Shelter Six:  Credit Reports to No Longer Include Tax Liens

April 30, 2018 by · Leave a Comment 

Three years ago in the aftermath of a settlement with 31 state attorney generals, the three national credit bureaus launched the National Consumer Assistance Plan (NCAP) in an effort to make credit reporting more accurate and credit problems easier to fix.

Last year, as a key NCAP initiative, Equifax, TransUnion, and Experian removed all civil judgments and the majority of tax liens from consumers’ credit reports.

After a critical CFPB report earlier this year, the three bureaus are now ceasing to report all tax liens and have been actively removing them from credit reports.

Moving forward, the only public records that will remain on credit reports will be bankruptcies, which come with publicly identifiable information such as a SS#.

According to FICO, credit scores are going to rise up to 20 points for 11M borrowers and up to 40 points for 700K borrowers.  With less credit information and higher scores, lenders are anticipating the fallout to be greater default risk.

With judgments and liens not appearing on credit reports, it will also be harder for creditors to collect forcing them to resort to other tactics such as wage garnishment and seizing funds via court orders.

Rate Update

Mortgage rates moved higher over the first half of last week only to settle back down toward the end of the week and finish nearly unchanged.

This Week

The Core PCE Price Index is due out on Monday, the ISM National Manufacturing Index on Tuesday, and Employment figures on Friday.  The next Fed meeting will also take place on Wednesday and no change in policy is expected.

Shelter Six:  Potential Trade War Biggest Risk to Economy

April 23, 2018 by · Leave a Comment 

1. According to Fannie Mae’s latest economic report, U.S. economic fundamentals remain strong with the stimulus from the tax cut and new federal budget working well.

2. According to the report, the biggest economic downside risk at this time is the potential trade war with China.

3. Fannie Mae expects the Fed to raise interest rates for the second time this year in June and then once more before the end of the year, for a total of three times this year and not four.

4. After three months of unexpected declines, Retail Sales figures rebounded in March up to a very healthy .6%.

5. Multi-family Housing Starts were strong but Single-family Housing Starts fell 4% in March.

6. Shelter’s new Smart Choice program allows for loan amounts up to $2M with only 10% down and no PMI with the flexibility of one mortgage late in the last year and up to a 50% debt ratio.

Rate Update

Despite no compelling economic news nor a clear reason, mortgage rates moved to the highest point in several years last week.

This Week

Existing Home Sales will be released on Monday, New Home Sales on Tuesday, and Durable Orders on Thursday.

Shelter Six:  Optimistic Survey Points to Healthy Spring R.E. Market

April 16, 2018 by · Leave a Comment 

1. Fannie Mae’s March National Housing Survey painted a very optimistic picture with more respondents indicating that it is a good time to both sell and buy a home.

2. Detailed minutes from the Fed’s March 21 meeting gave insight that Fed officials expect US economic growth to be stronger than average for the next few years.

3. MGIC lowered its borrower-paid PMI rates by approximately 11% to reflect the lower corporate tax rates signed into law in 2017.

4. Self-employed buyers now have a mortgage alternative where they don’t need to provide tax returns or any income documentation.

5. Shelter’s “SmartSelf” program allows a self-employed buyer’s income to be calculated exclusively from the last 1-2 years of bank statements.

6. The program requires only 10% down with no PMI and a 620 credit score while allowing for a Bankruptcy or Foreclosure as recent as two years ago and up to 15 financed properties.

Rate Update

The stock market performed well last week causing investors to shift money from bonds to stocks.  This was negative for mortgage rates which finished the week a bit higher.

This Week

Retail Sales and NAHB Housing figures will be released on Monday while Industrial Production and Housing Starts will come out on Tuesday.

Shelter Six:  Mortgage Option for Buyers with Credit Problems

April 9, 2018 by · Leave a Comment 

1. Buyers with significant credit problems can still get a mortgage up to $1M with 20% down.

2. Shelter’s SmartTrac program requires only a one year waiting period for a Bankruptcy or Short Sale, only two years for a Foreclosure, and even allows for multiple mortgage late payments over the last 12 months.

3. The program is available as either a fixed-rate or an ARM, includes an Interest-Only option, requires a 620 score, and allows for up to 15 financed properties.

4. Against a consensus forecast of 175K, the economy added only 104K jobs in March.

5. Even with this disappointing figure, the economy has added an average of 202K jobs per month during the first three months of 2018.

6. The bright side of March’s Employment Report was that the Unemployment Rate remained only 4.1% and Average Hourly Earnings were up a little more than expected.

Rate Update

Mortgage rates moved to the lowest levels in nearly two months in the aftermath of last week’s trade-war inspired market sell-off.  As panicked investors moved money out of the stock market and into the bond market, mortgage rates fell slightly.

This Week

Wednesday is the big day this week with the release of the latest Consumer Price Index figures as well as the latest minutes from the Fed’s March 21 meeting.