Owners Are Missing Out on Savings

Owners Are Missing Out on Savings

Nearly 4.5 million borrowers are eligible to refinance and could lock in savings on their monthly mortgage payments but have not taken advantage, according to a new report from Black Knight Financial Services.

The average borrower stands to save $260 a month. Nearly 700,000 borrowers could save $400 or more per month, the report shows.

“The recent pause in the upward movement of interest rates continues to encourage late-to-the-game borrowers to refinance,” says Lynn Fisher, the Mortgage Banker Association’s vice president of research and economics.

But many owners are not refinancing, despite the potential savings.

“Our data doesn’t tell us about motivation,” says Ben Graboske, senior vice president of data and analytics at Black Knight Financial Services. “It leaves us to surmise that the reason is apathy, lack of awareness, and education.”

Some homeowners may still be underwater on their home loans, owing more than what the home is currently worth. Other owners may have a low credit score that is blocking them from taking advantage of lower rates.

Still, owners likely will have more time to take advantage. “I don’t think this will be the last opportunity [to refinance into a low rate], but I don’t have a crystal ball,” says Graboske. “There are enough pressures in the market—lenders getting more efficient—that we’re going to have competitive rates around for awhile.”

Source: “Reason to Refinance: 4 Million Homeowners Are Leaving $1 Billion on the Table,” CNBC (June 22, 2017)

Lenders Easing Up Credit Standards

Lenders Easing Up Credit Standards

More mortgage lenders are reporting that they have lowered their credit standards and expect to continue to do so in the coming months, according to Fannie Mae’s second-quarter 2017 Mortgage Lender Sentiment Survey.

The share of lenders reporting they have eased mortgage credit standards over the prior three months has gradually been growing since the fourth quarter of 2016. Additionally, the number of lenders who say they plan to ease credit standards for Fannie Mae and Freddie Mac loans, non-GSE eligible, and government loans has reached or surpassed survey highs in the second quarter, the survey finds.

“Expectations to ease credit standards climbed to survey high points in the second quarter as more lenders reported slowing mortgage demand and increasing concerns about competition from other lenders,” says Doug Duncan, Fannie Mae’s chief economist. “Lenders cited additional contributing factors such as diminishing compliance concerns and more support from the GSEs, including clarification on representations and warranties and tools that provide greater certainty during the loan underwriting process. Easing credit standards might also be due in part to increased pressure to compete for declining mortgage volume.”

For the third consecutive quarter, the number of lenders expecting a profit decrease within the next three months was higher than those with an expected profit increase, according to Fannie’s survey. More lenders say they are concerned about increased competition from other lenders for business.

Source: Fannie Mae

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New-Home Prices Hit Record High

New-Home Prices Hit Record High

The median price for a new single-family home reached a record high in May of $345,800, the Commerce Department reports. Buyers will be paying a huge premium for new construction, as new-home prices are now 16.8 percent higher than they were a year ago.

So far, however, the higher price tags don’t seem to be spooking home shoppers. In May, 61,000 new homes were purchased—a 2.9 percent increase from April and an 8.9 percent increase from a year ago, the Commerce Department reports. “Builders are focused on the mid to upper end of the housing market,” says Joseph Kirchner, realtor.com®’s senior economist. “It means that it will be more difficult to find more affordable homes for first-time buyers, millennials, and low-income people.”

Only 6,000 newly constructed homes sold in May were priced between $150,000 and $199,999. Further, there were about 14,000 sales in the $200,000 to $299,999 range. New homes now cost about 36.8 percent more than previously existing homes, which also reached record-high prices in May.

Regionally, new-home sales increased the most in the West last month, posting a 13.3 percent month-over-month jump, followed by a 6.2 percent increase in the South. New-home sales, meanwhile, fell 10.8 percent in the Northeast and plunged 25.7 percent month-over-month in the Midwest.

