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	<title>Mortgages &#8211; HOA ALLIANCE</title>
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	<title>Mortgages &#8211; HOA ALLIANCE</title>
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	<item>
		<title>729 Bonaventure Grand Opening</title>
		<link>https://www.hoaalliance.org/729-bonaventure-grand-opening/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Mon, 15 Dec 2025 00:48:56 +0000</pubDate>
				<category><![CDATA[Atlanta HOA Alliance]]></category>
		<category><![CDATA[Community Events]]></category>
		<category><![CDATA[Community News]]></category>
		<category><![CDATA[Fulton County HOA]]></category>
		<category><![CDATA[Georgia HOA]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/729-bonaventure-grand-opening/</guid>

					<description><![CDATA[Atlanta is making leaps forward in the mission to eradicate homelessness with an impressive string of achievements in 2024. Following the impactful $60M Homeless Opportunity Bond, the largest in the city's history, Atlanta introduces 700 new affordable housing units, including the innovative development of The Melody in South Downtown. Today, we proudly mark the grand opening of 729 Bonaventure—a cornerstone of the Housing Office’s Rapid Housing Initiative. This site brings 23 housing units exclusively for the chronically unsheltered, echoing the success of The Melody with comprehensive support services. Witness the power of innovative programs and partnerships as Atlanta builds a brighter future for all its residents. 

#12DaysofAccomplishments #MovingAtlantaForward #OneSafeCity]]></description>
		
		
		
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		<title>Are Local Bank Escrow Accounts Secure for Home Sellers and Buyers?</title>
		<link>https://www.hoaalliance.org/are-local-bank-escrow-accounts-secure-for-home-sellers-and-buyers/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Fri, 19 May 2023 16:23:10 +0000</pubDate>
				<category><![CDATA[Homeowners]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/?p=324779</guid>

					<description><![CDATA[Written by Jeff Lazerson Missing from the headlines of regional bank collapses in recent weeks was the mention of real estate transactional risk. Homebuyers and sellers, this is something for you to start thinking about since banks are dropping like dominoes . Three to fall were Signature Bank, Silicon Valley Bank , and most recently, First Republic Bank . First Republic was the second-biggest bank crash in American history. More recently, PacWest Bancorp and Western Alliance made the news over their stock price volatility. Today, we turn our attention to escrow trust accounts, which do not offer any additional layers of FDIC protection when buying or selling a home than traditional checking, savings and money market accounts. It’s all the same. And in high-cost California, those escrow accounts often hold tidy sums of money well above the $250,000 cap for federal insurance. And adding to the concerns, if your escrow company’s bank is coincidentally your personal bank, you may have less FDIC insurance protection because the cap is $250,000 per person, per bank. It’s not per bank account, per person at one institution, according to Jessica Felton, a lawyer at the firm RELAW in Westlake Village. “Funds in an escrow company’s trust account are insured just like other accounts, each depositor person (natural person or legal entity with a separate tax ID number) is insured up to their limit ($250,000) for all funds held at that particular financial institution,” said Felton. “Escrow companies often hold significantly more (than) the limit amount for individuals, which would not be insured if the bank failed.” READ MORE: FDIC faces $23 billion in costs related to bank failures Full disclosure: I have an ownership interest in Prosper Escrow Corp. at which Felton is legal counsel. A person walks past a First Republic bank branch in Manhattan on April 24 in New York City. “The party insured is the depositor (for escrow that’s generally the buyer), not the potential beneficiary (for escrow that’s