<![CDATA[James Clooney Online - Blog]]>Fri, 18 Nov 2022 15:35:57 -0800Weebly<![CDATA[Consumers Are Back to Paying Mortgages Ahead of Credit Cards        ]]>Tue, 27 May 2014 19:29:34 GMThttp://www.jamesclooneyonline.com/blog/consumers-are-back-to-paying-mortgages-ahead-of-credit-cardsAmericans are putting their mortgages ahead of their credit cards when they pay the bills, reversing an unusual pattern that had developed after the housing bust.

As home values plunged during the downturn, consumers began to default on their mortgages while continuing to make credit card payments, according to research from TransUnion, reversing a long-standing hierarchy in which lenders expected mortgages to be paid first.

New data from the credit-reporting firm reveal that the normal payment hierarchy returned at the end of last year, following around two years of rising home values. “People are paying their mortgages again ahead of their bank card,” said Steven Chaouki, a financial-services executive at TransUnion, though the payment relationship hasn’t returned entirely to pre-crisis levels.

The data also show that before, during and after the crisis, Americans are most likely to make their car payments first.


read more: http://blogs.wsj.com/economics/2014/05/27/consumers-are-back-to-paying-mortgages-ahead-of-credit-cards/]]><![CDATA[Home loans hit 14-year low as rates rise ]]>Fri, 25 Apr 2014 19:23:45 GMThttp://www.jamesclooneyonline.com/blog/home-loans-hit-14-year-low-as-rates-rise
The mortgage industry's output of new loans is at the lowest point in 14 years, according to estimates from a trade publication. 

Inside Mortgage Finance said Thursday that even in the depths of the financial crisis, mortgage lenders were busier than during the first quarter of 2014.

One factor is the end of a refinance boom as interest rates have risen well off their record lows. But though the rates are still great by historical measures, mortgages written for home purchases have been weak as well, as sales of new and previously owned homes have slowed.


About $235 billion in new home loans were made last quarter, Inside Mortgage Finance said, off 23% from the fourth quarter’s estimated $305 billion and 58% lower than in the first quarter of 2013.

It was the lowest output since the first quarter of 2000, when new originations totaled $215 billion. At the height of the financial crisis, in the fourth quarter of 2008, lenders still managed to originate $260 billion in home loans.

read more: http://www.latimes.com/business/money/la-fi-mo-home-loan-slump-20140424,0,2825002.story#axzz2zpq7SaDw
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]]><![CDATA[James Clooney ranked #8 in USTA Men's 55 PPR Singles]]>Sat, 19 Apr 2014 21:03:12 GMThttp://www.jamesclooneyonline.com/blog/james-clooney-ranked-8-in-usta-mens-55-ppr-singles]]><![CDATA[Professor Puts Ideas in Practice as Reverse-Mortgage CEO ]]>Mon, 20 Jan 2014 14:40:00 GMThttp://www.jamesclooneyonline.com/blog/professor-puts-ideas-in-practice-as-reverse-mortgage-ceoColumbia Business School Professor Christopher Mayer says he’s so convinced that reverse mortgages can be a cornerstone of responsible retirement planning that he’s gone into the business.

The loans were criticized by regulators including the U.S. Consumer Financial Protection Bureau after they were pitched to senior citizens needing quick cash under rules that allowed borrowers to take out and quickly spend most of their equity. Now, with new limits to curb up-front spending, they can help ensure retirees won’t outlive their assets, according to Mayer, who is teaching fewer classes at Columbia so he can be chief executive of a startup reverse-mortgage lender.

“It’s an enormous underserved market,” Mayer, 48, said of the money-making potential for the company, Longbridge Financial, in which he’s also a partner. “You have $3 trillion in housing wealth among older Americans. You have large institutions exiting the market, and more and more elderly with housing debt coming out of the crisis as well as other kinds of debt.”

Retirees may need to tap home equity as they live longer while relying on income from 401(k) and similar plans that are riskier than guaranteed payouts from employer pensions. Reverse mortgages, most of which are federally insured and limited to homeowners over 62, are intended to allow borrowers to gain access to more of their assets without having to move out of their homes. Payments aren’t due until the properties are sold. 

