Housing Risk In 2015: It's Déjà Vu All Over Again!

“24% of all purchase loans have a debt-to-income ratio greater than the CFPB’s Qualified Mortgage rule limit of 43% [of debt to income], a new series high.“ ~Mortgage Risk Index-March 2014 Release, AIE’s International Center on Housing Risk

Hmmm. I thought the CFPB was the new sheriff in town, protecting the Little Guy from the villainous Big Banks. Isn’t that why it created the Qualified Mortgage or “QM” rules? Wasn’t QM that safe harbor, giving peace and comfort to lenders who stayed within the guidelines deemed “safe”? Wasn’t a debt-to-income ratio[1] over 43% deemed “risky”? And for those lenders foolish enough to stray outside of the QM box, they became subject to the draconian Ability to Repay, or “ATR” rules, which, if violated, gave borrowers the right to sue lenders for giving them loans they should not have taken out. Huh? Continue reading “Housing Risk In 2015: It’s Déjà Vu All Over Again!”

A One-Party Listing Agreement obligates the seller to pay a broker’s commission only if he/she sells the home to a buyer who has been brought to him/her by that broker. One-Party Listings are generally used in situations where a seller is attempting to sell their home without the assistance of a real estate broker. Such sellers are known in the industry by the acronym, “FSBO,” i.e. “For Sale By Owner.” Continue reading “One-Party Listings vs. Compensation Agreements”

Like the pig through the python, we are still seeing homeowners slowly going through the unpleasant process of foreclosure, seven years after the housing and credit crash began, in earnest, in 2008. Yes, there are fewer than before, but they cause the same trauma and upset they always have. However, some things have changed today. For example, some banks and servicers have gone back to doing non-judicial sale, which materially speeds up the process.

Accordingly, I thought I’d update my Foreclosure FAQs for 2015. For those still plagued with questions about the process, this may provide some help and information to make it more understandable and less fearsome. Go to link here. Good luck! ~PCQ

Portland-Metro’s 2014 RMLS™ stats bested 2013’s numbers in all metrics:

New listings (37,654) were up 5.0%;
Pending sales (28,220) were up 4.3%;
Closed sales (27,752) were up 3.6%;
Average price ($333,000),was up 7.2%;
Median sale price ($285,500) was up 7.7%;
Average market time dropped from 83 days for 2013 to 70 for 2014, reduction 15.5%;
Inventory in Months[1] began at 4.1 and ended at 2.3.[2]

Continue reading “2014 Portland-Metro Sales Stats: Good News Except For Inventory – What’s Up?”

The last three months of 2014 have brought us some very good financial news. Here are the highlights of 4Q 2014 – together with potential upsides and downsides for 2015:

Interest Rates and Stocks. Notwithstanding the voices of doom and gloom predicting that interest rates would spike when the Federal Reserve tapered its Quantitative Easing (“QE”) program[1] beginning at the end of 2013, it didn’t happen. QE finally ended in October 2014, and interest rates have actually continued to drop a bit. [See Bankrate table here.] This has been very good news for homebuyers, car buyers, and purchasers of other capital goods, such as equipment and machinery. Continue reading “2014 Ended On A Good Note – How Will it Affect 2015?”

Background. Quantitative Easing or “QE” is a process whereby the Fed purchases large quantities of long-term securities held by big banks. The Fed prints money to make these asset purchases. By reducing the supply of these securities for other investors, the price goes up. When the price of the bonds goes up, their yield goes down. This means that for large companies and municipalities who depend upon the sale of bonds for the financing of projects, their borrower costs go down. Continue reading “Will Interest Rates Rise In 2015?”

Quantitative Easing (“QE”) & Tapering. QE is a process whereby the Fed purchases large quantities of long-term securities held by big banks. The Fed prints money to make these asset purchases. By reducing the supply of these securities for other investors, the price goes up. When the price of the bonds goes up, their yield goes down. This means that for large companies and municipalities who depend upon the sale of bonds for the financing of projects, their borrower costs go down. Since mortgage interest rates track the long term T-Bill rates, as QE keeps these rates low, it also keeps mortgage interest rates low. The goal of QE was to keep long term interest rates low and release more money into the marketplace, thereby increasing economic activity for households and businesses.[1] Continue reading “The Federal Reserve 2015: Looking For The Goldilocks Solution”

Nationalmortgagenews.com recently carried a story (“Fannie Moves Aggressively on New Low-Down-Payment Loans”) by Kate Berry reporting on Fannie’s and Freddie’s [collectively, “GSEs”[1]] venture back into more risky lending. Perhaps the GSEs’ near-death experience in September-October 2008 did not leave a sufficiently lasting impression…. Continue reading “Fannie And Freddie Throwing Caution To The Wind: 3% Downpayment Loans!”

The RMLS™ Market Action Report just came out. Link is here. The Portland-Metro stats for November 2014 continued to show steady growth in almost all sectors, with the exception of new listings, which were down 2.7% from the same period last year. Inventory remained stubbornly low (see chart below). Continue reading “Portland-Metro RMLS™ Stats For November 2014”

According to a recent article in housingwire.com, titled “Ocwen posts open letter and apology to borrowers,” the widely reviled Ocwen, apparently (sob) guilt-ridden because it, once again, was caught doing what it does best – taking advantage of the little guy. Continue reading “Ocwen’s Heartfelt Apology – Ummm, Right!”