generally the seller) until the transaction closes. So, if we have a transaction with two buyers and two sellers, it is only insured for the two buyers ($500,000 total) up until closing. After it closes, that would shift and the seller would be insured on the funds, not the buyer. Only one side can be entitled to the funds at any given time,” said Felton. “The average deposit is 3% of the sales price,” said Felton. For example, on a $1 million sales price, 3% would be $30,000. So, what is the fuss, you ask, if you are covered up to $250,000? MORE ON HOMEBUYING: Fannie, Freddie increasing ‘debt’ fees on borrowers this summer Well, the borrower will need to bring in the rest of the down payment and deposit it into escrow before the lender funds the loan. How much could that be? A lot! Let’s ponder the risks for someone buying that $1 million home mentioned above. Say the borrower’s mortgage is $600,000, meaning they’re putting down an impressive $370,000 in addition to the initial earnest money deposit. Don’t forget about buyers’ side closing costs, too. Whether it’s your money or mom and dad gave you a ginormous gift, the potential exposure is still there. Banks crash. A seller’s exposure occurs when the buyer and the buyers’ lender pay you off (assuming it’s not an all-cash deal). You have a million dollars sitting in escrow with just $250,000 of insurance. Can you say exposure? So, be sure to check out the escrow company and not just the bank. Under federal law, the buyer chooses their settlement servicer. In practice, it’s the real estate agents or builder who steers this business. Southern California resale real estate transactions are arranged through escrow companies licensed and regulated by the Department of Financial Protection and Innovation. Or California-licensed real estate brokerages may have in-house escrow companies licensed and regulated by the same California Department of Real Estate. The real estate brokerage’s escrow must have a dog in the fight to participate. It must be representing a principal (buyer, seller or both or arranging the mortgage financing). Otherwise, broker-owned escrows cannot participate. It’s common to see Southern California homebuilders with new tracts engage with title insurance companies, which provide both escrow and title insurance services. Title companies are licensed and regulated by the California Department of Insurance. Escrow companies licensed by DFPI must go through what seems like a Secret Service-type background check prior to licensing. And all workers must have their information (photos, fingerprints, etc.)  submitted to the DFPI (via the Escrow Agents Fidelity Corp.) within 10 days of employment. Escrow companies tend to keep substantial amounts of money in their trust accounts. The DFPI wants to avoid seeing any escrow company on tomorrow’s newspaper’s front page for absconding trust funds. While the California Department of Real Estate has a reputation of being a mean dog on a short leash when it comes to enforcement, in-house real estate broker-owned escrow companies do not have anywhere near the oversight rigor mandated by the DFPI. I “thank” the political influence of the California Association of Realtors for these standards. America has a plethora of economic headwinds right now. To name just three, we have a debt ceiling coming due with congressional Democrats and Republicans playing chicken with each other. The Federal Reserve is struggling with ways to tame inflation-increasing the prime borrowing rate on May 3 to 8.25%. (It was less than half of that at 4% on May 4, 2022.) And, Wall Street has major concerns about the stability of the banking system. How else can you protect yourself especially when big bucks are involved? Felton points out there is additional FDIC insurance coverage accessible beyond the $250,000 — if you’re willing to pay for it. She also recommends you direct the escrow officer to set up a separate interest-bearing trust account for your trust funds. No need to combine your funds with the other trust funds and the primary trust account.= Freddie Mac rate]]></description>
		
