ADUs and IRA home loans are hot topics – Orange County Register
There’s nothing like writing a mortgage column for a city newspaper. Can you believe it was 10 years ago?
Aside from my weekly concern about whether my editors (and you) will like what I do, I get a lot of feedback from readers on my columns. It’s usually something like, “Thank you. I had no idea. “Or it is” You put your head up. They don’t know what you are talking about. ” I am grateful to have received more of the former comments than the latter. But I get both.
Here are my 10 biggest takeaways since I started this column in August 2011.
1) Fannie Mae developed an automated scoring system called Collateral Underwriter. It was launched in 2015 and I think it’s an extraordinary invention.
The automated System (along with Freddie Mac’s Loan Collateral Advisor) speeds valuation decision-making and saves borrowers around $ 600 in valuation fees should a property inspection waiver be issued. It’s also an excellent real estate appraisal and quality checker for human-done appraisals.
My Two Cents: Why can’t Fannie and Freddie develop an automated process to forego a borrower’s income record? The data giants can easily and accurately determine the salaries of most people. The agencies could combine the approximate income with an equity / down payment metric. The result would be a bar with lower income accuracy for higher equity borrowers. For the love of peace, this could speed up the loan approval process. Nobody leaves this property with a deposit of around 30%.
2) An ah-ha moment for me was learning what to do with IRA money. Yes, you can purchase rentals with IRA funds for down payment. There are lenders willing to mortgage your IRA, not you directly. Many readers have told me that they implemented this funding mechanism because they didn’t have enough money outside of their retirement accounts.
3) Sometimes people in the mortgage industry, government officials, and even consumers lie to me. An executive at a large mortgage lender wanted to promote a particular loan program for his company. He explained that his company had managed to get an exclusive deal with Fannie and Freddie that no one else got. Neither Fan nor Fred would confirm the deal. The story never ran.
My newspaper bosses always said to me, “If your mother says she loves you, check it out.”
4) The 2020 Granny or Secondary Housing Act was probably the most absorbed column series I’ve written. (These columns were published in December 2019). In short, California law has saved citizens a ton of red tape adding housing to their homes. It’s a very good answer to help alleviate the housing shortage.
The law also provides a way for homeowners to more easily provide housing for their families or to provide rent as additional income. To this day I have received calls from people who want to know more about the ADU building process.
5) I love tips. I’ve written a lot of columns thanks to the people who brought a story to my attention. The best news I’ve ever received was from an industry colleague about a lender who has a nearly 10-year monopoly on cooperative mortgage loans in Laguna Woods Village. Despite all the noise the Laguna Woods cooperative owners are making, there is still only one cooperative lender in Laguna Woods today.
6) In 2011, in the days following the Great Recession, the market share of mortgage brokers was below 5% of home equity and refinancing loans. (Full disclosure: I’m a mortgage broker.) Brokers were primarily blamed for the mortgage crisis. Can you say “Scarlet Letter”?
According to a consumer survey jointly published last week by the Consumer Financial Protection Bureau and the Federal Housing Finance Agency, 46% of consumers applied to buy a home through mortgage brokers and 38% applied for refinance through brokers in 2019. Talk about returning from the dead!
7) Nothing makes a column better than subject matter experts. I have several names on my Rolodexes. (Yes, Mr. Old School has two on his desk).
Dave Stevens, a former FHA commissioner and retired president of the Mortgage Brokers Association, is the bionic brain of subject matter experts. He understands problems and knows politics like no other. He is articulate and thoughtful.
Real estate attorney Mike Hensley, along with CPAs Jeff Hipshman, Warren Hennagin, and Marcelo Sroka, was a great resource in enlightening me and you. And they are generous. Every week readers call or email me with column-related sensitive questions. Countless questions were answered for free by these fine people.
Nobody ever thinks too much about property titles until there is a problem. Glenn Awerkamp, Vice President Lawyers Title Insurance, has been quoted in these columns for years. And it was the walking information encyclopedia for readers – always looking for the solution to their complex title problems. Unfortunately, Awerkamp died suddenly and unexpectedly last weekend.
8) Being on the corporate side of media relations can be difficult. The bravest, toughest, most professional press officer I’ve ever dealt with is Tom Goyda, Senior Vice President of Media Relations at Wells Fargo Bank. Perhaps more than any other banker, I have asked Tom many difficult questions over the years about a variety of Wells Fargo practices and client concerns. He is a professional.
Goyda was always so quick to research and respond to inconveniences when asking Wells’ officials on hot topics. He’s always as calm as a cucumber.
9) Forecasting home prices, interest rates, and the like requires a lot of thought. It can be even more difficult to articulate everything in plain English. My preferred expert sources are Dr. Raymond Sfeir of Chapman University, Jordan Levine, Chief Economist of the California Association of Realtors, and Tendayi Kapfidze, Chief Economist of Lending Tree.
Separately but in the same arena, data companies Attom Data Solutions, Black Knight and Steven Thomas of Reports on Housing also offer incredible insights into the housing and mortgage markets.
10) Mortgage conventions and conferences offer a lot of action and lots of column fodder. To my complete surprise, Angelo Mozilo, the ex-CEO of the failed Countrywide Financial (think of the days of the mortgage meltdown) was invited to a mortgage conference a few years ago. He received a standing ovation from most of the audience. Boy, was that a fun column to write.
Freddie Mac rates news
The 30-year fixed rate averaged 2.77%, 3 basis points lower than last week. The 15-year fixed rate averaged 2.1%, unchanged from last week’s all-time low.
The Mortgage Bankers Association reported a 1.7% decrease in mortgage application volume from the previous week.
Bottom line: For example, suppose a borrower receives the average 30-year fixed rate on a compliant loan of $ 548,250, the payment last year was $ 32 higher than this week’s payment of $ 2,244.
What I see: Well-qualified borrowers can get the following fixed-rate mortgages locally at one point: A 30-year FHA at 2.125%, a 15-year conventional at 1.875%, a 30-year conventional at 2.375%, a 15-year conventional high balance ($ 548,251 to $ 822,375) at 1.875%, a 30-year conventional high balance at 2.625%, and a 30-year fixed jumbo at 2.75%.
Eye-catcher credit of the week: A 15-year fixed-rate mortgage at 2.375% with no closing costs.
Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or [email protected] His website is www.mortgagegrader.com.