Well, we’re four days into the new regulations, and — lo and behold — the sky has not fallen. It turns out there was a rush on mortgages last week, in preparation for the new regulations, but in most cases that may not have really been necessary. It appears that things are going smoothly at most lenders. The only real “danger” is that closings may take longer at the largest banks. If you’re looking at one of them, word on the street is that closing could stretch to 60 or 75 days.
Memories can be short lived. Sure, we all remember the mortgage meltdown of 2008. But do we really remember it? Would it surprise you to learn (or remember, or fail to remember), that one — and only one — executive from a major mortgage lender was found liable in a court of law? Rebecca Mairone, then COO for a division of Countrywide, in 2013 was found liable for misrepresenting the quality of mortgages. But the story is never quite that simple, as reported by Bloomberg Business.
U.S.A. Today posted a great article on Saturday, that they borrowed from the Motley Fool. The upshot of it is, as a home buyer, you need to keep in mind that the people across the table from you are trying to sell you something. And while clearly, with interest rates at their current levels, it’s hard to know when you’ll have a better opportunity to buy a home, if ever, it’s also true that pushing yourself to the limits of your finances may not be the best decision. Here are 5 things to keep in mind.
Well, we’ve been blogging about the tightening in mortgage lending regulations for what seems like forever now, but it finally went live this weekend. The “know before you owe” rules are officially in effect. Of course, in the age of very long internet contracts that no one ever reads, it may be optimistic to hope that borrowers will read the fine print of their mortgage contracts, but that’s one of the main aims of the new rules. The Financial Times has a little more background on these and surrounding regulations.
Last week’s Harvard Kennedy School PolicyCast seems to conflict with everything else we’re hearing on the street — including the news from top economists, as we recently reported, quoting Zillow’s chief economist. Christopher Herbert, managing director of the Harvard Joint Center for Housing Studies, says, “It’s more than a blip on the radar. This is a pretty fundamental shift, and one that I think is a reason for concern…. We have not yet come close to finding a bottom in the homeownership rate.”
We found this little piece in The New Yorker, and couldn’t resist sharing. It’s a pleasant little satire on the trials and tribulations of home ownership and home buying in the New York area. To be sure, we find it doubtful that you consider your home the house of your nightmares but there’s enough in here that carries the satirical ring of truth that we think it can resonate (at least a little) with every homeowner. For those of you who aren’t homeowners yet, don’t worry — it’s not just satirical, it’s also a little hyperbolic. Enjoy!
Well, we promised it, and we like to keep to our word, so — now that it’s Autumn, here’s your first Autumnal post. Today we’re focused on taking care of those chores that need to be done before winter sets in. We found this great checklist at demesne.info, that not only covers “in and around the house” and “in the yard and garden” fairly comprehensively, but also provides a bonus checklist covering emergency preparedness and getting your car ready, as well.
A while back, this blog covered the rapid increase in foreign investments in the U.S. housing market. With all of the recent news regarding (and never mind the news, the actual ups-and-down in) the Chinese stock market, it’s worth revisiting this state of affairs. RIS Media seems to be of the opinion that said volatility is likely to increase demand for U.S. real estate by Chinese nationals. But it also adds the need for extra caution amongst real estate professionals, to ensure that the volatility still leaves these foreign investors in a stable position.
Bloomberg Markets interviews Svenja Gudell, Chief Economist for Zillow, and she makes some interesting points, particularly in light of Yellen’s speech today outlining a case for interest rate hikes this year. One of the key points is understanding the importance of regionality. We get national numbers, but, say, a 0.25 point increase would have a vary different impact in frothy markets like San Francisco than it would in say, Philly. Similar regional arguments apply to renter sentiment.
In the wake of the recent sub-prime mortgage scandal, everyone is understandably nervous about repeating the past. Recent data indicates that, in fact, sub-prime lending is up significantly (20.4% for HELOCs, 29.5% for home-equity loans, and 30.5% for first mortgages). However, it seems unlikely that there’s cause for concern. Although those percentage increases are large, the number of overall sub-prime loans is very small. Only 146,000 of the 3.3 million mortgages year-to-date were issued to borrowers with a credit score below 620.
