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All Encompassing Mortgage and Real Estate Thread


UTPhil2006

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6 minutes ago, Okie State said:

I always choose the flexibility because you don't know what the future will bring. I get a 60 month car loan and pay it off in 12-24 months if possible. Nice to know I don't have to if shit hits the fan though.

This is also true of course. It’s a gamble on the borrowers side to shorten the term of the note. That’s why they must be paid for that gamble in the form of a lower interest rate…

typically that premium is 1/2 a point lower interest. Today it’s running almost a full point. That matters to some. Especially if it lines up with retirement or other saving goals. But as you point out it’s not always the best option even if you can afford it now. 

Edited by Wulaw Horn
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15 minutes ago, Wulaw Horn said:

No- what I am saying is that you would get about a point less in interest rate right now going with a 15 instead of a 30 year term.  Not that there’s a penalty for paying extra on a 30… 

OK, but I think the real calculus should be "how much extra principal would I need to pay each year to make a 15-year payoff?"

When that rate spread is 1%, it translates to less onerous monthly payments on a 15-year note as opposed to a 30-year note, so yes, it becomes somewhat more manageable.  Combined with the tendency of the average borrower to not maintain the discipline required to more aggressively pay off a 30-year note, then that starts to move the needle.

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1 hour ago, jimmyjazz said:

OK, but I think the real calculus should be "how much extra principal would I need to pay each year to make a 15-year payoff?"

When that rate spread is 1%, it translates to less onerous monthly payments on a 15-year note as opposed to a 30-year note, so yes, it becomes somewhat more manageable.  Combined with the tendency of the average borrower to not maintain the discipline required to more aggressively pay off a 30-year note, then that starts to move the needle.

Sure. 
What some consider welcome financial flexibility of a 30 year not others consider “mandatory savings account that I need” with a 15 year mortgage. I wasn’t at all saying that a 15 is definitely the right answer for everyone, merely that when you have a 1/4 of a point spread nobody should ever do a 15 (that’s where the spread was in May of 21) and when it’s a 1 point spread (as it sort of can be at this point in time) more people should think about it and consider it. 

That’s a big spread. I would definitely consider it and might do that next time I refinance- which I do yearly. I’m not saying that everyone should refinance every year (benefit is you make 10 payments a year instead of 12 and jam the extra into an investment account or principal reduction),  But I do have some frequent fliers that do that and it makes sense for them (IOW the cash flow is more important than the interest rate reduction for some- which works a lot better when you have a big loan and aren’t paying closing costs). 

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22 minutes ago, UT_OB1 said:

@Wulaw Horn how does the yearly reFi make sense with closing costs?

You get a refinance with a slightly higher than you could get rate in the market with the lender picking up all the closing costs.
EG:  with good credit on a $400k loan I could theoretically get you an interest rate of 3 and you could pay your closing costs of roughly $4,000. If I paid all your closing costs though at 3.25% you would pay an extra $53.00 per month in payment, but you wouldn’t pay any closing costs. So- you owed $400,000 when you started the process and when you finish the process you still owe $400k. Your monthly payment is $53.00 per month higher every month. If you are committed to doing this every year that means you will pay an extra $636.00 in interest over the course of that year. But- you will have skipped 2 payments at $1680 each. So, if you wanted to, you could use that $3380 to first pay yourself back that $636.00 in extra interest and then that extra $27xx you could use to pay down the principal of the mortgage at the end of the year. When you go to the next mortgage refinance 12 months later you would owe $2700 less than you would have if you didn’t refinance. 
If you are going to do this strategy yearly I would suggest harvesting the equity every year (without paying closing costs of course) so that you always have an 80% value (or 70 or 60 or whatever you are comfortable with) and use that equity to either pay down higher interest rate debts that you owe over a shorter term so that you have total payment relief) or, if you don’t have any other debt using that equity to advance your investment portfolio. The interest on the home is going to be tax deductible, so you have that immediate win, and you should, regardless of the rate on your house, expect to grow the money at a greater rate than what you are paying back. 
you won’t ever pay your home down to zero if you do this, but what you will do is grow your investment at a rate greater than you are growing the balance on your home. 
put another way- what would you rather have 30 years from now- a debt free house and no change in your investment portfolio, or a $500,000 debt on your house and an extra $1.8 million in your portfolio. 
This strategy isn’t for everyone and I’d only recommend it for a disciplined investor whose not going to fuck around and waste the investment, but for no up front cost and a pittance in extra monthly cost you can keep your investment portfolio balanced in the best way practical and do it in a tax advantages way. 
I know some are getting hit with AMT so that squashes the tax benefits, but the other benefits still exist regardless. It just becomes slightly less of a win. 
It’s not for everyone but the math definitely works out if you keep at it after time. 
what’s the average return on an S&P fund since 1957?  10.5%. What is the most you could imagine paying in interest in any one year if you employed this strategy- 5% or 6%?. I don’t think rates have been north of 6% in 20 or 25 years- something like that. 
 

