Opposition is building to private transfer fees. We first posted on this subject on August 15 (
“Private Transfer Fees.”)
To quote from an
article in REALTOR®Mag;
Freehold Capital Partners, which has developed the program, says it has enlisted thousands of developers nationwide. It argues that this is good for the economy because it will provide builders with more capital.
Seems to me if the builders need more capital, they either raise the price of the homes they are selling or go get a loan. This does nothing for the home buyer and it presumes that the builder will be around for 99 years.
Mortgage delinquencies fell very little in the second quarter.
| Delinquent mortgages as a percent of total |
| Q2 ‘09 |
Q4 ‘09 |
Q1 ‘10 |
Q2 ‘10 |
| 5.81 |
6.89 |
6.77 |
6.67 |
A good reason for this reduction would be home prices rose slightly and marginally underwater homeowners are catching up with mortgage delinquencies.
A bad (and the most likely) reason would be more homes were foreclosed eliminating the mortgage delinquency.
Private transfer fees are onerous fees that encumber a title and are placed on a property by a seller, usually the builder.
What happens is that each time the property is sold, a fee is paid to the person or entity that created the encumbrance. These can last for up to 99 years.
(more…)
Congress has finally passed a bill restoring and funding the Rural Housing Service, the provider of USDA loans. The bill now goes to President Obama for signature.
USDA has been issuing conditional loan approvals while waiting for bill passage.
The timing of this passage is important for there are buyers in escrow with conditional loan approval who want to close by September 30 so they can benefit from the first time home buyer tax credit.
USDA will issue new mortgage guidelines shortly.
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On July 19 we published a post “
Applying For A Loan? Pregnancy Is Out!” in which it is reported that lenders are denying loans because a working mother who is pregnant will have reduced earnings.
This seems like a raw deal and possible discrimination.
HUD has opened an investigation into these practices. You can read their announcement
here.
Resource: HUD
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What better way to follow a quiz on mortgage fraud is there than an update on the impact of the financial overhaul bill signed by President Obama on July 21. Here are a few of the key elements as they relate to mortgages;
- Lenders must prove that borrowers can afford their mortgages.
- Banks and other entities that pool mortgages and sell them to investors must keep at least 5 percent of the investments on their own books.
- Low-risk mortgages, mostly 30-year fixed-rate loans, are exempt from many regulations.
- Bonuses for brokers based on the cost of a mortgage are banned.
Number 1 is a little worrisome for we have seen lenders go to the extreme to get proof of the borrower’s repayment capability. It is a good requirement as long as lenders apply sound judgment. Our concern is that good buyers will have their mortgage request turned down.
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Remember those dreaded words from your teacher? Are you in the mood for a test? Click
here for a quiz on mortgage fraud. See how much you understand about some of the practices that led us into the crisis we are in today.
One good thing about this quiz is no one sees the results but you.
Resource: REALTOR®Mag
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Mortgage applications rose for a second week out of the past ten. Applications were up 3.4 percent on a seasonally adjusted basis from the prior week. Lets hope these applications result in approved loans and buyers.
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We report from time to time news on mortgage applications. Recently applications are down which means fewer buyers.
Is it any wonder the number of applications is falling when lenders tighten qualifications to an extreme level?
The New York Times has an article on how pregnancy can result in loan denial. And it isn’t just the lenders, Fannie and Freddie are getting into the act as well.
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Yes, new weekly mortgage applications are the lowest since December of 1996. On an unadjusted basis, new applications fell 12.7 percent from the prior week.
Updated rate information on Friday.
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