MGIC Investment Corp. has begun a public offering of $350 million in senior notes.
MGIC Commences $350M Debt Offering
Tuesday, August 2, 2016
Greenlight Capital Unit Moving into Mortgage Reinsurance
Greenlight Capital Re Ltd., the reinsurer seeking to reverse underwriting losses, is pushing into the mortgage guaranty market after being burned by fraudulent claims on property policies in Florida.
Greenlight Capital Unit Moving into Mortgage Reinsurance
wednesday-adp-employment-ism-non-mfg-index
Wednesday:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
• At 8:15 AM, The ADP Employment Report for July. This report is for private payrolls only (no government). The consensus is for 165,000 payroll jobs added in July, down from 172,000 added in June.
• At 10:00 AM, the ISM non-Manufacturing Index for July. The consensus is for index to decrease to 56.0 from 56.5 in June.
From Matthew Graham at Mortgage News Daily: Mortgage Rates Rise; Potential Volatility Ahead
Mortgage rates moved higher again today, after hitting the lowest levels in roughly 2 weeks last Friday. Like yesterday, today’s increase was fairly minimal in the big picture, but successive days of weakness can add up. Unlike yesterday, most borrowers would now be seeing slightly higher costs on today’s rate quotes compared to Friday’s.
Here’s the good news though: apart from the past 2 days, today’s rates are the lowest in more than 2 weeks. After rising to a range of 3.5-3.625% last week, conventional 30yr fixed rates are now more likely to be quoted in a 3.375-3.5% range on top tier scenarios.
emphasis added
Here is a table from Mortgage News Daily:
wednesday-adp-employment-ism-non-mfg-index
4-ways-to-keep-your-mortgage-closing-costs-low
Mortgage Closing Costs Are Rising
Closing costs are rising.
New loan regulations and financial safeguards have increased to bank costs, and banks have passed those costs on to consumers. Bankrate.com says mortgage closing costs are 6% higher as compared to last year.
There are ways to limit what your closing costs, though, and what you’ll pay for your loan.
Want to have the lowest closing costs available? Start by avoiding the common mistakes consumers make when shopping for a mortgage.
You, too, can get a great rate.
Click to see today’s rates (Aug 2nd, 2016)
Mortgage Closing Costs: How They Work
All mortgage loans require closing costs. The costs can be paid by the borrower, by the lender, or by a combination of the two.
Mortgages with which a lender pays all closing costs are known as “zero-closing cost mortgages”.
The loan’s not free, however.
In exchange for paying costs, the mortgage lenders will raise the mortgage rate for a borrower by a nominal amount — usually 12.5 basis points (0.125%) for a $250,000 loan size.
With a zero-closing cost loan, fees of both types — lender costs and third-party costs — are paid-in-full.
Mortgage lender closing costs may include such items as origination and discount points; underwriting fees; and, document preparation fees.
Lender fees are summarized in Section 800 of a Good Faith Estimate.
The second type of closing costs — third-party closing costs — are costs paid to companies other than your lender. Third-party closing costs may include appraisal costs, credit report costs, tax service fees, and title insurance.
Click to see today’s rates (Aug 2nd, 2016)
4 Mistakes That Lead To Unnecessary Closing Costs
Many borrowers like zero-closing cost option — especially when doing a mortgage refinance such as an FHA Streamline Refinance or VA Streamline Refinance.
However, going zero-cost is just an option. You may prefer to pay your closing costs up-front in exchange for that lower mortgage rate; and closing costs are a part of every loan made.
If you plan to pay closing costs, then,you won’t want to overpay. There’s no need to pay more closing costs than necessary.
These four tips should help you minimize what’s owed at closing.
Don’t Overpay On Discount Points
Discount points are a one-time, upfront fee paid at closing which gets a homeowner access to lower mortgage rates than “the market”. They’re paid as a percentage of your loan size such that 1 discount point carries a cost equal to 1% of your loan size.
A $200,000 loan with 1 discount point, therefore, would require $2,000 in “points” to be paid at closing.
For homeowners who plan to keep their mortgage for 7 years or more, paying discount points can be a sensible way to pay a little bit upfront in exchange for longer-term mortgage savings.
For everyone else, points may be wasted cash.
That said, discount points have a secondary effect — they lower your loan’s APR. Because of this, lenders will often use discount points as a way to make their rate quotes look more attractive in the marketplace.
Lenders know that consumers shop by APR even though they shouldn’t.
One way to reduce your closing costs, then, is to pay the proper number of points for your particular situation, which may actually be zero.
Discount points can be tax-deductible, but they can’t be refunded once paid.
Opt For Low- Or “Zero-Closing Cost” When Appropriate
Opposite from paying discount points, mortgage borrowers will typically have the option of doing a low-cost or zero-closing cost mortgage.
With a low-cost or zero-closing cost mortgage, closing costs are paid by the lender on behalf of the borrower. In exchange for paying the fees, the lender will raise the mortgage interest rate for the borrower’s loan.
The more costs that the lender covers for the borrower, in general, the higher the increase to the mortgage interest rate.
