Senior home equity nears $8 trillion in Q3 2020

The housing wealth of homeowners aged 62 and older hit a record high of $7.82 trillion in the third quarter of 2020, the National Reverse Mortgage Lenders Association (NRMLA) reported Thursday.

The association said seniors saw a $121 billion (1.6%) quarter-over-quarter gain in their housing wealth, as the value of seniors’ homes climbed by an estimated $149 billion (1.3%). The increase in home values was offset by a 1.6% or $28 billion rise in their mortgage debt.

The NRMLA/RiskSpan Reverse Mortgage Market Index was up in Q3 to 280.99, another all-time high since the index was first published in 2000.

“The reverse mortgage marketplace has greatly expanded over the past year to include more private-label products that offer consumers more options and greater flexibility compared to the FHA-insured Home Equity Conversion Mortgage,” said NRMLA President Steve Irwin. “While the HECM still accounts for over 90% of the market, we expect private-label reverse mortgage distribution channels to expand over time.”

Source: mpamag.com

US long-term mortgage rates rise; 30-year at 2.79% – Manhattan Mercury

WASHINGTON — U.S. long-term mortgage rates rose this week in an indication that the long period of record-low rates could soon be over.

Home loan rates touched new record lows last week, as the year opened against the continuing backdrop of damage from the coronavirus pandemic on the U.S. and global economies — which suppressed rates through most of 2020.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year fixed-rate home loan jumped to 2.79% from 2.65% last week. By contrast, the rate stood at 3.65% a year ago.

The average rate on 15-year fixed-rate loans, popular among homeowners seeking to refinance their mortgages, increased to 2.23% from 2.16%.

Long-term bond yields, which can influence interest rates on mortgages and other consumer loans, are climbing this month amid expectations of higher U.S. government spending on pandemic relief and an economic recovery as more people get vaccinated for COVID-19.

Source: themercury.com

First Community Mortgage appoints new assistant vice president

First Community Mortgage (FCM) has announced the appointment of mortgage veteran Eric Holmes as assistant vice president.

Holmes brings 25 years of mortgage industry experience to the role, working extensively across the Worthington, Ohio, region. Most recently, Holmes was sales manager of mortgage banking at The Union Bank Company.

“Eric has a great depth of experience, focusing on home lending for first-time buyers and self-employed individuals, and especially enjoys solving challenging loan scenarios,” said FCM President Dan Smith. “It’s to his credit that those challenging cases are often referred to him by Realtors, financial planners and CPAs to help their borrowers increase cash flow, reduce expenses and save for college or retirement.”

He currently serves on the board of the Columbus Mortgage Bankers Association and is chair of the CMBA’s Ethics Committee. Additionally, he is a founding member of the Community Lenders of Central Ohio, a group of experienced mortgage lenders who work together to help borrowers and referral partners that do not meet traditional lending standards.

“My clients trust me to provide them with honest answers and straight advice on mortgages,” Holmes said. “and I’m fortunate to have many realtors, financial planners, and CPAs who entrust me with their own clients and serve them in the same way.”

Source: mpamag.com

Interest Rates Are Low, but Loans Are Harder to Get. Here’s Why. – The New York Times

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Interest Rates Are Low, but Loans Are Harder to Get. Here’s Why.

Banks have tightened standards, becoming more choosy about their borrowers and asking a lot of questions.

Tori Smith and Philip Ellis, both teachers, had to pay a larger down payment than they had anticipated for their home in Zebulon, N.C.
Credit…Kennedi Carter for The New York Times

  • Published Aug. 4, 2020Updated Aug. 13, 2020

As public school teachers, Tori Smith and her husband have careers that should survive the coronavirus economy, but their mortgage lender wasn’t taking any chances.

It told them that they would have to put down more money to keep the interest rate they wanted, then dialed back what it was willing to lend them. And Ms. Smith said it had checked their employment status several times during the approval process — and again a few days before the couple closed on their home in Zebulon, N.C., last month.

Ms. Smith said she had never gotten a straight answer about the new requirements, but she ventured a guess. “I felt like we had to bring more just because of Covid,” she said.

The economic crisis caused by the pandemic has driven interest rates to rock-bottom levels, meaning there has hardly been a better time to borrow. But with tens of millions of people out of work and coronavirus infections surging in many parts of the country, qualifying for a loan — from mortgages to auto loans — has become more trying, even for well-positioned borrowers.

set aside billion of dollars for future defaults have also tightened their standards, often requiring higher credit scores, heftier down payments and more documentation. Some, such as Wells Fargo and Chase, have temporarily eliminated home equity lines of credit, while Wells Fargo also stopped cash-out refinancing.

It’s not unusual for lenders to tighten the credit reins during a downturn, but the current situation has made it especially challenging for them to get an accurate read on consumers’ financial health. Borrowers have been able to pause mortgages, halt student loan payments and delay paying their tax bills, while millions of households have received an extra $600 weekly in unemployment benefits. Those forms of government support could be masking an underlying condition.

“It makes it hard for a lender to understand what the consumer’s true state of credit quality is and their ability to pay back a loan,” said Peter Maynard, senior vice president of global data and analytics at the Equifax credit bureau.

Credit card companies, for example, mailed out 57 million offers to consumers in June, a historic low and down from 272 million a year earlier, according to Mintel, a research firm that has been tracking the offers since 1999. Some banks have stopped offering the types of cards that attract people who may be focused on paying down debt, such as BankAmericard, Mintel found.

Issuers are also being careful with cards belonging to current customers, said Mark Miller, associate director of insights for payments at Mintel.

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