In the years since the recession, the upturn in the economy and improved housing market are giving rise to “boomerang” buyers, or prospective home buyers that went through foreclosure and are now in an improved financial situation.
Helpful info for boomerang buyers:
Waiting Periods – The FHA imposes a 3-year wait to obtain a new FHA loan, and most lenders follow that guideline. A foreclosure remains on a credit report for seven years, though the negative impact will fade as time passes, according to myFICO.com. The website explains that a foreclosure is “a single negative item,” which does less damage in isolation than in conjunction with other late or missed payments.
There are many lenders willing to work with borrowers who have a foreclosure in their history, as long as they have established solid credit in the intervening years, have a good debt-to-income ratio, and a steady work history.
Be wary – Those “buy-now” loans in advertisements typically involve ugly financing terms. The interest rate will be higher than market rates and might be adjustable or fixed only for an initial term of three, five or seven years. An established history of paying other bills on time can help.
Do your research – Boomerang buyers whose foreclosed loans were backed by the FHA or U.S. Department of Veterans Affairs should be aware of CAIVRS, a government-run database of government-guaranteed loan delinquencies. Borrowers whose unpaid government-insured debts are tracked in CAIVRS typically can’t obtain new government-backed debt.
If a claim has been paid by the federal government on a previous mortgage, a borrower is ineligible until the government claim amount is paid. CAIVRS isn’t publicly accessible, so borrowers must consult an authorized lender to find out whether their foreclosed loan is listed.
New Market – Boomerang buyers who purchased their prior home with little or no cash are often surprised to learn that a down payment is required now. The FHA requires a down payment of at least 3.5 percent of the purchase price. The minimum down payment for a conforming loan without mortgage insurance is 20 percent.
Talk to a professional – Sometimes buyers tend to assume they’re ready, even when they still have issues that need to be addressed. That’s why it can be helpful to consult a mortgage pro in advance. According to Bankrate.com, “It is important to start early. Get in front of somebody and say, ‘If I want to buy a house again, what do I need to do?’ It might take a year. It might take two years.”
The Fed raised interest rates in December 2015 for the first time since 2006. Millennials are becoming a bigger force in the housing market. And cities like Denver, Seattle, Dallas and Portland are seeing huge increase in housing demand. What can the industry expect in 2016?
Zillow economist Svenja Gudell told Money.com that in 2016, “We have fairly low inventory in the cities. In 2016, we’ll see first-time homebuyers looking at suburbs – not just any suburbs, but those that are more dense, more walkable. We’re also going to see an uptick in the number of condos being sold, especially for first time homebuyers.”
Gudell also noted that markets haven’t yet reacted much to the fed raising rates, and probably won’t in the year ahead. According to Forbes contributor Bill Conerly, higher mortgage rates may eventually take their toll, but “we’re 18-24 months away from that,” and we can expect housing construction to increase and home prices to rise.
On millennials not jumping into the housing market, Gudell said, “One issue is that inventory is very low, especially on the bottom end of the price distribution. There are very few of those available, especially in these markets that have the most jobs.”
Economists at TheStreet.com predict that “boomerang buyers” are going to make a return. These are consumers who include the estimated 7 million Americans who went through foreclosure in the years following The Great Recession. Since then, many have been able to recover and now present a more reasonable credit risk. The National Association of Realtors (NAR) says that almost a million formerly distressed homeowners may be looking to buy again.
Agree/disagree? What’s it like in your city? Let us know in the comments!
Being prepared and feeling fully confident is a major key to successfully passing your licensing, or other, examination. Feeling uneasy or that there was more you could have (or should have) done to prepare can distract from your concentration, and potentially lead to failing.
Use these tips to help set up a study plan in preparing for your examination.
One: Be Prepared
Know the specifics, such as: the location of the exam center, the number of questions and how much time you’ll get to complete the exam, and what materials you are allowed to bring. Knowing the logistics will reduce the chance that a simple, but significant, mistake is made.
Two: Set Aside Time
Determine how you will fit in your study time and make sure it is a priority. You schedule meetings, lunches and classes, right? Scheduling your study time is just as important. It is even more important to set these schedules and expectations with your friends and family. Be sure to keep others in the loop on your progress and success, and they should be able to understand your need for uninterrupted study time. A series of shorter study sessions disrupted over several days is preferable to longer, but fewer study sessions.
