation's 50 largest housing markets, a ratio that has grown significantly since the end of 2021, according to Realtor.com. Mortgage rates, which nearly doubled in the past year, and home prices fading from a record-high in June caused homeownership costs to grow 37.4% in 2022, more than 10 times faster than rent growth over the same period. The typical monthly starter home payment in December was almost $800 higher than the median rental price of $1,712, the real estate firm found.Those who want to own property can find competitive homeownership opportunities in five Rust Belt markets. The locales offer average mortgage payments below the national average of nearly $2,000, and in some cases, under $1,000 a month."If you're a renter trying to decide if it's better to sign another lease or buy a home this year, market conditions are one factor to consider, but it's far more important to think about what you want and need from a home," said Danielle Hale, chief economist at Realtor.com. "How much flexibility or stability do you see fitting with your lifestyle over the next five to seven years?"Realtor.com ranked the top 50 metros by comparing the monthly cost for a starter home, ranging from a median-priced studio to a two-bedroom listing, to the median rental price for a similarly-sized property. Home costs were projected at a 7% mortgage rate and included property taxes, insurance and homeowners association fees. 

5 housing markets where it's cheaper to buy than rent2023-02-06T10:46:06+00:00

15-Year Fixed vs. 30-Year Fixed: The Pros and Cons

2023-02-05T16:47:28+00:00

It’s time for another mortgage match-up: “15-year fixed vs. 30-year fixed.”As always, there is no one-size-fits-all solution because everyone is different and may have varying real estate and financial goals.For example, it depends if we’re talking about a home purchase or a mortgage refinance.Or if you’re a first-time home buyer with nothing in your bank account or a seasoned homeowner close to retirement.Ultimately, for home buyers who can only muster a low down payment, a 30-year fixed-rate mortgage will likely be the only option from an affordability and qualifying standpoint.So for some, the argument isn’t even an argument. It’s over before it starts.But let’s explore the key differences between these two loan programs so you know what you’re getting into.15-Year Fixed vs. 30-Year Fixed: What’s Better?The 15-year fixed and 30-year fixed are two of the most popular home loan products available.They are very similar to one another. Both offer a fixed interest rate for the entire loan term, but one is paid off in half the amount of time.That can amount to some serious cost differences and financial outcomes.While it’s impossible to universally choose one over the other, we can certainly highlight some of the benefits and drawbacks of each.As seen in the chart above, the 30-year fixed is cheaper on a monthly basis, but more expensive long-term because of the greater interest expense.The 30-year mortgage rate will also be higher relative to the 15-year fixed to pay for the convenience of an additional 15 years of fixed rate goodness.Meanwhile, the 15-year fixed will cost a lot more each month, but save you quite a bit over the shorter loan term thanks in part to the lower interest rate offered.15-Year Fixed Mortgages Aren’t Nearly as PopularThe 15-year fixed is the second most popular home loan program availableBut only accounts for something like 15% of all mortgagesMainly because they aren’t very affordable to most peopleMonthly payments can be 1.5X higher than the 30-year fixedThe 30-year fixed-rate mortgage is easily the most popular loan program available today, holding a 70% share of the market.Meanwhile, 15-year fixed loans hold about a 15% market share.The rest are adjustable-rate mortgages or other fixed-rate mortgages like the lesser-known 10-year fixed.While this number can certainly fluctuate over time, it should give you a good idea of how many borrowers go with a 15-year fixed vs. 30-year fixed.If we drill down further, about 90% of home purchase loans are 30-year fixed mortgages. And just 6% are 15-year fixed loans. But why?Well, the simplest answer is that the 30-year mortgage is cheaper, much cheaper than the 15-year, because you get twice as long to pay it off.Most mortgages are based on a 30-year amortization schedule, whether