Tag Archives: Loan

Clarification of Mortgage Rules Comes From CFPB

20 Sep

The Consumer Financial Protection Bureau (CFPB) this month finalized amendments and clarifications to its January 2013 mortgage rules to help the industry comply and to better protect consumers.

In January of this year the CFPB introduced the Ability-to-Repay rule, requiring lenders to make a “reasonable, good-faith determination” that prospective borrowers have the ability to repay their loans.


On June 24, 2013, the CFPB proposed several amendments and clarifications to the mortgage rules adopted in the final rule, which is intended to clarify interpretive issues and facilitate compliance. One of the Bureau’s modifications is to clarify what servicer actives are prohibited in the first 120 days of delinquency. This rule prohibits servicers from making the “first notice or filing” under state law during the first 120 days a borrower is delinquent.


Under the rule, servicers will be allowed to send certain early delinquency notices required under state law to borrowers that may provide beneficial information about legal aid, counseling or other resources.


Another rule the CFPB aims to clarify is the definition of a loan originator.  Under the CFPB’s new rules, persons classified as loan originators are required to meet qualification requirements and are also subject to certain restrictions on compensation practices.


The provisions of the CFPB’s loan originator compensation rules that have not yet gone into effect were scheduled to take effect on January 10, 2014.  The  CFPB has changed the effective date for certain provisions of the rule to January 1, 2014.

“Our mortgage rules were designed to eliminate irresponsible practices and foster a thriving, more sustainable marketplace,” said CFPB Director Richard Cordray. “Today’s rule amends and clarifies parts of our mortgage rules to ensure a smoother implementation process, which is helpful to both businesses and consumers.”

NY, NJ Among Top 5 In Non-Current Loans

23 May
JACKSONVILLE, Fla. – May 22, 2013 – Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology, data and analytics to the mortgage and real estate industries, reports the following “first look” at April 2013 month-end mortgage performance statistics derived from its loan-level database representing approximately 70 percent of the overall market.
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure):  ​ 6.21%​
     Month-over-month change in delinquency rate: ​ -5.81%​
     Year-over-year change in delinquency rate: ​ -9.61%​
Total U.S. foreclosure pre-sale inventory rate: ​ 3.17%​
     Month-over-month change in foreclosure presale inventory rate: ​ -5.83%​
     Year-over-year change in foreclosure presale inventory rate: ​ -24.55%​
Number of properties that are 30 or more days past due, but not in foreclosure: (A) ​ 3,111,000​
Number of properties that are 90 or more days delinquent, but not in foreclosure:  ​
Number of properties in foreclosure pre-sale inventory: (B)  ​ 1,588,000​
Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) ​
States with highest percentage of non-current* loans: ​ FL, NJ, MS, NV, NY ​
States with the lowest percentage of non-current* loans: ​ MT, WY, AK, SD, ND​
 *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
(1) Totals are extrapolated based on LPS Applied Analytics’ loan-level database of mortgage assets.
(2) All whole numbers are rounded to the nearest thousand.

The LPS full report should be out by June 5.

Making Comments on CFPB Proposed New Forms

11 Jul

Did you know that you may comment on the new mortgage forms proposed by the CFPB (Consumer Financial Protection Bureau)?

The link below allows you to search for the proposed forms and make a comment on their improvement.  Comments will be accepted through November 6.


Considering that getting a mortgage is probably the biggest financial decision most people will make, the CFPB aims to make disclosure forms more readily understood by the general public.

This means that mortgage professionals will have to learn to use and explain the new forms.  There is sure to be a learning process involved, but the end result will provide greater clarity in the costs and terms of a loan.

Some Promising Numbers

23 Mar

Mortgage rates dropped slightly this week after an uptick of just under ½% in the last two weeks. The recent rate increase, however, immediately impacted activity in the housing market. The Mortgage Bankers Association reported that for the prior week, applications for home purchases declined by 1.0%. The big impact of the rate increase was felt in the refinance index which dropped 9.3%.

The Housing Market Index, which measures the confidence reported by the National Association of Home Builders, is at the highest level since the start of the recession. Home builders are indicating that they are expecting significant growth in new construction in the coming months. Although housing starts dropped slightly after January’s very strong report, the good news is that permits for new construction are continuing to increase which is evidence of the builder’s sentiment on an improving real estate picture.

Existing Home Sales dropped just under 1.0%, however this report comes after January’s upwardly revised jump of 5.7%. Compared to last year, existing home sales are up 8.8%, making us optimistic that housing is on the mend.

Inflation and Its Impact on Home Loan Rates – Simplified!

4 Nov

The Consumer Price Index, or the amount of  you pay for goods and services day in and day out, plays an enormous role in consumer loan rates as well – here’s how:

Imagine for a moment that you are going to lend someone your own money to buy a house. So you determine that this person is a good credit risk, you do the loan, and you start receiving $1,500 per month as your regular payment. You then of course take that $1,500 and start loading up your shopping cart with the goods and services you need on a monthly basis…food, clothing, medicine, gas, etc.

But over time, you notice something happening. Every month, you are getting slightly less in your cart than you did the month before, for that same $1,500 you are spending. Why? Because costs are on the rise–that’s inflation.

Now imagine that you are once again going to lend your very own money to another person to buy a house. You go through all the paces once again, and determine that the person is a good credit risk. You want the same shopping cart full of “stuff” that you got last time in return for doing the loan, but this time you realize that you can no longer get that same cart full with $1,500. Due to inflation, you now need $1,700 to buy those same goods and services.

So what does this mean for the interest rate you will charge this second person? It means you will need to charge a higher interest rate to compensate you for the ongoing impact of inflation. And that is why home loan rates change when there is a fear of inflation in the air, as lenders need to offset the impact of inflation over the years, which will erode the value of the dollars they are receiving over time. And that’s also why it makes sense to work with a smart home loan professional who can be watching these types of indicators and keeping you informed and advised.


National Home Price Index Up In 2nd Q But Still Down Year-Over-Year

31 Aug


The U.S National Home Price Index increased 3.6% in the second quarter of 2011, but the index is still posting a decline of 5.9% over the same period last year.

As CBS News reported last night, average home prices are at a level comparable to 2003 levels across the nation.  With prices and mortgage interest rates so low, they asked, why aren’t people buying?

The answer seems to lie in the difficulty people are having in securing a loan.  Qualifying credit scores required for many lenders have jumped by 100 points.  Well qualified, buyers, however, should overcome their fear of the market and purchase their dream home at a price that is now within reach.

Buyers over age 62 should look into a reverse mortgage (HECM For Purchase).  No income or credit qualifications are currently required. 

Call Karen at Tradition Title Agency today for the name of an experienced loan officer who can help with any type of financing.