ABBA First Mortgage News

Who would’ve thunk? Goes to show that nobody has a crystal ball in this industry!

March 25th, 2017

Rates bounced back down in the past week, not unusual for a week after the Fed raises rates, because the markets had moved up in anticipation of the action and there were no surprises.  Although the following are averages from all lending sources, ABBA First Mortgage offers a lower rate than the market place.  Read on and call us to find out how you can take advantage of these savings..

For the week ending March 23, Freddie Mac announced that 30-year fixed rates fell to 4.23% from 4.30% the week before. (ABBA First was 4.0% with no points for the qualified borrower).  The average for 15-year loans decreased to 3.44%, and the average for five-year adjustables moved down to 3.24% compared to ABBA First at 3.125%.  A year ago, 30-year fixed rates averaged 3.71%. Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield fell about 10 basis points this week. The average rate on 30-year fixed loans moved with Treasury yields and dropped 7 basis points to 4.23 percent. This marks the greatest week-over-week decline for the 30-year rate in over two months, a stark contrast from last week’s jump following the FOMC announcement.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Look for improved credit scores soon!

March 24th, 2017

12 million consumer credit scores about to go up!

Millions of consumers may soon see their credit scores go up, clearing the way for some prospective borrowers to qualify for mortgages. But the move could also raise risks for lenders.

The three major credit-reporting agencies – Equifax, TransUnion and Experian – have decided to take many tax liens and civil judgments off of people’s credit reports, according to a Wall Street Journal report. The data will be removed starting around July 1, in a move that could affect up to 12 million consumers.

According to the Journal, the credit-reporting agencies will remove tax-lien and civil-judgment data if it doesn’t include at least three data points: the consumer’s name, address and either a Social Security number or date of birth.

“The result will make many people who have these types of credit-report blemishes look more creditworthy,” the Journal reported.

The move comes shortly after the Consumer Financial Protection Bureau released a report dinging the credit-reporting agencies for problems including using inadequate identity-matching criteria on the information they collect.

According to a 2013 Federal Trade Commission study, one in five consumers has an error in at least one of their credit reports. According to the Journal, Equifax, TransUnion and Experian received a combined total of around 8 million disputes about information on credit reports in 2011.

The removal of tax-lien and civil-judgment data from credit reports could encourage more consumers to borrow. But it could also increase the risks for lenders, who might not be able to determine borrowers’ default risk accurately enough. Consumers with lien or judgments are twice as likely to default on loan payments, according to the Journal.

“It’s going to make someone who has poor credit look better than they should,” John Ulzheimer, credit specialist and former manager at Experian, told the Journal. “Just because a lien or judgment has been removed and someone’s score has improved doesn’t mean they’ll magically become a better credit risk.”

By Ryan Smith from MPA on 3/24/2017

March 24th, 2017

2 million consumer credit scores about to go up

by Ryan Smith15 Mar 2017

Millions of consumers may soon see their credit scores go up, clearing the way for some prospective borrowers to qualify for mortgages. But the move could also raise risks for lenders.

The three major credit-reporting agencies – Equifax, TransUnion and Experian – have decided to take many tax liens and civil judgments off of people’s credit reports, according to a Wall Street Journal report. The data will be removed starting around July 1, in a move that could affect up to 12 million consumers.

According to the Journal, the credit-reporting agencies will remove tax-lien and civil-judgment data if it doesn’t include at least three data points: the consumer’s name, address and either a Social Security number or date of birth.

“The result will make many people who have these types of credit-report blemishes look more creditworthy,” the Journal reported.

The move comes shortly after the Consumer Financial Protection Bureau released a report dinging the credit-reporting agencies for problems including using inadequate identity-matching criteria on the information they collect.

According to a 2013 Federal Trade Commission study, one in five consumers has an error in at least one of their credit reports. According to the Journal, Equifax, TransUnion and Experian received a combined total of around 8 million disputes about information on credit reports in 2011.

The removal of tax-lien and civil-judgment data from credit reports could encourage more consumers to borrow. But it could also increase the risks for lenders, who might not be able to determine borrowers’ default risk accurately enough. Consumers with lien or judgments are twice as likely to default on loan payments, according to the Journal.

