FHA Bullish Reduces MIP .25

Bullish on FHA loans

HUD announcement today January 9, 2017 to reduce MIP
premiums. 

Borrowers who close FHA mortgages after January 27 will pay 25 basis points less for the mortgage insurance premium, the Department of Housing and Urban Development said.

MIP is insurance for the lender, not Borrowers

Congress set certain liquidity rules for FHA.

Today HUD says reserve ratio stood at 2.32% last year, the second year in a row to exceed the 2% threshold.

“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” HUD Secretary Julian Castro .

Unfortunately with mortgage rates rising, and expected to take two more leaps this year I don't think this black steer is going to be running out to apply for a home loan. Getting the loan closed with all the Dodd Frank rules is the real obstacle to real estate economic growth, that and affordable housing.

What does .25 in MIP mean in payment savings monthly? Perhaps about $12 dollars per $100000. monthly savings. This might be the difference in getting someone's debt to income ratio within approval, or not.

TransUnion Equifax OWE YOU Money

Santa Slaps the CREDIT COPS

A day after CFBP announced that TransUnion would have to pay  seventeen million dollars in fines for deceptive advertising, the CFPB announces: now Equifax, another credit reporting agency is also being crushed in the wallet. Richard Cordray is surely paying his own salary here. Not that anyone feels sorry for the credit cops who preyed upon American Consumers touting their services of credit reporting are accurate, fair and useful. Credit cops TransUnion Equifax and others charge huge fees to mortgage lenders and consumers for their mathematical models which are flawed.

It's easy for business to hate The Consumer Financial Protection Bureau (CFPB). It will be near to impossible for Trump to dismantle the strong arm, as they are funded by fining. CFBP is perhaps one of the most profitable entities in Washington D.C. EASIER NOW for consumers to realize the Credit Cops lied, and cheated consumers

TransUnion Equifax and (Experian not yet named) and their subsidiaries and affiliated- those pesky credit karma, free credit report crap that get your credit card and bill consumers until the cows come home. deceiving consumers about the usefulness and actual cost of credit scores they sold to consumers. Credit cops lure consumers into costly recurring payments for credit-related products with lies, misrepresentation and fear. CFPB orders TransUnion and Equifax now advertise the true value of the credit scores they provide and the cost of obtaining those credit scores and other services. Line up for your eleven dollar check from TransUnion and Equifax. Credit cops must pay $17.6 million in restitution to consumers, and fines totaling $5.5 million to the CFPB.

“TransUnion and Equifax deceived consumers about the usefulness of the credit scores they marketed, and lured consumers into expensive recurring payments with false promises,” said CFPB Director Richard Cordray. “Credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them.”

Chicago-based TransUnion and Atlanta-based Equifax  collect credit information, including a borrower's payment history, debts, maximum credit limits, creditors, and other elements of their credit relationships. Information is gathered but often incorrect, erroneous and mistaken. Bits of historical payment records are conglomerated into a giant rubber band ball of numbers. A consumer who tries to correct mis-information about a similar name (those who happen to be a Junior with same name as father) or those who have wrong information find it near to impossible to get right. Credit reports and scores tare provided to subsidiaries for employment checks, loans, and all kinds of "snoopdom". Through subsidiaries, TransUnion Interactive and Equifax Consumer Services, Credit cops advertise and sell credit products to consumers, such as credit scores, credit reports, and credit monitoring. 

TransUnion sells to consumers via VantageScore Solutions, LLC. The big lie is VantageScores are not used for credit decisions by mortgage lenders, car loans and credit card loans. Equifax sold scoring to consumers from Equifax’s own machine: Equifax Credit Score, which is an “educational” useless credit score that also is not used by anyone to make credit decisions.

Furthermore TransUnion and Equifax sold consumers monthly services to check your score or check your credit which are worthless numbers. Both lied to the public. These are violations of Dodd Frank and Consumer Financial Protection Acts. Both TransUnion and Equifax failed to get consumer written authorization to pull these reports millions of times

•  EVER TRIED TO CANCEL THESE SERVICES? BOTH TransUnion and Equifax hide from consumers to avoid cancellation of monthly charges. They must stop billing recurring charges. They must now advertise and list their phone number, answer the phone and have online cancellation forms, mail to, fax to and submit on line available to cancel services. These credit cops are worse than Match.com and Eharmony for not allowing consumers to cancel and USING their own information to sell as product. It's a wonderful digital world.