		
		
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		<title>First-time homebuyer pickle: Sparse inventory, high rates, looming recession</title>
		<link>https://www.hoaalliance.org/first-time-homebuyer-pickle-sparse-inventory-high-rates-looming-recession/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Thu, 09 Mar 2023 17:09:05 +0000</pubDate>
				<category><![CDATA[Homeowners]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/?p=323254</guid>

					<description><![CDATA[Written by Jeff Lazerson It’s bad timing, for sure, if you’re looking to get on the road to homeownership. You’ll find a meager inventory of homes for sale, largely a list of overpriced crumbs. Certainly, mortgage rates have dropped nearly a full point since November, but they remain double what they were during the pandemic. Talk about an affordability punchout. Sorry to say, it’s going to get worse before it gets better. Let us count the ways, starting with interest rates. On Feb. 1, the Fed raised its benchmark rate just a quarter-percentage point, a mere 48 hours before hiring news would ricochet across the markets. The Labor Department on Feb. 3 reported a 3.4% unemployment rate — its lowest level in nearly 54 years — as employers added 517,000 new jobs . Five days later, Federal Reserve Chairman Jerome Powell had to eat crow following his previous transitory inflation remarks. “We think we are going to need to do further rate increases,” Powell said. “The labor market is extraordinarily strong.” To be fair, nobody was expecting the hiring pace to be so red-hot. Job counters were expecting a gain of 106,000. “The Fed would have raised rates one-half point if the data came out sooner (ahead of the Fed meeting),” said Raymond Sfeir, director of Anderson Center for Economic Research at Chapman University. The financial markets had already built in a one-quarter percent prime rate increase for both the March and June Fed meetings, projecting the prime rate would land at 8.25%. Now it’s looking more like we’ll see 8.5% this year, perhaps another quarter-raise at the Fed’s September meeting. Translation: Expect higher interest rates for short-term credit cards, home equity lines of credit and auto loans. While the 30-year fixed mortgage isn’t directly tied to the prime rate, more rate hikes won’t help in the near term as mortgage markets will be seeking higher yields for investors. Expect mortgage rates to rise over the next several months. If you can, take an even higher rate now. The tradeoff for a higher rate is either zero points or zero points and zero cost. Plan on knocking your rate way down by refinancing in late 2023. Powell has been saying for months that job losses will be the roadkill consequential to fighting inflation — getting us back to a 2% inflation rate. What does that do for homebuying confidence, first-timer or not? Fannie Mae Home Purchase Sentiment Index, a national housing survey, indicated only 17% of respondents in January believed it was a good time to buy. “For consumers, the same affordability issues are persisting, as they continue to indicate that home prices and high mortgage rates make it a ‘bad time to buy’ a home,” said Doug Duncan, chief economist at Fannie Mae. “Until we see improvements in affordability via lower home prices and mortgage rates, we expect home sales to remain muted in the coming months.” What else does that portend? A recession. The Wells Fargo Economics Group released an economic outlook Feb. 8 indicating the likelihood of a mild recession in the second half of 2023. Charlie Dougherty, director and senior economist with Wells Fargo’s Corporate and Investment Bank cited energy prices, China’s economy opening up after COVID lockdowns and the war in Ukraine as the top of the list of inflationary concerns. “Balance of risk is tilted to the upside. This could increase inflation risk and could cause (lead to) a more severe recession,” Dougherty said. Or maybe no recession. “All the talk about recession is total bull—-,” said Christopher Thornberg, founding partner at Beacon Economics LLC. “There is no material imbalance in the economy. Home prices went up 45% over the last few years. That’s insane. Now prices have to normalize. Why do we have such a tough time saying things are so damn good?” If, and when a recession hits, you can expect mortgage rates and the prime rate to drop right along with home prices. This is what I call the homebuyer timing pickle. Yes, I think we are in for a recession with mortgage rates starting to fall in the fourth quarter. “Wealth accumulation is long-term. It’s not to time the market,” said Jordan Levine, chief economist at the California Association of Realtors. It may be a very long time until the housing market normalizes with respect to a balance of home sellers and homebuyers. Other than life cycle sellers (divorce, death and job relocations, for example), everyone else is staying put. Mortgage rates around 2%-3% secured during the pandemic, plus low property tax rates tell us so. Right now, first-time buyers can at least get in. They aren’t competing with large down payment and all-cash buyers. Over time, property values always increase. Can you say inflation? Freddie Mac rate news The 30-year fixed-rate averaged 6.12%, 3 basis points higher than last week. The 15-year fixed-rate averaged 5.25%, 11 basis points higher than last week. The Mortgage Bankers Association reported a 7.4% mortgage application increase from last week. Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $726,200 loan, last year’s payment was $1,072 less than this week’s payment of $4,410. What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with 1 point: A 30-year FHA at 5.25%; a 15-year conventional at 4.875%; a 30-year conventional at 5.625%; a 15-year conventional high balance at 5.5% ($726,201 to $1,089,300); a 30-year high balance conventional at 5.99%; and a jumbo 30-year fixed at 6.375%. Note: The 30-year FHA conforming loan is limited to loans of $644,000 in the Inland Empire and $726,200 in LA and Orange counties. Eye catcher loan program of the week: A 30-year jumbo fixed-rate for the first five years at 5.25% with 1 point cost. Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or jlazerson@mortgagegrader.com. Shared from OC Register]]></description>
		
		
		
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		<title>Home equity lines, second mortgage lending spikes as consumer debt soars</title>
		<link>https://www.hoaalliance.org/home-equity-lines-second-mortgage-lending-spikes-as-consumer-debt-soars/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Mon, 09 Jan 2023 21:10:15 +0000</pubDate>
				<category><![CDATA[Homeowners]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/?p=322959</guid>

