By KIMBERLEY HAAS With the Federal Reserve raising interest rates seven times this year – and with more rate hikes on the way in 2023 – people are wondering if their policies to cool inflation are unfairly punishing those in the housing market. The Fed’s policy-setting committee raised its benchmark rate a half-point to 4.5% this week. The goal is to reach 2% inflation by controlling monetary policy. The chair of the Federal Reserve opened his press conference on Wednesday saying that he would like to underscore for the American people that they understand the hardship that high inflation is causing. Jerome Powell said the U.S. economy has slowed significantly from last year’s rapid pace. “Recent indicators point to modest…
Home flippers are feeling the sting of the housing market correction, seeing flips fall for a second consecutive quarter as typical profit margins on resold homes hit a 13-year low. ATTOM’s Q3 U.S. Home Flipping Report found that 7.5% of all home sales last quarter were flipped homes, down from 8.2% in Q2. Flipping remains at its third-highest level in ten years, up from last year when flips accounted for only 5.9% of sales. Its highest was in Q1 2022, at 9.7%. As turnarounds dropped, so did investors’ profits. Typical gross profits fell to their lowest point in nearly three years – $62,000 – and at the fastest pace since 2009. Profit margins also dropped to their lowest point in…
By KIMBERLEY HAAS The CEO of an advanced analytics company says the latest version of their platform includes a new reporting tool that can help lenders and servicers navigate the current market. Augie Del Rio is the co-founder of Gallus Insights, headquartered in Chicago. They have satellite offices in Dallas and Buenos Aires, Argentina. Del Rio and Bernardo Loitegui started the company in 2021. Leaders at the company recently released information about the upgraded version of their cloud-based platform. It includes a Home Mortgage Disclosure Act reporting tool and comes on the heels of $1 million in pre-seed funding. Users can pull insights on the total market, specific geographies, products, and peer lenders. Data about borrowers, loans, and employees can…
By KIMBERLEY HAAS A Los Angeles broker convicted of defrauding lenders to obtain more than $8 million in mortgage loans has been sentenced to five years and four months in prison. Alex Ashod Dadourian, 61, was a licensed mortgage loan broker whose company, Success Funding, doing business as Pride Funding, was located in Northridge, California. Investigators claim that Dadourian received more than $254,000 in fees and commissions by taking out 17 mortgage loans based on fraudulent applications and supporting documentation between 2017 and 2019. Dadourian was convicted on 91 felony charges of mortgage fraud, grand theft, identity theft, and conspiracy, according to a press release issued on Dec. 7. “We won’t stand idly by when bad actors take advantage of…
Most pet owners are willing to forgo their dream home if it doesn’t suit their furry friends, according to a new survey from Realtor and HarrisX. Of more than 3,000 American adults surveyed, 82% who owned pets and planned to buy a home in the next year reported that their pets’ needs are just as important as their own or their family’s needs. About three-quarters of homeowners own a pet, and 79% say they consider their animals when choosing a home or apartment. More than 60% of prospective buyers say they have passed on an otherwise perfect home because it didn’t accommodate their pets. Neighborhoods matter, too, as 87% of those with pets looking to buy a house within the next…
By KIMBERLEY HAAS The housing market traditionally cools during the holiday season as people focus on family and friends but industry leaders say it is a good time for potential sellers and buyers to weigh their options. After mortgage rates recently surged above 7%, real estate activity and consumer sentiment took a nosedive. Home delistings hit a record high in November as sellers and buyers pulled out of the market, according to journalists Lily Katz and Ben Walzer at Redfin. Markets where home prices skyrocketed during the pandemic are now cooling the fastest. In Sacramento, Calif., an average of 3.6% of active listings were delisted per week during the 12 weeks ending on November 27, up 1.6 percentage points from one year earlier.…
Americans who bought a home this year are facing rising underwater risk as home prices cool. Black Knight’s October Mortgage Monitor found that 8% of homes bought in 2022 are now at least marginally underwater, while almost 40% have less than a 10% equity stake in their homes. “Make no mistake: negative equity rates continue to run far below historical averages, but a clear bifurcation of risk has emerged between mortgaged homes purchased relatively recently versus those bought early in or before the pandemic,” said Black Knight President Ben Graboske. “Risk among earlier purchases is essentially nonexistent given the large equity cushions these mortgage holders are sitting on. More recent homebuyers don’t fare as well.” This is a particular issue…
Just days ago, Inlanta Mortgage seemed poised to go under due to declining homebuyer demand. The Wisconsin-based company operates in 27 states. Leaders there announced plans to close next year, starting the winding down process immediately. The company cited “the dramatic and unanticipated drop in mortgage product demand” for its demise. In a letter to Wisconsin’s Department of Workforce Development, it said 62 employees would be let go. Some of those employees may now be saved from termination by Guild Mortgage, which announced it is acquiring Inlanta. Terms of the acquisition were not disclosed. In a press release, Guild CEO Mary Ann McGarry said the decision aligns with Guild’s expansion mindset. “Inlanta is a natural fit because of its almost…
By KIMBERLEY HAAS Leaders at Big Purple Dot and CoreLogic have come together to launch a platform that provides detailed production data on loan officers and a service to help lending companies in their recruiting efforts. Roxana Davidoff, Founder and CEO of Big Purple Dot in Irvine, California, recently sat down with The Mortgage Note to explain why this data is needed by lenders as the housing market cools following a whirlwind pandemic-driven surge. “We understand where we are headed in this environment, where before people were hired just to fund a loan. Business was so hot people were funding loans every single day. Now the music has slowed down and people need to take a look now, and they…
By CHUCK GREEN According to experts, not only is the housing market expected to continue cooling this year, the forecast remains chilly entering 2023. Real house prices jumped 10.5% in September and logged a 60.6% YOY increase, according to First American’s Real House Price Index. But prices fell in 15 out of the top 50 markets they analyze. Mortgage originations saw their largest annual decline in 21 years this fall, further evidence that the housing boom is coming to an end. Originations fell 47% YOY in Q3, according to ATTOM Data’s Q3 2022 U.S. Residential Property Mortgage Origination Report. Quarter-over-quarter they were down 19%, the sixth consecutive drop. So, what in the name of the cranky barometer’s up? For one thing, surprise, surprise,…
