Bulk home buyers slowed by mortgage rules

Pity the owners of multiple homes in Metro Vancouver: it is getting tougher to find conventional residential financing once they own more than five properties in the world’s second-least affordable market..

“On Monday, another major bank pulled back their policies to only allow for five rental properties maximum, instead of having no limit to the number of rental properties. The move mirrors what most major banks are currently doing right now and leaves very few options for clients with multiple rental properties,” Vancouver mortgage broker Kyle Green of Mortgage Alliance stated in a memo to clients April 21.“It’s getting unbelievably hard to get investors financed, so be prepared to have more limited options if you fall into the five plus category.”

“It wasn’t too long ago that some of our clients were able to acquire 70 to 90 properties through major banks without too many issues,” Green told BIV this week. “Now, some are forced to take on joint venture partners or go to private lenders.”

Green said only two major lenders, Scotiabank and National, continue to lend on bulk residential investments “at competitive rates.”

The reason for the tighter regulations relates to recent restrictions on Canada Mortgage and Housing Corp. mortgage insurance for multiple residential properties, according to Green. He explained that residential mortgages are packaged into mortgage-backed securities that are then sold to investors. Investors, however, insist that all the mortgages be covered by insurance.

An option for those owning more than five rental properties would be to apply for commercial financing, which offers both lower mortgage rates and no cap on the amount of properties, or to finance properties with different lenders.

“We have several clients that hold between 40 to 100 individual rental condo units, and they typically spread these out between a variety of lenders,” said Bryan Dudley of Realtech Capital Group.

read more: http://www.biv.com/article/2015/4/bulk-home-buyers-slowed-mortgage-rules/

Justice Department sues Quicken over mortgages

New York • The Justice Department is suing Quicken Loans, saying the lender approved hundreds of mortgage loans that didn't meet federal standards, leaving the government stuck with the bill when borrowers defaulted.

The U.S. Department of Justice said Thursday that between September 2007 and December 2011, Quicken approved, underwrote, and certified the insurance of hundreds of mortgages that didn't meet federal guidelines.

It said Quicken encouraged its employees to disregard Federal Housing Administration rules and say that mortgages met the guidelines when they did not. Quicken sometimes asked appraisers to inflate the value of homes so it could approve the loans, and managers sometimes let underwriters break

The loans were insured by the U.S. Department of Housing and Urban Development, and Quicken filed for reimbursement when the loans defaulted. According to the Justice Department, HUD has already paid millions of dollars in claims on the loans Quicken underwrote, and there could be more claims coming.

In a statement, Quicken said the FHA's own reporting ranks it as the highest-quality large FHA lender — meaning it has the lowest default rate. It also said its FHA-backed mortgages make large profits for the government. The company described the lawsuit as "abusive" and the government's investigation as a "witch hunt."

Quicken sued the federal government Friday, saying it had done nothing wrong and that the government was trying to get it to admit wrongdoing and pay big penalties for political reasons. The company says it is the second-largest mortgage lender in the U.S. and the largest lender of loans guaranteed by the FHA. It says it was notified about a government investigation three years ago.

The Detroit-based company was a direct endorsement lender approved by the FHA, which meant FHA and HUD did not review the loans before the FHA insured them.

see more: http://www.sltrib.com/home/2436050-155/justice-department-sues-quicken-over-mortgages

Mortgage applications rise 2.3%, led by homebuyers

Buyers are returning to the housing market in ever growing numbers, as indicated by continued gains in loan applications to purchase a home.

Total mortgage application volume rose 2.3 percent week to week on a seasonally adjusted basis for the week ending April 17th, according to the Mortgage Bankers Association (MBA). The gain was driven largely by purchase applications, not refinances, even despite lower mortgage rates.

"Purchase applications increased for the fourth time in five weeks as we proceed further into the spring home buying season," said Mike Fratantoni, chief economist for the MBA. "Applications for FHA [government insured] purchase loans remained strong as well."

Mortgage applications to buy a home increased 5 percent from the previous week and are now 16 percent higher than the same week one year ago. Applications to refinance increased just one percent, but they are still up 41 percent from a year ago, when rates were considerably higher, around 4.25 percent.

A Bank of America branch in New York City.

Carlo Allegri | Reuters

A Bank of America branch in New York City.

Buyers are returning to the housing market in ever growing numbers, as indicated by continued gains in loan applications to purchase a home.

Total mortgage application volume rose 2.3 percent week to week on a seasonally adjusted basis for the week ending April 17th, according to the Mortgage Bankers Association (MBA). The gain was driven largely by purchase applications, not refinances, even despite lower mortgage rates.

"Purchase applications increased for the fourth time in five weeks as we proceed further into the spring home buying season," said Mike Fratantoni, chief economist for the MBA. "Applications for FHA [government insured] purchase loans remained strong as well."

Mortgage applications to buy a home increased 5 percent from the previous week and are now 16 percent higher than the same week one year ago. Applications to refinance increased just one percent, but they are still up 41 percent from a year ago, when rates were considerably higher, around 4.25 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) last week decreased to 3.83 percent, its lowest level since January 2015, from 3.87 percent, with points decreasing to 0.32 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, according to the MBA survey.

