Underwater mortgages hold housing market back

Despite several years of an improving housing market, a large share of Georgia homeowners are still “seriously underwater” – owing 25 percent more on their mortgages than their homes can bring in a sale. About 17.3 percent of all the homes in the state that have a mortgage are underwater, according to a report released today by RealtyTrac, a California-based real estate research firm. That compares to the national rate of 13.3 percent, which represents more than 7.4 million homes, said Daren Blomquist, vice president at RealtyTrac. That share had been falling steadily, but the slide has leveled off, he said. “Slowing home price appreciation in 2015 has resulted in the share of seriously underwater properties plateauing.” A year ago, 18.7 percent of Georgia mortgages were underwater. The state has the seventh-highest share of seriously underwater homes, according to the RealtyTrac calculation. Worst on the list is Nevada with 25 percent of mortgages in that category. Underwater mortgages can be an obstacle to a housing resurgence. That is because few homeowners are willing and able to take a loss on the sale of a home. The result is that many homeowners sit tight when they might prefer to sell. Those who are “seriously underwater” are the least likely to move. Homeowners who are underwater can also be hamstrung financially. They are unable to refinance their mortgages to take advantage of low interest rates and they cannot access the value of their homes with homes to pay bills. The American economy thrives on motion. In most markets and most situations, the more transactions, the better. But underwater mortgages chills the market in two ways: homeowners are prevented from buying other homes, while their own homes are kept off the market. The real estate markets in Atlanta and Georgia were among the leaders in the years of the housing bubble. And the burst of the bubble did greater-than-average damage here. Average prices have now been rising for several years, and the market in many areas has bounced back. But in many places, prices are still far below their peak levels leading to the burst of bubble. And while the RealtyTrac data indicates a residual problem, it doesn’t include all the people who are prevented from moving because they are just moderately underwater or only slightly above it. Of homes owned for nine years, more than one in five is seriously underwater, RealtyTrac said. And nearly 40 percent of underwater homes were purchased seven to 11 years ago, according to RealtyTrac. That would include properties bought between 2004 and 2008, years that straddle the burst of the bubble. read more http://www.ajc.com/news/business/underwater-mortgages-hold-housing-market-back/nm87q/

Hispanics face hurdles in access to credit, mortgages

WASHINGTON

They make up the fastest growing segment of the U.S. population yet Hispanics are increasingly locked out of home ownership because of tighter lending standards that rely on outdated measures of creditworthiness.

Comprising more than 17 percent of the population right now and projected to double, Hispanics are a political and economic force to be reckoned with. And they potentially represent an answer to turning around a sagging national home ownership rate that’s approaching levels not seen since before the fall of the Berlin Wall.

The national rate of home ownership fell to 63.8 percent over the first three months of 2015. The last time it was lower was the final quarter of 1989 when it stood at 63.7 percent.

The problem for Hispanics, who in 2014 had an ownership rate of 45.4 percent, a 14-year low, is that conventional tools for gauging creditworthiness are locking them out in large numbers.

“Communities of color under the current scoring model aren’t being accurately captured,” said Joe Nery, president-elect of the National Association of Hispanic Real Estate Professionals. “You don’t have the opportunity to establish your credit.”

Hispanics are more likely to pay in cash, and have extended families under a single roof with a higher tendency to pool resources. Yet that counts for little in the traditional scores used by credit-reporting agencies and banks to determine whether an applicant qualifies for a mortgage or car loan.

“The current (credit) models established in the 1980s and early ’90s really don’t account for those methods of payment,” said Nery, a Realtor in Chicago. “Unfortunately that limits the access to loan products, especially for those of minority descent.”

In fact, the Consumer Financial Protection Bureau issued a report in early May noting that 26 million Americans are “credit invisible,” meaning they have no credit history on file with any of the major credit-reporting companies such as Experian, Equifax and Transunion. About 15 percent of African-American and Hispanic consumers are among those 26 million, the report said.

Currently, credit reporting is dominated by FICO scores. They date back to 1956, when software developers Bill Fair and Earl Isaac created a program to gauge the risk of a consumer credit default. Lenders now purchase more than 10 billion FICO credit scores annually for use in making loan decisions. Consumers are granted free access to their FICO score.

FICO’s current methodology dates back to around 2004, and relies on a borrower’s income, payment history, debt load and to a lesser degree how often lenders take a look at a borrower’s credit history.

Here’s the rub for Hispanic borrowers: When looking at payment history, the FICO scoring relies on whether payments have been timely on credit card bills, mortgages, car loans and the like. There’s greater weight given to lengthy repayment of credit.

“For most first-time homebuyers … their largest monthly expense is their rent payment,” said Joe Castillo, the managing broker at ERA Mi Casa Real Estate in Chicago. “And at the current time the credit agencies do not provide landlords larger or even small avenues to report that payment. So that is a huge misstep, or missed opportunity.”

That’s the problem Maria Flores faces in the Hispanic suburbs of Chicago. She sold her home at a loss several years ago amid the Great Recession, and is trying to buy again but her on-time rental payments aren’t factored into her ability to pay. It’s ironic because her monthly mortgage payment had been $2,000 a month. Her rising rental payments now are $1,800, which she routinely pays on time.

