It’ Friday desk clearing time for this blogger. “Even if the economy does turn sour, people getting mortgages today are in good financial shape, added Jacob Channel, senior economist at Lending Tree. ‘If you are getting approved for a loan right now, there’s a very, very good chance that your lender did a lot of due diligence to ensure you can actually afford that loan over the long term,’ he said. Channel noted that there might be a higher risk of foreclosure for some more recent homebuyers, but he thinks most of them will have no trouble keeping up with their payments. The banks made sure of that.”
“It’s called a ‘Zero Down Mortgage.’ Alex Elezaj, UWM’s Chief Strategy Officer, said the Zero Down Mortgage is an upfront loan that helps buyers buy a home. They are given the cash for a down payment, which they are eventually required to repay. The program has attracted thousands of home buyers since it started two weeks ago. Ken Bouthillier, a mortgage advisor with Cross Country Mortgage in Scottsdale, doesn’t think the ‘Zero Down Mortgage’ is anything buyers should be afraid of. Bouthillier insists that anyone worried that this kind of loan could lead to another housing crisis like in 2008 needs to remember that qualifying for a loan is much different than it was 16 years ago. ‘So much of the problem came from programs that didn’t verify income, didn’t verify assets, and we had a massive supply of inventory nationwide at the time that things went sideways,’ said Bouthillier. ‘Now, all the guidelines around income and job history are so strict compared to what they used to be that the zero down, really, on its surface, isn’t a problem.’”
“In San Mateo County, the median sales price was $2.15 million — down from its peak of $2.4 million in April 2022, but up 9.1% from April 2023, when the median price was $1.97 million. The combination of increased prices and high rates is hitting buyers especially hard. Unfortunately for buyers, they’re likely to stay that way — especially if interest rates come down, as some real estate agents predict, which could drive even more demand. ‘Buyers may as well get in now,’ said Connie Miller, a real estate agent based in Los Altos. ‘The prices are only going to get higher.’”
“Steven and Katherine Wolf missed out on the ultra-low mortgage rates of the pandemic. Rather than wait, the former renters jumped into home ownership in fall 2022. They also stretched, buying a Bakersfield home that carried an uncomfortable monthly payment. Steven Wolf figured the pain would be fleeting. Within a year rates rates would drop enough to allow them to refinance and put hundreds of dollars back into their pockets. That hasn’t happened and isn’t expected to soon. In fact, rates are higher. ‘We did this with the expectation that we would only have to weather this high payment for a chunk of time,’ the 37-year old English teacher said. ‘Now that chunk of time is looking like it might actually be permanent.’”
“As interest rates stay higher for longer, some Americans express varying degrees of regret as their finances buckle. A woman in Twinsburg, Ohio, said she’s taken a second job. A man in Oregon said putting money away for retirement is a ‘distant thought.’ Some said they’re now selling their home or will need to soon. Chelsea Bolinger purchased a house in Highland Ranch, Colorado. The 35-year-old tech worker called the experience ‘horrible.’ ‘I only bought it because the loan company really pushed that interest rates were going to go down,’ Bolinger said.”
“Going forward, the Wolfs are looking to move to Baltimore after they received better job offers there. Because their high monthly payment is more than they could rent their house out for, they’ve listed it for sale and don’t expect to get their down payment back. The other day, Wolf said he spoke with his loan officer who encouraged him to buy right away in Baltimore so they don’t get priced out and gave a new prediction for when rates would drop. He also offered to do their loan, according to Wolf.”
“In Kalispell, the median home price peaked in June 2022 at $647,500 and dropped to a low of $460,000 the following December; prices have since hovered around $550,000, according to Montana Regional MLS data. In Flathead County, the median price for townhouses and condos dropped 21%, falling from $535,000 in April 2023 to $422,500 in April of this year. ‘I don’t think it’s going to drop,’ said Wendy Brown, owner of Chuck Olson Real Estate in Kalispell. ‘I think people are thinking we have maxed out and property prices are going to start coming down, but you have a lot of buyers saying ‘let’s wait until prices come down.’ They are not coming down.’ When interest rates do begin to drop, however, Brown predicts that bidding wars will return. ‘The problem is when interest rates go down, all of the buyers will be competing,’ Brown said. ‘We will end up in a bidding war situation again. All the buyers that were holding back, they are all going to be looking to purchase at the same time again.’”
