By Dennis Norman, on December 10th, 2014 The Mortgage Delinquency Rate, the pre-cursor to, and leading indicator of, foreclosures, which play havoc with home prices, is expected to decline to 3.12 percent by the end of this month and continue to decline next year hitting 2.51 percent by the end of 2015, according to a forecast just released by TransUnion. If mortgage delinquency rates fall as lowest as forecast, it will hit the lowest level since the housing bubble burst. A home mortgage that is 60 days or more delinquent is counted in the mortgage delinquency rate for this report by TransUnion.
The report goes on to state that, even though the forecast is good and the rate will be low relative to what we have seen the past 6 years or so, even if the mortgage delinquency rate hits 2.51% as projected, it will still be significantly higher than the historical norm of 1.5% – 2.0%.
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Continue reading “Mortgage Delinquency Rate Forecasted To Drop To Pre-Bubble Rates Next Year“
By Dennis Norman, on November 20th, 2014 UPDATE December 17, 2014 – Congress has passed an extension of the Mortgage Forgiveness Debt Relief Act of 2007 through December 31, 2014 – It is part of a bill that has been sent to President Obama for his approval. This falls short of the two year extension the National Association of REALTORS (NAR), among other groups, was pushing for which would have covered next year as well, but is at least some relief for those affected this year.
The Mortgage Forgiveness Debt Relief Act of 2007 provided relief for homeowners that receive forgiveness on some of their mortgage debt (such as is the case on a short-sale) in the form of removing their obligation to pay income tax on the amount of their debt that was forgiven by their lender. Originally, the Mortgage Forgiveness Debt Relief Act, was to expire at the end of 2012 but was later extended through the end of 2013 and on April 3rd of this year the Senate Finance Committee approved a bill that, if passed, would reinstate a bunch of tax provisions that expired at the end of 2013, including the Mortgage Forgiveness Debt Relief Act of 2007 , through December 31, 2015. Thus far, the bill has not passed and now many are concerned that it may not which will leave all the people that did short sales this year, or had debt relieved in some other manner, possibly owing income tax on the forgiven debt.
The National Association of REALTORS (NAR) have issued a call to action to it’s 1 million plus members asking them to urge their Member of Congress and Senators to act on “The Mortgage Forgiveness Tax Relief Act” before the end of 2014. Apparently, the stumbling block to getting this extended has been politics…shocker, right? The Democratic Majority Leader of the Senate, Harry Reid, according to the NAR website, “refused to allow an open amendment process” which then, in turn, the Republicans “exercised their rights to prevent the bill from moving to a vote.”
Should the Mortgage Forgiveness Debt Relief Act of 2007 be extended?
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Continue reading “Will The Mortgage Forgiveness Debt Relief Act of 2007 Be Extended?“
By Dennis Norman, on November 11th, 2014 Would you like to know how to sell your home for the highest price in the shortest time? If so, perhaps the best place to find the answer is from prior sellers that have been successful in doing just that. This, and much more information gathered from home owners that sold a home in the past year, was just released in the National Association of REALTORS 2014 Profile of Home Buyers and Sellers. This gives some great insight into what worked for sellers as well as what did not.
Highlights from the NAR 2014 Profile of Home Buyers and Sellers:
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Continue reading “How To Sell Your Home For The Highest Price In The Shortest Time“
By Dennis Norman, on October 23rd, 2014 Over half of the homeowners in Ferguson are in a negative-equity position meaning their current mortgage loan balance exceeds the current value of their home, according to data from RealtyTrac. According to the latest data available, 51% of the homeowners in Ferguson with a mortgage are seriously underwater on their mortgages with balances that are equal to or higher than 125% of the value of their homes. Another 14% of Ferguson homeowners have mortgage balances of between 90% and 110% of the value of their homes.
Ferguson Serious Underwater Rate More Than Double Rate for St Louis MSA…
As the table below shows, Ferguson’s seriously underwater rate, at 51%, is more than double the rate for the St Louis MSA as a whole (21%) and is nearly double the rate for St Louis county of 27%. At the other end of the spectrum, only 6% of Ferguson homeowners have mortgages equal to 50%, or less, of the value of their homes, exactly half the rate for St Louis County and less than half the rate for the St Louis MSA.