it doesn’t have to be an either or strategy. You can refinance without harvesting the equity and just use the skipped payments to kill principal. But- you have to show a net tangible benefit so, you can’t go higher without getting cash out with your rate. Ben though it would still make sense to refinance going higher from a dollars and cents perspective if you were doing it yearly as a commitment. Like going to the dentist or getting a physical as a check up. 

Edited by Wulaw Horn
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31 minutes ago, Neonmoon said:

Fannie/Freddie just buttfucked the second home market. 

If you live in a tourist destination (like me), it's super cool. 

Interest rates up a smooth 3/8 of a point this week it looked like comparing par to par on a guy that was hunting last week into this week.  Looks like 2022 is shaping up to be a good one so far in the industry!

I missed the second home deal- what is up there?

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The Federal Housing Finance Agency introduced new upfront fees on Wednesday for some high-balance and second-home loans sold to Fannie Mae and Freddie Mac.

Upfront fees for high balance loans will increase between 0.25% and 0.75%, tiered by loan-to-value ratio. For second home loans, the upfront fees will increase between 1.125% and 3.875%, also tiered by loan-to-value ratio. 

The new pricing framework will take effect April 1, 2022, to “minimize market and pipeline disruption,” the agency said in a press release.

Loans in some affordable programs — including HomeReady, Home Possible, HFA Preferred and HFA Advantage — will not be subject to the new fees. First-time homebuyers in high-cost areas whose incomes below 100% of the area median income will also be exempt from the new high-balance upfront fees, although only a small number of those borrowers seek second homes and high-balance loans.

In a statement, FHFA Acting Director Sandra Thompson said the fee increases are another step FHFA is taking to both strengthen the government-sponsored enterprises’ safety and soundness, and ensure access to credit for first-time homebuyers and low- and moderate-income borrowers.

“These targeted pricing changes will allow the enterprises to better achieve their mission of facilitating equitable and sustainable access to homeownership, while improving their regulatory capital position over time,” said Thompson.

While the new fees on high-balance and second homes will function similarly to the now-suspended limits on investor and second homes, mortgage industry stakeholders welcomed Thompson’s decision.

Mortgage Bankers Association President Bob Broeksmit said he appreciated the delivery date for the new fees is in April, which gives lenders more than 90 days to adjust their rate sheets appropriately.

He also said he expected that this announcement would not be the last word on pricing adjustments, and that it sets the stage for reducing loan-level price adjustments for first-time borrowers, and those facing higher fees due to the loan-to-value ratio or their credit score.

“To the degree they recognize better margins on these loans, we would expect that cross-subsidy would flow to mission-centric borrowers,” said Broeksmit.

In an October interview with National Housing Conference President David Dworkin, Thompson said carrying out a broader review of the GSEs pricing was on her “to-do list.”