“For a bank, we are too low-income,” said Flores, whose truck-driving husband is an owner-operator who earns more than $100,000 before expenses. “Before, it was fine. It was the same as we earn now!”

Post-crisis lending standards are decidedly tougher, and that hits all borrowers. But for Hispanics there’s also the real issue of what is being measured. Cell phone payments are also not counted in conventional payment history. That would have helped Flores, who said she had no credit problems until the Great Recession.

Read more here: http://www.charlotteobserver.com/news/local/article28765174.html

The Extreme And Violent Background Of The Group Consulting On The Anti-Planned Parenthood Videos

 The anti-choice group Operation Rescue has been consulting with the Center for Medical Progress to attack Planned Parenthood with deceptively edited footage. Operation Rescue attempts to stop the "Abortion Holocaust" by "systematically harassing" abortion clinic workers. The group's leadership includes a convicted felon who attempted to bomb an abortion clinic, and it once issued a press release saying the killer of an abortion doctor should have been able to argue it was a "justifiable defensive action."

Operation Rescue Consulting With Center For Medical Progress To Attack Planned Parenthood

Center For Medical Progress Produced Anti-Planned Parenthood Video "In Consultation With Operation Rescue." Operation Rescue says the Center for Medical Progress' (CMP) campaign attacking Planned Parenthood was created "in consultation with" their group. CMP has released deceptively edited videos against Planned Parenthood that have been called out by observers. [OperationRescue.org, accessed 7/21/15; Media Matters, 7/15/15]

Operation Rescue's Senior Policy Advisor Was Jailed For Attempting To Bomb An Abortion Clinic

Cheryl Sullenger Was Sentenced To Prison For Conspiring To Bomb An Abortion Clinic. Cheryl Sullenger's Operation Rescue biography states that she is the group's senior policy advisor and "has been involved in the pro-life movement since 1984." That involvement includes attempting to bomb a San Diego abortion clinic in 1987. The Los Angeles Times reported in 1988 of Sullenger's sentencing:

    Saying he wanted to set an example for those who would consider breaking the law even for a righteous cause, a federal judge Thursday imposed stiff prison terms on the first of the Rev. Dorman Owens' followers to be sentenced for conspiring to bomb a San Diego abortion clinic.

    U.S. District Judge Earl B. Gillam sentenced Cheryl Sullenger, 32, to three years. He sentenced her husband, Randall Sullenger, 35, to an 18-month term--six months of it in a halfway house so he can continue working at a warehouse before leaving for one year in prison.

    [...]

    The Sullengers are the first of eight members of the fundamentalist Bible Missionary Fellowship in Santee to be sentenced for their part in the attempted bombing of the Family Planning Associates Medical Group on July 27. The gasoline bomb failed to go off when wind blew out the fuse. [OperationRescue.org, accessed 7/21/15; Los Angeles Times, 5/6/88]

Sullenger's Biography States "She Now Regrets" Actions. Her biography states:

    In a 1987 act she now regrets, Sullenger was charged and pled guilty to conspiracy to damage an abortion clinic. Even though the clinic was not damaged, Sullenger took responsibility for her actions, and served 2 years in Federal Prison. Since then, Sullenger has openly denounced violence as a means to stop abortion and has worked for over two decades as an advocate of peaceful activism as a means to save babies and stop abortion. [OperationRescue.org, accessed 7/21/15]

read more: http://mediamatters.org/research/2015/07/21/the-extreme-and-violent-background-of-the-group/204519

Bank of America says it’s No. 2 for mortgage customer satisfaction. So does Chase.

In the competitive U.S. mortgage market, bank giants are battling to be runner-up in customer satisfaction for home loans.

On Wednesday, Bank of America BAC, +0.83%  boasted of earning the No. 2 spot in J.D. Power’s customer-satisfaction study for mortgage originations. On Tuesday J.P.Morgan Chase JPM, +0.51%  proclaimed it was No. 2 in J.D. Power’s customer-satisfaction study for mortgage servicing.

Both claims are true, with a caveat: USAA out-scored Bank of America in the origination study, but it wasn’t included in the ranking because its mortgages are only available to those who have been or are in the military, plus their families.

So, who is No. 1 for mortgage-customer satisfaction? That’s Quicken Loans, an online lender based in Detroit. Quicken nabbed top spots last year in customer satisfaction for both originations and servicing.

For the origination survey, Quicken has ranked No. 1 for five consecutive years, with good marks for loan offerings, the application and approval process, and problem resolution, among other categories. For the servicing study, 2014 was the first year that J.D. Power included Quicken, which promptly beat its competition. Quicken performed well in categories such as billing and payment process and escrow-account administration.

source: http://www.marketwatch.com/story/bank-giants-battle-to-be-no-2-for-mortgage-customer-satisfaction-2015-07-15

Mortgage rates dip amid world economic concerns

With all the chaos in the world these days – Greece, China, Puerto Rico, not to mention falling oil prices – investors have sought safety in bonds, driving yields down. That usually pushes mortgage rates lower. Although home loan rates dipped this week, they didn’t slide very far, according to the latest data released Thursday by Freddie Mac.