they are fixed or not (even ARMs), meaning they take 30 full years to pay off.The 30-year fixed is the most straightforward home loan program out there because it never adjusts during this industry standard 30-year term.Shorter-Term Mortgages Are Too Expensive for Most HomeownersThe lengthy mortgage term on a 30-year mortgage allows home buyers to purchase expensive real estate without breaking the bank, even if they come in with a low down payment.But it also means paying off your mortgage will take a long, long time…possibly extending into retirement, or pushing it back even further.This enhanced affordability explains why it’s heavily advertised and touted by housing counselors and mortgage lenders alike.Simply put, you can afford more house with the 30-year fixed, which explains that 90% market share when it’s a home purchase.Meanwhile, the 15-year fixed-rate market share is significantly higher on refinance mortgages.The reason is borrowers don’t want to restart the clock once they’ve already paid down their loan for a number of years.It’s also more affordable to go from a 30-year fixed to a 15-year fixed because your loan balance will be smaller after several years. And ideally interest rates will be lower as well.This combination could make a 15-year loan more manageable, especially as you get your bearings when it comes to homeownership.Despite the overwhelming popularity, there must be some drawbacks to the 30-year mortgage, right? Of course there are…15-Year Mortgage Rates Are A Lot Lower15-year mortgage rates are lower than 30-year mortgage ratesHow much lower will depend on the spread which can vary over timeIt fluctuates based on the economy and investor demand for MBSYou may find that 15-year mortgage rates are 0.50% – 1% cheaper at any given timeFirst off, you get a discount for a 15-year fixed vs. 30-year fixed in the form of a lower interest rate.Even though both offer fixed rates, the cost is lower because you get less time to pay off the mortgage.For that reason, you’ll find that 15-year mortgage rates cost quite a bit less than those on a 30-year loan product.In fact, as of February 2nd, 2023, mortgage rates on the 30-year fixed averaged 6.09% according to Freddie Mac, while the 15-year fixed stood at 5.14%.That’s a difference of 0.95%, which should not be overlooked when deciding on a loan program.In general, you may find that 15-year mortgage rates are about 0.50% – 1% lower than 30-year fixed mortgage rates. But this spread can and will vary over time.I charted 15-year fixed mortgage rates since 2000 using Freddie Mac’s June average, as seen above.Since that time, the lowest spread compared to the 30-year was 0.31% in 2007, and the highest spread was 0.88% in 2014.In June of the year 2000, the 15-year mortgage rate averaged 7.99%, while the 30-year was a slightly higher 8.29%.So the 15-year has been enjoying a wider spread lately, though that could narrow over time.Monthly Payments Are Higher on 15-Year MortgagesExpect a mortgage payment that is ~1.5X higher than a comparable 30-year fixedThis isn’t a bad deal considering the loan is paid off in half the timeJust make sure you can afford it before you commit to itThere isn’t an option to make smaller payments once your loan closesWhile the lower interest rate is certainly appealing, the 15-year fixed-rate mortgage comes with a higher monthly mortgage payment.Simply put, you get 15 less years to pay it off, which increases monthly payments.When you have less time to pay off a loan, higher payments are required to repay the balance.The mortgage payment on a $200,000 loan would be $386.10 higher because it’s paid off in half the amount of time.Despite the lower interest rate on the 15-year fixed, the monthly payment is about 32% more expensive.As such, affordability might be a limiting factor for those who opt for the shorter term.Take a look at the numbers below, using those Freddie Mac average mortgage rates:30-year fixed payment: $1,210.70 (interest rate of 6.09%)15-year fixed payment: $1,596.80 (interest rate of 5.14%)Loan Type30-Year Fixed15-Year FixedLoan Amount$200,000$200,000Interest Rate6.09%5.14%Monthly Payment$1,210.70$1,596.21Total Interest Paid$235,852.00$87,317.80Okay, so we know the monthly payment is a lot higher, but wait, and this is the biggie.You would pay $235,852.00 in interest on the 30-year mortgage over the full term, versus just $87,317.80 in interest on the 15-year mortgage!That’s more than $148,000 in interest saved over the duration of the loan if you went with the 15-year fixed as opposed to the 30-year mortgage. Pretty substantial, eh.You’d also build home equity a lot faster, as each monthly payment would allocate much more money to the principal loan balance as opposed to interest.But there’s another snag with the 15-year fixed option.  