“It’s going to make someone who has poor credit look better than they should,” John Ulzheimer, credit specialist and former manager at Experian, told the Journal. “Just because a lien or judgment has been removed and someone’s score has improved doesn’t mean they’ll magically become a better credit risk.”

Rates continue to rise!

March 21st, 2017
  • Rates matched their highest level in more than a year as the specter of a Fed rate increase approached, but the numbers did not reflect a move down after the rate increase was announced.
  • For the week ending March 16, Freddie Mac announced that 30-year fixed rates rose to 4.30% from 4.21% the week before.
  • The average for 15-year loans increased to 3.50%, and the average for five-year adjustables moved up to 3.28%.
  • A year ago, 30-year fixed rates averaged 3.73%.
  • Attributed to Sean Becketti, chief economist, Freddie Mac — “As expected, the FOMC announced its first rate hike of 2017 and hinted at additional increases throughout the remainder of the year. Although our survey was conducted prior to the Fed’s decision, the release of the February jobs report all but guaranteed a rate hike and boosted the 30-year fixed rate 9 basis points to 4.30 percent this week. Increasing inflation, continued gains in the labor market and the Fed’s intentions for further rate increases — all three will keep pushing rates up this year.”  

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Judgements on credit reports to be purged?

March 15th, 2017

So another bombshell hit the credit reporting and lending world this week. This time it is potentially big news for millions of Americans and thousands of lenders. In the ongoing effort to provide accurate credit reporting to consumers, the three major credit reporting agencies, Equifax, Experian and TransUnion have announced that in July, 2017 many tax liens and judgments will be removed from consumer credit files.

As part of the ongoing overhaul of the credit reporting system, entities that report information to our credit report, otherwise know as furnishers must provide specific infomation that accurately ties the account to the consumers credit file.

Public records like tax liens and judgments often do not contain the required identifiers that permit those accounts to be reported. After July of this year, any lien or judgment that does not contain the proper information will be purged from consumer files.

Now in the near term this is excellent news, but it is not all puppy dogs and ice cream. There is always a caveat. We must consider that government agencies and lien holders are not going to take lightly to this. I hate to make them, but I will make the assumption that there will be pressure applied to court houses and Lexis Nexis to improve their record keeping.

It is also important to know that this will not affect all Americans with these items. If the lien or judgment does contain the proper identifiers, it can remain on the consumer’s credit file.

It will be interesting to see how this impacts the mortgage world, but at first glance, Summer 2017 is looking to a very busy one for the mortgage industry!

 

Confidence encourages more confidence

March 6th, 2017

In the past few weeks there has been much talk about confidence. Certainly, confidence has been the major influence behind the recent stock rally. It has also influenced the recent movements in rates and oil prices. If this confidence spills over to a hiring spree, then the chances of another rate increase by the Federal Reserve Board’s Open Market Committee likely comes sooner than later.  The trend of an improving economy from recent data being reported, shows signs that our country may be rebounding from many years of stagnant growth.  This may also mean that interest rates will continue to spiral upwards; a trend that home buyers would certainly like to avoid.  If you have any desire to move towards the purchase of a new home, whether a first time home buyer or a seasoned borrower seeking to refinance with cash out to pay off debt, now is a great time to give ABBA First Mortgage a call toll free at 866-676-3349 for a free quote with everything spelled out clearly for you.  When calling ask to speak to me, Rich Biagini the owner of ABBA First Mortgage Inc., or if calling after hours, when prompted, extension 101.

Happy days are here again? Consumer confidence is up but so are mortgage interest rates!

February 28th, 2017

Consumer sentiment has surged since the November election, as Americans become increasingly optimistic about the future of the economy and their own personal finances. But most consumers seem to understand that better economic growth comes at the cost of higher interest rates. According to data, that may be nudging them into the housing market. In the University of Michigan’s closely-watched consumer sentiment survey, the number of people who said that now is a good time to buy a home because of rising interest rates surged to the highest level in more than 20 years – one in five. It makes sense that Americans are responding to the possibility of higher rates.

