Blog Articles from Allegiant Mortgage, LLC

First-time buyers expected to increase say mortgage pros

Three quarters of mortgage professionals polled recently say that they expect first-time buyers’ market share to stay the same or increase by at least 3 percentage points in 2016.

New buyers are a key reason for tightening inventory according to respondents but there are still barriers to homeownership. Most (64 per cent) of respondents said that lack of a down payment was the top obstacle limiting access to mortgage credit; 16 per cent cited inadequate income; 9 per cent said home price; and 8 per cent said poor credit scores.

The high demand from first-timers, together with these barriers to mortgage credit, has led to a rise in piggyback mortgages, a concern for 49 per cent of respondents.

The survey was conducted by Genworth Mortgage Insurance at the Mortgage Bankers’ Association Secondary Conference in New York in May.
Housing counseling collab announced
A national collaboration of lenders, investors, real estate agents and housing counseling agencies announced today that they are joining forces to raise awareness of the opportunities and benefits of working with housing counseling agencies.

The groups, including the Mortgage Bankers’ Association and National Association of Realtors, will help to spread the word about housing counseling and how it can help would-be homeowners.

"Homeownership is an investment in the future, but consumers sometimes need a little extra help on the path to get there," said NAR President Tom Salomone. "Homeownership counseling is available to help consumers meet those challenges head on, and the Homeownership Collaborative will make more people aware that these services are available to them."
How the Presidential election is impacting housing
Three reports this week reveal how the forthcoming presidential election is having an effect on the housing market.

The first, from the California Association of Realtors, shows that historically there has been little impact on the state’s housing market from elections.

“Transitory political events such as presidential elections don’t drive the housing market,” said CAR president Pat “Ziggy” Zicarelli. “Market fundamentals such as housing inventory, affordability, interest rates, job growth, and consumer confidence are the real factors that influence the housing market.”
A separate poll, commissioned by CAR and conducted by The Futures Company think tank, revealed that 70 per cent of respondents who are considering buying a home want their presidential candidates to talk about housing affordability.

Finally, a poll by mortgage lender loanDepot found that 21 per cent say their vote will be influenced by housing and finance policy.

A third say that the candidates are not saying enough on the issue and a similar proportion say that the candidates are doing a bad job of setting out their policies on housing and finance. 

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Posted in:General
Posted by Rose Tignor on June 22nd, 2016 8:17 AM

It turns out homebuyers are really into barn doors.  

When Zillow looked at design features that sell homes at the best price and with the shortest listing time, that feature topped the list. 

Anything craftsman-style, like rectangular farmhouse sinks, also got homes off the market at a premium. 

Zillow Digs screened over 2 million listings for homes sold between January 2014 and March 2016 and looked for the keywords that had the best effect on how much more than the expected price and how much faster they sold.  

Here are the top 15 design features:

1. Outdoor Kitchen

Percent of homes that sell for above expected values: 3.7%

How many days faster than expected the home sells: 19

2. Tankless Water Heater

Percent of homes that sell for above expected values: 4%

How many days faster than expected the home sells: 43

3. Backsplash

Percent of homes that sell for above expected values: 4.1%

How many days faster than expected the home sells: 46

4. Granite

Percent of homes that sell for above expected values: 4.1%

How many days faster than expected the home sells: 38

5. Stainless Steel

Percent of homes that sell for above expected values: 4.2%

How many days faster than expected the home sells: 42

6. Heated Floors

Percent of homes that sell for above expected values: 4.3%

How many days faster than expected the home sells: 28

7. Frameless Shower

Percent of homes that sell for above expected values: 4.6%

How many days faster than expected the home sells: 38

8. Pendant Light

Percent of homes that sell for above expected values: 4.6%

How many days faster than expected the home sells: 48

9. Exposed Brick

Percent of homes that sell for above expected values: 4.9%

How many days faster than expected the home sells: 36

10. Craftsman

Percent of homes that sell for above expected values: 5.4%

How many days faster than expected the home sells: 14

11. Quartz

Percent of homes that sell for above expected values: 6.0%

How many days faster than expected the home sells: 50

12. Subway Tile

Percent of homes that sell for above expected values: 6.9%

How many days faster than expected the home sells: 63

13. Farmhouse Sink

Percent of homes that sell for above expected values: 7.9%

How many days faster than expected the home sells: 58

14. Shaker Cabinet

Percent of homes that sell for above expected values: 9.6%

How many days faster than expected the home sells: 45

15. Barn Door

Percent of homes that sell for above expected values: 13.4%

How many days faster than expected the home sells: 57


Posted in:General
Posted by Rose Tignor on June 14th, 2016 2:44 PM

TRID has caused a lot of problems for lenders – but it may be causing homebuyers to review their mortgage documents more carefully, according to a new study.