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By Dennis Norman, on October 9th, 2014
The U.S. Department of Housing and Urban Development (HUD) just announced that Wells Fargo Home Mortgage has agreed to a $5 Million settlement to resolve allegations that Wells Fargo discriminated against women who were pregnant, or had recently given birth, and were on maternity leave. (Click HERE for settlement agreement)
There have been a total of 190 maternity leave discrimination complaints filed with HUD against lenders in the past 4 years and those complaints have resulted in 40 settlements for a total of $1.5 million, prior to today’s settlement with Wells Fargo.
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Continue reading “Wells Fargo Agrees To $5 Million Settlement of Claim Of Discrimination of Pregnant Women & Women On Maternity Leave“
By Shelly Clark, on October 2nd, 2014 You’ve owned your home for 20 years, and you’ve never been required to have flood insurance on your property. So why did you get a notice saying that you are required to have flood insurance or else your lender is going to impose it upon you now – after all these years?
Simply stated, The Federal Emergency Management Agency (FEMA) believes that your lot is now at risk for being flooded in the event of a 100 year flood. FEMA creates Flood Insurance Rate Maps (FIRMs) which depict and show where it is calculated that the water will spread in the event of a flood. Because our communities’ landscape is constantly changing due to construction and population increase, the FIRMs become outdated and are no longer accurate. In order to accurately depict where the flood waters will expand to, the FIRMs are updated as needed.
Interactive Online Flood Map for the U.S. Here
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Continue reading “Why did I get a notice that says I have to have flood insurance?“
By Dennis Norman, on September 30th, 2014 The St Louis Foreclosure rate in July 2014 was 0.78 percent, down almost 30 percent from the same time last year when the St Louis foreclosure rate was 1.08 percent, according to data just released by Corelogic. The foreclosure rate for the state of Missouri in July 2014 was .64%, down from .89% a year ago.
On another good note, the serious mortgage delinquency rate (90+ days) for St Louis in July 2014 was 3.33%, down from 3.85% in July 2013. On the state level, the Missouri serious mortgage delinquency rate for July 2014 was 3.06% down from 3.52% the year before.
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Continue reading “St Louis Foreclosures & Serious Delinquencies Fall In Past Year“
By Dennis Norman, on September 19th, 2014 Mortgage Interest Rates rose this week to an average of 4.23 percent for a 30-year fixed rate home loan, up from 4.12 percent last week, marking the largest one-week jump in interest rates we have seen thus far this year, according to data just released by Freddie Mac. Mortgage interest rates for fixed-rate loans have now hit the highest level since May 1st.
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Search St Louis Homes For Sale HEREMortgage interest rates from the Freddie Mac report:
- 30-year fixed rate mortgages averaged 4.23%
- Last week the rate was 4.12%
- Last year at this time the rate was 4.5%
- 15-year fixed rate mortgages averaged 3.37%
- Last week the rate was 3.26.
- Last year at this time the rate was 3.54
- 5-year hybrid adjustable rate mortgages averaged 3.06%
- Last week the rate was 2.99%
- Last year at this time the rate was 3.11%
- 1-year adjustable rate mortgages averaged 2.43%
- Last week the rate was 2.45%
- Last year at this time the rate was 2.65%
By Dennis Norman, on August 26th, 2014 The Mortgage Interest Deduction (MID) is often a topic of much debate often around whether or not it truly helps promote home ownership or is just a another tax break for higher income tax payers. The interesting thing is, the best I can tell, when the deduction for interest was first established it actually had nothing to do with promoting home ownership but instead was intended to benefit proprietors and small business owners. Few realize that the deductibility of interest goes back to 1913 when Congress ratified the Sixteenth Amendment to the constitution which gave the government the right to “to lay and collect taxes on incomes, from whatever source derived.” At the time this passed, people did not obtain loans to buy homes but instead paid cash for them and the provision to allow for the deduction of interest was put in primarily to benefit businesses.
