overleveraged

With mortgage rates at historic lows, many people might be tempted to buy a home before they’re financially ready.

In order to determine where homeowners have the most unsustainable mortgage debts in the country, WalletHub recently released the 2017 Home Overleverage Report. Their analysts compared the median mortgage debt to the median income and median home value in more than 2,500 U.S. cities.

Dallas did not fare well when it comes to overleveraged mortgage debtors.

“Dallas ranked fairly well when compared to other major cities as it has an affordable median house value at $135,400,” said WalletHub analyst Jill Gonzalez. “However, the median earnings per individual are fairly low at just $27,935, which makes it harder to pay off a $131,144 median individual mortgage debt.”

Many residents are simply taking on more mortgage debt than they can handle, and putting very little money forward as a down payment.

“Being overleveraged can make it harder for homeowners to make their monthly payments, possibly leading to defaulting on their mortgages,” she said. “The city was ranked and scored based on its mortgage debt-to-income ratio and mortgage debt-to-house value ratio. Dallas’ overall rank is mostly due to its high debt-to-income ratio, at 469 percent.”

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mortgage

On Friday afternoon, just hours after swearing in, President Donald Trump suspended a Federal Housing Authority (FHA) mortgage premium rate cut issued by former President Barack Obama earlier in the month. The quarter-point cut would have taken effect on January 27.

An FHA loan, with its low down payment and less stringent credit score requirements, offers first-time and low-income homebuyers the opportunity to get a foot in the proverbial door. Aimed at countering rising interest rates following the November elections, the Obama administration’s mortgage insurance premium (MIP) cut would have made it possible for a greater number of buyers to be eligible for credit based on their debt-to-income ratios. For even more buyers, it may have made a monthly mortgage payment more affordable.

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National Salary Map SM

HSH.com has been around since 1979 (yes, pre-internet) and acts as a mortgage research site with information and mortgage calculators (sorta like Bankrate.com).  They recently published data on what salary it would take to afford a median-priced home in the top 27 metropolitan markets by population.

You may recall, last September I published a piece titled, “How Much Money Does it Take to Live Like a Human in Dallas?” Based on research provided by the Economic Policy Institute, metro Dallasites renting housing for two adults and two children needed $61,150 after taxes to enjoy “a secure yet modest living standard.” This would include transportation, childcare, healthcare, food and utilities.

HSH.com reports that homebuyers have it much worse.

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Guardian Mortgage 50th anniversary

Guardian’s 50th anniversary party

And we shall be getting more Guardian Angels as Guardian Mortgage Company, the 51-year old Richardson-based residential mortgage loan origination company, spreads those angel wings to Austin, Phoenix and… Troy, Michigan.

Dave Jansen will serve as branch manager at the newly minted Troy location, and a number of experienced loan officers (angels) will also join his team. Jansen says he is more than ready to start serving Michigan area homebuyers.

“We are so excited to broaden our reach in the great state of Michigan,” Jansen said. “Our team can’t wait to get in there and start working with local residents, guiding them on their journeys and helping them get the best financing possible.”

The new location at 900 Wilshire Drive in Troy will come aline on April 6, with members of the Troy Chamber of Commerce all over the place. Jansen says the place will be crawling.

Guardian is set to open five new branches this year, with the first expansion already happening earlier this month in San Antonio.

Marcia Phillips, former CEO and President of Guardian Mortgage (more…)

Photo: Nan Palmeiro via flickr

Photo: Nan Palmeiro via flickr

Anyone who’s ever been through the home buying process knows one thing: It can be a little daunting. There’s countless paperwork, hundreds of forms to fill out, and lots of back-and-forth between you, your real estate agent, your lender, your home inspector, and a dozen other pros you meet along the way. If you’re not really on top of things, it can mean months in delays or, what’s worse, losing that dream home altogether.

Fortunately, with a little prep work, a few helping hands, and some good old communication, a smooth, easy home purchase really can be possible. Here’s how to do it:

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Finding the right mortgage company is about more than just the lowest rate.

