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Mortgage Delinquencies Rise After Hurricanes

Posted on December 11, 2017 by Laura Lam

The three major hurricanes that caused devastation during August and September were largely responsible for the third-quarter increase in mortgage delinquencies. The seasonally adjusted delinquency rate of 4.88% was 64 basis points higher than the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey. The 30-day delinquency rate was responsible for 50 basis points of that increase, said Marina Walsh, the MBA’s vice president of industry analysis. Compared with one year ago, delinquencies were 36 basis points higher. “Hurricanes Harvey, Irma and Maria caused disruptions and destruction in numerous states,” Walsh said. “Florida, Texas, neighboring states, as well…

The Recession: 10 Years Later

Posted on December 08, 2017 by Laura Lam

In December 2007, employment peaked and started to head south – for two long years. What followed: The loss of more than 8 million jobs, half the value of the Dow and the S&P 500, and trillions of dollars in retirement accounts and household wealth. Lives and businesses were ruined and whole neighborhoods emptied out, as banks took back homes bought on badly underwritten credit. A decade later, the American economy has recovered in many ways. Employers have been steadily adding jobs since early 2010, the stock market is booming and home prices have reached new all-time highs. But in…

Mortgage Delinquency Rates Lowest Since Recession

Posted on December 07, 2017 by Laura Lam

The serious mortgage borrower delinquency rate, which is considered 60 days or more past due, dropped about 16% annually to 1.91% by the end of the third quarter of 2017, according to TransUnion’s report. “Serious mortgage delinquency rates continue to drop to new post-recession lows, indicating there may be opportunities to responsibly expand access,” said Joe Mellman, TransUnion senior vice president and mortgage business leader. Delinquency rates have continued to drop consistently year-over-year since the third quarter of 2010, and now fell to the lowest point since the recession. In fact, the only state that didn’t see a decrease in annual…

Could Capital Gains Tax Reform Reduce Housing Supply?

Posted on December 06, 2017 by Laura Lam

While tax reform will impact everyone who works in mortgage finance to some degree, it may also affect potential homeowners and home sellers via reform to the capital gains tax. Capital gains is a tax that may be levied when an investor sells an asset at a notable profit — selling a home may be an example of this type of taxable transaction. Data and analytics firm Black Knight did a deep dig into the tax reform. One clear finding from Black Knight is that proposed changes to the capital gains exemption on profits from the sale of a home…

Cybercrime Will Increase in 2018

Posted on December 05, 2017 by Laura Lam

If you think 2017 was a bad year for cyberattacks, just wait to see what happens in the coming years, one cybersecurity expert warns. “We’ve only seen the beginning,” said Dr. Eric Cole, CEO of Secure Anchor and former CTO of McAfee and Lockheed Martin. “Cybercrime is big business, it’s a very high-payoff, low-risk crime … we’ve seen nothing yet.” In 2016, U.S. financial losses stemming from cyberattacks totaled $1.33 billion, a 24% increase over the year prior, according to an FBI report. An Accenture study concluded that the number of hacks likely increased by more than 27% between 2016…

The Anatomy of Today’s First Time Homebuyer

Posted on December 04, 2017 by Laura Lam

Millennials continue to surge into the housing market, their demand rising unchecked by rising home prices or increasing mortgage rates. Ellie Mae’s Millennial Tracker showed these first-time homebuyers saw a jump of more than .5 percentage points from their mortgage rates last year, yet they continue to buy homes. Now, a new infographic from the National Association of Realtors shows exactly what these younger homebuyers look like, and what they want. NAR pointed out Millennial homebuyers faced various obstacles in their path to homeownership including higher rents and home prices, tight inventory conditions and repaying student loan debt. These impediments…

Debt-to-Income Levels Could be Under Stress

Posted on November 28, 2017 by Laura Lam

Defaults for second lien mortgages and other types of consumer credit in October were up compared to the previous month, according to Standard & Poor’s and Experian’s indices. “For the first time since January 2017, the default rate for autos, bank cards and mortgages all rose together,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “The data does not suggest any unusual financial stress facing consumers which would explain the small, but across the board increases in default rates,” he said. However, “the one concerning item, which might explain the default numbers, is recent…

Housing Affordability May Plummet in 2018

Posted on November 21, 2017 by Laura Lam

During the recent CoreLogic and the Urban Institute’s Housing Finance, Affordability and Supply in the Digital Age conference, CoreLogic Chief Economist Frank Nothaft predicted rising interest rates will cause home prices to rise. Mortgage interest rates are expected to continue rising over the next couple years as experts predict the Federal Reserve will raise the Federal Funds rate in once more this year in December and up to 4 more times in 2018. As the chart shows, CoreLogic forecasted it will rise to 4.7% by December 2018. Nothaft explained as mortgage interest rates increase throughout 2018, less current homeowners will be motivated…

Americans Waiting for a Bigger Raise

Posted on November 17, 2017 by Laura Lam

The government said that average hourly earnings rose 2.4% over the past 12 months. That’s a slip from the 2.9% increase reported in September. It remains below the 3% to 3.5% range that many agree is normal in a truly healthy economy. The last time wages were up more than 3% year-over-year was in April 2009, just as the economy was emerging from the depths of the global banking crisis that fueled the Great Recession. Why have wages remained stagnant even though many other indicators of the job market and broader economy look healthy? Unemployment continues to drop. The housing…

Sales to First-Time Home Buyers Fell 34% in 2017

Posted on November 16, 2017 by Laura Lam

First time homebuyers continue to struggle to enter the housing market amidst limited housing inventory, falling to the fourth lowest level since 1981, according to the National Association of Realtors’ 2017 Profile of Home Buyers and Sellers report. The share of first time homebuyers in the housing market decreased from 35% in 2016 to 34% in 2017. In the 36-year history of NAR’s report, the long-term average of first-time homebuyers rests at 39%. “The dreams of many aspiring first-time buyers were unfortunately dimmed over the past year by persistent inventory shortages, which undercut their ability to become homeowners,” stated NAR…

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