In June, there was working paper published by Jason Fichtner, Senior Research Fellow and Jacob Feldman, Research Analyst, at Mercatus Center at George Mason University titled “Reforming the Mortgage Interest Deduction” (scroll down for charts as well as link to complete report). In their paper, Fichtner and Feldman make several points in opposition to the mortgage interest deduction (MID) including:
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By Dennis Norman, on August 19th, 2014 The Fannie Mae monthly national housing survey for July 2014 shows 67 percent of those surveyed feel now is a good time to buy a home, down from 70 percent that felt that way the month before and down from 74 percent that responded in July 2013 that it was a good time to buy. Forty-three percent of the respondents feel now is a good time to sell a home, an increase from 40 percent the month before and up from July 2013 when 40% felt it was a good time to sell. Other Fannie Mae Housing Survey Highlights:
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By Dennis Norman, on August 15th, 2014 Mortgage interest rates fell to an average of 4.13 percent in July on a 30-year fixed rate mortgage, marking the lowest mortgage interest rate we have seen in over a year. The last time mortgage interest rates were this low was back in June of 2013 when the average interest rate on a 30-year fixed-rate mortgage was 4.07 percent, according to the latest data from Freddie Mac.
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Search St Louis Homes For Sale HERE Source: Freddie Mac
By Dennis Norman, on August 4th, 2014 Missouri, along with it’s affordable home prices, also has the 3rd lowest mortgage closing costs according to data just released today by BankRate. According to the report, in Missouri, the average mortgage closing costs on a $200,000 home loan are $2,387.00, almost 6% less than the national average of $2,539.00. Holden Lewis, senior mortgage analyst at Bankrate, said mortgage closing costs have risen 6 percent in the past year and says “new mortgage regulations are the biggest reasons why closing costs went up“.
Texas, at $3,046, had the highest closing costs in the nation, followed by Alaska at $2,897 and New York, at $2,892. Nevada had the cheapest mortgage loan closing costs in the country at $2,265 followed by Tennessee with $2,366 and then Missouri.
Find the latest St Louis Mortgage Loan Interest Rates Here.
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By Dennis Norman, on July 18th, 2014 Mortgage interest rates, in spite of predications to the contrary by many, are actually lower today than a year ago, according to the latest date available from Fredde Mac. According to Freddie Mac, the U.S. average interest rate for a 30 year mortgage was 4.15 percent on July 10, 2014, down significantly from July 11, 2013 when the average 30 year mortgage rate was 4.51 percent.
As the interactive chart below from the St Louis Fed Reserve shows, mortgage interest rates have definitely risen from the historic lows we say in 2012 and part of 2013 however are still lower than 5 years ago. So, will this trend continue and will the predictions of interest rates topping 5 percent next year not come to fruition? It’s very hard to say as a lot of it hinges upon what happens in the economy and the housing market as well. My guess is, there is a much better chance of rates increasing over the next year than decreasing but that’s just my opinion.
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Continue reading “Mortgage Interest Rates Lower Today Than A Year Ago To The Surprise of Many“
By Dennis Norman, on July 8th, 2014 Consumers continue to gain confidence in the housing market but not enough to return us to a “normal” housing market, according to the June 2014 Fannie Mae National Housing Survey. In the survey consumers are asked, among other things, what their expectations are with regard to home prices and, while the expectation is for home values to increase 2.4% in the next 12 months, this is slightly lower than indicated in the previous few months. When asked about the expectation with regard to mortgage interested rates, 55% of the consumers think interest rates will rise in the next year, this is a 6 point increase from last month.
Doug Duncan, chief economist at Fannie Mae, said “the housing recovery gained its footing” but went on to say “…we do not expect to see ‘normal’ levels of new residential construction…before the end of 2016.”
Highlights from the Fannie Mae National Housing Survey:
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By Dennis Norman, on June 17th, 2014 Mortgage default rates, as tracked by the S&P/Experian Consumer Credit Default Indices, on first mortgages were at .92 in May 2014, down from 1.01 the month before and down almost 30% (29.7%) from May 2013 when the first mortgage default rate index was at 1.31. The default rate index on second mortgages is improving as well with the index for May 2014 at .57, down from .63 in April and from .60 in May 2013, according to the report.