					<description><![CDATA[Written by Jeff Lazerson “Let the good times roll” might be the perfect tagline for credit card companies financing consumer debt in 2022. With consumer debt piling up, many homeowners might be unaware their home equity could offer lower interest rates and quicker debt resolution. Call it a spending binge or spending bender. Thirty-five percent of Americans amassed holiday debt in 2022, according to an annual Lending Tree study.  The average amount for those taking on debt was $1,549, the study says. That’s up 24% from last year and is the highest in the eight-year history of LendingTree’s survey. Credit card balances increased by $38 billion in the third quarter of 2022 compared with the previous quarter, according to the Federal Reserve Bank of New York. Credit card balances increased 15% year over year in the same quarter, marking it the largest increase in more than 20 years. The average credit card interest rate carrying charge is 19.2%, according to Money Geek. The average annual percentage rate or APR for a credit card cash advance is 25%. Even though borrowing costs are much higher across the board (mortgages, auto loans and credit cards) than 12 months ago, equity-rich, consumer debt-ridden homeowners have choices besides astoundingly high credit card rates. Home equity lines of credit (or HELOCS) along with seconds mortgages should be considered for those short of funds. These types of loans can completely wipe out credit card balances in short order — say less than six months. While there is no telling how the funds were being spent, total home-equity lines of credit and closed-end second mortgages for the first nine months of 2022 was up 55.3% from the same period last year, according to Inside Mortgage Finance. California homeowners took out more than $11 billion in HELOCs in the third quarter of 2022, according to Attom Data Solutions. In our region, Los Angeles County accounted for 9,865 new HELOCs, Orange County had 4,518, Riverside County 2,830 and San Bernardino County had 1,886, says the ATTOM report. Outstanding HELOC balances stood at $322 billion at the end of the third quarter, the New York Fed says. In general, depositories (banks and credit unions) are your best bet for tapping home equity. To my knowledge and experience, depositories don’t charge application fees nor do they charge any closing costs. Many do charge annual renewal fees of say $75 to $100. They may also charge an early payoff penalty of perhaps $500 if you close the loan in the first three years. So, let’s compare payments. For $30,000 of credit card debt racking up 19.2% in interest payments, a minimum interest-only payment (not paying back principal) would be $480. Switch to a HELOC interest-only rate at 8.75% and the payment shrinks to $219. While the term is typically 30 years, borrowers can cut that down incrementally. The mental game a borrower should play with respect to the HELOC is to pretend they must still pay the entire $480 — as if it was the credit card rate. That way you are powering down the principal balance by paying an additional $261 toward the principal. Fixed-second loans could carry a rate closer to 10%, but it’s fixed for the term, for example, 30 years. Moreover, all second lien rates largely depend on the ability to qualify, considering income and overall debts, the lowest middle FICO scores of borrowers, and remaining equity (property value minus total liens). Depositories do tend to be more conservative regarding the total of the combined liens, income for qualifying purposes and the appraisal value. If the depository says no or won’t lend as much as you want, the mortgage broker community has access to more aggressive second-lien instruments. A borrower will likely pay a higher rate and have to pay closing costs. For example, a borrower can get up to 90% cash-out on a second in the mortgage broker community. Depositories tend to be far more conservative. For self-employed borrowers. you can also get a $1 million second, qualifying on bank statements. Depositories don’t entertain income based on net bank deposits. A note of caution on those interest payments. “Mortgage interest that is deductible is related to “buying, building or substantially improving your home. You cannot deduct mortgage interest to pay off credit card debt,” said Dr. Danielle Lazerson, assistant professor of accounting at San Jose State University. (Proud disclosure: Danielle is my daughter.) “With the knowledge that the debt is not erased and still has to be paid off, it is a good idea to lower your overall interest rate. The interest (paid) would not be tax deductible regardless since it is credit card debt. It is better to have a lower rate overall,” said Danielle Lazerson. So, shop around. Do a Google search for the cheapest HELOC rates available, for example. Ask for recommendations from those you trust. Depositories may match the price or beat a competitor’s written quote. If you have bank accounts, stock accounts or retirement funds that you might be willing to move over, chances are the bank may further knock down your borrowing rate. “The key is if you do this, you don’t want to run up your credit cards again,” said Rick Sharga, executive vice president, Attom Data Solutions. Freddie Mac rate news The 30-year fixed rate averaged 6.48%, 6 basis points higher than last week. The 15-year fixed rate averaged 5.73%, 5 basis points higher than last week. The Mortgage Bankers Association reported a 13.2% mortgage application decrease from two weeks earlier. Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $726,200 loan, last year’s payment was $1,432 less than this week’s payment of $4,581. What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.625%, a 15-year conventional at 5.25%, a 30-year conventional at 6%, a 15-year conventional high balance at 5.625% ($726,201 to $1,089,300), a 30-year high balance conventional at 6.5% and a jumbo]]></description>
		
		
		
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		<title>North Carolina Homeowner Fighting To Reverse HOA Foreclosure</title>
		<link>https://www.hoaalliance.org/north-carolina-homeowner-fighting-to-reverse-hoa-foreclosure/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Mon, 26 Dec 2022 18:41:40 +0000</pubDate>
				<category><![CDATA[Homeowners]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/?p=322780</guid>

