Pam Marron Home Lending

Candidates Need to Focus on Housing Affordability: Survey

June 23, 2016 by · Leave a Comment 


Nearly two-thirds of Americans think that something can be done to address problems related to housing affordability — and they want the presidential candidates to talk about it.

Sixty-three percent of adults believe that candidates for president have not spent enough time discussing housing affordability, according to the fourth annual How Housing Matters survey released Thursday from the John D. and Catherine T. MacArthur Foundation. The survey also found that 81% of adults believe that housing affordability is a problem in America today.

And results from the survey suggest that Americans’ optimism toward the economy’s recovery from the financial crisis is waning. This year, 29% of adults said that they felt “the housing crisis is pretty much over,” down six percentage points from a year ago. In contrast, 44% believe the country is still in the midst of the housing crisis, and 19% said the worst is yet to come.

Meanwhile, having stable, affordable housing tied for second with saving for retirement as being very important for maintaining “a secure, middle-class lifestyle,” with 85% of respondents. Having a good job came in first with 90% of survey takers.

Unsurprisingly then, most respondents think more can be done politically, with 76% saying it is either very or fairly important for leaders in Washington to address the issue of housing affordability.

Democrats and independents were more likely than Republicans to say that the 2016 presidential candidates have not focused enough attention on the subject, with 75% of Democrats and 66% of independents saying this versus just 49% of Republicans, according the MacArthur Foundation’s report.

Over 20% Say Housing Will Affect Their Choice for President

June 23, 2016 by · Leave a Comment 

by Jacob Passer, National Mortgage News – June 22, 2016

More than one in five Americans say the presidential candidates’ policies on housing and finance will shape their vote in November, according to the results of a survey conducted for loanDepot.

Altogether, 21% of survey respondents said that these policies will influence their choice of candidate, loanDepot reported Wednesday. But 36% of survey-takers said that the presidential candidates are not articulating their policies in these areas well.

Nevertheless, folks across the country are hungry for more: 35% of respondents said they want to hear more from the candidates on housing and finance, and that figure rose to 56% for Democrats and 39% for Republicans.

“People across the nation told us they want to hear more from the presidential candidates about their housing and financial policies on issues like income, access to credit, interest rates and affordable housing,” loanDepot Chairman and Chief Executive Anthony Hsieh said in the release.

“The candidate who does a good job in communicating their policies moving forward has an opportunity to influence millions of potential voters.”

Regarding the next president’s first 100 days in office, 37% of respondents said increasing the affordability of homeownership for lower- and middle-income families ranked as the top economic or housing priority to be addressed. Next was keeping interest rates low, 34%, and increasing the availability of credit to small businesses, 11%.

Nearly half of both Democrats and Republicans also responded that they wanted interest rates to remain low during the first 100 days of the next president’s term.

As for voters’ expectations of how the next president would affect their financial situation, 66% said they expected their situation to remain the same while 24% believe they will be worse off. Just 6% of voters expect the next president to improve their financial situation.

But loanDepot noted in the survey that voters’ perceptions don’t always align with reality. Case in point: 38% of respondents said they think it is harder to get a home loan today than it was immediately after the financial crisis. But as loanDepot notes, citing data from the Federal Reserve, denial rates for purchase loan applications reached 18% in 2008 versus 13% in 2014, the most recent year for which data is available.

The survey was conducted by Omniweb and included 1,000 adults, split evenly between men and women.

We’re still in a housing crisis survey reveals

June 20, 2016 by · Leave a Comment 

by Steve Randall, from Mortgage Professional America

A new study reveals that 81 per cent of Americans believe that the housing affordability crisis in on the rise. More than two-thirds of respondents in a national survey by the MacArthur Foundation say that it is more challenging to find affordable housing now than for previous generations.

Just 29 per cent believe that the housing crisis is over and 76 per cent say that it is important that their elected leaders in Washington take action to address the situation.

The majority (60 per cent) believe that owning a home is an excellent long-term investment.