Three: Don’t Try to Cram it in
Select a reasonable chunk of material to study. Make a list of topics that are likely to be on the exam and prioritize these subjects based on how important they are and how much more you need to learn about them. Spend the majority of your time familiarizing yourself with the subjects you are less confident about, and do it at the beginning of your study session, when you have more energy and are ready to dive in.
Four: Dress Uncomfortably and Sit at a Desk
If you dress comfortably and set up your study session on the couch, you are apt to lose focus, be interrupted and be less productive. Sit upright at a desk and avoid dressing casually so that you can remain awake and attentive.
Five: Study Buddies
When possible, it is a good idea to work with someone with whom you can review material, discuss potential questions and clarify concepts. Utilizing a study buddy can help to keep you focused and grasp information in a different perspective.
Six: Seek Support
Check with other students to get their perspectives on what information will be on the exam. Utilize a group setting where you can share study ideas and strategies. Verbalizing and writing the information is key to storing the material in your long-term memory.
Seven: Put it in Your Own Words
Don’t just memorize the information and move on. You should be able to explain the main idea in your own words. By putting it in a context that you understand, you will have an easier time recalling it than if you simply repeated a concept over and over without really connecting to it. Study buddies can be utilized here, explain in your words the concept and see if the concept is understood by other individuals. If you find people are able to receive your explanation well, then you are likely obtaining an understanding of a particular concept.
Eight: Test for the Test
Spend a lot of time with practice exams, if available. As a basic rule of thumb, test until you consistently obtain scores of 90% or better on every practice exam. For an added challenge, you can come up with study questions while you’re reviewing material you are not as comfortable with. This will force you to do some mental searching while you study. Studying this way helps to replicate the act that you’re preparing for in the first place, so it’s good idea to incorporate it into your study regimen.
Nine: No All-Nighters
Reviewing familiar material is a good way to prepare, but trying to learn something for the first time right before an exam is just going to stress you out and make it harder for you to focus on what you do know. When scheduling your exam, make sure you give yourself an adequate amount of time to study and feel prepared.
Ten: Be Physically Prepared
This may seem obvious, but it’s something we see some students struggle with. Make sure that you’ll have time to review your notes and get an adequate amount of sleep the night before your exam. Have a balanced breakfast, and avoid drinking too much coffee. Taking care of yourself physically will help ensure that your can focus on the matter at hand when you’ve got the exam in front of you.
Eleven: Try Chewing Gum
An informal study by a Cornell University marketing professor has shown that chewing gum offers improved memory and concentration which may improve your test-taking abilities.
Twelve: Don’t Be Over-Confident
While confidence is important, studies have shown that feeling too confident can lead to complacency. A little bit of anxiety can actually be helpful for test takers in keeping you focused. Instead of trying to completely shun anxiety, see it as a tool that can help you stay aware of what you’re doing and on the lookout for potential mistakes.
Do you have any other tips, not listed here, that have helped you in the past? Comment and share them.
Visit our past blogs for more testing tips and strategies.
For more information visit our website: MTIProEd.com
It is completely understandable why the vast majority of our students are so focused, and somewhat fearful, of their NMLS licensing examination. This exam will determine their fate as a licensed mortgage loan originator, should he or she fail (even by the slightest of margins) they must wait, at minimum, another 30 days before testing again.
Word has spread throughout the industry as to the difficulty of this exam, only helping to enhance pre-exam jitters and anxiety. On a daily basis we receive inquiries about preparing for the NMLS exam, everything from how many prep tests are enough to any techniques we can provide that will help with answering exam questions.
It is MTI’s goal to have every student succeed and pass their licensing exam. We have compiled some of the best techniques and strategies to help students get fully prepared for their exam and enter their exam location with the full confidence and belief they will pass and leave a licensed mortgage loan originator!
Utilizing some of these techniques can assist you in understanding, retaining, and retrieving the information learned and provided during the licensing course.
- Spacing Your Study Times. In most cases students will have several weeks to prepare for their exam, it is quite rare that a student will take their exam just days after completing their coursework. Even though they may have weeks, some students try and cram for their exam just days before they take it. They would do better if they spent a little time studying every few days following the course. Spacing self-tests and study time every few days allows the brain to partially forget, and then re-learn the information, with powerful effects on memory.