“One of the things that we committed to doing was taking a look at pricing, we haven’t done a holistic review of the Fannie and Freddie pricing analysis, g-fees and everything that comprises g-fees and pricing for enterprise loans,” said Thompson.

The FHFA also formally signaled its intent to update the GSEs’ pricing framework in its 2022 Scorecard for Fannie Mae, Freddie Mac, and their jointly owned securitization platform, Common Securitization Solutions. The regulator directed the regulated entities to “increase support for core mission borrowers, while fostering capital accumulation, achieving viable returns and ensuring a level playing field for small and large sellers.”

During her tenure so far as FHFA acting director, Thompson has made affordability a top priority. In August, FHFA proposed new affordability benchmarks for the GSEs, setting goals for purchase loans in low-income and minority communities, and substantially increasing the low-income refinance goal.

Those actions have elicited praise from the affordable housing community. But some of the same groups have also argued there is still ample room for improvement. In October, a coalition of twenty affordable housing groups called on the regulator to reject the Duty to Serve plans the GSEs proposed in May for 2022 to 2024.

The affordable housing groups said those plans did not meet the “spirit or the letter” of the regulation, because the plans would eliminate programs to purchase manufactured housing loans titled as personal property. The plans would also reduce loan targets for manufactured housing, affordable housing preservation and rural housing.

Some have also questioned whether FHFA’s decision to back mortgage loans of nearly $1 million aligns with the GSEs’ mission, and have asked for more clarity on the government’s role in the housing finance system.

“Whether taxpayer backing of $1 million mortgages is consistent with the GSE charter is a question that legislators and policymakers should address,” said Ed DeMarco, president of the Housing Policy Council and acting director of the FHFA from 2009 to 2014, in a December interview with HousingWire.

 
 
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2 hours ago, Neonmoon said:

Fannie/Freddie just buttfucked the second home market. 

If you live in a tourist destination (like me), it's super cool. 

I think that's basis points, not on the rate.  25 bps isn't going to cool the second home market by much. 

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24 minutes ago, Neonmoon said:

It is going to affect pricing 
 

image.thumb.jpeg.a0999a8893f3c29db45f7bfaa19127ea.jpeg

Holy shit. If I’m reading that correctly that’s going to be what- some where between 1/4 and 2 points in interest rate to borrower?

if the non QM guys hold the line they will be priced better than conventional stuff, probably?

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You said it brother.  Off another 47 basis points as of 11:00 am today (and my wizards of smart tell me we have another 65 bips to free fall before we hit support).  That's 1/2 a point to borrower this week.  

I got a call from a recruiter today and she was all peppy and was like- how are you doing today?  I was like- you are in the industry right?  That's why you are calling, right?  How do you think I'm doing?  Don't mind me- I'm just hanging out here on this ledge.

On a serious note we were locking everyone we talked to and got a bunch of people to jump between xmas and new years b/c I felt like January was going to suck but I damn sure didn't expect this cluster fuck basically overnight.

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1 hour ago, jimmyjazz said:

What's the current 30 yr conventional?

The national average thing I’ve been posting from my loan sifter program had it at 3.46 I think Friday morning and then we lost 37 basis points Friday so should be over 3.5 on Monday. 
if I was buying a house today I might seriously consider taking a 3.875 or 3.99 rate, have my mortgage guy pay all the costs on the loan and figure I might be able to revisit sometime in the next 5 years (which would be the cross over time where your credit is eclipsed by your extra payments) and end up with a lower rate for being more permanent. 

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Here's the chart I'd been throwing up on Monday's when I remember to do so/something of interest has happened.

Remember what this is- the average of rates locked according to my software program, nationally, as of close of business the day prior- not a promise for me to give you this rate or me saying- hey these are my rates.  Typically we are pretty well better than average... 

 

30-YR. CONFORMING

3.571% +0.029

30-YR. JUMBO

3.340% -0.059

30-YR. FHA

3.665% +0.045

30-YR. VA

3.334% +0.021

30-YR. USDA

3.531% +0.031

15-YR. CONFORMING

2.709% +0.079
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Day started off down 27 points in the mortgage backed but we've come roaring back to +8 for the day. Can we finish with an up market for the first time all year? Have we found a bottom or are we going to keep digging?  Don't know.