Borrowing costs jumped nearly a full percentage point in the weeks after the November election. But they’re still low. Even with that late-year surge, the 2016 average for rates was the lowest on record, Freddie Mac noted last month. There’s some uncertainty about the direction of rates over the next year or so. Housing economists surveyed by MarketWatch in early December forecast an average of about 4.5% over the course of 2017. But many economists who watch the bond market think the furious selling of Treasurys in the weeks after the election may have been overdone. Rates on home loans generally track the direction of the benchmark 10-year Treasury yield. Whatever the precise course of rates over the next year, it’s a good sign that consumers are aware that they could be rising, and that their response is to try to get ahead of it in order to buy a home.

Source: MarketWatch

 

Is the broker a middleman in a mortgage transaction?

February 21st, 2017

Yes.  ABBA First Mortgage is a middleman for our clients to find the program, rate, and terms which are the most beneficial for their needs.  It is GOOD to have a middleman on your side.  We have relationships with more than a dozen lenders who will aggressively price their rates and fees to earn YOUR business.  As the broker that works between you and the lender, we strive to find the lowest costs and rate for your particular transaction without being subjected to one rate available as it is with retail banks.

It’s cheaper to go through the middleman rather than going directly to a bank, and that’s all because of wholesale pricing. That’s the thing that many people don’t understand. You go to a mortgage broker because all the lenders that the broker has a relationship with, have to price their rates and fees more competitively.  Consulting a mortgage broker for a loan is beneficial as wholesale lenders, that the broker works with, are all vying for your business.

The best thing that ABBA First as a mortgage broker can do, is be an expert in finding the right loan or option for you, the borrower. It all comes down to options – having lenders bidding for your business as a consumer. If you are dealing with a bank or retail lender, you are captive to those loans, and you miss out on the different options and opportunities to save money, each and every time!  Call us today and find out how we can save you money!

What’s happening to rates?

February 21st, 2017

Last week, rates were slightly lower again. For the week ending February 16, Freddie Mac announced that 30-year fixed rates fell to 4.15% from 4.17% the week before. (ABBA First Mortgage offers lower than market rate averages).  The average for 15-year loans decreased to 3.35%, and the average for five-year adjustables moved down to 3.18%. A year ago, 30-year fixed rates averaged 3.65%. Attributed to Sean Becketti, chief economist, Freddie Mac — “For the last 46 years, the rate on a 30-year fixed home loan has been almost perfectly correlated with the yield on the 10-year Treasury, but not this year. From Dec. 29, 2016, through today, the 30-year rate fell 17 basis points to this week’s reading of 4.15 percent. In contrast, the 10-year Treasury yield began and ended the same period at 2.49 percent. While we expect rates on home loans to fall into line with Treasury yields shortly, this just may be a year full of surprises.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Can we be too optimistic about the future?

February 17th, 2017

During the past few months we have had a very solid rally in the stock market, which has been accompanied by higher interest rates. Certainly, the economic results that have been released have not changed that much during that period, and thus we can conclude that the changes in the markets are not because of a change in fundamentals. This conclusion is not surprising, because often the markets trade on feelings rather than results.

We do know that the change in psychology is due to a change in leadership. New leadership and new policies bring a lot of uncertainty to the table. Generally, the markets do not like uncertainty. On the other hand, it is not unusual for optimism to trump uncertainty (excuse the pun). If the markets are optimistic that the changes will help the economy, high stock prices and higher rates are justified. Of course, it does help that the economy is already heading in the right direction.

As slow as it has been, the recovery has seen a precipitous drop in the unemployment rate and a net gain of several million jobs. Revving up an economy which is already growing requires much less energy, as opposed to turning around an economy. And that is what is likely making the markets more optimistic. It is unusual to apply stimulus to a growing economy, as opposed to moving an economy out of recession. On the other hand, too much stimulus to a growing economy could stimulate inflation, and this is the risk which is supporting higher rates. Remember, the markets are not always right regarding what will happen, because there is no way of accurately predicting the future.