One area that has recently been named the metro with the highest level of underwater homes is also far above the national average for concern over affordability and putting household budgets under extreme pressure.

Defaulting HELOCs: A growing concern

June 15, 2016 by · Leave a Comment 

June 10, 2016 – In 2004, millions of homeowners tapped into the equity of their homes through low-interest – or no interest – home equity lines of credit (HELOC). Their 10-year grace periods are now done and they’ve had to start paying. And that’s why HELOC delinquencies are now suddenly soaring.

In March, second-lien HELOC delinquencies – the number of homeowners who are behind on this second mortgage – climbed 87 percent compared to a year ago, Black Knight Financial Services’ reports.

Delinquencies may continue to climb, and those homeowners who cannot make the increased HELOC payments or refinance could find themselves facing foreclosure.

HELOCs taken out in 2005, 2006 and 2007 comprise 52 percent of all active lines of credit. In 2005, there were about 850,000 home equity lines; in 2006 and 2007, it was 1.25 million. The grand financial total from just those three years: $192 billion.

The recent increase in HELOC delinquencies is the first annual increase since June 2012, Black Knight notes. An 87 percent spike in delinquencies among 2005 HELOCs over the past 12 months has been attributed to most of the recent spike.

Source: Black Knight Financial Services and “A Decade After the Bubble, Home-Equity Line Delinquencies Jump,” MarketWatch (June 6, 2016)

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Chicago Among Cities with Largest Share of Underwater Homeowners

June 14, 2016 by · Leave a Comment 


Stuck in a home you can’t sell for enough to get out from underneath the mortgage? You are not alone.

More homeowners in the Chicago area are trapped in underwater mortgages than in almost any other major metropolitan area in the country, according to two new studies released this week.

One report, released Thursday by housing research data firm CoreLogic, found Chicago slightly better off than Las Vegas and Miami. But a separate study released Wednesday by real estate website Zillow places Chicago homeowners in the worst position in the nation, with a larger portion of homes underwater than in either Las Vegas or Miami.

When homeowners are underwater, they have unpleasant choices. Their homes are worth less than they owe their lender. So if they decide to sell, they won’t make enough on the sale to repay the lender. Somehow they have to Read more…

Good Credit Doesn’t Help Those with Negative Equity

June 14, 2016 by · Leave a Comment 

by Pam Marron – June 14, 2016

Policy still exists today that requires mortgage delinquency first before any help on lower payments for underwater homeowners is considered. There are still 6.7 million underwater homeowners “staying put” awaiting equity to return and who are paying their mortgage on time. A great majority of them have no refinance option except a modification…. which requires mortgage delinquency and a hardship first.

Homeowners who have negative equity, who are staying put, and who are current on their mortgage… need to be given a refinance option just like those with equity available to them… a refinance that does not require mortgage delinquency first and allows continued, on time mortgage payments.

Many have asked why I am obsessed with keeping problems that surround underwater homeowners at the forefront. It is because of continued policy applied to those who have negative equity that requires mortgage delinquency first just to be considered for a better finance option when no refinance is available, or when an underwater homeowner must short sale their home.

For those with a non-Fannie Mae, non-Freddie Mac conventional first mortgage, a second mortgage or a home equity line of credit that has negative equity, mortgage delinquency is still required first just to be considered for a modification, their only option.

This delinquent mortgage requirement results in a denial of a new secondary market mortgage and a prolonged period of time to get a new mortgage. This directly affects mortgage and real estate industries and the U.S. economy.

Resetting [1]Interest Only First Mortgages, Second Mortgages and Home Equity Line of Credit (HELOC)

A large number of loans originated as interest only first, second mortgages and HELOCs are now resetting to fully amortized payments. Interest only loans have a set period of time when interest is paid only. It is common to see a three, five, seven or ten year reset time frame where full principal and interest payments on the outstanding balance including principal that is unpaid start to be paid back. In areas across the nation where home values have not come back yet, homeowners are stuck with initial higher interest rates simply because they have negative equity. Fully amortized payment increases have been seen as high as 400%. The only option available for negative equity non-Fannie Mae, non-Freddie Mac conventional first mortgages, second mortgage or home equity line of credit (HELOC) is a modification that.… you guessed it… requires mortgage delinquency and a hardship first in order to get help.