A study conducted by the American Land Title Association shows that there’s been a jump in the share of homebuyers who actually take time to review their closing documents. ALTA conducted the survey in two phases. First, the group assessed the closing experience of homebuyers prior to TRID implementation. Then the same information was gathered from homebuyers after implementation.

“Title and settlement agents went to great lengths to prepare and train staff prior to implementation of the regulation,” said Michelle Korsmo, CEO of ALTA. “The hard work of these professionals paid off as 92% of surveyed homebuyers are taking time to review their mortgage documents before the closing. This compares to only 74% of consumers who reported having reviewed their documents prior to the new regulation.”

ALTA did find that TRID implementation caused some closing delays – but according to survey results, the impact wasn’t earth-shattering. Prior to TRID implementation, 77% of closings took place on time. With TRID in effect, that dropped to 74%.

“Settlement agents reported that the top reasons for rescheduling a closing to another day were issues with lender underwriting, a delay from the lender and an issue with the three-day rule,” Korsmo said.

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Posted in:General
Posted by Rose Tignor on May 18th, 2016 9:16 AM

Mortgage savings that homeowners would have realized because of falling interest rates have been cut into deeply – and in some cases, canceled out entirely – by rising home prices.

Black Knight Financial’s monthly Mortgage Monitor report, released Monday, calculated how much per month it would cost to purchase a median-priced home. “All else being equal, interest rate declines would save borrowers significant money on a home purchase,” Black Knight stated in a release.

Unfortunately, all things are not equal, as Ben Graboske, Black Knight Data & Analytics senior vice president, explained. 

"Excluding home price movement, the interest rate decline since the start of the year would save borrowers approximately $44 a month when purchasing the median-priced home nationally,” Graboske said. “However, when you factor in estimated home price appreciation (HPA) – the most recent Black Knight Home Price Index Report for February showed annual HPA at 5.3 percent – those monthly savings fall to just $18.”

It’s not all bad news, Graboske stressed.

“The mortgage on a median-priced home is still more affordable than it was in December, despite rising prices, just not as much as one might expect given that rates are as low as they are,” he said. “This isn't to say that interest rate reductions aren't beneficial to buyers – they almost certainly are. If rates hadn't dropped over the past four months, it would cost an additional $28 to buy the median-priced home today as compared to December 2015. By and large, borrowers are still seeing net reductions in monthly payments across the country heading into the early home buying season. In some areas though, prices are appreciating so quickly that they may have fully offset any savings from rate declines. Assuming the HPA observed in February continues through March and April, it may actually cost home buyers more in monthly principal and interest to purchase the median-priced home in Washington, Colorado and Oregon than it did at the end of 2015, even with a 35 BPS drop in interest rates."

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Posted by Rose Tignor on May 3rd, 2016 1:03 PM
The chair of the Senate Banking Committee had harsh words for the director of the Consumer Financial Protection Bureau at a hearing Thursday.

Sen. Richard Shelby (R-Ala.) criticized the CFPB’s use of enforcement actions to set market standards rather than a rule-making process, its perceived lack of accountability, and many aspects of the Dodd-Frank Act itself.

“Unfortunately, the drafters of Dodd-Frank immunized the Bureau from any meaningful congressional influence, leaving it free to engage in questionable practices and unreasonable expansions of its jurisdiction,” Shelby said. ““The only effective restraint available now resides in the courts. Fortunately, this week a federal court of appeals has directed the CFPB to defend the constitutionality of its structure.”

Shelby said the CFPB’s actions have actually undermined its mission.

“There is now growing concern that, despite the Bureau’s mission, its rules and regulations actually restrict access to credit, increase costs, and deny financial products to the consumers who need them,” he said. “Last year’s survey by the Federal Reserve found that 47% of U.S. households are unable to come up with $400 in emergency funds without selling something, going into credit card debt, or using a short-term loan.

“By targeting some of these products in its rulemakings, the Bureau may be blocking access to the very financial services many Americans may need in a crisis,” Shelby added. “Consumer protection should not mean limiting consumers’ options by substituting the Bureau’s judgment for the consumers’.”

Posted by Rose Tignor on April 26th, 2016 11:54 AM

Sure, you’ve saved up for a down payment on a new house, but if you have average credit, you may have a hard time qualifying for a mortgage and buying the home of your dreams. The good news is, you can do a lot to improve your score before you apply. With these tips, you’ll have a much better chance of getting approved and locking in an affordable interest rate.

