It has been seven years since the mortgage crisis first hit the country, and much has been written about “recovery” for housing and for the consumer lending market. Is that “recovery” finally upon us now?
According to a study released by TransUnion on Wednesday, yes, the consumer lending market will experience a full recovery from both the mortgage crisis and the subsequent Great Recession by the end of 2016.
More here @ DSNews.com
TransUnion’s 2016 Forecast Expects Consumer Credit Markets to Complete Recovery
We’ve previously explored homebuyers’ “Do’s and Don’ts” and uncovered some vital tips that help or hinder the home buying process. In today’s special edition, we examine hints for successfully coping with TRID (the new TILA-RESPA Integrated Disclosures rules that go into effect this weekend). As always, the “Do’s” contain very real helpful points to avoid closing delays, while the “Don’ts” offer a somewhat satirical look at potential (but hopefully improbable) real life situations that will complicate or delay closings, particularly given TRID’s stringent new requirements.
TRID Do: Discuss your loan options in detail with your lender, and apply once you have decided which loan best suits your needs.
TRID Don’t: Ask your lender for a LE (Loan Estimate) on a 30 year fixed loan, then opt for a 15 year 5 days before your scheduled closing….
The October 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months. This summary discusses the responses from 76 domestic banks and 22 U.S. branches and agencies of foreign banks.
Questions on commercial real estate lending. A modest net fraction of banks reported that they had eased standards on construction and land development loans, while standards for loans secured by nonfarm nonresidential structures and multifamily residential properties remained about unchanged. Moderate net fractions of banks indicated that they had experienced stronger demand for all three subcategories of CRE loans. On balance, foreign banks also reported having eased lending standards on CRE loans and having seen stronger demand for such loans over the past three months.
Questions on residential real estate lending. A moderate net fraction of large banks reported that they had eased standards on prime residential mortgages over the past three months. Smaller banks reported that standards for prime residential mortgages were about unchanged on net. Reported changes in demand for mortgage loans were mixed. On net, although large banks reported that demand for prime mortgages had weakened, smaller banks experienced increases. However, demand for nontraditional mortgages was weaker, on net, across both bank size groups. Few banks reported having changed their standards on home-equity lines of credit, and respondents indicated that they had experienced little change in demand for such loans on net.
“Of the 44.6 million residential properties with positive equity, approximately 9.4 million, or 19 percent, have less than 20 percent equity (referred to as “under-equitied”) and 1.3 million of those have less than 5 percent equity (referred to as near-negative equity). Borrowers who are “under-equitied” may have a more difficult time refinancing their existing homes or obtaining new financing to sell and buy another home because of underwriting constraints. Borrowers with near-negative equity are considered at risk of moving into negative equity if home prices fall. In contrast, if home prices rose by as little as 5 percent, an additional 1 million homeowners now in negative equity would regain equity.”
CoreLogic Reports 273,000 Residential Properties Regained Equity in Q3 2014
Calculated Risk: Update on FHA Mortgage Insurance Premium (MIP) Reduction.
“Lenders can cancel loans in process so borrowers can obtain lower annual MIP. As Swanson notes, there will probably be a surge in loans starting January 26th (all the canceled loans, and an increase in refinance activity).
Read more at http://www.calculatedriskblog.com/2015/01/update-on-fha-mortgage-insurance.html#ik3EP4Vc2pKSF12B.99″
A no-cost mortgage (NCM) is one on which all lender fees are waived, and (subject to the possible exceptions described below) other fees are paid by the lender. The quid pro quo is a relatively high interest rate, which makes the NCM costly for borrowers who expect to have their mortgage a long time. But if the borrower has limited cash, avoiding an upfront cash drain may be much more compelling than the higher interest cost spread over many years.
No-cost mortgages have one feature that I like a lot. Because lenders offering NCMs pay for services obtained from third-parties, such as title companies and appraisers, they have an incentive to find the service providers offering the lowest price. When borrowers pay for these services, which is most of the time, lenders generally accept high prices that make the service providers beholden to them.
The relative simplicity of a mortgage with only one price dimension is also attractive. In principle, it should make price-shopping much easier. Unfortunately, ambiguity about which costs are covered and which aren’t can nullify this benefit.
via No-Cost Mortgages – Mortgage Professor.
“Recently, mortgage giant Fannie Mae revised its forecast for the U.S. housing market, and the news is not too good. Basically, thanks to a weak first half of 2014, Fannie now thinks total home sales will actually be lower in 2014 than they were in 2013, and that 2015 won’t be much better.”