					<description><![CDATA[Written by HOA Management Is it possible to reverse HOA foreclosure sales? One homeowner in North Carolina is trying. THE DEBT THAT STARTED IT ALL Trenita Rogers had been living in her fully-paid Pitt County home for 12 years. One day, she received a call from a man asking her when she planned to move out. While she initially thought it was a joke, Rogers soon found out the horrible truth. Rogers had apparently racked up a $1,491 debt to her HOA, the Irish Creek Section 2 Owners Association. This came as a shock to her because she didn’t even know she belonged to an HOA in the first place. The $1,491 in unpaid fees eventually resulted in a lien on her property, which led to her home being foreclosed and sold in a bid for $221,000. Her home had a value of $413,000. “I’ve been there for 12 years. I’ve never paid an HOA,” Rogers told ABC 11 News, continuing that she never even got an invite to an HOA. Rogers added that, if she had known about the HOA and her debt, she would have paid it off in full. NO KNOWLEDGE OF THE FORECLOSURE According to court records, the HOA filed liens against the property in question in 2013 and 2017. Both of those liens stemmed from unpaid dues. However, Rogers was apparently unaware of these liens. Additionally, Rogers did not receive her lawsuit papers. They were never served to her. The papers were sent out as certified mail during the COVID-19 pandemic. But, the carrier did not secure Rogers’ signature. Instead, the carrier wrote “C-19,” which stands for COVID-19. At the peak of the pandemic, carriers would do this to limit contact and promote social distancing. Rogers claimed she never saw those papers either. Someone from the Pitt County Sheriff’s Office also attempted to deliver a notice to Rogers in person last September. However, their efforts were unsuccessful. FIGHTING TO GET HER HOME BACK Rogers has since moved out of her home and is living with a friend. Now, Rogers is working to reverse the HOA foreclosure and get her home back with the help of her attorney, Jim White. Rogers has a court date set this month. Shared from HOA Management]]></description>
		
		
		
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		<title>Homebuyers face 91% increase for mortgage credit reports starting Jan. 1</title>
		<link>https://www.hoaalliance.org/homebuyers-face-91-increase-for-mortgage-credit-reports-starting-jan-1/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Fri, 25 Nov 2022 17:20:32 +0000</pubDate>
				<category><![CDATA[Homeowners]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/?p=322185</guid>

					<description><![CDATA[Written by Jeff Lazerson This past Monday morning I choked on my coffee after reading a price increase notification letter from Equifax Mortgage Services, my firm’s former mortgage credit reporting vendor. Starting Jan. 1, the notice said, a FICO-scored joint (spouses) credit report is rising to $74.53 from $39.01. That’s a 91% price increase or nearly double the price. Say what? But wait, it gets worse. Terry Clemans, executive director of the National Consumer Reporting Agency, sent me a letter confirming the vast majority of the mortgage lending industry will most likely incur “a massive mortgage credit report price increase in 2023.” “This is a paradigm shift in the pricing structure for credit scores and is being dictated to the mortgage credit reporting industry from all three national credit bureaus and/or FICO,” the letter states. The pricing, which will be tiered, includes a wholesale price increase of less than 10% for the top tier of roughly 46 lenders, about 200% for six lenders in the middle tier, and more than 400% for all other mortgage lenders in the nation,” NCRA’s letter continues. None of the lenders were named. In the bigger picture, this is a disastrous omen for anybody buying, selling or refinancing a property. The sudden jump in prices is an unspoken green light from mortgage regulators and policy writers for every other real estate settlement provider to consider a similar tactic. In other words, if credit-score companies can hike fees, then what’s to stop others, like underwriters,  from following suit? How FICO’s credit scoring system works Front and center in the mortgage loan approval process is a credit report pulled by a mortgage loan originator. The report will come from all three credit bureaus (Experian, Equifax and TransUnion) and include