This is good news for the housing market and consistent with the trend we have seen lately of lower delinquencies and fewer defaults which lead to fewer foreclosures and fewer REO’s, all of which put downward, or negative, pressure on home prices.
By Dennis Norman, on June 9th, 2014 Forty-eight percent of Americans surveyed feel home prices will increase in the next twelve months and only 7 percent think home prices will decline, accordion to Fannie Mae’s May 2014 National Housing Survey which was just released. As for the economy, consumers weren’t so optimistic as, according to the report, 57% of those surveyed feel the economy is headed the wrong direction.
Other highlights from the Fannie Mae National Housing Survey for May 2014:
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 Tyler Frank,
Paramount Mortgage
NMLS ID 942420 We hear lots of advice these days about how to improve a credit score. However, not all advice is good advice. Here are nine credit score myths that could actually do more harm than good:
Myth #1 – Closing out old, inactive accounts will help your score.
Thirty percent of your credit score is based on your utilization rate – your total balances versus the total amount of credit available to you. Canceling old accounts reduces the total amount of your available credit, changing that ratio. Any balance will utilize a higher percentage of your credit, which will hurt your score.
Myth #2 – Opening (but not using) accounts will help your score.
To improve their utilization rate and, theoretically, their credit scores, some people open as many accounts as they can. According to Rod Griffin, director of public education for the credit bureau Experian, “Your score is affected by how well you manage the credit you do have over a period of time, not by how many credit cards you have or the available balances.”
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By Dennis Norman, on May 20th, 2014 Indicating continued stabilization of the housing market, the first mortgage default rate dropped in April to 1.01%, the seventh-consecutive monthly decline and the lowest level seen since July 2006, according to the just-released S&P/Experian Consumer Credit Default Indice report. In April, 2013, the first mortgage default rate was 1.31%.
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By Dennis Norman, on April 22nd, 2014 Mortgage delinquency and foreclosure rates both declined in March to the lowest levels since October 2007 and 2008, respectively, according to data just released by Black Knight Financial Services (formerly LPS). The U.S. mortgage delinquency rate (30+ days delinquent) in March 2014 was 5.52%, a 7.57% decline from the month before and a 16.29% decline from a year ago. The U.S. foreclosure pre-sale inventory rate in March 2014 was 2.13%, a decline of 4.23% from the month before and a drop of 36.69% from March 2013.
There are still several states with double-digit mortgage delinquencies, Mississippi being the one with the highest rate with 13.39% of all mortgages being 30+ days delinquent. Below is the list of the top 5 states for the highest mortgage delinquency rates as well as the top 5 states for the lowest rates.
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By Dennis Norman, on April 17th, 2014 Almost 1 of every 4 St Louis homeowners with a mortgage (23%) are seriously underwater, meaning their mortgage(s) total at least 125% of their homes current value, according to a report for the 1st quarter of 2014 just released this morning by RealtyTrac. According to the report, there are 161, 310 St Louis homeowners that are underwater while 138,492 homeowners (19%) have “resurfacing equity” meaning their mortgage totals are 90% – 110% of their homes current value, allowing them to see the light at the end of the tunnel. Throughout the state of Missouri, 22% of homeowners with a mortgage are seriously underwater and 20% have resurfacing equity.
At the opposite end of the spectrum, 13% of St Louis homeowners with a mortgage are “equity rich” with more than 50% equity in their homes.
St Charles County Has Lowest Rate of Underwater Homeowners
Of the five counties that make up the bulk of the St Louis market on the Missouri side of the Mississippi, St Charles county has the lowest percentage of underwater homeowners at just 11%. The table below shows complete data for all 5 counties.
