May, 2015

Google Launches Built-in Mortgage Calculator

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Consumers will be able to calculate mortgage payments within Google searches.

Lenders who were unhappy with the Consumer Financial Protection Bureau’s new mortgage payment calculator will soon have a new target for their ire, Google (GOOG).

That’s because the internet search monolith began very quietly rolling out a mortgage payment calculator of its own on Tuesday. The built-in mortgage calculator will apparently appear when a user searches for terms like, “mortgage calculator,” “loan interest calculator,” and “interest calculator.”

The native mortgage calculator was first spotted by Searchengineland.com. HousingWire searched for Google’s mortgage calculator and found it on an Android-powered phone.

We also captured a screenshot of the tool in action:

 Google calculator

While the roll-out of the Google mortgage calculator seems to be limited thus far, Google did share some news on the mortgage calculator on its Google+ page.

“Preparing for homeownership just got a bit easier,” Google’s post states. “Starting today you can ask Google things like ‘How much can I borrow at $200 a month?’ or ‘At 5% APR how much can I borrow over 10 years?’ You can even adjust the mortgage amount, interest rate, mortgage period and more to see which financial options fit your needs?”

Google’s foray into the land of mortgage calculation comes on the heels of the controversial “borrower education tool” from the CFPB. As part of the “Owning a Home” consumer tool, the CFPB included “Rate Checker,” which it touted as a tool to help consumers understand what interest rates may be available to them by using the same underwriting variables that lenders use on their internal rate sheets.

“In other words, we are giving consumers direct access to the same type of information that the lenders themselves have,” CFPB Director Richard Cordray said at the time.

The CFPB’s tool was met with angst from mortgage lenders, including the Mortgage Bankers Association. The MBA suggested the Rate Checker mentions rates and costs without including disclosure items TILA_RESPA rules and the CFPB mandate for borrowers – annual percentage rate, closing fees, etc.

Essentially, mortgage bankers said that if the Rate Checker were a lender advertisement or mortgage calculator, it would violate the CFPB’s disclosure rules.

Google even included a screenshot of what its mortgage calculator looks like on a mobile phone. Click the image below to take a larger look at what Google’s mortgage calculator looks like. Google calculator2.jpg

“It sets borrowers up for severe disappointment,” David Stevens, president and CEO of the Mortgage Bankers Association, told HousingWire. “It should be taken down.”

Stevens says that the tool doesn’t inform borrowers of a host of other costs that lenders are required to disclose under TILA-RESPA, such as closing costs, APR, and other charges and fees, Stevens added.

“This tool has none of that. It gives borrowers none of that,” Stevens said. “It could allow lenders to rate bait the market.”

The third-party tool offers accurate but incomplete information, Stevens added.

The CFPB’s response, in a note to HousingWire, appeared unequivocal. The Rate Checker is not coming down.

“The Rate Checker is an educational tool, and part of a larger suite of tools to help consumers be more informed and effective mortgage shoppers. The Rate Checker does not connect consumers with lenders,” a spokesperson for CFPB told HousingWire.

Other details of Google’s mortgage calculator, such as whether if features details on closing costs, fees, etc. are currently unknown, but HousingWire will continue to monitor the situation to see if Google’s mortgage calculator becomes a permanent feature or just a flash in the digital pan.

By Ben Lane Reprinted from Housingwire

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CoreLogic: More Than 1 Million Homeowners Regained Equity in 2014

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5.4M properties still underwater as of 4Q14

Regaining Equity2Some 1.2 million borrowers regained equity in 2014, bringing the total number of mortgaged residential properties with equity at the end of Q4 2014 to approximately 44.5 million or 89% of all mortgaged properties, according to CoreLogic (CLGX).

Nationwide, borrower equity increased year over year by $656 billion in 4Q14. The CoreLogic analysis also indicates approximately 172,000 U.S. homes slipped into negative equity in the fourth quarter of 2014 from the third quarter 2014, increasing the total number of mortgaged residential properties with negative equity to 5.4 million, or 10.8% of all mortgaged properties.

This compares to 5.2 million homes, or 10.4%, that were reported with negative equity in Q3 2014, a quarter-over-quarter increase of 3.3%. Compared to 6.6 million homes, or 13.4%, reported for Q4 2013, the number of underwater homes has decreased year over year by 1.2 million or 18.9%.

“The share of homeowners that had negative equity increased slightly in the fourth quarter of 2014, reflecting the typical weakness in home values during the final quarter of the year,” said Frank Nothaft, chief economist for CoreLogic. “Our CoreLogic HPI dipped 0.7% from September to December, and the % of owners ‘underwater’ increased to 10.8%. However, from December-to-December, the CoreLogic index was up 4.8%, and the negative equity share fell by 2.6 percentage points.”

Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

For the homes in negative equity status, the national aggregate value of negative equity was $349 billion at the end of Q4 2014. Negative equity value increased approximately $7 billion from $341.8 billion in Q3 2014 to $348.8 billion in Q4 2014.

On a year-over-year basis, however, the value of negative equity declined overall from $403 billion in Q4 2013, representing a decrease of 13.4% in 12 months.house_mortgage_underwater_life_preserver_304

Of the 49.9 million residential properties with a mortgage, approximately 10 million, or 20%, have less than 20% equity (referred to as “under-equitied”) and 1.4 million of those have less than 5-percent equity (referred to as near-negative equity). Borrowers who are “under-equitied” may have a more difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints. Borrowers with near-negative equity are considered at risk of moving into negative equity if home prices fall. In contrast, if home prices rose by as little as 5%, an additional 1 million homeowners now in negative equity would regain equity.

“Negative equity continued to be a serious issue for the housing market and the U.S. economy at the end of 2014 with 5.4 million homeowners still ‘underwater’,” said Anand Nallathambi, president and CEO of CoreLogic. “We expect the situation to improve over the course of 2015. We project that the CoreLogic Home Price Index will rise 5% in 2015, which will lift about 1 million homeowners out of negative equity.”

Here are some highlights:

  • Nevada had the highest percentage of mortgaged properties in negative equity at 24.2%; followed by Florida (23.2%); Arizona (18.7%); Illinois (16.2%) and Rhode Island (15.8%). These top five states combined account for 31.7% of negative equity in the United States.
  • Texas had the highest percentage of mortgaged residential properties in an equity position at 97.4%, followed by Alaska (97.2%), Montana (97.0%), Hawaii (96.3%) and North Dakota (96.2%).
  • Of the 25 largest Core Based Statistical Areas (CBSAs) based on mortgage count, Tampa-St. Petersburg-Clearwater, Fla., had the highest percentage of mortgaged properties in negative equity at 24.8%, followed by Phoenix-Mesa-Scottsdale, Ariz. (18.8%), Chicago-Naperville-Arlington Heights, Ill. (18.5%), Riverside-San Bernardino-Ontario, Calif. (14.8%) and Atlanta-Sandy Springs-Roswell, Ga. (14.6%).
  • Of the same largest 25 CBSAs, Houston-The Woodlands-Sugar Land, Texas had the highest percentage of mortgaged properties in an equity position at 97.7%, followed by Dallas-Plano-Irving, TX (97.1%), Anaheim-Santa Ana-Irvine, Calif. (96.4%), Portland-Vancouver-Hillsboro, Ore. (96.4%) and Denver-Aurora-Lakewood, Col. (96.2%).
  • Of the total $349 billion in negative equity, first liens without home equity loans accounted for $185 billion aggregate negative equity, while first liens with home equity loans accounted for $164 billion, or 47%.
  • Approximately 3.2 million underwater borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $228,000. The average underwater amount is $57,000.
  • Approximately 2.1 million underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $295,000.The average underwater amount is $77,000.
  • The bulk of home equity for mortgaged properties is concentrated at the high end of the housing market. For example, 94% of homes valued at greater than $200,000 have equity compared with 84% of homes valued at less than $200,000.

By Trey Garrison Housingwire

 

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Realtor.com: Tightening Inventories Likely To Push Home Prices Up

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Inventories tightened 8.7% from January 2014 to January 2015

tightening inventoryHousing inventory continues to tighten in markets across the country – a 2015 trend identified by realtor.com Chief Economist Jonathan Smoke in its housing inventory data report for January.

Nationwide total listings declined by 6.7% month over month and about 8.7% year over year.

“January’s inventory data suggest a continuation of the tightening trend we identified last month in the December data, and with a shortage of inventory typically comes increased home prices,” Smoke said. “Half of the 200 markets realtor.com tracks experienced year-over-year price increases of at least 6% in January.”

Despite a shortage of inventory nationally, data on the 200 largest markets found a handful of housing markets categorized as healthy and growing.

These markets include: New York-Newark-Jersey City, NY-NJ-PA,;Tampa-St. Petersburg-Clearwater, Florida; Jacksonville, Florida, and Pittsburg, Pennsylvania.

“These four markets are bucking the trend, showing notable increases year over year in total listing counts and median list prices as well as clear declines in median inventory age,” Smoke said. “We will likely see the most sales growth in these markets in the coming months.”

Key monthly indicators for the national housing market include:

  • Median list price – $211,000 (Up 8.8% year over year)
  • Total listing count – 1,591,853 (Down 8.7% year over year)
  • Median age of inventory – 103 Days (Down 4.6% year over year)

By Trey Garrison Housingwire.com

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