their accompanying FICO credit scores. Lenders typically use the lowest middle FICO score to either approve or deny a loan and loan pricing. The higher the middle FICO the better the rate and/or lower origination point cost. The industry calls this a tri-merged credit report. If you don’t have a tri-merged credit report, you’ve got no chance at mortgage financing. FICO, also known as Fair Isaac Corp., and these three credit companies hold the monopoly on tri-merged credit reporting; there are no other options — yet. The Federal Housing Finance Agency (regulator and conservator for Fannie Mae and Freddie Mac) recently approved Vantage Score as another credit scoring system for mortgage lenders. FHFA indicated it would take years to onboard Vantage Score. Vantage Score is jointly owned by the three main credit bureaus and will be a “competitor” to FICO, something it hasn’t seen in ages. Consumer credit reporting companies such as Kroll, CoreLogic Credco and even a separate division of Equifax (Equifax Mortgage Services) buy the credit and credit score information, markup the cost, and then sell the borrowers’ tri-merged credit report to the mortgage firm from which borrowers apply for mortgage credit. Mortgage lenders and mortgage loan originators are prohibited by federal law from marking up the price of the credit report. It’s a straight pass-through consumer charge. I reached out to FICO with some questions regarding the price hikes. Here is the company’s response, in part. Beginning in December, FICO adopted a tier-based royalty structure for mortgages, which will be based on the volume of FICO scores delivered to lenders. With this royalty increase, FICO collects approximately $2-$8 total for all three scores out of an up to $50 tri-merged report, according to Jim Wehmann, executive vice president of Scores-FICO. Wehmann declined to provide the number of mortgage FICO scores it provides each year. He also declined to name the 46 lenders in tier one and the six lenders in tier two. FICO also would not explain how much the royalties would rise for credit reports of more than $50. Nor would they explain why the price is going up 91% for some mortgage brokers (like me). Who pays for the reports? Mortgage lenders and mortgage brokers have largely paid upfront for the mortgage applicants’ credit reports as a cost of doing business. They would bill the borrowers at closing. Federal law allows mortgage lenders/brokers to charge applicants upfront for the credit report. The lenders would typically absorb the cost of the credit reports on both canceled loan applications and denied loans. In my mortgage brokerage experience, we fund one borrower’s mortgage out of approximately every three applicants we run credit on. A borrower’s cold feet, a competitor snagging said borrower or a loan denial typically are the reasons for a loan fallout. I’m probably typical for the industry. By providing tiered pricing, I asked  FICO if the company is picking winners and losers as higher volume shops will get a huge price advantage. And has FICO estimated how many mortgage companies will be in jeopardy of going out of business due to the pricing disparities? FICO declined to comment. Representatives with FHFA, TransUnion and Experian declined to comment. Equifax, however, did respond. In addition to explaining tiered pricing and acknowledging the pricing increase letter my mortgage firm received, an Equifax spokesperson said the FICO price increase “is unprecedented in the size of the increase, with many customers receiving more than 400% increases.” What about the legality of this? “This increase is mystifying because it has to be passed on by the brokers to their residential clients,” said attorney Mike Hensley. “Forgetting regulatory concerns, it may well raise antitrust concerns of monopolization, price fixing, and tying as well as possible unconscionability claims.” Freddie Mac rate news The 30-year fixed rate averaged 6.58%, 3 basis points lower than last week. The 15-year fixed rate averaged 5.9%, 8 basis points lower than last week. The Mortgage Bankers Association reported a 2.2% mortgage application increase from the previous week. Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $647,200 loan, last year’s payment was $1,361 less than this week’s payment of $4,125. Related Articles What I see: Locally, well-qualified borrowers can get the following]]></description>
		