“On Florida’s southwest coast, more than a year and a half after Hurricane Ian, the fallout continues. Housing costs and insurance have spiked, prompting many to put their homes up for sale. The main reason for the cooling of the once-hot Cape Coral home market is mortgage interest rates. In recent months, sales have slowed in Cape Coral realtor Sam Yaffe says, ‘It is unusual. We do have several months’ worth of homes available.’ Sherry Oakes and her husband already pay $8,000 a year in insurance, costs that will go up if FEMA eliminates the flood discount. It’s one reason she thinks so many homes now are for sale. ‘I think a lot of people that are in the flood zone don’t want to pay these astronomical prices,’ she says.”
“A self-proclaimed millennial mogul from the Grand Strand and her business partner are at the center of a North Carolina Department of Justice investigation connected to several investment deals. ‘We were lied to by Jameian Selmon and Sharain Hemingway,’ said Jeanette Vasquez. Vasquez, Lezlie Briggs, Encantis Anderson and Latonia Greene all say this started with the promise of building generational wealth through investments in boats, vacation rentals, tiny homes, restaurants, and even a greenhouse farm. Latonia Greene said looking back on Selmon’s investment pitch made her feel infuriated. ‘She literally took everything I had,’ she said. ‘If I would’ve lost my job, I would’ve had no money whatsoever.’”
“Ernest P. Ricci, a 62-year-old North Kingstown contractor, brazenly fired off emails to federal investigators declaring them ‘Bozos’ too dumb to nab him for bankruptcy fraud. Then he pleaded guilty in November to attempting to defraud creditors out of about $2 million. In an appeal for leniency and home confinement instead of prison, Ricci blamed his crimes on him getting ‘way over my head’ in trying to save a Florida home from foreclosure, a property he said he and his wife, Brenda, intended to use in their retirement. (The government said he had made no mortgage payment on the property for more than five years.) Ricci said he had learned ‘the hard way’: his 34-year marriage was over, two of his three children would not speak to him and he had lost friendships.”
“In 2020, as a federal bankruptcy trustee pressed Ricci to turn over financial records from the couple’s business, Ricci responded: ‘Here’s my response. GO [expletive] YOURSELF Charlie. How’s that? … The party’s over [expletive] … Move on and admit you [expletive] with the wrong guy. ITS OVER!!! Lololol Ernie Ricci.’”
“Canada’s largest banks continue to set aside more money to cover bad loans as Canadians grapple with rising unemployment and elevated interest rates. Together, the lenders recorded $4.3 billion in provisions for credit losses (PCLs) in the second quarter, an increase from the $4.1 billion in the first quarter. ‘The consumer is getting pressured now,’ said Carl De Souza, senior vice president of North American financial institution ratings at Morningstar DBRS. ‘Particularly as their debts reprice at higher interest rates, and they get payment shocks.’ And the worst is yet to come: of all mortgages outstanding as of February 2024, 76 per cent will be coming up for renewal by the end of 2026, according to OSFI.”
“An Ontario builder is facing investigations from new home regulators after it moved some residents into a new condominium building before it obtained occupancy permits from City of Toronto building inspectors. ‘The whole thing is extremely frustrating,’ said Melanie Lima-Robeiro who was told by builder First Avenue Properties that she could take interim occupancy of her new-build condo apartment at 859 The Queensway, in Etobicoke on Sept. 28, 2023. She said the building was incomplete when she moved in and her unit was unfinished with elements such as glass doors for her showers and separations on the terrace balcony still missing.”
“‘They didn’t even paint my unit,’ said Ms. Lima-Robeiro, who was three-months pregnant at the time. ‘I had to pay $4,000 [in occupancy fees] regardless if you move in, so I thought I might as well move in. It’s not like I benefited: there were no amenities, dust was everywhere, the heat went off two or three times. I’m a first-time home buyer, this is all new to me and I didn’t know how to navigate the system.’”
“Young Aussies buying property are being left entirely broke by the process. Taylor Dodds, 25, recently posted TikTok a video of her and her partner eating dinner on the floor of their new house. The two sat together munching on kebabs, and there wasn’t a piece of furniture in sight. It might not look like it, but they bought their dream home. ‘POV. You bought your first home but spent all your money on a deposit,’ she wrote. Ms Dodds and her partner bought in NSW’s Newcastle but, like most first homebuyers at the moment, it cost every last dollar they had. ‘All savings are gone and used on the deposit,’ she told news.com.au.”
“So much of this stress comes from rising interest rates. Money expert Sarah Megginson said that, because property prices are soaring and wage growth isn’t keeping up, when people do manage to finally buy, they are often left financially strapped. ‘If you bought a home two years ago and your loan is around $600,000, which is the average national home loan size, you’re paying around $15,000 more per year for your mortgage repayments now than you were back then,’ Ms Megginson said. ‘You’re having to fork out a disproportionate amount of your income to pay off your home loan, and it’s not surprising that big banks are reporting an uptick in the number of people falling 90 days or more in repayments.’”