Read More: http://www.bloomberg.com/news/2014-01-17/professor-puts-ideas-in-practice-as-reverse-mortgage-ceo.html
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]]><![CDATA[Making mortgages sustainable]]>Fri, 17 Jan 2014 14:59:53 GMThttp://www.jamesclooneyonline.com/blog/making-mortgages-sustainable]]><![CDATA[No point in paying extra to retire low-rate mortgages ]]>Thu, 16 Jan 2014 17:19:52 GMThttp://www.jamesclooneyonline.com/blog/no-point-in-paying-extra-to-retire-low-rate-mortgages]]><![CDATA[U.S. Mortgaged Homes Returning to Positive Equity ]]>Thu, 09 Jan 2014 14:59:28 GMThttp://www.jamesclooneyonline.com/blog/us-mortgaged-homes-returning-to-positive-equityThe number of U.S. homes considered to have serious negative equity dropped in December 2013, according to the latest U.S. Home Equity & Underwater Report from RealtyTrac.

A total of 9.3 million homes were "deeply underwater" -- homes worth at least 25 percent less than the combined loans for the property -- representing 19 percent of all homes with a mortgage in December.  
The figure dropped from the 10.7 million homes deeply underwater in September 2013, and was lower than the 10.9 million properties in January 2013. The December number is also down from the peak of 12.8 million in May 2012. 

In December, a total of 239,470 homes in the foreclosure process were considered deeply underwater, representing 48 percent of all properties. That was 60,000 fewer than three months prior. 

The report also highlighted the percentage of homes in the foreclosure process with positive equity in December. The number increased to 31 percent, from 24 percent last September. 

Read more: http://www.worldpropertychannel.com/north-america-residential-news/us-homes-with-negative-equity-realtytrac-foreclosures-december-2013-7862.php


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]]><![CDATA[New mortgage rules protect American dream: Column]]>Wed, 08 Jan 2014 15:21:55 GMThttp://www.jamesclooneyonline.com/blog/new-mortgage-rules-protect-american-dream-columnLet me tell you a common story I hear. It starts with a woman in 2005 or 2006 who took out a mortgage to buy her first home. After two years, her teaser interest rate expired. Her monthly payments doubled so she could no longer afford them.

When she sought help from her lender, she found that a different company, a mortgage servicer, was handling the loan. When she tried to contact the servicer to figure out a way to save her home, she got passed from one representative to another, each giving conflicting information about her options. She sent in the same paperwork multiple times. Finally, she thought her application for a loan modification was being considered, but before she heard anything further, her home was in foreclosure.

Ending the broken system

This happened again and again, all across the country. But this broken system ends Friday, when the Consumer Financial Protection Bureau's new rules take effect. The common-sense rules for banks and other mortgage companies do two main things: ensure that consumers are sold only mortgages they can actually afford to repay, and make sure consumers are not hit with surprises or given the runaround if they have problems paying their mortgage and are trying to avoid foreclosure.

Under the new rules, lenders must determine that borrowers can afford a mortgage before making the loan. Of course, mortgage lenders do not have a crystal ball: They cannot predict layoffs and health problems. But they must look at a consumer's income and assets, along with debt, and weigh this against the long-term monthly payments — not just a teaser rate. This back-to-basics approach is the very foundation of responsible lending. But in the lead-up to the financial crisis, it often did not happen.

For people who already have mortgages and are making payments, the new rules will act as a backstop. Mortgage servicers have to clean up their act by promptly crediting payments, tracking paperwork accurately and responding directly to consumers. If you fall behind on your mortgage, your servicer will now be required to reach out to see whether you need help. If you apply for a loan modification, it will have to process your application and provide you with any help available.

Never again

Most important, these new rules put in place safeguards to help make sure the great mortgage meltdown never happens again. It wrecked our economy and did untold damage to millions of Americans. These rules will ensure that the past will not repeat itself.

There is a lot of misinformation out there about these rules. Our rules do not dictate who can and cannot get a mortgage. Lenders can make a loan to anyone as long as they reasonably determine that the consumer is in a position to repay. Down payments are still entirely up to the lender and home buyer. And we are not requiring loads of red tape: Lenders will likely ask a potential home buyer for proof of things such as income or assets — the kinds of things responsible lenders like our good community banks and credit unions have been asking for all along.

