Louisiana Mortgage News

The number of Americans who are planning to buy a home within the next 5 years has increased to 54% according to a new report from BMO Harris Bank. The lender’s Home Buying Report also reveals that 90% of first-time buyers are or intend to get a preapproval for their loan before beginning their home search while more than three-quarters of buyers set a budget before searching and stick to it! Buyers are expecting to spend an average of $277,000 for their next home with an average downpayment of 32%. "Future buyers are encouraged about their prospects for a home purchase in the near future, and they're keeping their budget top of mind," said Steven Zandpour, Senior Vice-President and Head of Retail Banking for Chicago Metro North. When searching for their new home, 70% of respondents said they spent less than 6 months looking for their purchase while 10% were lucky enough to find a home without really looking, or in some cases without even intending to buy. Around two thirds of buyers will consult a real estate broker to help find their next home while 61% will use online search portals and 38% will ask family and friends. Millennials are more likely to use a mobile device for their home search, highlighting the importance for real estate agents to ensure that their listings are mobile-optimized.
Posted in:New Home Buyers
Posted by Kevin Levy on October 2nd, 2017 3:16 PM
ATTOM Data Solutions, Irvine, Calif., said foreclosure filings in April fell to their lowest level since November 2005. The company's April U.S. Foreclosure Market report said foreclosure filings--default notices, scheduled auctions and bank repossessions--totaled 77,049 U.S. properties, down 7 percent from the previous month and down 23 percent from a year ago. "Foreclosure activity continued to search for a new post-recession floor in April thanks in large part to the above-par performance of loans originated in the past seven years," said Daren Blomquist, senior vice president with ATTOM. "Meanwhile we are seeing an elevated share of repeat foreclosures on homeowners who often fell into default several years ago but have not been able to avoid foreclosure despite the housing recovery." The report said nationwide, one in every 1,723 housing units had a foreclosure filing in April. ATTOM reported 34,085 U.S. properties started the foreclosure process in April, down 6 percent from the previous month and down 22 percent from a year ago and continuing well below the pre-recession average of more than 77,000 foreclosure starts per month between April 2005 and November 2007.
Posted in:Real Estate
Posted by Kevin Levy on July 24th, 2017 7:08 PM
The regulator and conservator of Fannie Mae and Freddie Mac is warning that the agency will not allow the pair of companies to run out of capital. It has been nearly nine years since the two secondary mortgage lenders were forced into conservatorship by the Federal Housing Finance Agency. Melvin L. Watt says that the regulator has responsibly balanced and met FHFA's multiple statutory mandates to manage the GSEs' day-to-day operations. Watt, who was sworn in as FHFA director in January 2014, made the comments before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, according to a copy of prepared testimony provided by FHFA. But while he's done the best he can, Watt noted that the conservatorships are not sustainable. "I reaffirm my belief that it is the role of Congress, not FHFA, to make those housing reform decisions and I encourage Congress to do so expeditiously," Watt added. But until housing finance reform takes place, Watt is concerned about the GSEs needing another taxpayer bailout since the preferred stock purchase agreements call for the two organizations' capital buffer to fall to zero on Jan. 1, 2018. For one thing, zero capital will not allow for a loss during any quarter. Watt is concerned that without any capital buffer, investor confidence will erode -- potentially stifling liquidity in the mortgage-backed securities market and increasing the cost of credit for borrowers. Watt warned that there is no room to risk the loss of investor confidence -- especially given that FHFA has explicit statutory obligations to ensure that Fannie and Freddie operate in a safe and sound manner and foster liquid, efficient, competitive and resilient markets.
Posted in:GSEs
Posted by Kevin Levy on June 30th, 2017 1:15 PM
The Department of Veterans Affairs has clarified its appraisal requirements on loans secured by properties located in rural areas. In its lender handbook, VA says that comparable sales used in appraisal reports should be located as close to the subject property as possible. But this has left some VA lenders confused when it comes to properties where comparable sales might not be ideally located near the subject. So, the Veterans Benefits Administration issued Circular 26-17-14 to clarify VA policy. According to the bulletin, market areas can be greatly expanded in suburban or rural communities. As a result, suitable comparable sales might be many miles away from the subject. "In such cases, the appraiser should specify why those comparable sales were used and how they compare/compete with the subject," the circular states. "The appraiser should evaluate whether extended distances are normal for this market, submit a description of the market area, and determine whether the comparable sales are within the subject's market." The department added that the appraiser should indicate whether any adjustments were made for locality or proximity. In cases where there are other recent comparable sales closer to the subject, the appraiser should discuss why they weren't used. In addition, providing detailed commentary about the market and the comparable sales utilized could help reduce appraisal report revisions.
Posted in:Real Estate
Posted by Kevin Levy on June 27th, 2017 12:02 PM

Recent data has shown that renting can cost more than owning a home, and with millennials gearing up to the responsibility of owning a home, home builders are shifting their strategy in order to cater to this age group. In the first quarter of 2017, more new US households preferred to purchase a home than rent in the first quarter of 2017– the first time the scale has tipped that way in more than a decade, according to a Wall Street Journal report. Data from the Census Bureau indicated that 854,000 new-owner households were formed in the first quarter of the year, handily beating the 365,000 new-renter households formed in the same quarter. 