Source: National Association of Home Builders and “New Homes Just Keep Getting Pricier, But Buyers Keep Coming,” realtor.com® (June 23, 2017)

Home Security tips from OOMA Home Security

Home Security tips from OOMA Home Security

Summer time is one of the largest times for home break ins.  Omma home security has offered a few sound advice ideas for you to keep your home, family and valuables safe while you are away for vacation or even just at work during the summer hours.

1st home security tip is to get a for or front door surveillance system.  It’s shown a lot of home break ins happen at the front door, after no one answers a knock or ring of the bell.  The use of a remote app to “answer” the door cuts these types of break ins by over 70%.

The 2nd security tip it do be sure your 1st floor windows are locked and secured. these are some of the easiest points of entry for a would be thief.  By locking the windows the burglar now needs to make a lot more noise to get into your home.

Window ac units are easily pushed, securing these with lock downs or installing motion sensors where you have these units will cut down on this being the entry point.

Setting up lights on timers that have variable time settings is the oldest but most effective way to still confuse and deter criminal activity.

Installing a home security system like OOMA is the final piece of the puzzle when trying to protect your home during the summer and almost any time during the year.

12M Consumers May Get Credit-Score Boost

12M Consumers May Get Credit-Score Boost

The three largest credit-reporting agencies will begin cleaning up credit reports in July, which could help lift the credit scores of about 12 million consumers.

In a survey by the Federal Trade Commission, one in four people say they spot errors in their credit reports, most commonly concerning tax liens and civil judgments. Up to half of tax lien data on a credit report is inaccurate or incomplete, says Eric J. Ellman, senior vice president for public policy and legal affairs at the Consumer Data Industry Association. Civil judgments—which means a court has ruled a person owes money—also tend to be ripe with errors or omissions on a credit report, experts say. Consumers can dispute the errors, but the process can be cumbersome.

Beginning July 1, Equifax, Experian, and TransUnion will automatically exclude tax lien and civil judgment records from credit reports if they are missing a person’s name, address, Social Security number, or date of birth. Claims that do contain this key information, however, will remain on credit reports.

Six percent of Americans with a credit score—or 12 million— likely will see their score go up once the new policy takes effect. About 11 million could see an increase of about 20 points. “A lot of people who have liens or judgments against them already have crummy credit to begin with,” says Keith Gumbinger, vice president at HSH.com, a mortgage resource website. “A 10- or 20-point increase isn’t going to make a difference for a lot of borrowers.”

But borrowers who are on the cusp of qualifying for a home loan may stand to benefit the most. For example, Gumbinger says, a would-be buyer with a credit score of 570 who receives a 10-point uptick may be able to qualify for an FHA loan. FHA loans require a minimum 580 credit score.

Source: “Have a Bad Credit Score? It Could Soon Get Better – But Is it Enough to Buy a Home?” realtor.com® (June 22, 2017)

Steadier Mortgage Rates Buoy Loan Demand

Steadier Mortgage Rates Buoy Loan Demand

Mortgage applications for refinancing and home purchases remained elevated last week as mortgage rates continued to give consumers incentive to make a move.

“Both the 10-year Treasury yield and the 30-year conventional mortgage fixed rate held steady last week, keeping rates well below the recent highs,” says Lynn Fisher, the Mortgage Bankers Association’s vice president of research and economics. “The recent pause in the upward movement of interest rates continues to encourage late-to-the-game borrowers to refinance and to assist those ready to purchase.”

Total mortgage application volume increased 0.6 percent on a seasonally adjusted basis last week, the MBA reported Wednesday. Still, total volume is nearly 14 percent lower compared to a year ago.

The low rates boosted refinance activity, with volume 2 percent higher week over week. Meanwhile, applications for home purchases dropped 1 percent last week. However, purchase applications remain 9 percent higher than the same week a year ago.

The average on a 30-year fixed-rate mortgage was unchanged last week at 4.13 percent, the MBA reports.

Source: “Mortgage Applications Hold Steady as Rates Remain Low,” CNBC (June 21, 2017)