		
		
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		<title>Will these zero-down loans for homebuyers doom real estate again?</title>
		<link>https://www.hoaalliance.org/will-these-zero-down-loans-for-homebuyers-doom-real-estate-again/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Tue, 22 Nov 2022 17:38:22 +0000</pubDate>
				<category><![CDATA[Homeowners]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/?p=322147</guid>

					<description><![CDATA[Written by Jeff Lazerson Nearly a year into a special lending program aimed at underserved homebuyers, the initiative is soon to expand from a few banks to mainstream, non-banking lenders. Could these good intentions be the beginning of our next lending debacle?” Launched in February this year, the Special Purpose Credit Program is the government’s way of getting mortgage lenders to expand access to credit. More specifically, it gives mortgage lenders the freedom to come up with zero-down loan programs that support first-time buyers in underserved communities. There are no minimum government underwriting standards. “SPCPs are endorsed by HUD (U.S. Department of Housing and Urban Development), the CFPB (Consumer Financial Protection Bureau) and the OCC (Office of the Comptroller of the Currency). But they don’t provide guidelines,” said Jung Choi, a senior research associate at the Urban Institute’s Housing Finance Policy Center. “Lenders are on their own.” We’ve seen this movie before. It was called the “Great Recession and Mortgage Meltdown.” Lenders 15 years ago were under pressure from government officials and community stakeholders to lower the mortgage qualifying bar to make access to homeownership easier for Black, Brown and low-income borrowers. This pressure to broaden homeownership was admirable. Americans gain much of their community esteem and family wealth by owning property. A home provides stability and family shelter, a savings account of sorts for owners who benefit by paying down the mortgage (rather than paying rent) along with historical property appreciation. Let’s revisit for a moment the loose lending practices in 2006, which were a recipe for disaster. A class of unscrupulous mortgage lenders funded a cornucopia of predatory mortgages to unsuspecting homebuyers and refinance borrowers, getting them funded with little or nothing down. Oftentimes these deals came with easy underwriting requirements, too. Coupled with asleep-at-the-switch mortgage regulators and ivory tower policy writers, it was a predictable disaster that destroyed the American dream for many underserved homebuyers and their communities. Before we throw the baby out with the bathwater, let’s ponder whether no downpayment loans and looser underwriting are inherently bad. Several experts I interviewed cited a lack of down payment funds as a significant barrier to homeownership. So, zero down, zero closing cost SPCPs can work, they said, especially when reasonable underwriting standards are added to the credit decision rigor. Bank of America was one of the bigger banks to launch its own SCPC, the Community Affordable Loan Solution. The no-down payment program debuted Aug. 30 in specific Black and/or Hispanic-Latino metros across the U.S. including certain Los Angeles area census tracts. Here are some of the program highlights: \- Applicants must be first-time buyers from any race or ethnicity. They don’t have to be Black or Hispanic-Latino. \- Applicants get in with zero down payment. BofA pays the closing costs. And it provides a $15,000 equity “gift” for Los Angeles buyers. For example, an applicant pays $500,000 for a home with zero down. The starting mortgage balance is $485,000, thanks to the BofA gift. \- Prospective buyers must complete a homebuyer certification course before writing an offer. \- Buyers must be income qualified. BofA considers the total house payment plus monthly bills (even adding utilities which Fannie and Freddie do not) divided by the borrower’s monthly income. The bank also looks at the applicant’s history of paying bills on time for things like utility bills. Applicants can leverage those on-time payment histories for non-traditional credit references to overcome low or no credit scores. A BofA spokesperson declined to say how many people have applied in the Los Angeles market or what percentage of applicants were approved. And while the bank declined to provide the interest rate offered on its Community Affordable Loan Solution, a source who asked not to be identified because the person is not authorized to speak on behalf of BofA told me the rate is fixed at 7.125% for 30 years. That’s zero down with lender-paid mortgage insurance built into the rate. BofA also pays the customary  buyer closing costs. Here’s an example of how a loan would work under the BofA program: On a home sales of $500,000, the loan amount is $485,000 with a 7.125% interest rate. The principal and interest payment including BofA’s paid mortgage insurance built into the rate is $3,267.53 monthly. Now, add in the monthly property taxes at 1.25% for $520.83, and monthly homeowners insurance at roughly $121.25 and the total payment is $3,909.61. (This is assuming no HOA fees). It’s unclear if or when BofA will be expanding the program Orange, Riverside and San Bernardino counties. So, what about best practices for mortgage lenders to ensure both borrowers and lenders don’t fall into default — especially when it involves these zero-down mortgages? “As BofA has done, it is a best practice to require first-time homebuyer counseling,” said Jeff Jaffee, senior advisor at Housing Finance Strategies. “It is important to make sure borrowers understand all the benefits and risks of homeownership.” Prudent underwriting is likely another good reason. “Bank of America is holding these loans on its books,” said Guy Cecala, CEO, and publisher of Inside Mortgage Finance. “The last thing they want is to have bad loans (non-performing loans) on their books,” What happens if such programs become a free-for-all? Choi told me Fannie and Freddie are gearing up to roll out their own SPCPs. Mortgage lenders are going to be making those loans and selling them to F &#038; F. Let’s not forget the game of hot potato  leading up to the mortgage crisis. Mortgages got funded that should never have been funded. Those loans were sold to investors or pooled as mortgage-backed securities. Somebody else was left holding the bag when the borrowers couldn’t pay. Something else to consider: “Mortgage rates are high. Home prices are high. It’s not really a great time to buy a home,” said Choi. Mortgage police: Are you listening? Freddie Mac rate news The 30-year fixed rate averaged 6.61%, 47 basis points lower than last week. The 15-year fixed rate]]></description>
		
		
		
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		<title>FICO score simulator paves approval path for borderline homebuyers</title>
		<link>https://www.hoaalliance.org/fico-score-simulator-paves-approval-path-for-borderline-homebuyers/</link>
		
		<dc:creator><![CDATA[HOA Alliance]]></dc:creator>
		<pubDate>Thu, 07 Jul 2022 13:56:53 +0000</pubDate>
				<category><![CDATA[Homeowners]]></category>
		<category><![CDATA[Mortgages]]></category>
		<guid isPermaLink="false">https://www.hoaalliance.org/?p=320677</guid>

