FICO 10T and Vantage Scores

The FHFA mandates using FICO 10T and Vantage this year for Fannie Mae

and Freddie Mac Loans

What started as a push to reduce costs for the lower to moderate mortgage borrower in America now bows to the credit cops to incorporate both scores, thus increasing costs.

The magic is supposed to be that the lower end person with little credit history can use rental history, utilities and recent up trends in personal habits to overcome weaker credit.

What our government forgets is this was already being done by

every good mortgage lender for free on a hand written explanation,

uploading the history, and demonstrating in writing the cause.

FICO 10T and VantageScore 4.0, mandated by the GSEs (Fannie Mae and Freddie Mac), have the potential to increase access to home loans for borrowers with lower credit scores in a couple of ways:

• Considering a broader range of financial data: These new models look beyond traditional credit history, including rent, utilities, and telecom payments [2]. This can benefit borrowers who may not have a long history with credit cards or loans but have consistently made payments on other bills.

• Accounting for trends: FICO 10T considers if your credit score is on an upward trajectory, which could be helpful for borrowers who may have had past credit issues but have recently improved their financial habits [4].

However, it's important to understand some nuances:

• Minimum requirements likely remain: Even with the new models, lenders will still have minimum credit score requirements for loans. These may not change dramatically.

• Not a guarantee: Just because you have a higher score under the new models doesn't guarantee loan approval. Other factors like income and debt-to-income ratio will still be crucial.

Overall, the new scoring system is a step towards a more inclusive approach. Borrowers with lower credit scores who can demonstrate responsible financial behavior may have a better chance of qualifying for a home loan.

Three Little Pigs House No roof?

House of Straw House of Sticks House of Bricks

All three without a roof?

Extreme weather events are no longer a rarity. From hurricanes battering coasts to wildfires raging across forests, these disasters are becoming more frequent and intense. This has a direct impact on homeowners insurance, causing costs to surge and, in some cases, leading insurers to pull out of high-risk areas altogether.
Here's how extreme weather is shaking up the home insurance landscape:

Increased Risk, Increased Premiums: Insurance companies base premiums on risk. With the likelihood of claims due to weather events like hurricanes, tornadoes, and wildfires on the rise, they need to charge more to offset potential losses. This can be a significant burden for homeowners, especially in areas repeatedly hit by disasters.
Policy Cancellations and Non-Renewals: In some cases, the risk becomes too high for insurers to justify offering coverage at all. This is particularly true in regions prone to wildfires or hurricanes. Homeowners in these areas may find their policies cancelled or not renewed, leaving them scrambling for alternative (and often more expensive) coverage, or worse, with no coverage at all.
Focus on Mitigation: To manage risk, some insurers are offering discounts for homeowners who take steps to mitigate potential damage. This might include installing hurricane shutters, fire-resistant roofing, or flood barriers. While upfront costs exist, these measures can save money on premiums in the long run.
Examples by Disaster:
Hurricanes: Coastal regions are particularly vulnerable to hurricanes, with stronger storms and rising sea levels leading to increased flooding. This has caused some insurers to limit or exclude flood coverage altogether, forcing homeowners to seek separate flood insurance, which can be expensive.
Wildfires: Wildfire seasons are becoming longer and more intense, threatening homes in fire-prone areas. Insurers are raising premiums and, in some cases, refusing to write new policies in high-risk zones. This leaves homeowners with limited options and potentially devastating consequences if a fire strikes.
Tornadoes: While tornadoes are more localized events, the increasing frequency and intensity can still lead to significant damage and rising insurance costs. Mitigation efforts like storm shelters can help reduce risk and potentially lower premiums.
The bottom line is that extreme weather is a growing concern for homeowners and insurers alike. Understanding the risks and taking steps to mitigate them can help you protect your home and keep your insurance costs manageable.

Is your hazard insurance company cancelling you?

Is your insurance company pulling out of your state?

Time to call your Senator and Congressperson.

https://www.fanniemae.com/research-and-insights/perspectives/consumers-worried-about-impact-extreme-weather-homes-and-insurance-premiums

Real Estate Digital Tools

There are hundreds of vendor tools for real estate investment, valuations,

management, lead marketing, and data collection and organization.

All have focus either on commercial or residential real estate.

Some are used for purchasing property, some for ongoing management.

Here are a few categories of digital software that an investor, a lender, 

a management company, or bank might purchase.

Customer Relationship Management (CRM):

• Lofty
• Chime CRM

Valuation:

• Quantarium
• Compstak (commercial)

Residential Analysis:

• Cash Flow Atomizer

Other:

• House Canary
• ATTOM Data
• REI (possibly property management)
• MRI software for accounting (accounting)
• Rentrange /altisource
• Northspyre
• Entera
• Yardi
• REI property pro (possibly property management)
• Argus Altus Group
• LexisNexis
• Plunk
• Property Shark
• Corelogic
• MRI
• Reonomy
• Real Capital Analytics

Uncategorized:

• REI 360: this is a CRM claiming to be property management software, or something else related to real estate.

Then there are tools used by institutions and lenders

• Real Estate Data & Analytics: They provide a data hub that gathers and analyzes property information to aid in accurate valuations and market analysis.
• Workflow Software: Their Voxtur Verify product specifically helps title agents, loan officers, and underwriters by simplifying real estate transactions through a user-friendly workflow platform.
• Valuation Tools: Voxtur offers solutions like ApexSketch, which assists appraisers and assessors in creating accurate and professional floorplan sketches for property valuations.
• Property Tax & Assessment: Voxtur helps with property tax assessments through their technology solutions.

In essence, Voxtur acts as a behind-the-scenes player in the real estate industry, providing tools and data to various professionals involved in buying, selling, and appraising properties. They don't directly interact with consumers through a single consumer-facing app.

And many appraisal valuation tools

Claw Back Unpaid Income Taxes From Insurance Companies?

Insurance Companies Don't pay income tax in the states they operate or to the IRS on the premiums they collect. Perhaps Florida, Texas, and now California should claw back what they saved. Insurance companies pulling out of homeowner/ fire/ hazard

insurance policies.

• Insurance premiums aren't profit: The money paid for insurance isn't considered income for the company. It's seen as a reserve to pay out future claims.

• Taxation on investment income: Insurance companies invest a portion of the premiums they collect. The income generated from these investments is typically taxed like any other company's earnings. Insurance companies invest in real estate, mortgages, and stocks. Gains on sale of investments may be taxable but they seem to roll the gains and rarely pay.

• Reserves and claim payouts: The money set aside for potential claims acts as a buffer, reducing taxable income. Insurance companies can only deduct a portion of these reserves each year, following specific tax code guidelines.

• Different tax treatment for life insurance: Life insurance companies often have a different tax structure than property and casualty insurers. They may receive special tax treatment for a portion of their reserves due to the long-term nature of life insurance policies.

In essence, insurance companies are taxed on their investment income, not the premiums they collect. However, the way they manage reserves and the type of insurance they offer can influence their overall tax liability.