It’s harder to qualify for because you’ll be required to make a much larger payment each month, meaning your DTI ratio might be too high as a result.For many borrowers stretching to get into a home, the 15-year mortgage won’t even be an option. The good news is I’ve got a solution.Most Homeowners Hold Their Mortgage for Just 5-10 YearsConsider that most homeowners only keep their mortgages for 5-10 yearsThis means the expected savings of a 15-year fixed mortgage may not be fully realizedBut these borrowers will still whittle down their loan balance a lot faster in the meantimeNow obviously nobody wants to pay an additional $148,000 in interest, but who says you will?Most homeowners don’t see their mortgages out to term. Either because they refinance, prepay, or simply sell their property and move. So who knows if you’ll actually benefit long-term?You may have a well-thought-out plan that falls to pieces in 2-3 years. And those larger monthly mortgage payments could come back to bite you if you don’t have adequate savings.What if you need to move and your home has depreciated in value? Or what if you take a pay cut or lose your job?No one foresaw a global pandemic, and for those with 15-year fixed mortgages, the payment stress was probably a lot more significant.Ultimately, those larger mortgage payments will be more difficult, if not impossible, to manage each month if your income takes a hit.And perhaps your money is better served elsewhere, such as in the stock market or tied up in another investment, one that’s more liquid, which earns a better return.Make 15-Year Sized Payments on a 30-Year MortgageIf you can’t qualify for the higher payments associated with a 15-year fixed home loanOr simply don’t want to be locked into a shorter-term mortgageYou can still enjoy the benefits by making larger monthly payments voluntarilySimply determine the payment amount that will pay off your loan in half the time (or close to it)Even if you’re determined to pay off your mortgage, you could go with a 30-year fixed and make extra mortgage payments each month, with the excess going toward the principal balance.This flexibility would protect you in periods when money was tight. And still knock several years off your mortgage.There are biweekly mortgage payments as well, which you may not even notice leaving your bank account.It’s also possible to utilize both loan programs at different times in your life.For example, you may start your mortgage journey with a 30-year loan, and later refinance your mortgage to a 15-year term to stay on track if your goal is to own your home free and clear before retirement.In summary, mortgages are, ahem, a big deal, so make sure you compare plenty of scenarios and do lots of research (and math) before making a decision.Most consumers don’t bother putting in much time for these mortgage basics, but planning now could mean far less headache and a lot more money in your bank account later.Pros of 30-Year Fixed MortgagesLower monthly payment (more affordable)Easier to qualify at a higher purchase priceAbility to buy “more house” with smaller paymentCan always make prepayments if wantedGood for those looking to invest money elsewhereCons of 30-Year Fixed MortgagesHigher interest rateYou pay a lot more interestYou build equity very slowlyIf prices go down you could fall into an underwater quite easilyHarder to refinance with little equityYou won’t own your home outright for 30 years!Pros of 15-Year Fixed MortgagesLower interest rateMuch less interest paid during loan termBuild home equity fasterOwn your home free and clear in half the timeGood for those who are close to retirement and/or conservative investorsCons of 15-Year Fixed MortgagesHigher payment makes it harder to qualifyYou may not be able to buy as much houseYou may become house poor (all your money locked up in the house)Could get a better return for your money elsewhereAlso see: 30-year fixed vs. ARM

