Category Archives: Mortgage Information

! Veterans Pay high price as Lenders push cash-out home loans !

Vets is you have any questions or concerns contact the VA: https://www.va.gov/   844-698-2311

Eric Kandell is making his pitch to veterans. Wearing a red T-shirt, with the words “Low VA Rates” emblazoned across his chest, he looks fit and muscular, as if he had stepped off an Army base himself. In a Youtube he tells current and former service members how they can take tens of thousands of dollars in cash out of their homes. They can pay off credit cards, remodel a kitchen, install a swimming pool, or travel to Las Vegas. “Do whatever you want,” he tells them. “Imagine your home is like an ATM.”

Kandell is targeting borrowers from the U.S. Department of Veterans Affairs mortgage program. He’s the 43-year-old president of a company whose very name is a come-on: Low VA Rates LLC. It’s among the lesser-known financial outfits dominating the business of selling cash-out VA mortgage refinancing, which totaled $41 billion worth of new loans over the past year.

This boom is alarming federal regulators. Lenders, who can charge thousands of dollars in fees, are encouraging veterans to extract as much as 100 percent of their home equity. Many of the borrowers have poor credit and low incomes, and they could soon find themselves deep underwater. Multiple refinancings helped spark the 2008 financial collapse. In a recent Federal Register notice, the VA itself says financial companies are reviving “subprime lending under a new name.”

read more at: https://www.bloomberg.com/news/articles/2018-12-28/veterans-pay-high-price-as-lenders-push-cash-out-home-loans?srnd=premium

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US Pursues One of the Biggest Mortgage Fraud Cases Since the Crisis

Owners of an apartment complex near Pittsburgh, who wanted to take out a mortgage on the buildings, allegedly made vacant units look occupied by turning on radios, placing shoes and mats outside doors and in one instance having a woman tell inspectors her boyfriend was asleep inside.

The owners obtained a $45.8 million loan, which was wrapped into mortgage securities and sold to investors.

Practices such as these—which were alleged in a federal search-warrant application—have sparked one of the largest mortgage-fraud investigations since the financial crisis. It focuses on whether income from commercial properties was falsified, a move that would enable owners to get larger mortgages and take out cash or expand their businesses faster.

Still in its early stages, the investigation has so far yielded a fraud-conspiracy indictment against four real-estate executives in upstate New York. Loans that some or all of them were involved with totaled about $170 million, the indictment alleges.

Investigators have sought mortgage data on dozens of other apartment buildings, according to documents reviewed by The Wall Street Journal and interviews with people familiar with the probe. Investigators have looked at student housing and self-storage facilities in addition to apartment complexes.

About $1.5 billion of securities issued by Fannie Mae and Freddie Mac are backed by mortgages from just one developer who has been under scrutiny, according to a Journal analysis of loan data from Thomson Reuters .

Read more at: https://www.wsj.com/articles/u-s-pursues-one-of-the-biggest-mortgage-fraud-probes-since-the-financial-crisis-1534357872

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Homeowners not tapping into rising home equity

Homeowners are sitting on a record amount of equity, but this time they’re stubbornly reluctant to borrow against it.

Strong home price appreciation has handed Americans more than $5.8 trillion of equity they could be tapping and aren’t, more than double the level in 2011, according to data provider Black Knight Inc. At least part of that reluctance stems from rising rates, which means debt carrying adjustable rates will keep growing more expensive.

Last decade’s mortgage crisis has likely made consumers hesitant, too. Home prices fell 35 percent after the bubble burst, leaving many borrowers owing more than their house was worth. People who tapped their equity to pay off their credit cards ended up struggling to meet their obligations, said Dan Alpert, managing partner at Westwood Capital, a New York-based investment bank focusing on real estate.

“There’s a long-memory issue,” Alpert said. “People got caught with home equity lines last time.”

The banking industry is now encouraging homeowners to take a little more risk. Lenders jacked up the number of direct-mail solicitations for home equity products by 30 percent in the first quarter compared to a year earlier, according to market research firm Mintel.

The offers are landing in the mailboxes of potential customers like Andy Dogan, 42, who considered taking out a home equity line to increase his stake in the architecture firm where he’s a partner and make home improvements. He ultimately passed when the bank offered him a line for about $20,000 less than the mailer said he could be eligible for.

read more at: https://www.bloomberg.com/news/articles/2018-07-12/homeowners-have-more-equity-than-ever-but-don-t-want-to-tap-it

disclaimer: for information and entertainment purposes only