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The 30-year fixed-rate average slipped to 4.04 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.08 percent a week ago and 4.15 percent a year ago. The 30-year fixed rate has stayed above 4 percent for the past five weeks.

The 15-year fixed-rate average edged down to 3.2 percent with an average 0.5 point. It was 3.24 percent a week ago and a year ago.

Hybrid adjustable rate mortgages also fell. The five-year ARM average dropped to 2.93 percent with an average 0.4 point. It was 2.99 percent a week ago and a year ago.

The one-year ARM average dipped to 2.5 percent with an average 0.3 point. It was 2.52 percent a week ago.

“Yields on Treasury securities declined this week in response to investor concerns about events in Greece and China. Mortgage rates fell as well, although not by as much as government bond yields,” Sean Becketti, Freddie Mac chief economist, said in a statement.

“Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases. In addition, the minutes of the June meeting of the Federal Open Market Committee suggest the Federal Reserve will proceed cautiously — monitoring events both overseas and in the United States to ascertain the appropriate moment to begin raising short-term interest rates. As a result, mortgage rates may remain in the neighborhood of 4 percent for a while.”

read more: http://www.washingtonpost.com/blogs/where-we-live/wp/2015/07/09/mortgage-rates-dip-amid-world-economic-concerns/

Mortgage Loan Rates Dip, but Remain Volatile

The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning, noting a week-over-week increase of 4.6% in the group’s seasonally adjusted composite index for the week ending July 3. That followed a decrease of 4.7% for the week ending June 26. The weekly results included an adjustment for the Independence Day holiday. Mortgage loan rates decreased on all five loan types.

On an unadjusted basis, the composite index decreased by 6% week over week. The seasonally adjusted purchase index rose by 7% compared to the week ended June 26. The unadjusted purchase index dropped by 4% for the week and remains 32% higher year over year.

The MBA’s refinance index increased by 3% week over week, and the percentage of all new applications that were seeking refinancing slipped from 48.9% to 48.0%, its lowest level since June of 2009.

Mortgage Daily News reported Tuesday that a majority of lenders were quoting conventional 30-year fixed mortgage loan rates of 4% for their top-tier borrowers earlier in the day, but after European markets closed Tuesday those rates disappeared and the prevailing rate moved back to 4.125% for top-tier borrowers. The report goes on to say:

    This type of intraday movement is par the course recently, and it’s not going away any time soon. Whether it’s driven by domestic events such as [Wednesday]’s release of the Minutes from that last Fed meeting, or by several days of negotiations over a new Greek bailout that follow, volatility is the only safe bet. For the past three business days, that volatility has generally left mortgage rates in better shape, but until we see a more stable change in market behavior, it’s safer to treat such days as “lock opportunities” as opposed to promises of further improvement. [Emphasis in original.]

Read more: http://247wallst.com/housing/2015/07/08/mortgage-loan-rates-dip-but-remain-volatile/

Sen. Lucio passes on consulting question

HARLINGEN — After filing the required annual personal financial statement, state Sen. Eddie Lucio Jr. declined to say if any firm paid him for consulting work last year.

Thus, it could not be ascertained if his past practice of consulting for firms doing business in the Rio GrandeValley has continued.

“Rio Consultants does not hold any contracts,” Lucio said of one of his businesses.

But asked if any firm paid him irrespective of contracts, Lucio said, “I have disclosed all the information that is required by the state of Texas.”

“I respectfully pass on requests that go beyond what is required by law,” the senator stated in an email to the Valley Morning Star.

Lucio, D-Brownsville, filed his annual personal financial statement earlier this year.

He reported being self-employed by Rio Shelters, Inc. and Rio Consultants. He also is a partner in Lone Star Golf Carts.

He reported assets of at least $85,000 for his business interests and liabilities of at least $60,000.

Lucio reported owing — alone or with other family member — at least $190,000 to several banks including the Lone Star National Bank, Rio Bank, Texas Regional Bank, BBVA Compass Bank, International Bank of Commerce and Plains Capital.

His personal financial statement notes he and his wife own half a lot in Port Isabel, he and other family member own 10 acres in Los Fresnos and his wife owns remaining properties in Brownsville and Los Fresnos.

State law requires public officials to annually file the statement with the Texas Ethics Commission regarding their sources of income, assets and liabilities of the prior year.

A legislator is allowed to accept compensation for work performed in a capacity other than as a public servant as long as it reflects the actual value of the work performed.

Financial disclosure laws are aimed at discouraging conflicts between a public servant’s personal interests and the performance of the officer’s official duties. The goal, the statute states, is “to strengthen the faith and confidence of the people of this state in state government.”

In 2002, it was learned Lucio was being paid by at least five companies: Aguirre Corp. of Dallas, CorPlan Corrections of Argyle, Dannenbaum Engineering of Houston, Management and Training Corp. of Utah (MTC), and Houston-based TEDSI Infrastructure.

 

read more: http://www.valleymorningstar.com/news/local_news/article_5b3abf00-22c9-11e5-a459-a31bf8546cf4.html