TransUnion and Equifax owe you money TransUnion's phone call free and ask for your $100.00 1 (855) 681-3196

CFPB’s  Order against Equifax is here:http://files.consumerfinance.gov/f/documents/201701_cfpb_Equifax-consent-order.pdf 

 text of the CFPB’s Order against TransUnion is here:http://files.consumerfinance.gov/f/documents/201701_cfpb_Transunion-consent-order.pdf 

Contact:  C G  Barbeau (949) 784-9699

Trashes Dodd Frank

Burned Kettle

Calling the Dodd-Frank Act a “negative force,” presumptive Republican presidential nominee Donald Trump says he will unveil a plan to overhaul the controversial Wall Street reform law that was passed in 2010 in response to the crisis.

While he did not disclose specific changes he would  dismantle Dodd-Frank.

“Dodd-Frank has made it impossible for bankers to function,” Trump said “It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop.”

The presumptive Democratic presidential nominee, Hillary Clinton, was swift to respond to Trump’s stated intention to overhaul Dodd-Frank. Wednesday morning, Clinton tweeted, “Latest reckless idea from Trump: gut rules on Wall Street, and leave middle-class families out to dry.”

I'm not sure either one knows what they are speaking about. Dodd Frank was a well meaning but stupidly executed plan. Dodd Frank made the big banks richer and the little guy not to get a mortgage. Dodd Frank did not get the crooks and liars out of mortgage banking, the tin men sales people moved to loan modifications, those who couldn't pass a knowledge test moved to sell cars or work under someone else's license. I challenge Borrowers who say they had no idea their payment might go up. I do admit that African Americans were preyed upon by some lenders, who gave them higher rate loans. Of the thousands of Option ARM loans I closed I have a tough time convincing a Borrower whose rate is now under 3% but has to make principle payments to refinance.

Republicans have been trying to roll back Dodd-Frank ever since it was passed in July 2010. Lately several bills aimed at chipping away at the law have gained traction in Congress. In mid-April, two  bills passed in the House Financial Services Committee; one to repeal Dodd-Frank’s bailout fund for large, complex financial institutions and one to put the Consumer Financial Protection Bureau’s spending on a budget in an attempt to make the Bureau more accountable to taxpayers. CFPB has become the gorilla in the day care center.

Rep. Jeb Hensarling (R-Texas), Chairman of the House Financial Services Committee, recently told DS News that “America needs a new vision—a new model for financial reform—because the Dodd Frank Act is a failure.”

Democrats have generally been fiercely protective of Dodd-Frank and highly critical of Republican efforts to undermine it. Rep. Maxine Waters (D-California), ranking member of the House Financial Services Committee, said of those two bills that passed in the Committee in mid-April, “Both of these bills, if enacted, would take our financial system back to September of 2008, when regulators did not have the tools to protect consumers or the broader economy from financial sector ruin. It would take us back to a time when we were hemorrhaging nearly 800,000 jobs a month, household wealth dropped by $13 trillion, and millions of our fellow Americans were facing foreclosure, eviction, and potential homelessness.”

Where is our country going?

Tip if your kettle gets black from propane gas not being mixed right- Fells Napha soap on the pot can help. Rather than just calling the kettle black

Qualified Mortgage

 

Dodd Frank implemented 13,789 pages of rules –regulated by more than nine agencies…

More change is down the road. Wall Street still controls the mortgage market. The individual taxpayer receives no benefits from Wall Street. Dodd Frank is going to roll out more rules.

 

The big banks: J P Morgan Chase, Wells Fargo and Bank of America have gotten larger in the past five years. Big banks close small numbers of home loans. Rich bankers aren't out to offer help to consumers. Banks will move further away from the mortgage business as they are forced to buy back bad loans and keep up with regulations.

The big banks charge the largest fees for a bounced check, some are instigating flat annual fees for your account and the highest student loan rates in centuries…

Don't get me started on the student loan industry -- it is a mess.

If you believe Senior bank executives will pass on savings to the small consumer, dream again. Institutional banks will get in compliance with all the reforms and new regulations but Americans will pay for it.

Dodd Frank regulation makes it more costly to run a bank business. The little guys are getting squeezed out. The independent local bank that offered a smorgasbord of financial products will struggle to keep up with all the Federal and State regulations. They will be bought out or closed.

