5 Reasons Homeowners are not Taking Advantage of Refi Opportunities
Historically low mortgage rates have been circling the housing market for several years now. Low mortgage rates present opportunities for homeowners to refinance their homes, but recent data and analysis shows that they are not taking advantage of billions of dollars in savings.
Although the number of refinancers may appear to be large, it is actually down from over 7 million in April 2015. Black Knight reports that interest rates were under 3.7 percent during this time, and the 20-year rate was 3.96.
Black Knight Data & Analytics SVP Ben Graboske explained, “This population is diminishing, and as mortgage interest rates rise, it will only continue to shrink further.”
Here are the five:
Lower credit scores and income.
Hassle and upfront expense.
Not enough equity.
Inconsistent job history.
Lack of assets.
Lots more info plus a link to the original study.
My comment: interesting analysis plus a link to the nerdwallet full analysis. I have always wondered why so few people are not doing refis with rates still at historic lows.
CU Quick Guide Videos Now AvailableNew short videos (~4 min) show how to easily use the Collateral Underwriter® (CU™) web application to research common messages. Watch the Quick Guide Intro to the Comp Selection Message to see how to use CU to review appraisals with a material difference between the appraiser-provided and CU model-selected comparable sale rankings. The Quick Guide to Data Discrepancy Messages shows how to quickly view other appraiser observations when there is a discrepancy in reported data (either from what the appraiser previously reported or from what other appraisers have reported.) Want to learn how other lenders have leveraged CU? Review this new Housing Industry Forum article which details how lenders that maximize the use of CU have been able to make the underwriting process more efficient while improving appraisal quality and reducing appraisal-related loan defects.Additional CU live webinar dates are also now available:
CU User Interface Basic Training: Feb 10, 2016 from 2 – 3:30 p.m. ET
CU User Interface Advanced Training: Feb. 18, 2016 from 2 – 3:30 p.m. ET
Maximize your Appraisal Review Efficiency and Effectiveness with CU: Feb. 24, 2016 from 2 – 3 p.m. ET
For more information on CU visit the CU web page.
My comment: see how CU works, from the lender side.
America’s Most Unwanted: The Neverland Ranch and Other Unsold $100 Million Mega-Mansions
Michael Jackson’s $100 million Neverland-formally known as Sycamore Valley Ranch-is still stuck on the block.
Listed last May (sans the King of Pop’s amusement park), the 2,698-acre compound in Los Olivos showcases a 12,598-square-foot, French Normandy-style main house with six bedrooms and nine baths. Other structures include three separate guesthouses, a 5,500-square-foot movie theater with a stage, numerous barns, animal shelter facilities, and a maintenance shop.
Check them all out at:
My comment: if they ever do sell… very, very long exposure times!
Adjustments – “Support” vs. “Proof, what should you do?
New in the FEBRUARY 2016 issue of the paid Appraisal Today
– Adjustments Part 1 – Are you making too many adjustments? Lots of ideas, research, etc.
– Support vs. proof for adjustments by Bob Keith. A very good explanation of Scope Creep on adjustments. He is the former Executive Director
of the Oregon State Appraisal Board and is a consultant for appraisers with state board complaints
– Identifying Residential Architectural Styles by Mark Nadeau,SRA, Book review. Read my review to decide if you want to buy the book.
– Two good, practical residential books, with very good tips on adjustments Book reviews.
– The Dictionary of Real Estate Appraisal, 6th Edition – Read my review to decide if you want to buy this book.
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Fannie, Freddie Unveil New Appeals Process for Loan Repurchases
Fannie Mae and Freddie Mac unveiled an appeals process Tuesday that will allow an independent arbitrator to resolve disputes between lenders and the government-sponsored enterprises over loan repurchase demands.
The new independent dispute resolution process, which was approved by the Federal Housing Finance Agency and endorsed by the Mortgage Bankers Association, is an effort to provide lenders more certainty that they won’t later face costly repurchase requests if a loan goes bad.
My comment: Maybe lenders will be less paranoid about appraisals causing buybacks and cut back on Excessive Appraisal Requirements.
One-third of realty transactions are plagued by delays, some of them fatal By Ken Harney
According to the study, of the 32 percent that experienced delays, 46 percent were triggered by “financing issues,” which is up from 40 percent during the first half of 2015. Appraisal-related problems caused 21 percent of the delays and home-inspection issues in 14 percent. Of the nearly 1 of every 16 (6 percent) of deals that turned into total disasters and fell through, home inspection and financing were the primary culprits. Sixteen percent went south because of the appraisal.
My comment: maybe that’s why some AMCs are pressuring/asking for more when you “come in” under the sales price. Their clients, the lenders, don’t like deals falling through…
Study finds discrepancies between reported and actual home sales prices By Ken Harney
Are some realty agents hyping the pricing information on closed sales they report to their local multiple listing service, or MLS? And if so, should you care?
A first-of-its-kind study by appraisal and real estate experts suggests that maybe they are and maybe you should. Researchers compared closing documents – which are supposed to indicate the final price in sales transactions – with the prices that agents actually reported to their MLS and found that in nearly 1 of every 11 cases (8.75 percent) there were discrepancies. Overstatements of final price exceeded understatements by a ratio of nearly 3 to 1. In one case, the price reported to the MLS was 21.4 percent above the actual closing price.
My comment: And AMCs worry about discrepancies on public records and appraisers on GLA!! Another reason Big Data (CU) fails and needs appraiser input.
HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to www.mbaa.org
Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to www.appraisaltoday.com/products.htm or send an email to firstname.lastname@example.org . Or call 800-839-0227, MTW 8AM to noon, Pacific time.
Mortgage applications decreased 2.6 percent from one week earlier
WASHINGTON, D.C. (February 3, 2016) – Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 29, 2016. The previous week’s results included an adjustment for the Martin Luther King holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 11 percent compared with the previous week. The Refinance Index increased 0.3 percent from the previous week to its highest level since October 2015. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index increased 11 percent compared with the previous week and was 17 percent higher than the same week one year ago.
The refinance share of mortgage activity increased to 59.2 percent of total applications from 59.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.9 percent of total applications.
The FHA share of total applications increased to 12.9 percent from 12.7 percent the week prior. The VA share of total applications remained unchanged from 11.1 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since October 2015, 3.97 percent, from 4.02 percent, with points increasing to 0.41 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This is the fourth straight weekly decrease for this rate. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to its lowest level since April 2015, 3.84 percent, from 3.89 percent, with points increasing to 0.26 from 0.25 (including the origination fee) for 80 percent LTV loans. This is the fourth straight weekly decrease for this rate. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.80 percent from 3.83 percent, with points decreasing to 0.35 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.22 percent from 3.28 percent, with points remaining unchanged at 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 3.00 percent from 3.09 percent, with points remaining unchanged at 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100
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