It wasn't long ago that the 30 year average on this tool was below 3.  Now? Ha!  Haha!  Hahaha!

Today's chart of suck:

30-YR. CONFORMING

3.659% +0.088

30-YR. JUMBO

3.356% +0.016

30-YR. FHA

3.704% +0.039

30-YR. VA

3.348% +0.014

30-YR. USDA

3.642% +0.111

15-YR. CONFORMING

2.756% +0.047
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On 10/4/2021 at 5:22 PM, Wulaw Horn said:

30-YR. CONFORMING

3.174% -0.030

30-YR. JUMBO

3.088% -0.081

30-YR. FHA

3.177% -0.072

30-YR. VA

2.770% -0.041

30-YR. USDA

3.096% -0.076

15-YR. CONFORMING

2.399% -0.028

1/2 a point over the last 2 months on the 30.  Which was in turn probably 1/4 of a point from first of September.  I was looking at my MBS postings and we were on the 2% coupon for measurement back then- just got the first 3% coupon update quote in 2 or so years.  

It was nice while it lasted. Now, I just want consistency from the Fed and not to see rates move 1/2 a point in a week because they released notes.  We shall see. 

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Can anyone refer a third-party or neutral frame inspector for a new build? Situation is my builder had a framing crew, they did half the job, went AWOL, took a while but found a second crew to finish the job and with the dropping of the ball I'd like to do my own due diligence just to make sure there were no gaps from crew A and crew B.

The builder is telling me that the city inspector is thorough and tough, etc. but also welcome and open to me sending my own guy and at this point I'll pay out of pocket if reasonable for peace of mind.

Would appreciate any DM recommendations.

Thanks

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On 1/6/2022 at 7:06 PM, Neonmoon said:

Yep. They are trying to push second homes to the private market. With that pricing, they will. 
 

 

Went bank side with ours and got a better rate and lower costs on closing costs. Bank side rates are still running low if you have a relationship and decent credit/financials.

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5 minutes ago, tokamak said:

My mortgage servicing just got transferred to something called "Mr. Cooper". Lol, what the fuck kind of name is that?

Lol. I used to work there. Spent a good 5 million bucks on going from Nationstar Mortgage to Mr. Cooper and even the employees thought the name was weird. 

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18 minutes ago, tokamak said:

My mortgage servicing just got transferred to something called "Mr. Cooper". Lol, what the fuck kind of name is that?

 

10 minutes ago, Loch Ness Monster said:

Lol. I used to work there. Spent a good 5 million bucks on going from Nationstar Mortgage to Mr. Cooper and even the employees thought the name was weird. 

Funny story there…

Nationstar had one of the worst reputations/customer satisfaction scores. So they hired some smart guys to come in there and figure out how they could have better scores. They came up with the idea that if they named themselves after a human rather than a company name people would have a harder time being mad at them as a servicer and thus was  born The stupid name. 

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6 minutes ago, Wulaw Horn said:

 

Funny story there…

Nationstar had one of the worst reputations/customer satisfaction scores. So they hired some smart guys to come in there and figure out how they could have better scores. They came up with the idea that if they named themselves after a human rather than a company name people would have a harder time being mad at them as a servicer and thus was  born The stupid name. 

I literally Googled "who the fuck is mr cooper?" last night for the lulz. Found some press releases about the name change with lots of platitudes about their market research showing that it comes across as kinder, gentler, and blah blah blah. I just think it's a weird ass name for a mortgage servicing company.

I have to admit that I've had several different mortgage servicers in my lifetime, and I've never been specifically pleased or displeased with any of them. They cash my checks. How or why would our relationship need to be any more complicated than that?