- Changing Things Up With MTI’s Preparation Tests. Shuffling different types of practice questions into an unpredictable order is a technique known as Interleaving. This is accomplished through the use of MTI’s practice tests, provided to each student. Students often study in an orderly fashion that builds on the last item studied. Interleaving questions builds on a crucial testing skill: figuring out what kind of problem the question is asking.
- Try an Exam Wrapper. As you use MTI’s practice tests, you will find they are immediately scored after completion and you have the ability to review. After completing a practice exam try also completing an exam wrapper. An exam wrapper is a set of brief instructions, printed on a piece of paper. The instructions will lead you through the process of reflecting on how well you prepared for the practice exam, how well you performed, and what you can do differently on the next test. If you find yourself struggling with obtaining acceptable scores, this method may help you to determine how to better prepare. CLICK HERE for an exam wrapper you can use with your preparation, or, as an example to build your own.
- Calming Your Testing Fears. Before a high-stakes exam, many people often experience a quickened heartbeat, sweaty palms, and/or butterflies in their stomach. These feelings may be interpreted as meaning, “I’m so nervous,” which in-turn causes them to become more anxious. Many studies have shown that spending 10 minutes prior to an exam writing down, on any piece of paper, whatever comes to mind significantly helps to reduce the levels of stress and anxiety and allows for better performance on the exam. Some students will begin to feel their level of anxiety increase when taking the practice tests as well. If you have a high level of anxiety when test-taking, try this technique prior to the next practice test and compare your results against previous tests.
To some the thought of the NMLS licensing exam can be overwhelming and scary. Take full advantage of your preparation time and integrate some of these techniques, or the additional tips and strategies we have posted. Allowing yourself adequate time to prepare and utilizing the preparation tools provided by MTI will provide you with an arsenal for triggering successful passing of your exam!
Visit our website for more information: www.MTIProEd.com
Think back for a moment. Back to a time when you had a very important test to take, one that you placed great importance on. Prior to this test did you feel tense, have trouble focusing, feel sweaty, or possibly get headaches? If one, or more, of these symptoms sound familiar, it was quite possible you were experiencing a high level of test anxiety.
It is very common for individuals to feel a higher level of anxiety prior to taking an important test, such as a licensing test. Knowing the implications of the test, some people can even begin to feel these increased levels of anxiety while preparing and studying. Bottom line is test anxiety can happen to anyone.
According to Ryan Ferguson, an expert in test preparation,
“The way to fight test anxiety is to be prepared, be confident and do not over-study.”
Students can often fall into traps prior to a test that can lead to high anxiety. One of these traps is pre-test hysteria. Pre-test hysteria normally occurs during the minutes leading up to the test. This is the time when nervousness can take over causing students to begin going over all the notes right before the test. This will only increase anxiety and possibly cause students to make mistakes. Instead, students should take this time to relax and not overthink questions. Deep breathing exercises are a useful aid, as well as, simply grabbing a piece of paper and writing down whatever happens to come to mind. Both of these help to calm the body and keep the mind sharp.
Another common trap is cramming, although this one can be a little more difficult to avoid in certain situations. Cramming for a test can cause students not to recall information for longer periods of time, since it is contained within short-term memory. However, life happens, and there are times when a student may have no choice, but to cram for a test.
Should a student be left with no other choice but to cram for a test, there are a few steps he/she can follow to get the most out of the cramming. To begin, the student should start by determining which of the topic areas are most difficult, those where he/she feels deficient. Next, he/she should organize the preparation materials to the best of their ability. Finding unique ways to recite the information will go a long way in helping to recall the information during the test. Many experts suggest making up rhymes or comparative tricks to help remember the information during the test, plus this kind of memory enhancement is a form of studying. Students can also try different methods of reading through the material, such as out loud or with a ‘study buddy’. The different ways a student reads through the material the better the information will be retained. The final, and most important step to cram studying, is to relax and try not to stress yourself out. Try some of the tips mentioned previously in this article to aid with relaxation.
