Ally Financial Offers Mortgages Again

Ally Financial Offers Mortgages Again

After two years out of the mortgage business completely, Ally Financial Inc. has decided to re-enter the business and offer new home loans to customers.

Ally’s GMAC Mortgage unit was one of the largest lenders of subprime mortgages prior to the 2008 housing crisis. It now plans to offers home loan originations next year.

“Don’t think of this as Ally going down the road of the old GMAC,” Jeffrey Brown, Ally’s CEO, said at a recent Goldman Sachs Group Inc. financial conference in New York. Brown vowed that the mortgage company will do things differently this time around.

Ally spokeswoman Gina Proisa says that the bank does not have plans to securitize its originations and it doesn’t plan to keep any servicing rights or build out a servicing operation. Ally will provide more details about its new product offerings in February, but it does not expect to start offering risky products like GMAC did.

During the housing boom in 2006, GMAC’s Residential Capital once ranked 12th among U.S. subprime lenders, according to Inside Mortgage Finance. Ally exited the home lending business in 2013, which led to more than $10 billion in losses and a $17.2 billion U.S. bailout.

Source: “Ally Returns to Mortgage Business Two Years After Total Exit,” Bloomberg Business (Dec. 11, 2015)

Fannie, Freddie Halt Foreclosures for the Holidays

Fannie, Freddie Halt Foreclosures for the Holidays

Fannie, Freddie Halt Foreclosures for the Holidays

Mortgage financing giants Fannie Mae and Freddie Mac announced they will suspend foreclosure evictions during the holiday season. The holiday moratorium, which the government-sponsored enterprises have done for the last few years, will begin Dec. 18 and run until Jan. 3, 2016.

During that time, Fannie Mae and Freddie Mac say they will not conduct any eviction lockouts and allow families to remain in their homes during the holidays. However, legal and administrative proceedings for evictions will continue during that time, but families will be permitted to stay in their homes.

The moratorium will apply to all foreclosed, occupied single-family homes as well as 2-4 unit properties on which Freddie Mac or Fannie Mae guarantees or owns the mortgages.

“As we have done in past years, we are suspending evictions during the holidays,” says Joy Cianci, senior vice president of credit portfolio management for Fannie Mae. “We also continue to remind home owners who may be struggling with their mortgages to reach out for help. Options are available to avoid foreclosure, and we want to help pursue those options whenever possible.”

Source: “Fannie Mae, Freddie Mac Suspend Foreclosure Evictions During Holidays,” HousingWire (Dec. 10, 2015)

Why You Should Avoid Using Periods in Texts

Why You Should Avoid Using Periods in Texts

English teachers will cringe, but a new study suggests that using a period in your text messages can make the message appear “less sincere” than if no punctuation is used to end a statement.

Researchers at Binghamton University’s Department of Psychology studied the communication behavior of 126 undergraduates through either text messages or handwritten notes. Texting was chosen as “one of the most frequently used” communication methods and “mimics face-to-face communication,” according to the study, titled “Texting Insincerely: The Role of the Period in Text Messaging.”

“When the exchanges appeared as text messages, the responses that ended with a period were rated as less sincere than those that did not end with a period,” according to the study. The study found there was no difference whether punctuation was used on handwritten notes.

“When speaking, people easily convey social and emotional information with eye gaze, facial expressions, tone of voice, pauses, and so on,” says lead researcher Celia Klin. Texting omits social cues and so “it makes sense that texters rely on what they have available to them — emoticons, deliberate misspellings that mimic speech sounds and, according to our data, punctuation.”

Source: “Study Says Using Periods in Text Messages Is ‘Less Sincere,’” AJC.com (Dec. 9, 2015)

NAR Teams with Boys & Girls Clubs of America

NAR Teams with Boys & Girls Clubs of America

The National Association of REALTORS® has announced that it is partnering with the Boys & Girls Clubs of America to show support for the nation’s youth. Starting in 2016, NAR and BGCA will collaborate to find positive ways to impact communities across the country as local and state associations team with their neighborhood clubs and determine volunteer opportunities and resources that are needed.

NAR and BGCA have launched a co-branded web page at realtor.org/BGCA that will serve as a resource for associations and members and includes a club locator, tool kits for getting involved, and a list of sample volunteer activities.

“BGCA has been close to my heart for many years, and as I begin my NAR presidential term, I am very excited that REALTORS® will be partnering with their local clubs and offering their time and resources to make a difference in the lives of their communities’ children,” says NAR President Tom Salomone.

BGCA is a youth development organization that serves nearly 4 million kids and teens annually in the U.S. State and local REALTOR® associations will be offering their time and resources to aid their local groups, with activities ranging from clean-up days to holiday-themed parties to tutoring assistance and career days.

“We are proud to partner with NAR, state, and local REALTOR® associations and the more than 1 million REALTORS® nationwide,” says Jim Clark, president and CEO of BGCA. “This partnership will have an immediate and profound impact on clubs, communities, and most importantly, young people across the country. REALTORS® live and work in every ZIP code in the country and, like Boys & Girls Clubs, are woven into the fabric of the communities they serve. We look forward to this impactful partnership and working together, hand-in-hand, on volunteer projects, club improvements and mentoring, as well as fundraising and awareness initiatives to enable more young people to achieve great futures.”

Associations that participate in the BGCA partnership may be able to meet their “Community Involvement” or “Community Investment” requirement under NAR’s Organizational Alignment/Core Standards policy.

Source: National Association of REALTORS®

Repeat Buyers Plunge: Fannie Offers Help

Repeat Buyers Plunge: Fannie Offers Help

The percentage of repeat home buyers has fallen 40 percent between 2002 and 2014, according to mortgage financing giant Fannie Mae’s research.

Why the drastic drop? Jude Landis, vice president of single-family credit policy at Fannie Mae, speculates that for home owners who are credit eligible to buy another home it could be low equity in the existing home that may be preventing them from moving.

Landis urges lenders to promote several loan products offered by Fannie Mae that could help these creditworthy home owners who are “locked in” by insufficient equity to move.

For example, HomeStyle Renovation is a product that allows home owners to finance updates such as a kitchen renovation, a bedroom addition, or modifications for aging in place.

Also, Landis says that earlier this year Fannie Mae updated its Selling Guide policy to make it easier for borrowers to finance a new home while converting their previous home into a rental property. The update includes ways underwriters can include rental income in the debt-to-income calculation.

HomeReady is a new program, Landis says, that expands the eligibility to low and moderate-income creditworthy borrowers to finance homes in designated low-income, minority, and disaster-impacted areas. The product offers low down payment financing – up to 97 percent for the purchase of a one-unit property and up to 95 percent for a limited cash-out refinance. The program also includes a feature for extended family households that allows lenders to consider income from a non-borrower household member as a compensating factor in figuring the debt-to-income ratio. It also allows consideration of rental income from an accessory dwelling unit, such as a basement apartment.

Source: “Serving Creditworthy Borrowers in Today’s Market,” Fannie Mae Commentary (Dec. 3, 2015) and “Fannie Touts Benefits of Recent Guideline Changes,” Mortgage News Daily (Dec. 4, 2015)