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3 minutes ago, tokamak said:

I literally Googled "who the fuck is mr cooper?" last night for the lulz. Found some press releases about the name change with lots of platitudes about their market research showing that it comes across as kinder, gentler, and blah blah blah. I just think it's a weird ass name for a mortgage servicing company.

I have to admit that I've had several different mortgage servicers in my lifetime, and I've never been specifically pleased or displeased with any of them. They cash my checks. How or why would our relationship need to be any more complicated than that?

A bad mortgage servicer can be a pain in the ass. Mess up your escrow account. Don’t pay insurance or taxes. Pay insurance or taxes too often. Call you on the 2nd and hassle you about why they don’t have your payment yet. Clunky website always down. No website. Long hold times when you call needing something etc. it happens. Some are worse than others. 

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23 minutes ago, tokamak said:

I literally Googled "who the fuck is mr cooper?" last night for the lulz. Found some press releases about the name change with lots of platitudes about their market research showing that it comes across as kinder, gentler, and blah blah blah. I just think it's a weird ass name for a mortgage servicing company.

I have to admit that I've had several different mortgage servicers in my lifetime, and I've never been specifically pleased or displeased with any of them. They cash my checks. How or why would our relationship need to be any more complicated than that?

It’s for the bad ones you have to worry about. Or the bad clients for them is when it comes into play. 
 

The fact that you have no feelings either way is a good thing 

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6 minutes ago, UTPhil2006 said:

It’s for the bad ones you have to worry about. Or the bad clients for them is when it comes into play. 
 

The fact that you have no feelings either way is a good thing 

Yeah...kind of like the ump at a ball game. If you don't notice them, they are doing a good job. 

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My brother got changed over to Mr. Cooper for his mortgage late last year.

They told him they couldn't process automatic payments for at least 90 days after the change.  So he mailed a check that they deposited. Then he started getting past due phone calls and letters threatening foreclosure after each months payments.  Utter trainwreck.

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1 hour ago, Loch Ness Monster said:

Lol. I used to work there. Spent a good 5 million bucks on going from Nationstar Mortgage to Mr. Cooper and even the employees thought the name was weird. 

This is why my dream is to be a consultant.  Not sure how you get that gig, but its seems pretty fucking sweet.

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15 hours ago, JulesVerne said:

Can anyone refer a third-party or neutral frame inspector for a new build? Situation is my builder had a framing crew, they did half the job, went AWOL, took a while but found a second crew to finish the job and with the dropping of the ball I'd like to do my own due diligence just to make sure there were no gaps from crew A and crew B.

The builder is telling me that the city inspector is thorough and tough, etc. but also welcome and open to me sending my own guy and at this point I'll pay out of pocket if reasonable for peace of mind.

Would appreciate any DM recommendations.

Thanks

Just found out that the tubs put in were the regular model and not the contracted deluxe tubs with the deck mount. So now they are going to have to rip it out and get these installed, what a disaster.

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4 minutes ago, Neonmoon said:

This will be interesting 

image.png.c0b891c1bca9f7c85a44533724035b95.png

So this has always been the case that Gig work is taxable.  Lots of people acting like this is a big change- but the law is the same.  It's just now the IRS is going to have your venmo type companies turn into informants on people and let the IRS know this money was going out.  On one hand I don't have a problem with people being forced to pay taxes on income- that's kind of the game and I've never shorted the IRS a penny. On the other hand- I don't appreciate being turned into an informer by the IRS (to some extent we already were I Know) and I strongly suspect that there will be a mess made of people sending money that weren't engaged in commerce (yes- I sent so and so $1000 as our share of the vacation we went on- or b/c I owed them money- or as a gift- or blah blah blah) being caught in this net- and the tax cheats will just say- no checks- no venmo- give me cash.  Which will be less convenient and irritating.  

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3 hours ago, Incredulity said:

My brother got changed over to Mr. Cooper for his mortgage late last year.

They told him they couldn't process automatic payments for at least 90 days after the change.  So he mailed a check that they deposited. Then he started getting past due phone calls and letters threatening foreclosure after each months payments.  Utter trainwreck.

