Tag Archives: Lending

TRID – A Year Later

On October 3rd 2015, history was made in the mortgage industry when the TRID Rule, or the “Know Before You Owe” Rule was implemented in the United States. TRID was created in order to bridge the gap of transparency between borrowers, regulators, and lenders through more consumer-friendly documents and additional time restraints in the lending process with the hope of creating a more informed, and therefore better protected consumer. In the two years leading up to the implementation of TRID, those in the lending industry feared that additional paperwork and time would deter potential buyers. Once TRID was implemented, there were a few hiccups in the road, but the mortgage industry has been changed forever.

With a year of the implementation of TRID officially under America’s belt, we want to take a look back on the up’s, down’s, and still-to-come’s.

THE TRID TRAIN, A TIMELINE:

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November 2013: TRID unveiled to the lending industry with the proposed roll-out date to take place August 1st 2015. Cue industry-wide panic attacks due to the copious amounts of work they will have to do in order to adhere to the new rule (think technology and work process overhauls).

November 2013- June 2015: Everyone freaks out about the implementation of TRID, concurrent with an “administrative error” prompting the CFPB to change the start date to October 1st, 2015.

June 24th 2015-  A proposed amendment to TRID is released where the official start date of the “Know Before You Owe” rule will be October 3, 2015.

October 3, 2015- TRID goes into effect, and companies are mandated to comply. Many express concern and complaints that the CFPB is vague in some sections of TRID and the lack of guidance offered in the following months.

January 2016- Ellie Mae’s Origination Insight Report shows that total time to close has reached a high of 51 days, an indicator that the 6 days added in the process were being added to the total time instead of integrated in. Lending companies continue to complain about vagueness and lack of education from the CFPB regarding TRID.

July, 2016- The CFPB responds to concerns by lending companies and other businesses impacted by TRID and put some new changes into place regarding the secondary market to better help and inform lenders. The proposed changes include: tolerances for the total of payments, expanding the number of housing assistance loans that would qualify for exemptions, including cooperatives in the rule, and clarifying how a creditor could provide separate disclosure forms to the consumer and the seller.

August 2016- NAR surveyed 2,500 REALTORS to get their perspective of how the TRID rule was working which revealed that the majority saw no changes through the implementation of the rule.

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TRID IN 2017

While there were a few up’s, down’s, and hiccups in the past year for the lending industry (as expected with any major industry overhaul), it is apparent that TRID has been a mostly beneficial and much needed industry update for the consumer. As Pete Mills from the Mortgage Bankers Association stated, “TRID was a massive undertaking from a systems and business processes standpoint,” Although many anticipated the rule would significantly disrupt the closing process for consumers, the impact of TRID on consumers was mitigated because lenders and other participants in the closing process dutifully prepared for the final rule.”

Many lending companies are still making adjustments in their strategy with the implementation of the new rules, but with a year of adhering to TRID under their belt, lending companies are now analyzing ways to better streamline processes and resources to better serve their clients and integrate the additional 6 days in the process instead of adding them. Ready to own the house of your dreams? We’re here to help you from the beginning steps of your planning period all the way until you step through the doors of your new home. Contact us today at Alpha Mortgage!

 

Recent Changes in USDA Rates

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If you’ve been in the market for a mortgage lately, you’ve undoubtedly heard a lot of commotion about the recent changes in USDA rates, and are probably wondering what this means for you, a person who is looking to purchase or refinance a home. On May 16, 2016, the USDA recently announced a series of changes that will make it cheaper and faster to refinance a USDA loan. We’re here to break it all down for you.

To begin, it’s important to understand what a USDA loan is. USDA loans are mortgages backed by the US Department of Agriculture as a part of its USDA Rural Development Guaranteed Housing Loan program. USDA loans have increased in popularity over the past few years due to their 100-percent financing program that helps approved lenders provide low to moderate-income households with an opportunity to own a home in a rural or semi-rural area (to buy it, refinance it, build it, rehabilitate it, improve it, or relocate another dwelling) with no down payment, reduced mortgage insurance premiums, and an attractively low monthly interest rate. No, you don’t have to be a farmer to obtain the loan, you just have to meet the following criteria:

  • Meet income eligibility
  • Agree to personally occupy the dwelling as your primary residence
  • Be a US Citizen, US non-citizen national, or qualified alien
  • Demonstrate the willingness to meet credit obligations in a timely manner
  • Purchase a property that meets all program criteria including location as defined by the USDA

The loans were created in 1991 to encourage homebuyers to live in rural and suburban areas in hopes of boosting the local economies and growth through more affordable housing options. So what do the new changes mean? Nothing but good news for those who qualify!

Starting June 2nd, 2016, homeowners current on their mortgages for the past 12 months will no longer be required to secure an appraisal, provide a credit report, or undergo a debt-to-income calculation when they refinance for a 30-year term, saving applicants both time and money.

Average savings are expected to be around $150 per month, with some borrowers saving up to $600 per month. When it comes to the changes, Rural Housing Service Administrator Tony Hernandez says “These changes reaffirm the Obama Administration’s commitment to middle-class Americans, and I am pleased that we continue to provide affordable housing to support thriving economies in rural communities. Helping homeowners refinance their homes to reduce their monthly payments and take advantage of low-interest rates will bring increased capital to rural residents and the communities where they live and work.”

Interested in seeing if you qualify for a USDA loan or refinance? Contact us today!