An alarming number of elderly homeowners who have refused to go delinquent on their mortgage but have negative equity interest only loans are now coming forward. It is especially heartbreaking to see homeowners in their 70s and 80s demoralized by the fact that they have to destroy their credit just to be qualified for a lower interest rate.

And, if these underwater homeowners ultimately short sale, the negative credit from the required mortgage delinquency results in a higher rent payment.

A great deal of early press educated our nation about “strategic defaulters”, claiming that many who walked away voluntarily were able to make payments but chose not to. However, a 2015 study entitled [2]“Can’t Pay or Won’t Pay? Unemployment, Negative Equity, and Strategic Default” cites that though unemployment was the single biggest financial shock, most financially distressed households didn’t default and underwater homeowners tapped into retirement resources and friends or relatives to stay afloat. Even among unemployed households lacking enough savings to make even one monthly mortgage payment, more than 80% stayed current.

Another issue centered around families who could afford to keep paying their mortgage but chose not to do so. Despite media attention to strategic defaulters, the study shows that these were rare. Fewer than 1% of households with the financial means to pay instead chose to walk away.

The study largely confirmed that personal economic events led to mortgage defaults without citing negative housing equity as the overriding factor. It also showed that many underwater homeowners struggle to hang on to their homes perhaps longer than they should, wiping out retirement assets awaiting positive equity to return.

Many who are in the mortgage business in areas still affected by negative equity are acutely aware of how the required mortgage delinquency results in a downward spiral of credit that prompts other negative consequences for underwater home owners just trying to stay put.

This country can’t afford to turn a blind eye to what we all saw coming in 2007-08. Good credit is still the benchmark of the mortgage and real estate industries and the driver of a good economy. Solutions are available right now.

[1] The I-O payment period is typically between 3 and 10 years.

[2] Can’t Pay or Won’t Pay? Unemployment, Negative Equity, and Strategic Default”

Rising Prices Should Take 1M More Owners Out of Negative Equity

June 10, 2016 by · Leave a Comment 

by Jacob Passy (National Mortgage News)

There were more than a million homeowners whose properties exited negative equity status over the past year, with the potential for another million to do so if home prices continue to rise, according to CoreLogic.

CoreLogic reported Thursday that the number of underwater properties at the end of the first quarter totaled 4 million, which equates to 8% of all homes with a mortgage. That figure was down 6.2% from the fourth quarter and 21.5% from a year ago.

read more…

Negative Equity Falls Nationally, Finds Foothold in Midwest

June 10, 2016 by · Leave a Comment 

by Jacob Passy (National Mortgage News)

While negative equity rates continue to drop nationally from their 2012 peak, the share of homeowners underwater in the Rust Belt remains elevated, according to data from Zillow.

The negative equity rate, which measures the share of all homeowners with a mortgage who owe more than their home is worth, was 12.7% during the first quarter, down from 13.1% in the fourth quarter and 15.4% in the first quarter of 2015. The negative equity rate hit its peak in the first quarter of 2012 at 31.4% and has either fallen or held steady every quarter since then, Zillow said Wednesday.

read more…

Buyer’s Agents Needed Now more Than Ever

June 8, 2016 by · Leave a Comment

Underwater Homes are Still Looking for a Lifeline

June 6, 2016 by · Leave a Comment 

(from the Scotsman Guide)

The housing crisis seemed to start overnight in many parts of the country, going from good sales in December 2006 to no sales abruptly a few months later, when the bottom started to fall out.

Many of those most affected by the crisis were elderly underwater homeowners who got into trouble after pursuing refinances that were often done for the purpose of helping their kids. Although the elderly are commonly more cautious when it comes to home financing, a large number mortgaged their homes with risky interest-only first and second loans — convinced by their lenders or their own children that these loans would be paid back with escalating equity fueled by rising home appreciation.

Read More Here

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