Rates haven't moved very much lately, which may be why homeowners have seen little incentive to refinance. 

read more: http://www.cnbc.com/id/102608013

Zero down, no fees: New mortgage program will help homebuyers rehabilitate Detroit homes

Detroit Mayor Mike Duggan announced Thursday a new mortgage program that he hopes will address one of the city’s great ironies: empty, abandoned houses everywhere that nobody can buy because they are so cheap and so broken that banks won't lend on them.

Last year, just 10 percent of Detroit homebuyers got a mortgage; the rest had to pay in cash to make deals happen.

The challenge? Most require significant work to be habitable, but the cost of fixing them up is often more than what they are valued. After all, the median home price in Detroit was just $26,000 in February, according to RealtyTrac, an Irvine, Calif.-based company that sells real estate data.

“We know that the desire to renovate these houses and rebuild our neighborhoods is there,” Duggan said at a news conference. “What we haven’t had is enough lenders willing to take a chance on our city to show what’s possible.”

The new program, dubbed the Detroit Neighborhood Initiative, enlisted Bank of America, Boston-based Neighborhood Assistance Corporation of America and Detroit-based Opportunity Resource Fund to create a loan that can get around federal regulations that prohibit, in most cases, lending more than a home is worth.

"Mortgage rules are formulaic," said Matt Elliot, Michigan market president for Bank of America. They don't consider extenuating market conditions like the ones that exist in Detroit.

"We can’t have a sustainable renaissance without Detroit’s neighborhoods. And we can only be as successful as Detroit is successful.”

The new program will write mortgages up to 110 percent of a home's value – or up to 150 percent if purchased through the Detroit Land Bank Authority home auctions. Additionally, the new loans offer favorable terms and are available to anyone who will live in the house and doesn't already own a property, including:

    0 percent down
    No closing costs
    No fees
    No maximum income
    Credit score is not considered
    Below market fixed rates (currently 3.5 percent for a 30-year loan and 2.875 percent for 15 year)
    Ability to buy down the interest rates to near 0 percent
    Loans of up to $200,000

“This is character-based lending,” said Bruce Marks, the founder and CEO of NACA, likening it to the VA loans that were made to vets after World War II. “It is a fully documented loan, but we look at income and ability to pay, not credit scores. … This is a model for restabilizing neighborhoods.”

NACA offers these types of mortgages in about 40 states and is funded by $10 billion from Bank of America and $3 billion from Citigroup Inc. However, it will only issue 150 percent loan-to-value mortgages in Detroit.

read more: http://www.crainsdetroit.com/article/20150416/BLOG017/150419875/zero-down-no-fees-new-mortgage-program-will-help-homebuyers

U.S. Mortgage Application Volume Falls

 The average number of mortgage applications for the week ended Friday fell 2.3% from the previous week, according to a survey by the Mortgage Bankers Association.

The seasonally adjusted purchase index, which a week earlier reached its highest level since July 2013, fell 3% in the most recent period. The unadjusted purchase index fell 2% from the previous week and was 7% higher than the year-ago period, the MBA said.

The refinance share of mortgage activity ticked up to 58% of total applications, from 57% the previous week.

The adjustable-rate mortgage share fell to 5.4% of total applications.

The average rate on 30-year, fixed-rate mortgages with conforming loans--with balances up to $417,000--rose to 3.87% from 3.86% the previous week.

Rates on 30-year, fixed-rate mortgages with jumbo-loan balances--more than $417,000--rose to 3.84% from 3.81% a week earlier.

The average rate for 30-year, fixed-rate mortgages backed by the Federal Housing Administration fell to 3.67% from 3.69%.

The average rate for 15-year, fixed-rate mortgages rose to 3.16% from 3.15% a week earlier.

Read more: http://www.nasdaq.com/article/us-mortgage-application-volume-falls-20150415-00241

Mortgages stay low as homebuying heats up

The rate on the most common mortgage was unchanged this week, while others slipped slightly. The low rates brought in more potential homebuyers and follow a disappointing jobs report, which may help delay an interest rate hike by the Federal Reserve.

"Rates are still low, and everyone is talking about the volume. It's been a busier spring-break week than we've had in years," says Pava Leyrer, chief operating officer for Northern Mortgage Services in Grand Rapids, Michigan. "People's jobs are secure or they have gotten raises. People feel they can afford something they couldn't before."
Time to buy

The volume of purchase mortgage applications was up 7 percent, after a 6 percent increase last week and a 5 percent increase the week before that, according to the Mortgage Bankers Association, or MBA, on April 8. Overall, the number of mortgage applications rose 0.4 percent, softened by a 3 percent decline in refinances.
Mortgage rates this week
2015%30-year fixedJanFebApr3.703.803.904.00
30 year fixed rate mortgage -- 3 month trend

    The benchmark 30-year fixed-rate mortgage was unchanged from the previous week, at 3.82 percent, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.47 percent. Four weeks ago, it was 3.97 percent. The mortgages in this week's survey had an average total of 0.25 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.13 percent. This week's rate is 0.31 percentage points lower than that 52-week average.
    The benchmark 15-year fixed-rate mortgage fell to 3.04 percent from 3.06 percent.
    The benchmark 5/1 adjustable-rate mortgage fell to 3.06 percent from 3.1 percent.
    The benchmark 30-year fixed-rate jumbo fell to 3.92 percent from 3.93 percent.


Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-040915.aspxk

FICO testing score for unbanked

Are you saddled with a thin credit file? You don't have a credit report? No worries -- lenders soon may be able to score you anyway.

FICO, a major credit scoring company, says it's working on a new credit-scoring system for consumers with thin-to-no credit files.

The new score incorporates alternative data, including payment history on cell phone bills, cable bills, landline phone bills, and electric and gas bills to do so. It also uses property and public records data provided by LexisNexis.
Why should you care?

Under the traditional credit scoring system -- which requires consumers essentially to have loans to take on more loans -- approximately 50 million people don't have FICO Scores. The credit score's yet-to-be-named new version will cast a wider net, providing scores to an additional 15 million consumers, as first reported in The Wall Street Journal.

"FICO is trying to expand access to credit," Jim Wehmann, executive vice president of scores at FICO, said in an email. "This new score is an on-ramp to help people who don't have FICO Scores gain access to traditional forms of credit and begin building a credit history."
The rest of the story

The new score is currently being tested by 12 credit card issuers. FICO expects it to be generally available later in the year.

"People who gain access to credit through this alternative score will start building a credit history that can eventually help them receive a traditional FICO Score," Wehmann says, "In turn, this can help them pursue mortgages and auto loans."

FICO's not the only industry stalwart moving to improve the traditional credit scoring system. All three major credit bureaus -- Experian, Equifax and TransUnion -- have been experimenting and pushing for adding new data streams to credit post-Recession.

What type of information do you think should be factored into your credit score? Let us know in the comments below!

source: http://www.bankrate.com/financing/credit-cards/fico-testing-score-for-unbanked/

Mortgage rates little changed

Home mortgage-interest rates were little changed this week, with Freddie Mac’s survey showing lenders offering conventional 30-year loans at an average 3.7 percent, up from 3.69 percent last week.

As the spring homebuying season begins, rates are about where they started the year, said Len Keifer, deputy chief economist at Freddie Mac.

The average for 15-year fixed-rate mortgages was 2.98 percent, up from 2.97 percent a week ago, and the start rates for adjustable home loans were unchanged.

The survey asks lenders early each week about the terms they are offering to low-risk borrowers seeking mortgages of up to $417,000 that conform to the guidelines of Freddie Mac and Fannie Mae, the nation’s major housing-finance companies.

The borrowers would have paid a little more than half of 1 percent of the loan balance in upfront lender fees and discount points to obtain the best fixed rates. Payments for appraisals, title insurance and other third-party services are not included.

The survey provides a consistent gauge of mortgage trends, but actual rates fluctuate constantly and are influenced by many factors.

In addition to borrowers’ credit histories and debt loads, considerations include whether the borrowers opt for zero-cost loans at higher rates or pay extra to lenders initially to lower the rates.

see more: http://www.seattletimes.com/business/real-estate/mortgage-rates-little-changed/

30-Year Fixed Mortgage Rates Rise on Strong Economic Data; Current Rate is 3.62%, According to Zillow Mortgage Rate Ticker

SEATTLE, March 31, 2015 (GLOBE NEWSWIRE) -- The 30-year fixed mortgage rate on Zillow® Mortgages is currently 3.62 percent, up six basis points from this time last week. The 30-year fixed mortgage rate rose early in the week, then hovered around 3.65 percent before returning to the current rate on Tuesday.

"Rates increased last week on strong economic data from both the U.S. and Europe," said Erin Lantz, vice president of mortgages at Zillow. "This week we expect some volatility as markets hold their breath for Friday's monthly jobs report."

Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site, and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.

The rate for a 15-year fixed home loan is currently 2.87 percent, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 2.75 percent.

Purchase Mortgage Application Activity

Zillow predicts tomorrow's seasonally adjusted Mortgage Bankers Association Weekly Application Index will show purchase loan activity decreased by 1 percent from the week prior. Zillow combines loan requests made on Zillow Mortgages last week with the previous week's Mortgage Bankers Association (MBA) Weekly Application Index to predict the MBA's Weekly Application Index for purchase loans, which will be released tomorrow. For more information about this prediction, visit http://www.zillow.com/research/mortgage-app-index-part-one-7016/.        

Below are current rates for 30-year fixed mortgages by state. Additional states' rates are available at: http://www.zillow.com/mortgage-rates.

read more http://globenewswire.com/news-release/2015/03/31/720808/10127100/en/30-Year-Fixed-Mortgage-Rates-Rise-on-Strong-Economic-Data-Current-Rate-is-3-62-According-to-Zillow-Mortgage-Rate-Ticker.html