15-Year Fixed vs. 30-Year Fixed: The Pros and Cons2023-02-05T16:47:28+00:00

Snow Way! Timely tips for winter weather snow removal

2023-02-04T10:47:27+00:00

Remember when your landlord took care of things like snow removal? Now, as a homeowner, it’s all up to you. Here’s what you need to know about this winter ritual.   KNOW THE LOCAL LAWS Is there a sidewalk in front of your home? In some communities, you’re responsible for getting it cleared within a few hours after snowfall stops. Even if there’s no rule where you live, keeping it clear for your neighbors is a nice thing to do. Continue reading Snow Way! Timely tips for winter weather snow removal at Movement Mortgage Blog.

Snow Way! Timely tips for winter weather snow removal2023-02-04T10:47:27+00:00

20 residential depository lenders with the largest wholesale volume in Q3

2023-02-03T22:47:16+00:00

The top five lenders in our ranking have a combined wholesale volume of more than $27 billion at the end of Q3. In a difficult quarter, some lenders still saw growth between Q2 and Q3, with one seeing in increase of 104.3%.Scroll through to see which residential depository lenders made the top 20 and how they fared in Q3.

20 residential depository lenders with the largest wholesale volume in Q32023-02-03T22:47:16+00:00

Majestic Home Loan closes shop

2023-02-03T21:49:18+00:00

RMK Financial Corp., which also does business as Majestic Home Loan, is closing its doors.The California-based wholesale lender, which was founded in 1997, laid off most employees in mid-January via Skype and closed shop on January 31, sources familiar with the matter said. Over 60 employees were impacted.The company did not respond to multiple requests for comment.According to employees let go, the announcement that the lender would be shutting its doors came unexpectedly. Those impacted by layoffs in mid-January received their final paycheck, but did not receive severance pay.At the end of 2022, Majestic was actively bringing on new employees. In December, the company brought on board close to a dozen account executives. In a LinkedIn post, Michele Turcich, a national account executive at Majestic, noted that the company made the decision to shut down due to a "legacy issue" and wished the "team the best of luck in their future endeavors."While the company wouldn't confirm what the "legacy issue" was, the lender has faced a slew of enforcement actions from state and federal regulators spanning over half a decade.In 2021, the lender entered into a consent order with Oklahoma's department of consumer credit, which found that they failed to provide a comprehensive list of all active mortgage originators, and did not submit quarterly financial conditions as required by the state. A few years prior, in 2016, Majestic settled with the state of Kentucky for using four unregistered loan processors, violating state law. Meanwhile, eight years ago the lender was slapped with a $250,000 fine from the Consumer Financial Protection Bureau for false advertising. At the time, the CFPB claimed that through marketing the lender led consumers to believe that the company was affiliated with the U.S. government.RMK allegedly mailed print advertisements to more than 100,000 consumers in several states, using the names and logos of the Department of Veterans Affairs and the Federal Housing Administration in a way that falsely implied that the advertisements were sent by the VA or FHA, or that the company or the advertised mortgage products were endorsed or sponsored by the VA or FHA. 

Majestic Home Loan closes shop2023-02-03T21:49:18+00:00

Title partnerships abound in early 2023

2023-02-03T21:49:34+00:00

Zimmer Financial Services Group has started Iron Title, an agency whose leadership team includes former First American executives.Iron Title already has begun operations in Florida, and will be expanding into strategic markets nationwide in the coming months.Its CEO, Judd Hoffman, is the former president of First American Title's direct division. He is joined by Philip Wilson, the chief operating officer and Trenton Steindorf as senior vice president, both of whom were executives with First American Financial. Most recently, Wilson was senior division president at Stewart Title, and Steindorf served as assistant vice president of strategic initiatives at Orange Coast Title."We see the value in the human side of the title process — in delivering white-glove service to all parties of a transaction," said Hoffman. "We are recruiting people who believe in this, and investing in the best AI-driven technology to scale the high-touch experience."Other Zimmer entities include: Ategrity Specialty Insurance Co., an insurer in the excess and surplus market; Sequentis Reinsurance; Carrick Specialty Holdings, which provides reinsurance and run-off management solutions; and Zimmer Partners, a research-driven, multibillion dollar investment adviser.

Title partnerships abound in early 20232023-02-03T21:49:34+00:00
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