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By Dennis Norman, on April 9th, 2014 In spite of a somewhat sluggish start to the spring housing market, consumers are more optimistic about the housing market now than they were this time last year, according to the results of the Fannie Mae National Housing Survey results just released. Survey results show that 38% of the respondents think now is a good time to sell a home which, while low, is still almost 50% higher than a year ago when only 26% felt it was. Consumers are also feeling more optimistic about the prospects of obtaining a home loan with 52% saying they believe it would be easy to get a mortgage, an increase from 47% that felt that way a year ago.
Other highlights of the survey:
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- The percentage of consumers that feel home prices will go up in the next 12 months dropped slightly to 48%,
- Only 5% feel home prices will do down in the next 12 months.
- More than half (54%) of the survey respondents feel mortgage rates will increase in the next 12 months and only 3% think the rates will go down.
- Sixty-nine percent feel now is a good time to buy a home, this is down just a little form last month.
- The average 12-month home price change expectation decreased from last month, to 2.7 percent.
By Dennis Norman, on March 3rd, 2014 Even with rising home prices and interest rates that are following suit, it’s cheaper to buy then rent both on a national level as well as in all of the 100 largest metro areas, according to a report just released by Trulia. According to the report, nationally it is 38% cheaper to buy than rent and in St Louis, it is 54% cheaper to buy then rent putting St. Louis at the #10 spot on “Where Buying a Home is a No-Brainer” list. See below for the complete list of the top 10 no-brainer to buy cities as well as the 10 cities where buying a home would be a “risky proposition”. [iframe http://www.facebook.com/plugins/like.php?href=https%3A%2F%2Fwww.facebook.com%2FStLouisRealEstateNews&send=false&layout=standard&width=50&show_faces=false&font&colorscheme=light&action=like&height=35&appId=537283152977556 100 35 ] Continue reading “St Louis Makes Top 10 List For Places Where It’s Cheaper to Buy Then Rent“
By Dennis Norman, on February 12th, 2014 The mortgage delinquency rate for homeowners 60 days or more delinquent on their mortgages fell below 4 percent during the last quarter of 2013, the first time the delinquency rate has been below 4% since 2008, according to TransUnion. According to the report, every state in the U.S. saw a decline in mortgage delinquency rates from to the 4th quarter of 2012 to the 4th quarter of 2013 with only two, New Jersey and New York, not seeing a double digit decline. See the info graphic below for more info. Continue reading “Mortgage Delinquency Rate Falls To Lowest Level In 5 Years“
By Dennis Norman, on January 30th, 2014 
Home loan rates have been near historic lows for a while now but the $64 question is, where are home loan rates headed in the future? While there are, of course, a variety of opinions out there, the majority of the noteworthy ones are thinking interest rates are headed upward. In the Well’s Fargo Securities Economic Outlook report for 2014, interest rates in the year ahead (2014) was addresses, saying “we expect long-term rates to exhibit an upward bias as Fed tapering moves forward. However, the extent of any increase in long-term rates should be modest, given continued low inflation and a reduced federal budget deficit “. PNC Bank, in their Economic Outlook report for 2014 forecast that 30 year mortgage rates would increase to 4.95% during 2014, about 1% higher than 2013. Oh yeah, I should also mention, according to a recent poll by Rasmussen Reports, 50% of the consumers surveyed say they expect higher interest rates a year from now. So there you have it…higher rates on the horizon.
[iframe http://research.stlouisfed.org/fredgraph.png?g=rwt 580 400]
By Dennis Norman, on October 21st, 2013  The foreclosure rate in St Louis fell to 1.04 percent for the month of August, a decline of 33.5 percent from a year ago when the St Louis foreclosure rate was 1.55 percent, according to a report just released by CoreLogic. The national foreclosure rate for August at 2.36 percent was over twice as high as the St Louis rate. Other good news for the St Louis real estate market contained in the report was that the St Louis mortgage delinquency rate (90 days or more late) was 3.78 percent, a decrease of 16.6 percent from a year ago when the rate was 4.53 percent.
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By Dennis Norman, on October 15th, 2013 January 10, 2014 new QM rules (qualified mortgage) will go into effect and will most likely negatively impact the ability of some home buyers to obtain a mortgage. In terms of how many borrowers the new rules will affect, it is hard to say. There have been several analysis’ done of the percentage of home loans originated in 2012 would not have met the QM rules and the estimates vary from 12 percent to more than half. Personally, I think the lower estimates are probably closer to accurate, but it is still a significant number…potentially somewhere around 1 of every 9 home buyers may not be able to obtain a mortgage that, absent the new QM rules, would have been able to.