2016 Housing Market Predictions

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New Year, New Housing Market? Not so much. According to many housing predictions, 2016 will bring a whole lot of the same to the table. But is this a bad thing? Absolutely not. While 2015 was known as the best year for housing since 2007 due to many factors such as increased employment rates, implementation of TRID, and more, 2016 will also continue the housing market’s upswing- just not as exponentially.  We’ll start to secure a ‘normal’ in 2016. Remember that word?!

Here are our 2016 Housing Predictions:

  1. Increased Interest Rates– The Federal Reserve is expected to continue to raise interest rates in the short term between now and 2016’s end, & homeowners who have adjustable-rate mortgages or home equity loans will most likely see their interest rate rise as a result.  Housing wire goes as far to say that Fixed-rate mortgages will also rise, perhaps up one-half of a percentage point between now and the end of 2016, reaching 4.5% for 30-year loans. Despite this increase in interest rates, mortgage rates will remain historically low. If the rates do start to rise in 2016, as gradually as they may, we could see slightly lower home-buying numbers next year. But these changes will be minimal due to the continued increase in economic expansion and employment numbers- meaning more people are becoming able to afford houses.
  2. Evolving Mortgage Process – Mortgages may be in reach for more Americans in 2016 due to legislation that would allow Fannie Mae and Freddie Mac to take into account new ways to measure creditworthiness like evaluating rental history and utility bill payments instead of just the FICO credit score. More loans may also allow buyers to include income from room rentals, etc. More lenders are continuing to ease credit standards, and don’t see that changing in the future.  This is good news for potential homebuyers!
  3. Increased Housing PricesReverse Mortgage Daily reports that appreciation in national home price indexes will likely continue at a faster pace than inflation, but grow more moderately than last year. The CoreLogic Home Price Index was up about 6% over the last 12 months, and CoreLogic anticipates a rise of 4-5% during 2016. This increase in home sales and prices can be attributed to the improved economy, which has brightened the financial outlook for many families and enhanced their overall financial security. Prices may be higher, but they will still be affordable to most.
  4. More first time buyers– We expect first-timers to make up a bigger portion of the market than they did this year. The reason is simple: The market will be more welcoming to them thanks to the aforementioned slowing price growth and easier access to loans. It is important to note that Millennials & Young Gen X’ers are expected make up the largest demographic of home buyers in 2016 because they have recovered from the financial crisis, are entering their prime professional years, as well as their prime family raising years.
  5. Rental Homes & Millennials– According to a recent analysis by the Federal Reserve, outstanding student loan debt now totals more than $1 trillion. Student loan debt can create additional hurdles for mortgage shoppers. It increases the borrower’s total debt-to-income ratio, which can cause problems during the underwriting and approval process, and excessive debt can lower a person’s credit score. All of this makes it harder for Millennials to qualify for home loans.  This is why we predict rental homes will continue to increase in popularity- Millennials simply can’t afford homes. Rental vacancy rates for both apartments and houses are at, or near, their lowest levels in 30 years, and rents are rising quicker than inflation.
  6. Smart Homes/ Housing Tech – Smart homes and houses with more technological features available at time of sale will continue to become more popular. Features like beacon technology, security tech, VR and more will make homes more appealing. Smart home features will start to be expected by consumers in 2016.

We can’t wait to help you own your dream home in 2016! On behalf of all of us from Alpha Mortgage, we wish you a very happy New Year!

 

What Makes a Good Loan Officer?

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With 2015 upon us and the economy looking up, many people are looking towards purchasing a new home this year. It is no secret that one of the most important steps in property purchase involves communication and collaboration with loan officers. Loan officers, or Mortgage Originators, evaluate, authorize, or recommend approval of loan applications for people and businesses. According to the Bureau of Labor Statistics, they are normally responsible for contacting companies inquiring about loan needs, meeting with loan applicants to gather personal information, obtaining and verifying financial information, explaining loan terms and types, analyzing and evaluating applicant’s finances, and eventually approving or denying loan applications. So what should you look for in a loan officer to make your home-buying experience as seamless and stress-free as possible?

A good loan officer holds many great qualities including time-management skills, problem-solving skills, and responsiveness, but 5 traits that an outstanding Loan Officer must have are listed below:
• They are transparent with customers- a great loan officer is always in line with all national loan regulations, but arguably even more importantly, they are open and forthcoming with customers and realtors about important information that can make or break a loan in a timely matter. They never over-promise or under-deliver.
• They are passionate about what they do- one thing that sets apart excellent loan officers from average is their love for what they do. It is apparent when a loan officer hates what they are doing, but through positive energy and attentiveness to customer needs, passion from a loan officer shines.
• They measure all of their data and information- great loan officers understand that nothing can be improved if it is not first measured. Best performers know exact numbers of leads, credit report pulls, contracts, and closings they have had in specific time periods because they understand how imperative numbers are both to potential borrowers and to their own success.
• They are accountable– They work for companies that hold employees to high work standards and ethical standards because they want to push themselves to their highest potential as a loan officer. They appreciate accountability because it shows borrowers and real estate agents that they can be relied on for closings.
• They are connected– The best loan officers not only know basic real estate principles, but they have rich professional connections with local real estate agents. Great loan officers have a deep base of knowledge they use to inform real estate agents about the closing process for clients, and maintain a positive communication process between the parties.
Looking for a Loan Officer on the North Carolina Coast? Alpha Mortgage has their own in-house team of specially trained Loan Officers that meet all of these qualifications! Check them out and contact one today to get the ball rolling on the purchase of your dream home!

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