This is why people hate Mr. Cooper. I had the exact same experience with them 10 years ago when they got my mortgage so I managed to get out in front of it the next time they ended up servicing my mortgage like 3 years ago.  They are utterly incompetent.  

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1 hour ago, JulesVerne said:

Just found out that the tubs put in were the regular model and not the contracted deluxe tubs with the deck mount. So now they are going to have to rip it out and get these installed, what a disaster.

Not to laugh at your misfortune, but LOL.  When my house was being built 7 years ago, I came by one day and noticed that the window in an upstairs bedroom wasn't aligned with the window in the bedroom below, as per plan.  It was just framing at that point, so an easy fix, but I sure wasn't gonna live with them building a different house than I had contracted for.

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1 hour ago, JulesVerne said:

Just found out that the tubs put in were the regular model and not the contracted deluxe tubs with the deck mount. So now they are going to have to rip it out and get these installed, what a disaster.

Ugh.  

When you hire your inspector, I'd arm him with a full set of plans and specs, just because of stuff like this.  Including cut sheets for everything that's spec'ed. 

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21 minutes ago, Wulaw Horn said:

This is why people hate Mr. Cooper. I had the exact same experience with them 10 years ago when they got my mortgage so I managed to get out in front of it the next time they ended up servicing my mortgage like 3 years ago.  They are utterly incompetent.  

We have the same shitty experience.  

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59 minutes ago, Gil Bang said:

Ugh.  

When you hire your inspector, I'd arm him with a full set of plans and specs, just because of stuff like this.  Including cut sheets for everything that's spec'ed. 

First time housebuilder-- where would I go about hiring an independent inspector? I assume I can just google "home inspector" but maybe any advice more targetted than that?

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1 minute ago, JulesVerne said:

First time housebuilder-- where would I go about hiring an independent inspector? I assume I can just google "home inspector" but maybe any advice more targetted than that?

Yeah, I wouldn't do that.  You're gonna end up with a bunch of slapdicks that do home sale inspections that don't know shit about construction techniques.  

Try here: http://www.aci-assoc.org/directory.php

 

You're more likely to get a real construction guy rather than a home inspector. 

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1 hour ago, Wulaw Horn said:

So this has always been the case that Gig work is taxable.  Lots of people acting like this is a big change- but the law is the same.  It's just now the IRS is going to have your venmo type companies turn into informants on people and let the IRS know this money was going out.  On one hand I don't have a problem with people being forced to pay taxes on income- that's kind of the game and I've never shorted the IRS a penny. On the other hand- I don't appreciate being turned into an informer by the IRS (to some extent we already were I Know) and I strongly suspect that there will be a mess made of people sending money that weren't engaged in commerce (yes- I sent so and so $1000 as our share of the vacation we went on- or b/c I owed them money- or as a gift- or blah blah blah) being caught in this net- and the tax cheats will just say- no checks- no venmo- give me cash.  Which will be less convenient and irritating.  

They will find a work-a-round. I'm okay with that. I don't give a shit.

I selfishly think it might help the lending side. I mean, just tell the Gig workers to take the tax hit for 2 years and use these services so build up the documentable income. 

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17 minutes ago, Neonmoon said:

They will find a work-a-round. I'm okay with that. I don't give a shit.

I selfishly think it might help the lending side. I mean, just tell the Gig workers to take the tax hit for 2 years and use these services so build up the documentable income. 

Yeah. It might bring the people who need just a small push into compliance - especially the part timers, and that will definitely help us in the lending business.  The lady that was like- yeah- I teach piano and make $5,000 a year as a side hustle that now gets religion on reporting might actually have income to show and use now.  I have zero belief that it will lead to a lot of revenue for the government.  The people currently cheating will continue to cheat, people will stop using cash transfer apps if they are going to report to the IRS and people trying to comply will be further hassled. 

Edited by Wulaw Horn
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