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Uncategorized

Another Day, Another DOJ Settlement

Michael Vitali / October 11, 2016

Or, should I say settlements (plural)? This time, the Department of Justice settled two actions brought under the False Claims Act against two separate Utah-based lenders. The total settlement was close to $10 million. Primary Residential Mortgage (PRMI) agreed to pay $5 million while SecurityNational Mortgage (SNMC) chipped in another $4.25 million. Both are independent mortgage companies, not big banks…

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Mortgage Industry Trends

Are Non-Banks Doing a Better Job on FHA Loans?

Michael Vitali / October 7, 2016

It’s no secret that the major banks have moved away from FHA lending because of their perception of the risks related to the required loan certifications and lack of clarity on potential enforcement. As a result, non-bank mortgage lenders have picked up the slack. This presents some additional lending opportunities for non-bank lenders. With this increased FHA business, non-bank lenders…

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Mortgage Compliance

FHA Proposes to Make Condo Approvals Easier

Michael Vitali / October 5, 2016

On September 27th, FHA announced their new proposals to ease their process for approving both condo projects and individual units in a non-approved project. The real estate community sees this as a step in the right direction. The intent is to make more condo units available for FFHA-insured financing, thus helping to make more affordable housing available to low to…

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Mortgage Industry Trends

Fraud Rides Again

Michael Vitali / October 4, 2016

No fiery horse, no speed of light nor cloud of dust. Not even a Hi-Yo Silver. But, we’re returning to those thrilling days of yesteryear. No, not with the Lone Ranger, but a recent study found that Mortgage Fraud rides again. In their latest Mortgage Fraud Report, CoreLogic is reporting that in the second quarter of 2016 the risk of fraud…

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Despite the historically low mortgage interest rates, new low down payment programs, easing of some credit standards, and special programs for first time and low to moderate income home buyers, we are still seeing homeownership rates decline. Why? It seems that the problem is not all about helping potential home buyers qualify for their financing; it’s as much about them being able to find affordable housing. As I’ve written before, I believe we have an affordable housing crisis in this country and now some are agreeing with me. We don’t need more buyers, although that couldn’t hurt. We need places for them to buy that they can afford. So along comes two different approaches to solving the affordable housing problem. Both offer some opportunity for lenders. First, we see draft legislation released by Senator Ron Wyden (D-OR) for a proposed middle income tax credit. Fashioned after the successful Low-Income Housing Tax Credit program, this will offer incentives to developers, by way of tax credits, for the creation and renovation of affordable rental housing. Although this may not immediately increase homeownership it will create a pathway for low to moderate income households. They can gain experience in making housing payments while taking their first step toward homeownership. This also presents an opportunity for lenders to finance these rental units once developed and offered for sale to investors. Another idea is to increase the availability of new manufactured homes. The reported average price of a manufactured home is about $70,000. A far cry from the cost of a stick built house at around $380,000. Further, the new manufactured homes are drastically improved from the old mobile homes and much more difficult to relocate, once set in place. The obvious challenge is the stigma associated with mobile homes and the parks in which most are located. However, there are many manufactured home developments, especially those created for seniors, which mirror stick built communities. These along with the rental housing create new lending opportunities, as well as additional investment options for the secondary markets and private investors. It’s just a matter of developing the right lending programs and guidelines, to finance these units. So, if we really want to increase homeownership, and provide more people with the chance to attain the American Dream, we need to look at more than just low rates and low down payment programs. We need to develop homes that first time home buyers can afford and the lending programs needed to finance them This coupled with an economy that provides jobs, stable employment and income will create not just more first time buyers but help them move on to become second and third buyers in the future. A future that will be bright with a robust housing market and a higher rate of homeownership. Now, that’s really good for lenders.
Mortgage Industry Trends

Affordable Housing Getting a Closer Look

Michael Vitali / September 28, 2016

Despite the historically low mortgage interest rates, new low down payment programs, easing of some credit standards, and special programs for first time and low to moderate income home buyers, we are still seeing homeownership rates decline. Why? It seems that the problem is not all about helping potential home buyers qualify for their financing; it’s as much about them…

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