It is fairly obvious the major key to testing anxiety is relaxation. This can be very easy to say, but not so easy in practice. If you know you struggle with high anxiety during tests, or, if you find yourself suddenly anxious about an upcoming test, try some of these tips. They may sound rather mundane, but many time the simple things can have a great impact on us. Anxiety can play a huge role in the outcome of testing results and finding a way to curb the anxious feelings may be the difference between a pass and fail result. Lastly, trust your instincts. After all the preparation and studying, don’t second guess yourself, trust your instincts and trust your preparation.
Source: The Collegian
This will help licensees stay current with upcoming deadlines, state-specific licensing details, and other information they need for their license – and this makes it easy to access the information.
In 2010, the Department of Housing and Urban Development (HUD) decided to delay substantial RESPA reforms to the traditional HUD-1 and GFE by not taking action against companies that made a good-faith effort to comply with new rules in the first few months they were in effect. Though the new TILA-RESPA integrated disclosures rule has been finalized for about two years, many in the mortgage and housing industries are requesting a similar grace period after the implementation deadline, and may get it.
The House Financial Services Committee recently approved a bill that would delay enforcement of the TRID rule until next year. Under the bill, the TRID effective date remains October 3rd, but would delay lawsuits or CFPB enforcement actions until February 1, 2016. (The bill still has to be voted on before October before it would be effective.)
Inman published an article titled “3 Reasons why the CFPB should delay TRID enforcement” that pretty well spells out the major challenges the industry faces in the first few months of implementing the new disclosures.
- Closing delays – One of the most controversial changes in TRID is the requirement that the new Closing Disclosure be provided at least 3 business days prior to closing. Since last-minute changes are sometimes unavoidable, many scenarios may now trigger the creation of new Closing Disclosures and new wait periods. This could create burdens for both industry professionals and consumers in the closing process.
- 3rd-party vendors – Many smaller mortgage lenders and community banks hired third-party software vendors to be ready for TRID compliance. According to Inman, many of these vendors haven’t yet provided the necessary updates. In April, only 2 percent reported to the ABA they would be ready by the deadline.
- Cross-collaboration growing pains – Effective implementation of TRID will require diligent cross-collaboration between mortgage brokers, real estate agents, title companies and many others. Title insurance industry professionals have led in efforts for collaboration, but say there will be significant “growing pains” in the first phases of implementation, and an enforcement delay could give the industry the time it needs to get comfortable with TRID.
The Obama administration and HUD recently announced the finalization of a 377 page rule aimed at implementing fair housing in markets where neighborhoods remain markedly segregated. Four decades after the Fair Housing Act was passed, many urban centers like Baltimore and Chicago remain largely segregated along racial lines. Proponents say the Affirmatively Furthering Fair Housing (AFFH) rule will help minorities gain equal access to affordable housing in better neighborhoods.
“Unfortunately, too many Americans find their dreams limited by where they come from, and a ZIP code should never determine a child’s future,” said HUD Secretary Julian Castro in a statement.
Shanna Smith, president and CEO of the National Fair Housing Alliance, adds that “When Congress passed the Fair Housing Act in 1968, it recognized that government policy had helped to create deeply segregated communities and then starved many communities of the services and amenities that were critical to their health and vitality.”
There are two major takeaways from the new rule.
1. It enables HUD to collect a lot more data that will hopefully provide information “on patterns of integration and segregation, racially and ethnically concentrated areas of poverty, disproportionate housing needs, and disparities in access to opportunity.” With this data, local officials should have valuable information to combat segregation in their communities and to create housing policies that will do so.
2. Since not all local officials involved in housing will suddenly decide to address inequities based on data, HUD built an enforcement clause into the rule. Armed with the new data, HUD will be empowered to withhold funds from organizations that don’t meet the requirements they’ve set forth.
The rule still faces challenges in the House of Representatives before it can be funded and implemented. Since its implementation requires the collection of vast amounts of data – which costs money – the issue could be a contentious one between Republicans and Democrats. Conservative opponents of the rule also say that it is overreaching by the federal government to dictate housing policies to local communities, and is an encroachment on states’ rights.
The AFFH rule comes on the heals of the disparate impact ruling by the Supreme Court last month, and in the midst of the housing industry’s implementation of the new TILA RESPA disclosure rules.
Let us know what you think of the recent government actions in the comments!
