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New Federal Rules Make It Tougher to Get a Reverse Mortgage

reverse mortgage

Thanks to a set of new federal rules doled out earlier this week, it has now become a bit more difficult to obtain a reverse mortgage on your home. The good news, however, is that for those who do get them, they will have a lot less to worry about.

According to the new regulations, potential borrowers will be subject to a “financial assessment” to review the income, cash flow and credit reports of prospects.

“I think these changes are positive overall,” Phil Stevenson, a certified reverse mortgage professional and principal of PS Financial Services in Coral Gables, Fla., told Forbes. “They’ll affect five to 10% of potential borrowers and, in reality, those are the ones who probably shouldn’t have done reverse mortgages in the past.”

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Credit

Credit Requirements Loosening, Mortgages Becoming Easier to Obtain

credit

Potential homebuyers are finally finding it easier to obtain a mortgage after years of needing to have nearly pristine credit.

The initial crackdown came in the wake of the housing market crash, as lenders were hit with lawsuits and faced buybacks, and therefore tightened the belt on whom they lent money to.

Now, however, that is all changing.

“Now that we know more of the rules than we did in the past, you’re seeing credit widening to a wider spectrum,” Greg Gwizdz, executive vice president at Wells Fargo Mortgage, told CNBC.

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News

Report: Pending Home Sales Highest Since June 2013

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According to a new report released on Tuesday by the National Association of Realtors (NAR), the number of pending home sales in March was the highest it’s been since June 2013.

The data released by the NAR showed the Pending Home Sales Index (PHSI) had reached 108.6, which was 1.1 percent higher than the month before, making it the third month in a row pending sales have increased month over month. Additionally, that number is the highest we’ve seen since it hit 109.4 in June 2013.

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News

Rising Cost of New Homes Explained Simply: They’re Much Bigger

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The cost of newly constructed homes in the U.S. has risen drastically over the last several years, and it’s no wonder; because as the Wall Street Journal points out, the driver is simple: houses are getting bigger.

According to CoreLogic, new-home prices rose 18 percent between 2010 and 2013, and much of that can be credited to the growing size of homes, as well as the amenities – like fireplaces and walk-in closets – that becoming increasingly standard.

Interestingly, the average new home last year sold for $343,000. But if builders had stuck to the size and amenity standards that were prevalent in the 1970s, the average price would have been closer to $199,000.

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All About Insurance

Report: Financial Sector ‘Rooting’ for Mortgage Rate Hikes

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As mortgage interest rates continue to remain at historic lows, potential homebuyers are loving it and the financial sector is hating it.

“There’s virtually nothing in the financial services area that’s benefiting from continued lower and lower rates,” Barclays CEO Bob Diamond said at the Milken Conference in Los Angeles on Monday. “[We are] rooting for higher rates.”

Moreover, depending which side of the coin you’re on, you’ll either be pleased or disappointed to hear that experts do not believe a move to higher interest rates will happen “quickly.”

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All About Insurance

House Eases Mortgage Lending Requirements With New Legislation

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Last week, the House of Representatives approved legislation that will ease mortgage lending requirements in an attempt to undercut the Dodd-Frank law.

The first measure eases curbs on lending measures for mobile and modular homes. The second measure reduces restrictions, which sponsors of the bill say have made it harder for some prospective borrowers to obtain credit.

The White House has threatened to veto the bills, warning that they would permit borrowers to be “steered” into higher-cost loans.

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U.S. Justice Department Sues Quicken Loans for Mortgage Fraud

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Quicken Loans is being charged with mortgage fraud by the U.S. Justice Department for approving hundreds of mortgage loans that didn’t meet federal standards.

On Thursday, April 23, the Department of Justice reported that between September 2007 and December 2011, Quicken Loans approved, underwrote and certified the insurance for these loans that didn’t meet requirements.

The U.S. Department of Housing and Urban Development insured the loans, and when the loans defaulted, Quicken filed for reimbursement.

In a statement, Quicken Loans called the lawsuit “abusive” and the government investigation a “witch hunt.”

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Homebuyers Drive Rise in Mortgage Applications

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According to the Mortgage Bankers Association (MBA), mortgage applications have risen in volume 2.3 percent this week. This has largely been due to purchase applications.

“Purchase applications increased for the fourth time in five weeks as we proceed further into the spring home buying season,” said Mike Fratantoni, chief economist for the MBA.

It seems that buyers are returning to the housing market, and their numbers are continuing to grow.

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Manhattan, Vancouver and London Real Estate Becoming Hotbeds for Wealthy Investors

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Forget gold and stocks – real estate in Manhattan, Vancouver and London is where the wealthiest citizens of the world are now choosing to invest their riches.

“The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” explained Larry Fink, creator of BlackRock Inc. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

As previously reported, the average sales price of an apartment in Manhattan is $1.73 million, with Rupert Murdoch’s Madison Avenue triplex taking the cake with a current asking price of $72 million.

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GE in Early Talks to Sell Portfolio to Wells Fargo

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Reuters reported on Monday that General Electric Co. is in early, confidential talks with Wells Fargo & Co. about potentially selling its entire U.S. commercial lending and leasing portfolio to the bank.

According to a source familiar with the situation, the portfolio is worth an estimated $74 billion.

The insider also explained that the discussions just began last week, and other parties may also be considered for the purchase.

Image via Wikimedia Commons/General Electric Company

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