In the end, our new mortgage rules put behind us the irresponsible lending that disrupted the housing market and upended our economy. And they protect all homeowners against sub-par mortgage servicers not doing their jobs. Americans deserve these basic protections.

source: http://www.usatoday.com/story/opinion/2014/01/07/new-mortgage-rules-richard-cordray-financial-crisis-column/4360719/


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]]><![CDATA[Mortgages and protection]]>Tue, 07 Jan 2014 14:42:40 GMThttp://www.jamesclooneyonline.com/blog/mortgages-and-protectionMortgages are on the up, it’s now time for protection to tag along, says Nick Jones, brand & marketing manager at Exeter Family Friendly

As a nation, it’s fair to say that we’re pretty obsessed with bricks and mortar. From early childhood, we’re almost programmed to work towards the dream of owning a home. Whether that’s a house for the family or a city pad, it doesn’t really matter; renting doesn’t sit too comfortably with many.

So in that context it’s good to see the housing market on the way up again. It may not be good news for everyone that prices are beginning to rise at a rapid rate, particularly first-time buyers, but the increased availability of mortgages will be welcome for many would-be homebuyers or movers.

It’s also very good news for mortgage advisers who have endured a tough few years. Harsher lending criteria, a shortage of supply in the housing market and a move from lenders away from advised distribution has hindered many, so it’s nice to see times changing.

This upward trend has other impacts too. Buying a home is one of the key triggers to accessing wider financial planning for many people. We’re not necessarily a nation that meticulously plots our way through the financial aspect of our lives. Instead we tend to live for the day, coping with events as and when they happen.

But taking on real or extra financial responsibility for the first time is one of the few occasions when this mindset can change. It’s an opportunity that frankly is too good to miss for financial advisers of all specialisms.

What’s the opportunity?

With the extra responsibility and financial burden that a mortgage brings, comes a heightened awareness of risk; a realisation and acceptance that bad things do happen and if they do, it may leave a massive mortgage to pay with a reduced or no income. That’s where protection comes in. There are three scenarios that can be covered; death, serious illness and forced periods of being unable to work. Historically, the view has been that as mortgage sales increased; so would protection, but in recent years this hasn’t necessarily been the case.

The lost link

Why? Well, it may be down to complexity. As mortgages have become more and more complex to arrange, you can understand why specialism and focus has taken precedence over wider advice. But is this the right way? I’m not so sure.

Firstly, it means that customers are treated in a more transactional, one-dimensional way “they are simply after one thing, so that’s what I’ll deliver and nothing more.”

Sure, this allows focus, but does it miss the point? Shouldn’t advisers be striving for a happy customer and one who is happy not only to come back for more, but also likely to recommend their services to friends and family? Word of mouth remains the strongest form of recommendation.

But secondly, it means we are at risk of selling customers short. Simply, there are no bigger financial decisions or burdens taken on by most people during their lives, so to simply ignore the possibility that ill health or death will place them in a financial catastrophe seems very wrong.

Protection, and particularly income protection, remains vastly undersold, which means the market has massive potential. Equally, the competition for leads and referrals has never been tougher; it probably costs more to acquire a customer than ever before.

Advice

Even with the best planning, home buying is complex and mortgages go wrong. So even though mortgages may be an adviser’s core specialism, advice could go further by giving customers the full picture. Who knows, it could be the start of a relationship that last years, rather than weeks.

Surely one of the keys to success is to make sure that the time and cost involved in arranging protection doesn’t come as a shock. To make sure this isn’t the case, advisers should set the scene early, getting would-be borrowers to appreciate that their affordability calculations need to include their essential protection insurance costs. Okay, so it may not be as appealing as the house purchase itself, but it doesn’t make it any less important.

Six-month review

If it’s too much for advisers and their clients to cover protection in detail whilst arranging the mortgage, they could arrange a six-month review and tackle it then.

Not only will this give them the chance to settle under a new financial regime and adjust to a new level of expenditure, but clients come back to the decision fresh, with a clear mind and perhaps an even greater appreciation of what’s at stake and the risks of not protecting their finances. Most businesses would love to find a reason to strengthen their relationships with customers.