I can name forty things that Dodd Frank made worse for consumers.

1.     Qualified Mortgage for the consumer means:

     IF you are self employed the little wiggle room at the high debt to income ratio loan is gone, the loan calculated on your twelve month’s deposits also gone and niche mortgage is going away. This is being debated as you read this and implemented January 2014.

 

    IF a lender doesn't have enough money to buy back failed loans, they will be shut down.
 

 

 

 

Don't be looking in your mailbox for a check ...

 

Caroline Gerardo

Mortgage Banker NMLS # 324982

(949) 637-8190 cell

 

 

BANK REFUSES TO CLOSE MY DINKY HOME LOAN!

MY LENDER WON'T CLOSE MY LITTLE LOAN

Bank can't close as there were changes after we locked and says this is a HPML

What are Higher Priced Mortgage Loans?

	Weekly Average Prime Offer Rates for Fixed Rate Loans
Week of 09/02/2013
Term (in years)		5*	10	15	20	25	30
APOR		3.44	4.51	3.64	3.64	4.57	4.57
Margin		1.5	1.5	1.5	1.5	1.5	1.5
HPML APR Tolerance		4.940	6.010	5.140	5.140	6.070	6.070

 

Weekly Average Prime Offer Rates for Adjustable Rate (ARM) Loans
Week of 09/02/2013
Term (in years)	1/1*	3/1	5/1	7/1	10/1
APOR	2.90	2.92	3.04	3.37	3.86
Margin	1.5	1.5	1.5	1.5	1.5
HPML APR Tolerance	4.400	4.420	4.540	4.870	5.390

 

     * Amortization or adjustment rate terms may not be available in current product offering.

 Higher Priced Mortgage Loan (HPML) test implemented under Regulation Z is a tricky rule. The HPML rule applies to Conforming and Jumbo loans for Primary Residences with an APR that is 1.5% or more above the Average Prime Offer Rate (APOR) for loans secured by a first lien. APORs are published each Friday and are effective the following Monday. Once the loan is locked, the APOR used for that loan does not change.

If the APR is equal to or exceeds the HPML APR tolerance, the loan is HPML and will be un-saleable in the Secondary market. If a $55000 mortgage is going to cost a lender $10000 to close because of this rule there is no money to pay the huge penalty. Many banks, brokers, mortgage bankers don't want to mess with a loan that they might earn $200 on for the risk of having to pay that $10000. Although Dodd Frank set this rule to protect Borrowers from being switched to a costly loan, the rule is a Catch 22.

 

What Causes HPML Loans?
There are several things that may cause a loan interest rate to go above the APOR:

·         Lower loan amounts – the impact of fees on the APR increases as the loan amount decreases. A $100,000 loan is more likely to trigger an HPML than a $300,000 loan.

·         Mortgage insurance – The loan may have MI over a longer period of time because the LTV is in excess of 100% (common in HARP loans).

·         Shorter loan terms – APR fees are averaged over the term of a loan, so the shorter the term, the higher the fee (a 20 year loan will have a higher APR than a 30 year loan).

          Locking a loan before you know the property is something different than you were told upfront

          Changing a loan request

          Adding or deleting a Borrower with lower FICO score

          FICO score change on Borrower with long extended escrow due to New Construction taking longer than planned or delays by Seller

           Locking a loan on a Short Sale to find substantive changes to package after months of wait and hold

      Discovering additional fees from Escrow, Attorney or Title

Borrower’s failure to disclose facts                                                      

Condo complexes that add huge fees after the fact for information and transfer.

LENDERS CAN’T CLOSE A LOAN THAT COSTS THEM THOUSANDS OF DOLLARS

ORGINATORS SHY AWAY FROM TAKING LOANS UNDER $120000 BECAUSE DODD FRANK’S HPML RULE IS A CATCH 22

How to Resolve an HPML Issue
If you receive a notice of HPML there are a number of different ways to reduce the APR:

·         Apply a seller credit to the APR fees

·         Lower the APR fees

·         Reduce the discount (if there is one)

·         Lengthen the term of the loan

·         Increase the premium paid to the borrower

·         Reduce the note rate

 

WHAT CAN A BORROWER DO?

          Disclose vesting type upfront

          Provide existing mortgage statement

          Get cost commitments from HOA or Management Companies upfront 

      

Don’t lock upfront on a delayed purchase such as short sale or new construction if you need have no real idea of closing date.