Low- and zero-closing cost mortgages are appropriate in a number of situations including scenarios in which the borrower plans to move or refinance within the next 36 months or so; or, when the borrower expects that mortgage rates may drop in the future.
Low- and zero-closing cost mortgages are a good way to “step down” with your mortgage rate while the market gradually improves.
Choose The Proper Loan Type For Your Needs
Today’s home buyers have access to a bevy of mortgage products. Buyers can choose from between conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, and more.
Each loan type meets a specific borrower need.
For example, FHA loans are typically best for buyers with less-than-perfect credit and minimal funds for a downpayment. VA loans, by comparison, are best for homeowners with military experience who wish to put little or nothing down.
Conventional loans are the default choice for buyers with twenty percent down, and USDA loans can be terrific is sparsely-populated parts of the country.
Each loan, though, comes with its own set of closing costs. Select the wrong loan type for your needs and you may pay more than is necessary.
For example, a FHA loan requires 1.75% of the loan size to be paid at closing, or $1,750 per $100,000 borrowed. For borrowers with three percent to put down, the HomeReady™ mortgage may be a better option.
The same is true for the VA home loan.
VA loans allow for 100% financing, but typically require a two percent “funding fee” to be paid at the time of closing. That 2% cost must be weighed against the cost of not using a VA loan.
USDA loans carry upfront closing costs, too.
Therefore, when choosing your loan type, consider more than just the mortgage rate — consider the loan’s upfront costs as well.
Choose A Realistic Rate Lock For Your Loan
Another way to reduce your loan closing costs is to lock your mortgage rate for the appropriate time frame.
Rate locks are typically available in 15-day increments up to 60 days, and then in 15- or 30-day increments thereafter.
Mortgage lenders “charge more” for longer rate locks. A 30-day mortgage rate lock is less expensive than a 60-day rate lock, for example, and a 60-day rate lock is less expensive than a 90-day rate lock.
The additional costs of a longer-term lock are paid as either cash as closing, or in the form of higher mortgage rates. An extra 30 days on your rate lock may add 25 basis points (0.25%) to your mortgage rate, in other words.
However! Lenders also charge fees for “blowing” a rate lock. That is, not having the loan funded during its current lock-in window.
Blowing a rate lock require a rate lock extension, and rate lock extensions carry high costs. It’s more expensive to extend a 30-day rate lock by fifteen day, for example, than it is to select a 45-day rate lock at the start.
Keep your closing costs low by selecting a realistic and appropriate rate lock for your loan.
What Are Today’s Mortgage Rates?
Mortgage closing costs can increase your costs of homeownership, and lower the benefits of a refinance. Be smart about your loan and how you pay your fees.
Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.
Click to see today’s rates (Aug 2nd, 2016)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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the-nuts-and-bolts-of-home-construction-loans
Cost overruns tend to come about because borrowers have a tendency to change their minds about what they want as construction proceeds.
Do your due diligence on the builder
An important aspect of building your home is choosing the right builder. Find one that has built the kind of house you want in terms of price, style and size. Look into the builder’s credentials with the local homebuilders association and ask for references from previous clients. You could also see if there are any complaints against the builder with the Better Business Bureau.
Typically, your lender will look into the builder’s credit standing, financial situation and licenses, as well as the track record for building similar homes.
Ongoing inspections
Lenders will conduct routine inspections as the home is built. During this period, the lender pays the builder in stages — called “draws” — and usually sends an appraiser or inspector to make sure that construction proceeds as planned.
Cynthia DeLuca, group mortgage manager for BB&T in Raleigh, North Carolina, says, “Our clients could get upside down, where they have 50% of the loan but the house is only 25% done. We look at how much it is going to cost to complete the house to try to stay on track.” Typically, you sign off on each draw request so that you are kept informed how the work is proceeding.
SEARCH RATES: Ready for a mortgage with a low down payment? Search now for an FHA loan.
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Millennials Central to Credit Union Growth, TransUnion Research Finds
The research findings were coupled with a survey of 96 credit union executives, which gathered insights on key industry issues. The information was released today at TransUnion’s annual credit union seminar in Las Vegas, which includes participants from leading credit unions across the country.
The survey found that 42% of credit union executives reported an overall year-over-year member growth rate higher than 5%. In particular, credit union memberships via mortgage origination have increased in recent years. In Q1 2016, credit unions had 3.8 million mortgage members, an increase of 4% from 3.67 million in Q1 2015. Compared to five years ago, credit union mortgage memberships have grown 13% from 3.29 million in the first quarter of 2011.
“The data show that credit union membership rates are growing much faster than the overall credit-active population,” said Verma. “Credit union executives are strategically focused on gaining membership growth through mortgage originations, as well as offering products such as credit cards to their existing member base.”
Credit Unions’ Opportunities: Auto Loans and Credit Cards
The survey also revealed that auto loans rank at the top for credit union executives in terms of loan growth, focus and opportunity over the next 12 months. This emphasis is a continuing one: according to TransUnion data, credit unions grew their auto membership 9.8% year-over-year from Q1 2015 to Q1 2016. In addition, in 2010 only 49 credit unions issued more than 10,000 auto loans. In 2015, 126 credit unions were issuing more than 10,000 auto loans.