					<description><![CDATA[Written by Jeff Lazerson Bioseh Ogbechie was eyeing a newly constructed Downtown Los Angeles high-rise condominium. The mortgage program that could make this purchase happen required a minimum 660 middle FICO score. Ogbechie’s stood at 610. With a “what if” automated credit score simulator providing specific direction, Ogbechie (a client of mine) raised that FICO score to 698, an 88-point boost. His loan was subsequently approved. “I didn’t know the process was available. I appreciate being able to see and know what to do quickly,” he told me.” This was the difference between getting my loan or not.” So, what changed? Ogbechie agreed to be removed as an authorized user on someone else’s credit card reporting a 60-day late payment. He also paid down some credit card debt. The paper trail proof of these completed borrower tasks was provided to my firm’s credit agency, Advantage Credit. Then we pulled another credit report named Rapid Rescore. Bingo. The tools used to help borrowers to reach their targeted middle FICO scores are called “what if” simulators and “way-finder” and are provided by a company named Credit Expert, according to Mindy Leisure, director of rescoring services at Advantage Credit. “We have an 85 to 90% success rate on rescoring — getting what they need,” Leisure said. This does not mean every borrower’s score is going to get boosted right away or at all. Every once in a while we have a long-term credit report that takes a while.” The service, considered a credit investigation, is free of charge for borrowers. Federal law prohibits borrowers from paying for credit investigation (also known as a rescoring process). Generally, it costs $35 or more per account — and per bureau — to rescore a borrower. For example, if a collection was deleted from all three credit bureaus (Experian, Equifax and Transunion) it would cost the mortgage lender $105. In my experience, a plurality of accounts is needed for most borrowers to get them to the desired FICO score. Rescoring can be valuable. Fannie Mae and Freddie Mac require a minimum 620 middle FICO for loan approval. So, one point short at 619 can mean the difference between approval and denial. To be very clear, the “what if” simulator can do things like assess and potentially eliminate late payments, for example, when the borrower knows he or she can get a confirmation letter from the creditor. The “way-finder” option can’t make those types of assumptions. It’s limited to the exact data in the credit report without making any outside assumptions. For example, pay down a credit card to $3,000 from $6,000 and then you’ll likely get a score of X. More broadly, mortgages are priced on a matrix of the lowest middle FICO score and loan to value. Home loan point cost pricing is in 19-point increments. For, example, 620-639, 640-659, 660-679, etc. How does middle FICO scoring work? For example, a borrower has scores of 740, 660 and 660. The loan program requires a 700 middle score for its loan approval and best pricing. We can see what the likely results will be using either way-finder or what-if simulator. If we can get both 660 scores to land at 700, but we really only need one of the two 660 scores raised to 700, then we’ll just rescore one of the bureaus for that account. Mostly because of the inherent cost to the lender. The true beauty of this system is you can largely see the exact results before you spend the time, energy and money. Here’s a practical example: Let’s say you put 25% down on a Fannie loan amount of $600,000 on a 30-year fixed. Your rate is 5.25% with 1 point or a $6,000 cost as your middle FICO score was 685. After abiding by the FICO simulator suggestions, and after the rapid rescoring process, your middle FICO jumped to 745. That means your cost for the 5.25% rate dropped to zero points, saving you $6,000. Ask early on about the rescoring process. Will your lender help improve your score? It’s their dime, not yours. And will your lender recognize rescoring when it comes to the loan approval and or improved pricing? “Some lenders don’t allow for rescoring,” said Leisure. FICO credit scoring (300-850 are the ranges) has been around for more than two decades, according to John Ulzheimer, founder of CreditExpertWitness.com. “Inquiries affect your FICO anywhere from zero to 4 or 5 points,” he said. Ulzheimer thinks rapid rescoring is a good tool if the supporting documentation is done in an authentic manner. In other words, don’t get involved in FICO scoring fraud. Years ago, a sales rep came to my office claiming she was a credit repair expert and could do miracles for my clients when it came to improved credit scores and more loan approvals. She offered an example of a derogatory credit (repossession via Toyota) item she was able to get deleted for a client. When I asked how she was able to do that, she said “we created their letterhead and wrote a letter.” Over my 35-year career, I have rarely heard anything positive from clients that have gone to credit repair companies. Typically, the borrowers complained they spent hundreds of dollars and accomplished nothing. I did have exactly one credit repair person I recommended who was good at negotiating settlements with collection companies. She eventually left the business because it was too hard. Your mortgage loan originator may be able to accomplish a lot to boost your middle FICO score for you in short order and free of charge. Each rescore creates a new inquiry on your credit report, but if you do this in short order, it’s not going to further affect your credit scores, Leisure said. “As long as you re-pull credit within a 45-day shopping window,” she said. “Unless you applied for five new credit cards, then you are hosing yourself. There is no shopping window for cards.” Something else to note: As of]]></description>
		
		
		
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