1. Pay off your credit cards

If you’re up to your ears in credit card debt, lenders will probably think twice before offering you a mortgage because both your credit utilization ratio and your debt-to-income ratio will be high. That’s why it’s a smart idea to start paying off those balances before sending out mortgage applications.

Make more than the minimum payments on your cards each month. Not only will this boost your credit score and lower your overall debt load, but it will also save you money on interest and show potential lenders that you’re serious about repaying what you borrowed.

2. Pull your credit reports and check for errors

Mistakes happen. And when they do, you don’t want to be the last person to know about them. Get free credit reports online from the three major credit bureaus, TransUnion, Equifax and Experian, and go through them line by line, checking for inaccuracies. If you come across an error, file a dispute as soon as possible.

Both Equifax and Experian have online dispute forms you can complete, and TransUnion has a form you can fill out and mail in. After submitting these forms, the credit bureau will contact the source, and the claim will be investigated within 30 days. You also have the option of sending a letter of dispute directly to the credit reporting companies with copies of supporting documentation. Remember to send these via certified mail to ensure the company receives your dispute.

3. Stop applying for new credit

If you’re moving into a new house, you may also be interested in getting a new car for your driveway and furniture to fill your rooms, but hold off on applying for new credit cards and auto loans until you’ve locked down that mortgage. You want your credit report to look as clean as possible when you send in your application, and many new inquiries may raise red flags for lenders.

Nerd note: While delaying the credit card applications could be a good call, it’s generally not a good idea to close all your paid-off cards at the same time. If you do this, your credit utilization ratio may go up and your credit history may appear shorter and less varied, which could also hurt your score. Instead, plan on keeping your accounts open, at least until your mortgage is approved.

4. Shop with purpose

Shop around for a mortgage with the best rates, but don’t let your search drag on. After about a month, your FICO score may start reflecting your applications as separate inquiries, which could ding your credit score. This could potentially be an even bigger problem if your lender uses the less common VantageScore or an older version of the FICO score, which consider mortgage applications as separate inquiries if they’re not within two weeks of each other. To stay on the safe side, keep your search focused and brief.

If possible, get pre-approved for a mortgage before even shopping for a house, so that if you do find the home of your dreams, you won’t have to worry about getting approved for a loan later.

5. Save aggressively

You’re focused on getting a mortgage now, but remember to protect your credit score after you’ve been approved. Once you make your down payment on your new house, your savings may take a hit and you may feel tempted to start relying on credit more heavily. In the short term, that may be OK, but making it a long-term habit could do some serious damage to your credit score.

If your savings account is dwindling, consider cutting back on fixed expenses and work toward saving six months’ worth of living expenses. This way, in case of an emergency, you won’t have to use your credit card as a crutch. By protecting your credit score, you’ll also have an easier time applying for mortgages and other credit lines down the road.

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Posted by Rose Tignor on April 13th, 2016 2:15 PM
Home flipping is a labor of love that can yield lucrative returns for those willing to make prudent choices in the fixer-uppers they buy and endure the process of an extensive renovation. But it's a route homebuyers are taking increasingly often to earn that healthy ROI, according to RealtyTrac, the Irvine, Calif.-based housing data company and online marketplace, which says the number of active home flippers is at the highest levels seen in recent years.  

"There were 110,008 investors or entities that completed at least one home flip in 2015, the highest number of home flippers since 2007, when there were 130,603 home flippers," RealtyTrac said. "The peak in the number of active home flippers was in 2005, with 259,192. There were 1.63 home flips per investor in 2015, the lowest ratio of flips per investor since 2008."

Some 179,778 U.S. single family homes and condos were flipped in 2015, according to RealtyTrac -- about 5% of sales -- and, more staggeringly, flipping in 12 major markets now is above 2005 levels, said RealtyTrac. . As for metros with especially torrid flipping, RealtyTrac pointed to Pittsburgh (19% above 2005 levels), Memphis (18% above 2005), Buffalo (12% above 2005) and San Diego (4% above 2005), Seattle (4% above 2005) and Birmingham, Ala.(4% above 2005). 

What does that mean? There just are more hobby flippers - or maybe they should be called part-time flippers - who are attracted to the scent of what smells like easy money.

Understand this: flippers are not necessarily bad for a real estate market, insisted Daren Blomquist, a senior vice president at RealtyTrac. He said that in many metros, flippers focus on gentrifying - but not prime - neighborhoods where they spruce up a house. Doing that yields their profit. By Blomquist’s math, flippers bought homes at an average of 26% below estimated market value and they sold them at 5% above estimated market value. That produced an average profit per home of $55,000, said Blomquist.

