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Fannie Mae’s new Desktop Underwriter Version makes it easier for potential buyers to qualify for a mortgage. Here is what borrowers can do to improve their chances of qualifying for a mortgage, and what the new system will mean for the future of credit scoring. …read more

From:: Real Estate Wire

As borrowers become better at making their mortgage payments, banks have less need of mortgage servicers. Over the past two years, banks cut mortgage servicer employees by 50%. However, the same cannot be said of nonbanks. …read more

From:: Real Estate Wire

By Susanne Dwyer

Last week’s Presidential debate was a stark reminder, if not an ominous one: the election is approaching quickly and the real estate industry remains in the crossfire. Speaking at RISMedia’s CEO Exchange held at the Harvard Club of New York City, Ken Trepeta, president and executive director of The Real Estate Services Providers Council Inc. (RESPRO), informed the crowd that the results of the election could sway legislative changes that will impact the future of the industry.

While the housing market currently remains stable, Trepeta indicated that its modest pace need not cause worry. First-time homebuyers represent 32 percent of sales, as of July, down from its normal 40 percent, but still better than in recent months. The unadjusted median home price was $244,100, up 5.3 percent from last year (and a new record).

“Slow and steady wins the race,” he said. “We’re doing okay, and interest rates remain near historic lows. But the biggest fears come out of Washington.”

Thanks to the Mortgage Choice Act, opportunities still exist, however, rising debt in our economy looms overhead, with debt doubling in the last eight years. Unfortunately, large deficits are still forecast for the foreseeable future, said Trepeta. In addition, tax reform for the government sponsored enterprises (GSEs) is “not going to happen” in the next couple months, he predicted.

“Going forward, we won’t hear about it in the political campaigns, but we owe more money than the rest of the world as a government,” said Trepeta. “At some point, that’s got to start weighing on us.”

While the Consumer Financial Protection Bureau (CFPB) has begun to hold lenders more and more accountable, issues at the state level remain. The New York emergency rule remains, while in Texas, an effort to change title insurance laws is underway. Regardless of current legislation still in play, things may change come November when the dust from the highly polarizing election settles. Trepeta said it’s akin to the now-classic 1980 election, “where the debates will really mean something.”

“There’s legislative work to be done on a number of fronts, and a lot is contingent upon the election,” said Trepeta.

The Mortgage Control Act will continue getting attention. There’s still a “cautious approach” to guidance from CFPB on MSAs and other enforcement issues. Regardless of who wins, there’s still plenty more lobbying and educating to be done surrounding the important housing laws that will affect our country in the future, in addition to further educating the CFPB on how the industry actually works and what consumers actually view as benefits. Though as Trepeta mentioned, there are plenty of “behind-the-scenes opportunities” alive in the industry.

With so many balls in play and a litany of lingering questions, Election Day 2016 is bound to be the catalyst that will knock down the first of many dominoes for the real estate industry. Regardless of which direction it may fall, the housing industry is likely to endure some shifting as a trickle-down effect due to activity and on-going changes out of Washington.

…read more

From:: Real Estate News

By Susanne Dwyer

Comprehensive regulatory overhauls are never easy, and harmonizing the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) through the Consumer Financial Protection Bureau’s (CFPB) “Know Before You Owe” (KBYO) mortgage initiative has been no exception.

In effect for one year now, real estate industry professionals are becoming more comfortable with the new KBYO disclosure forms, but some confusion still remains. Fortunately, CFPB issued a proposed rule in July to address many of the challenges raised by lenders, real estate agents and settlement providers about KBYO.

Over the past year, despite ongoing issues with the new KBYO process, transaction delays have started to decline. Prior to the October 3, 2015 effective date, a typical closing timeframe was roughly 30 days. After KBYO implementation, transactions were delayed 8.3 percent of the time, with a peak time-to-close of 41.2 days in November 2015. By the second quarter of this year, the share of transactions delayed due to KBYO eased to 1.7 percent.

The latest National Association of REALTORS® (NAR) Survey of Mortgage Originators revealed that while KBYO-related delays or cancellations decreased overall, some lenders were more reluctant to originate smaller loans and were more likely to increase fees to consumers to offset compliance costs due to KBYO.

Another unintended consequence has been lenders’ reluctance to share the new required Closing Disclosure (CD) with real estate professionals out of fear of liability for disclosing clients’ nonpublic personal information. Lenders claim sharing the CD violates federal privacy law (Gramm-Leach-Bliley Act). However, an exception within the law allows lenders to distribute the CD to third parties, including real estate professionals, and was not amended by KBYO.

Homebuyers and sellers rely on real estate professionals for guidance when navigating the complexities of a real estate sales transaction. Long before KBYO, real estate professionals had relatively unhindered access to the HUD-1, providing their clients with beneficial advice and helpful resources. Lenders’ refusal to share the CD under KBYO has placed recent buyers and sellers at an enormous disadvantage.

According to a survey of REALTORS®, 54.5 percent had problems obtaining the CD, and when access was permitted, more than half found errors within the document. The latest NAR mortgage originator survey also revealed that the percentage of lenders unwilling to share the CD increased to nearly 65 percent, upending the KBYO theme of transparency and accountability.

CFPB Proposes Changes
Based on continuing implementation issues, CFPB proposed amendments to KBYO in July, with an open comment period closing on October 18, 2016. The CFPB’s proposed rule updates fee tolerance provisions, allows for certain CD modifications after issuance, extends requirements for co-op transactions, clarifies construction loan issues and promotes housing assistance lending without upsetting existing exemptions, among other things.

As advocated by NAR, CFPB also included language acknowledging that sharing the CD with real estate professionals is permitted, in accordance with the Gramm-Leach-Bliley Act. Highlighting this law provides lenders with certainty when sharing the CD with real estate professionals and helps consumers avoid unnecessary and costly slowdowns for real estate purchases.

Not …read more

From:: Finance and Economy

Republican presidential candidate Donald Trump’s method to legally avoid federal income taxes for up to 18 years after suffering a $916 million business loss in 1995 is based on the same law that prevented many housing companies from going out of business less than a decade ago. In fact, one lawyer said back when this was going on that the law was most applicable to homebuilders. …read more

From:: Real Estate Wire

Just under a decade ago, the owner bought the home featured in the film Mrs. Doubtfire for less than half the price it is now on the market for. Here’s more on this expensive four-bedroom home. …read more

From:: Real Estate Wire