In summary, few would argue that the link between mortgages and protection is strong, yet it doesn’t always work out this way in practice. However, overcoming this issue may not be as difficult as it may seem. If advisers view protection as an opportunity to enhance the advice they offer, rather than simply an addition or hindrance to their core advice; it’s not just their businesses that will benefit, their customers will too.

source: http://www.mortgagefinancegazette.com/insurance/mortgages-and-protection/
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]]><![CDATA[A hybrid in your housing future?]]>Mon, 06 Jan 2014 14:08:14 GMThttp://www.jamesclooneyonline.com/blog/a-hybrid-in-your-housing-future Higher mortgage rates for 2014? Count on it. Could this be the year to check out hybrid mortgages, which haven’t been popular lately? Maybe.

You can count on interest rates going higher because:

• The Federal Reserve intends to continue reducing its monthly purchases of mortgage bonds and Treasury securities, which will have the side effect of raising rates.

• The national economy finally appears to be picking up steam, based on the latest quarterly data. Higher growth rates in turn will increase demand for available credit and likely nudge rates higher.

• New federal regulations for mortgage lenders aimed at avoiding another bust take effect Jan. 10. Not only will loan officers and underwriters scrutinize applicants’ income, debt ratios and credit extra carefully, they'll likely charge more for borrowers whom they see as a higher risk. Some mortgage economists predict that conventional 30-year fixed-rate loans could go to 5.5 percent before year-end.

So what does this mean for you if you’re thinking about buying a house or refinancing and you want to nail down the most favorable interest rate and terms? Should you shop primarily for a traditional mortgage product that guarantees you a specific rate for 15 to 30 years?

Or should you check out what’s also on the shelf in the way of hybrids — loans that provide you a guaranteed fixed rate for a predefined period of time, say five, seven or 10 years — then convert to a rate that can change annually?

The case for sticking with a traditional, fixed-rate mortgage is straightforward. Though 30-year rates are more than a percentage point higher this month than they were a year earlier, they are still not far off multi-decade lows. Bruce A. Calabrese, president of Equitable Mortgage Corp. in Columbus, Ohio, is adamant: “My advice for home buyers” in the new year, he says, “is to lock [early] into a 30-year fixed” while rates are still under 5 percent. “Take a 30-year fixed at 4.75 percent and be happy” because that’s still far below average rates over the past several decades.

Paul Skeens, president of Colonial Mortgage Corp in Waldorf, Md., agrees. “If fixed [rates] are under 5.5 percent and you are going to live in your home for five years or more, they are still a great deal,” he says. “I’m very partial to fixed rates since I remember when anything under 7 percent was a great deal.”

To illustrate Skeens’ and Calabrese’s historical point, consider these average annual 30-year fixed rates: In 1974, they averaged 9.19 percent nationwide, according to mortgage investor Freddie Mac. By 1984, they were at 13.88 percent. In 1994, fixed rates averaged 8.38 percent; and in 2004, 5.84 percent.

But what if you say: I don’t care about what rates were in previous decades. That was then. I’m here and now. I’m more concerned about being able to afford today’s housing prices on today’s income and household expenses.

Jeff Lipes, a lender in the Hartford, Conn., area and former president of the Connecticut Mortgage Bankers Association, believes that hybrids with fixed rates for between five and 10 years “are fantastic options for borrowers” in 2014, and can lock in rates that are one or more percentage points below competing 30-year fixed loans.

“Most first-time buyers purchase a home that will be sold when the family income increases or the family outgrows the house,” Lipes says. “That usually occurs in the first 10 years, so that is why a [hybrid] is a great option. The borrower saves a lot of money” — sometimes hundreds of dollars a month — “paying a lower rate.”

A check of Bankrate.com’s online rate monitor in late December found five-year hybrids averaging around 3.4 percent nationwide, seven-year hybrids at 3.81 percent and 10-year hybrids at 4.16 percent. Thirty-year fixed rates averaged 4.63 percent.

Ted Rood, senior mortgage consultant with Wintrust Mortgage in St. Louis, says he’s already seeing a shift in demand toward five- and seven-year hybrids. He just closed a seven-year at 3.5 percent on a house in Wyoming for a borrower who fully understood the risk that he could face higher rates at the conversion point in late 2020.

Bottom line for you if you’re in the market: Check out all the options on the menu. If you are comfortable with the potential risks, and the monthly savings advantages of a hybrid are substantial, go for it.

Source: http://www.miamiherald.com/2014/01/04/3849029/a-hybrid-in-your-housing-future.htmFollow me:

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