Rocky Lalvani, a 50-year-old flipper in Harrisburg, Pa. said he strategically looks for foreclosed homes, especially ones that “have been trashed.”  A sweet spot for him to buy is $50,000. He puts maybe $20,000 to $30,000 into the house - often they need a new furnace, for instance, maybe significant new plumbing - and he sells “in the low $100,000’s.”

In Greeley, Colo., 37-year-old Mark Ferguson said he has “flipped over 100 houses” and said he likes to buy at the lowest prices in his market ($100,000 to $150,000, he said). He puts in $20,000 to $25,000 on average in repairs, rehab and updates. And his hope is to sell at $175,000 “if I bought for $100,000.”

You want to sign up for those profits? Hold on. There is more to chew and some of it is worrisome for future flippers.

For starters: know that to get in the game you need cash. In fact, most flipped homes are bought in all cash deals, said Blomquist, who added that in 2015 70% of flipped homes were bought for cash. That, he added, is a key reason flippers can win discounts. They can close, fast, and there are no uncertainties about a mortgage going through.

The next problem: inventory of available homes for flipping is dropping, said 35-year-old Ryan Paliukaitis, who said he has been “doing this fulltime” since 2006 and operates across much of New Jersey. That has become key, he said, because it just is getting harder to find deals. “With increased competition comes bidding wars and thus less profit on the fix and flip deals,” he said.

A big reason for that is - as the RealtyTrac data show - a lot more of us are piling into flipping.

That raises another problem, said 53 year-old Irvine, Calif. realtor and sometimes flipper Jerry Koller: he is seeing more homes on the market that aren’t selling, because hobby flippers did fast cosmetic jobs on homes and then have expected huge returns. It does not happen that way. Koller said he knows one flipper in Orange County who bought a number of homes, put new paint on the walls, new flooring in most rooms, then upped the price $100,000. “They aren’t selling,” said Koller, who indicated this seller has been forced to put those homes up for rent.

Will flippers be left holding an expensive bag of unwanted property? Experts shrugged. That all depends on the velocity of the home buying market. If demand stays high - and mortgage rates stay low - there will be opportunities for flippers who can buy low and sell high. That is a constant.

The other constant: flipping is “definitely not for the faint of heart,” said Koller. A lot can - and often does - go wrong. But when the profits are there, flipping is sweet - and that is why so many more now want into it.

Original Article by: Robert McGarvey with Main St.
Posted by Rose Tignor on March 30th, 2016 8:20 AM

Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008. 

The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.

Posted in:General
Posted by on April 17th, 2009 1:17 PM

RealtyTrac®, one of the leading online marketplaces for foreclosure properties, released its U.S. Foreclosure Market ReportTM for Q1 2009, which shows that foreclosure filings - default notices, auction sale notices and bank repossessions - were reported on 803,489 properties in the first quarter, a 9% increase from the previous quarter and an increase of nearly 24% from Q1 2008. One in every 159 U.S. housing units received a foreclosure filing during the quarter.

Foreclosure filings were reported on 341,180 properties in March, a 17% increase from the previous month and a 46% increase from March 2008. The March and Q1 2009 totals were the highest monthly and quarterly totals since RealtyTrac began issuing its report in January 2005 despite a decrease in bank repossessions (REOs), which were down 13% from the fourth quarter of 2008 and 3% from February totals.

“In the month of March we saw a record level of foreclosure activity - the number of households that received a foreclosure filing was more than 12 percent higher than the next highest month on record. Since much of this activity was in new foreclosure actions, it suggests that many lenders and servicers were holding off on executing foreclosures due to industry moratoria and legislative delays,” said James J. Saccacio, chief executive officer of RealtyTrac. “It’s also likely that the drop in REO activity can be attributed to these processing delays, rather than to any of the foreclosure prevention programs currently in place. It’s very likely that we’ll see the number of REOs increase again now that most of the moratoria have been lifted.”

“On a positive note, it appears that demand is up in some of the harder-hit areas, particularly on bank-owned REO properties that first time homebuyers and investors see as bargains,” Saccacio continued. “But it’s unlikely that this increased demand will be enough to offset the growing number of foreclosures in the pipeline, accelerated by rising unemployment rates.”

Nevada, Arizona, California post top state foreclosure rates in first quarter
Nevada continued to document the nation’s highest state foreclosure rate in the first quarter, with one in every 27 housing units receiving a foreclosure filing - more than five times the national average. Foreclosure filings were reported on 41,296 Nevada properties during the quarter, an increase of 19% from the previous quarter and an increase of nearly 111% from Q1 2008. Bank repossessions in Nevada were down 3% from the previous quarter, but defaults increased 27% and auction sale notices increased 35%.