Finding the right mortgage company is about more than just the lowest rate.

As a real estate agent, your primary job is to help your buyers find the home they’re looking for, at a price they can afford.
But the job doesn’t stop there, by any means.

Agents are also responsible for helping clients through the entire buying process. From the initial search to scheduling tours and home inspections and, ultimately, attending the final closing, real estate agents are there through it all.

An agent can’t do it alone, though. Along the way, they also must recommend other industry professionals and services  —people like home inspectors, contractors, home warranty providers and, you got it, even mortgage lenders.

In fact, the latter might be the most important recommendation an agent will make in the entire home buying journey. After all, the lender will determine how much the buyers qualify for (and what type of property they can afford), and they’ll be a part of their lives for many years to come—as long as they own the home.

Needless to say, the lender recommendations you make are crucial. If you want your buyers to be successful homeowners – not just now, but even decades down the line—offering them the right mortgage options is the way to do it.

Do you have great lenders and loan officers you can recommend to your clients? If not, here are 6 ways to spot a stellar one that’s worthy of your buyers:

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Cap One

Get ready for a celebrity weekend! This Saturday yours truly here will be hobnobbing with TV stars and home buying and design experts Jillian Harris and Todd Talbot.  Love their show! It’s all going to happen at Stonebriar Centre up in Frisco off Billion Dollar Mile at the Capital One Home Loans Open House.

And even though we’ll be in a mall, there will actually be a house to tour.  You can tour a model replica home and hear me moderate a Q&A with Jillian and Todd to be sure they share all of their inside tips on home buying and remodeling with all of us in North Texas.

(There will be opportunities for photos and autographs, too!)

Shocker: These tips will probably include the use of online tools to simplify everything about the home buying and remodeling process. Because now you can truly start your home purchase on line, even when it comes to getting that all important home loan. Capital One Home Loans reps will be on hand demonstrating their new home loans digital offering. Dallas is one of a few markets where they are launching this re-imagined personal and digital home loans experience. Just imagine applying for a home loan on your phone? (Or on any other device you prefer?) (more…)

French Hill

Congressman French Hill (R – AR) urged swift passage of the Homebuyers Assistance Act, though the White House says it plans to VETO the bill.

The Homebuyers Assistance Act, which received bipartisan support in the House, clearly defines the “hold harmless” period of TILA-RESPA Integrated Disclosure to end on Feb. 1, 2016. There’s already a nebulous, undefined grace period in the recently implemented Consumer Financial Protection Bureau law, but Congress wants to give lenders a definite “safe harbor” period for those making a “good-faith” effort to comply. There’s a long list of professional organizations and associations that support the legislation.

On November 20, 2013, the CFPB finalized TRID, which combined certain disclosures that consumers receive in applying for and closing on a residential mortgage loan, including disclosures required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The effective date for the final rule was originally set for mortgage applications received on or after August 1, 2015, but due to “administrative errors,” the CFPB delayed the effective date until October 3, 2015.

The settlement process is an integral piece of a real estate transition, so any glitch or delay in the process affects buyers and sellers and all parts of the real estate industry, including realtors, bankers, homebuilders, and title companies. Almost 300 Senators and House Members wrote the CFPB to request a formal hold-harmless period.

H.R. 3192 does not delay implementation of the TRID rule, but rather, provides a temporary safe harbor to those who are making a good faith effort to comply until February 1, 2016.

 

However, the White House plans to veto the bill, calling it an “unnecessary delay,” according to HousingWire. That’s a pretty interesting stance to take on something that came out of the House Financial Services Committee with support from both sides of the aisle.

The CFPB has already clearly stated that initial examinations will evaluate good faith efforts by lenders. The Administration strongly opposes H.R. 3192, as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the Nation’s financial stability.

If the President were presented with H.R. 3192, his senior advisors would recommend that he veto the bill.

What do you think of the White House’s stance on extending the “hold harmless” period to next year?