Top Areas of Growth/Focus/Opportunity for Credit Union Executives in the Next 12 Months
Category | % Ranked #1 in 2016 Survey (2015 Percentages) | % Ranked Top 3 in 2016 Survey (2015 Percentages) |
Auto Loans | 41%(48%) | 80%(81%) |
Mortgage Loans | 22%(26%) | 61%(60%) |
Share Draft Accounts | 10% (3%) | 26% (24%) |
Credit Cards | 6%(8%) | 31% (46%) |
Credit cards were in the top three areas of opportunity, but only 6% of credit union executives ranked credit cards as their top priority for 2016. The survey found that 69% of credit union executives said more than half of their members do not have a credit card with their credit union. This finding was corroborated with TransUnion research, which found that in Q4 2015, 44% of credit union members did not have a credit card with a credit union, but did have credit cards in their wallets.
“Our data show that 18 million credit union members do not have a credit union card in their wallet, which presents a sizable opportunity for growth,” said Verma. “Credit union executives have an opportunity to cross-sell products to these members who may have a mortgage, auto loan or other product with their credit union already. Most importantly, 75% of these members have a prime or better credit risk score, which means credit performance would most likely remain strong.”
For more information about how to gauge trends and make better-informed decisions, visit http://www.transunion.com/prama. The PramaSM Market Insights module provides detailed, depersonalized information on multiple types of credit at a state, regional and national level, and can be segmented by banks, credit unions, finance companies and other organizations.
Millennials Central to Credit Union Growth, TransUnion Research Finds
Mortgage Principal Forgiveness Policy Is a Bad Idea - Heritage.org
[1] Federal Housing Finance Agency, “Federal Property Manager Report,” December 2008, http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2008-12-2_FPMReport_508.pdf (accessed June 3, 2016). See also Federal Housing Finance Agency, “Foreclosure Prevention Report—Federal Property Manager’s Report—First Quarter of 2016,” http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FPR_1Q2016FINAL.pdf (accessed July 11, 2016), and Federal Housing Finance Agency, “January 2016 Refinance Report,” http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/Refinance_Report_January_2016.pdf (accessed July 26, 2016).
[2] News release, “FHFA Announces Principal Reduction Modification Program and Further Enhancements to NPL Sales Requirements,” Federal Housing Finance Agency, April 14, 2016, http://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-PRM-Program-and-Further-Enhancements-to-NPL-Sales-Reqts.aspx (accessed April 19, 2016). Also, while prior non-performing loan pool sales are small (generally less than 1,000 loans per pool), there is some concentration to certain states, particularly to New York, New Jersey, and Florida. Federal Housing Finance Agency, “Enterprise Non-Performing Loan Sales Report,” http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/NPL-Sales-Report_May2016.pdf (accessed July 8, 2016).
[3] See Federal Housing Finance Agency, “Fact Sheet: Principal Reduction Modification Program,” http://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/Principal-Reduction-Modification-Fact-Sheet.pdf (accessed June 3, 2016). See also, Fact Sheet, “Enhanced Non-Performing Loan Sale Guidelines,” Federal Housing Finance Agency, May 14, 2016, http://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/NPL-Fact-Sheet_04-14-16.pdf (accessed July 11, 2016).
[4] The FHFA would cover the cost of such principal reductions, while borrowers receiving the mortgage principal reduction are responsible to cover any federal tax liability associated with the transaction. As a general note, this Heritage Foundation Issue Brief is not a comment on the federal tax treatment of such a debt forgiveness program.
[5] John Ligon, Filip Jolevski, and Norbert J. Michel, “GSE Reform: FHFA Should Not Pursue Mortgage Principal Reduction Alternatives,” Heritage Foundation Issue Brief No. 4108, December 17, 2013, http://www.heritage.org/research/reports/2013/12/home-mortgage-modification-policy-and-principal-reduction-alternatives.
[6] Congressional Budget Office, “Options for Principal Forgiveness in Mortgages Involving Fannie Mae and Freddie Mac,” May 2013, p. 22, http://www.cbo.gov/sites/default/files/cbofiles/attachments/44114_WorkingPaper-OptionsPrincipalForgivenesl.pdf (accessed November 27, 2013).
[7] We have discussed certain characteristics related to borrower behavior and the likelihood of re-default after various prevention efforts that have been studied in some of the academic literature. See Ligon, Jolevski, and Michel, “GSE Reform: FHFA Should Not Pursue Mortgage Principal Reduction Alternatives.” See also Norbert J. Michel and John Ligon, “Why Is the Federal Government Fixated on the 30-Year Fixed Rate Mortgage?” Heritage Foundation Backgrounder No. 2917, June 18, 2014, http://www.heritage.org/research/reports/2014/06/why-is-federal-housing-policy-fixated-on-30-year-fixed-rate-mortgages.
Mortgage Principal Forgiveness Policy Is a Bad Idea - Heritage.org
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