Canyon Lake Real Estate Trends Issue CL02 - Page 2
Real Estate Trends Newsletter
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Real Estate Trends Newsletter
New Mortgage Rules
(...continued from cover)
In remarks last year to the American Bankers Association, CFPB Director Richard
Cordray noted that the agency had published detailed examination procedures for
the rules six months before they were to take effect so that no one would be caught
by surprise. “Let me also assure you that our oversight of the new mortgage rules in
the early months will be sensitive to the progress made by institutions that have been
squarely focused on making good-faith efforts to come into substantial compliance on
time,” he told the bankers.
Ron Haynie, senior vice president for mortgage finance policy at the Independent
Community Bankers of America, says the regulations could have a chilling effect on
lending. “Lenders are going to be cautious,” he said. “What if you just make an honest
mistake? I mean, my God, what’s going to happen?” Haynie said the uncertainty
caused by the rules will “definitely dampen” the housing market.
The new rules, which went into effect on January 10th, are aimed at making the
mortgage industry safer by ensuring borrowers only receive loans they can afford.
Under the regulations, banks assess the ability of borrowers to repay their loans by
verifying several factors, including credit history, assets, income and debt. A mortgage
cannot push a borrower’s total debt load past 43 percent of income.
“Millions of Americans lost their homes during the past recession because of reckless
lending practices,” said Norma Garcia, manager of the financial services team at
Consumers Union. “These new rules will help promote more responsible lending and
borrowing and ultimately benefit both homeowners and the economy.”
“But the market still faces some hurdles from tight
lending and the possibility of rising mortgage rates,
which remain around historic lows.”
Joe Ventrone, the vice president for regulatory and industry relations at the National
Association of Realtors, predicted it would take about six months before it will be
known whether the mortgage rules have problems. He said there would probably be
changes that should clarify some provisions, especially on mortgage points and fees,
which will need a legislative fix. So far, the CFPB has shown that “it is flexible and
amenable to making mid-course corrections,” Ventrone said.
David Stevens, head of the Mortgage Bankers Association, said that the elimination of
bad practices in the industry, such as no-document and no-interest loans, has erased
95 percent of all default risk in the market. With those loans gone, he predicted the
CFPB would eventually realize that the 43 percent debt-to-income ratio requirement
simply isn’t needed.
Home Sales Dec 16, 2013 - Jan 15 2014
$ Per Square Foot
Canyon Lake Dr
Information compiled from various sources including Multiple Listing Service. All information is deemed accurate by not guaranteed. Agent makes now warranties about accuracy or completeness of data.
Download updated market reports, neighborhood statistics, and even request a free market valuation for your home at www.BevinsGroup.com
Regulators argue that all but 5 percent of loans wouldn’t meet the debt-to-income
requirement, but even that amount is causing concern for mortgage industry experts
who fear shutting out a significant number of potential borrowers. On the whole, the
CFPB expressed confidence that the housing market is ready for the new regulatory
“We certainly will be monitoring the market as the rule goes into effect, but we feel
good about where the rule is,” said Peter Carroll, the CFPB’s assistant director for
mortgage markets. -Ben Goad contributed.
Okay, I’m back. The good thing about all of the above is that for a good amount of
lenders, like Wallick and Volk, this is nothing different than our day-to-day practices.
We never really participated in the ‘out of the box’ or in newer terms ‘Non-Qualified
The guides set to measure a client’s ability to repay a loan, utilizing debt-to-income
calculations, paying attention to risk/reward aspects, measurements and variables that
go into a credit analysis and a credit decision, and a sprinkle of common sense, have
never really been changed…..they have loosened or tightened up, but credit decisions/
approvals have always involved the basics……those will never go away: Income/debt
analysis (capacity to pay loan), credit and collateral. -Dave
MORE USEFUL REAL ESTATE INFO AT:
It’s That Time
By Harold Newman
hat dreaded day is coming…. April 15th where everyone
rushes to get their taxes filed. Or file an extension just to
extend the time to file.
I know that this is the last thing people want to talk about, but as
the saying goes “There are only two things in life that you have
to look forward to – Death and Taxes”.
The good thing about real estate is that this is one deduction that
can lower your tax in most cases. For Example; if you purchase a
house in the year you can deduct the Origination fees, Mortgage
Interest, Real Estate Taxes, and Mortgage Insurance Premium
(MIP) for 2013. In 2014 we will still be able to deduct all the
above, except for the MIP - that provision expires at 12/31/13
unless congress extends it. With these deductions you will be
able to itemize and reduce your tax liability.
“Have peace of mind - get your taxes
done on time!!”
Other items homeowners might be able to deduct are as follows:
DMV registration fees
Sale Taxes (If they are more than the Real Estate Taxes)
Cash and Non-cash Donations to Charities
Unreimbursed Employee Expenses
Gambling Losses (to the extent of winnings) – just to
name a few..
There is also a new tax this year
call the “Net Investment Tax”
which will hit you at 3.8% of
your investment earnings and
kicks in if your income is in
excess of $250,000 Married
Filing jointly and $200,000
Single. With this new tax now
in place make sure that you
talk to your tax advisor and tax
planning is a must.
In closing, whomever you have
preparing your taxes, make sure
that they qualified to do so.
Enrolled Agents are America’s
Tax Experts. Enrolled Agents
specialize in taxation and are
the only federally licensed tax
Harold C. Newman
Newman Tax & Resolution Inc.
32605 Temecula Parkway
T - 951.302.6499
F - 951.302.6875
“Maybe who we are isn’t so much
about what we do, but rather
what we’re capable of when we
least expect it.”
-Jodi Picoult (born 1966);Author
Download updated market repo rts, neighborhood statistics, and even request a free market valuation for your home at www.BevinsGroup.com