UPDATE 12/06/13 – Read/download the CFPB Compliance Guide for new QM rule
Watch CFPB Video on QM Rule Here
What are the QM Rules and who do they affect? Continue reading “New QM Rules Going To Put Home Loans Out of Reach For Some Buyers Come January“
By Dennis Norman, on October 9th, 2013 Lawrence Yun, chief economist for the National Association of REALTORS (NAR), cautioned today that, given the fact the U.S. Government spends one dollar for every 75 -80 cents it takes in, if the debt ceiling isn’t raised, the government will have to decide where to cut its spending. Should the government choose not to pay its interest obligations, “we can expect interest rates on Treasury bonds to rise…and if that happens, mortgage rates will rise, because mortgage rates follow Treasury rates.”
Yun went on to say that if mortgage interest rates do rise we can expect home sales to drop by around 350,000 to 450,000 homes per year for every 1 percent increase in mortgage interest rates.
My advice to anyone in the market to buy a home is to buy sooner than later and, if possible, lock in your mortgage interest rate now before rates go up (think you can’t lock in your rate until after you have found a home? Wrong, contact me and I’ll tell you how).
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By Dennis Norman, on October 7th, 2013 As we enter the 7th day of the government shut down, concern grows among home buyers and sellers as to how this may affect the transactions here in St Louis. The short answer is that, fortunately, it appears the impact will be minimal for the most part. This morning at a meeting of the St Louis Industry Forum, which I chair, this topic was discussed and from the input of the real estate-related professions represented, it appears the impact of the government shutdown on real estate transactions here will be minimal.
Shelly Clark, President of Cardinal Surveying, said that there should not be any impact on obtaining a survey, however there will be some impact for homes located in a flood zone Continue reading “How Will The Government Shut Down Affect The St Louis Real Estate Market?“
By Dennis Norman, on October 2nd, 2013
Three of every 10 Americans don’t qualify for a home loan, according to the Zillow Mortgage Market Place Analysis. The analysis also showed that only borrowers with a credit score of at least 740 should expect to get the best mortgage rates offered due to tougher mortgage lending standards.
In doing their analysis, Zillow analyzed a total of 13 million loan quotes and over 225,000 purchase loan requests from September 2013. What was revealed was that borrowers with a credit score under 620 who requested a home mortgage for a 30-year fixed-rate loan, were unlikely to receive a loan. According to recent data from myFico.com, almost 3 of every 10 Americans (28.4 percent) have a credit score of 620 or lower, thereby putting a home mortgage out of reach for nearly one-third of Americans. Continue reading “Tough Lending Standards Mean Nearly One-Third of Americans Don’t Qualify For A Home Loan“
By Dennis Norman, on August 10th, 2013
Home Price Appreciation for 2013 is expected to be 6.75 percent (year-over-year from 2012), according to the average estimate of a panel of 106 economists surveyed by Pulsenomics. Interesting enough, though the economists had varying opinions, not one panelist project a decrease in home prices for 2013, in fact the lowest estimation of home price increase for 2013 was 1.69 percent and at the other end of the spectrum, the highest projection was 15 percent.
Also worth noting from the survey was the fact that 88 percent of the economists on the panel did not feel that recent increases in mortgage interest rates posed a “significant threat to the ongoing housing market recovery” however, it was noted that if interest rates hit 6 percent that could be a “show stopper” for the housing recovery.
(We work hard on this and sure would appreciate a “Like”)[iframe http://www.facebook.com/plugins/like.php?href=https%3A%2F%2Fwww.facebook.com%2FStLouisRealEstateNews&send=false&layout=standard&width=50&show_faces=false&font&colorscheme=light&action=like&height=35&appId=537283152977556 100 35 ]To see the complete survey results, including individual forecasts by the 106 panelists, click here.
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