Arizona posted the nation’s second highest state foreclosure rate for the first quarter, with one in every 54 housing units receiving a foreclosure filing, and California posted the nation’s third highest state foreclosure rate, with one in every 58 housing units receiving a foreclosure filing.

Other states with foreclosure rates ranking among the top 10 in the first quarter were Florida, Illinois, Michigan, Georgia, Idaho, Utah and Oregon.

Five states account for nearly 60% of nation’s first quarter total
California, Florida, Arizona, Nevada and Illinois accounted for nearly 60% of the nation’s foreclosure activity in the first quarter, with 479,516 properties receiving foreclosure filings in the five states combined.

With 230,915 properties receiving foreclosure filings during the quarter, California accounted for nearly 29%% of the nation’s total. The state’s foreclosure activity increased 35% from the previous quarter and 36% from Q1 2008, and the first-quarter total was state’s highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005.

Despite a 12% decrease from the previous quarter, Florida’s first quarter total was still second highest in the nation. Foreclosure filings were reported on 119,220 Florida properties, a 36% increase from the first quarter of 2008. The state posted the nation’s fourth highest state foreclosure rate during the quarter, with one in every 73 housing units receiving a foreclosure filing.

Foreclosure filings were reported on 49,119 Arizona properties in the first quarter of 2009, the third highest total among the states, and 41,296 Nevada properties received a foreclosure filing in the first quarter of 2009, the fourth highest total among the states.

Illinois posted the nation’s fifth highest total, with 38,966 properties receiving a foreclosure filing during the first quarter - a 32% increase from the previous quarter and a 68% increase from the first quarter of 2008. With one in every 135 housing units receiving a foreclosure filing, the state’s foreclosure rate also ranked fifth highest among the states.

Rounding out the states with the 10 highest foreclosure activity totals in Q1 2009 were Michigan, Ohio, Georgia, Texas and Virginia.

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Posted in:General
Posted by on April 16th, 2009 2:38 PM

Spending on remodeling is expected to reach $316 billion this year alone and the number is still climbing, according to the Home Improvement Research Institute. So make sure you know exactly how big a renovation you can afford and whether it justifies the time you intend to spend in your revamped home.

The Nest, a home-improvement Web site, says before making any big changes to your home you should ask yourself these big questions:

  1. How long do I plan to stay in my house after the renovations? The longer you plan to live there, the more creative you can be. But if you're planning on selling the house in the next five years, keep potential buyers in mind with your choices. In the latter case, for instance, go with neutral colors in the kitchen and bathroom, and consider maple cabinets. Some people hate oak, others hate cherry, but the majority can live with maple.

  2. Am I doing just cosmetic fixes or am I ready for an all-out overhaul? It's OK to make small changes one at a time, but think long-term about the next step. For example, if you're buying a new sink, buy one with enough holes on the deck for the faucet, sprayer and soap dispenser you might want to add on later. (Cutting more holes into stainless steel or porcelain after the sink is installed is an onerous job you don't want to get stuck with.) And if you know you're going to buy new cabinets later, don't replace the countertop with expensive granite now. The chances of reusing it are very slim -- either it breaks when you try to remove it, or it doesn't match the footprint of the new cabinets.

  3. Am I prepared for the home upheaval? Be realistic about how long these changes might take. Renovations can go on for months, so you need to be prepared to make do without that bathroom, kitchen or bedroom. When checking references before you hire your contractor, be sure to ask if the company finished the work on time. You'd be surprised how quickly a week can turn into a month. And if you're bunking up with your in-laws during renovation, that month can seem like a year.

  4. Are the renovations keeping with the style of my home? Any big changes you make to a home inside should reflect what future buyers will expect from the outside. If you live in a Victorian house, don't make it too contemporary. People who see a historical exterior will expect a historical interior, so stay true to the details. The same goes for a contemporary or modern home, where future buyers may not expect old-fashioned details like antique crown molding.

  5. Are my DIY choices reasonable? You may consider yourself handy, but many do-it-yourself jobs demand your time more than anything else. If you have a full-time job, are you capable of taking on a second one? Some makeovers that are not technically difficult can take longer than you think. For that reason, if you start any job yourself, try to sample it before committing to the whole thing. For example, while refinishing cabinets with a new stain isn't rocket science, sanding down each one can take forever.

A final tip: if you do plan to follow through with a large-scale renovation, do the smallest room in the house from start to finish -- the insulating, rewiring, painting, refinishing, tiling -- so you gain a sense of accomplishment.



Posted in:General
Posted by on April 15th, 2009 2:07 PM


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