 

“They’re crawling out of their parents’ basements, they’re forming households and they’re looking to buy,” Doug Bauer, chief executive of home builder Tri Pointe Group told the Journal. Zelman & Associates, a housing-research firm, said that in Q1 2017, 31% of homes built by major builders were reportedly in the starter-home range (2,250 square feet). Millennials recently eclipsed baby boomers as the nation's largest generation, so it is imperative that they have quality, long-term housing options," Steve Hovland, director of research for HomeUnion, told the Journal.

Posted in:New Home Buyers
Posted by Kevin Levy on June 23rd, 2017 3:05 PM

If you’ve heard that some people might get a boost to their FICO credit scores — without having to do anything — you’re right. According to a new study of 30 million credit files by score developer FICO, many Americans will experience bumps in the coming months, mainly modest increases of less than 20 points. But hundreds of thousands of the increases will be super-sized — in the range of 40 to 60 points and higher. That’s because, as part of an agreement with state attorneys general, in early July the three national credit bureaus will stop collecting public information on virtually all civil judgments and roughly half of all tax liens. Equifax, Experian and TransUnion have determined that the accuracy of the public records in these areas does not meet their standards. That means the wrong people too often got tagged with issues that affected their ability to get the terms they deserved.

 

But unanswered questions remain: How many credit files contain civil judgment or tax liens, erroneous or otherwise? After all, though many consumers’ credit files include bad information, other consumers face legitimate judgments and liens. So, some applicants’ credit scores may be artificially inflated. Examining giant samples of credit files supplied by the credit bureaus, FICO estimated that between 12 million and 14 million Americans have judgments or tax liens listed that could be affected by the changes. When these items are purged, their FICO scores tend to jump. Most of the affected consumers’ files had score increases between 1 and 19 points — not a big deal. But between 1 million and 2 million consumers appear to be in line for score boosts of 20 points to 39 points. At least 300,000 people could see increases of 60 points or higher, simply because negative information will be expunged from their files.

Posted in:Credit Scores
Posted by Kevin Levy on June 22nd, 2017 12:34 PM
The median home price is on the rise across the U.S., but it isn’t the only thing rising, according to a report from Trulia using data from the U.S. Census Bureau. Homeowners must also consider other costs such as property taxes or homeowner association fees. And the rate of increase for HOA fees leaves rising home prices in the dust. HOA fees increased 32.4% from 2005 to 2015, compared to 15.1% for the median home price. And those fees are becoming even more important, and could now even effect homeowners’ FICO scores. Last May, Sperlonga Data and Analytics, a data aggregation business for non-standard credit data sources, announced their agreement to report to Equifax, a global insights provider, information on HOA payments and account status data. Trulia’s study found HOA fees are more expensive in older housing units, decreasing about $90 for homes built after 2005. And, of course, larger homes come with larger HOA fees. On average, homeowners pay about $30 more in fees for each additional bedroom in the home. And they are not to be underestimated. In some metros, HOA fees make up over 40% of monthly housing costs.
Posted in:Real Estate
Posted by Kevin Levy on June 21st, 2017 8:02 AM

For many years during and after the recession, the monthly jobs report was important to gauge the strength of the recovery. However, during the past two years, the release of the report has taken on a new meaning. Now we are not only measuring the strength of the economy, but also tying that informations directly to actions by the Federal Reserve Board's Open Market Committee. If we added 250,000 jobs in a particular month five years ago, that was good news. But we did not have to worry about the Fed raising interest rates as a result of that information. Today, a strong report can lead us to direct action by the Fed.

And so it is with the report which came out on Friday. The increase of jobs of 138,000 and the revision of last month's data was seen as weakness. However, the unemployment rate moved to 4.1%, another post-recession low, and monthly wage growth came in at forecast. The question at this point is -- are we approaching full employment, which means we are also experiencing a shortage of labor? This information, taken together with the previous month's report, tells us that there is still a decent chance that the Fed will act when they meet next week, but slightly less of a chance than before the report was released.

The meeting will also be accompanied by the release of economic projections which will give us a gauge of where the Fed thinks that the economy is heading in the next several months. Keep in mind that the Fed will be considering other information which measure the strength of the economy. For example, on Tuesday last week, measures of personal income and spending for April came in with moderate strength following weak readings in March. Until the Fed meets next week, we can't say exactly how they will react, but certainly the data we saw last week give us some important clues.

Posted in:Economy
Posted by Kevin Levy on June 20th, 2017 12:54 PM