It seems like end of session Supreme Court decisions have taken over the news recently, with a few major rulings grabbing the spotlight. In all the hubbub, it might be easy to overlook Texas Department of Housing and Community Affairs v. Inclusive Communities Projects. With this case, the Supreme Court ruled on the interpretation of “disparate impact” in regard to the Fair Housing Act (passed in 1968) – a decision with an outcome that may have a significant impact on the housing industry.
“Disparate impact” is defined by the FHA as an allegation that a law or practice has a discriminatory effect on a group of people. The court ruled 5-4 in recognizing that the effects of “disparate impact” in housing cases, meaning that in the future, statistics and other evidence are permissible in court to show that certain housing practices may have discriminatory effects – without the plaintiff necessarily having to prove that the intentions of the accused were overtly discriminatory.
- Example of disparate impact – Say an apartment complex only accepts residents with full-time jobs. This could have the effect of barring disabled veterans and other people with disabilities who may not be able to work full-time, even though they can afford the apartment. In this case, the practice is not overtly discriminatory toward the disabled – meaning the apartment complex does not have an official policy of rejecting disabled individuals – but the practice does have the effect of excluding many disabled individuals from residency, creating a disparate impact.
The major question before the Supreme Court was whether the FHA allows people to sue over practices that may not be explicitly discriminatory, but end up hurting minorities or other protected classes disproportionately. With this decision, SCOTUS has basically said that those who file housing discrimination lawsuits may not necessarily have to prove they were the victims of intentional discrimination.
Jeb Hensarling (Rep.) of the House Financial Services Committee holds that the “…disparate impact will have predictable, negative consequences for all Americans who will experience less competitive and more expensive market for housing and credit – all without providing any meaningful support for the fight against actual discrimination.”
The MBA and ABA also oppose the ruling, saying that though lenders and financial companies may have race-neutral policies, they don’t always have results that fit into demographic distributions, and shouldn’t be penalized for something out of their control.
Fair housing advocates like HUD secretary Julian Castro, the National Community Reinvestment Coalition and ACLU take a different view, believing the ruling was a necessary step forward in the struggle against housing discrimination. The NCRC says that housing discrimination has evolved into a less blatant problem than it was when the FHA was passed over 40 years ago, and new standards apply.
The financial industry consensus is that the ruling is no good for housing and won’t prevent discrimination, while fair housing advocates are touting the ruling as a victory. Let us know what you think in the comments!
The CFPB TILA RESPA Integrated Disclosure rule is by far the biggest regulatory change to grip the mortgage industry since implementation of Dodd-Frank and the SAFE Act in 2008. Mortgage professionals across the country have been gearing up to meet the August 1 deadline for over a year. Lenders and brokers have been integrating new software, offering compliance training, re-evaluating 3rd party business arrangements, among a host of other efforts to prepare for the change.
So it came as quite a surprise to the industry when the carefully prepared for deadline was blown due to an “administrative error” on the part of the CFPB.
Pushing the deadline has been on the agenda of lawmakers and industry professionals alike since the finalization of the 1,888 page rule.
After a series of congressional hearings and requests to delay the deadline, Richard Cordray stuck to his guns in early May, saying the TRID deadline was firm and wouldn’t be moved.
Incrementally, however, that hard deadline became fuzzy. In late May, 300 member of Congress signed a letter requesting that the CFPB extend enforcement of TRID until at least the end of 2015. In early June, the CFPB confirmed that TRID implementation was still required by August 1, but that they would grant a good faith “grace period” in enforcing the rule in response to industry and congressional pressure.
Within a couple weeks however, the industry was taken aback when CFPB announced that because of an administrative error, they missed a filing deadline for two-page piece of paper that was supposed to be delivered to congress in order to ensure TRID implementation by the original deadline. As a result, lenders and brokers now officially have until October 1 to get their houses in order.
In addition to legislative pressure, industry lobbying groups, lenders and 3rd party vendors had been notifying the CFPB that many companies wouldn’t be fully ready for TRID by August 1.
In general, the industry reaction to the delay has been positive, as the delay will give the industry an extra two months to work out any kinks in their systems. Many that were ready to implement by August 1 will be able to test their compliance issues before any enforcement action becomes a possibility.
Let us know in the comments what you think of the delay, helpful or hurtful?