Mortgage experts debunk myth about Biden’s homebuyer rule

Published

2 years ago

May 10, 2023

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close video Lenders weigh in on mortgage rate adjustments: ‘We’re no stranger to these changes’

United Wholesale Mortgage Chief Operating Officer Melinda Wilner and loanDepot loan consultant John Gerardi debunk mortgage rate changes from the Federal Housing Finance Agency.

Experts at two of the nation's top lenders claim homebuyers may not fully understand a new Biden administration rule that redistributes high-risk loan costs to homeowners with good credit.

"I think there's a little bit of maybe misinterpretation," United Wholesale Mortgage (UWM) Chief Operating Officer Melinda Wilner told Fox News Digital.

"A lot of people think that higher credit scores are now paying more for their mortgages than lower credit scores and that's actually not the case. It's just some of the changes were more impactful to certain pockets of credit scores and loan to value."

BIDEN'S MORTGAGE REDISTRIBUTION PLAN SPARKS OMINOUS WARNING AS EXPERTS NOTE SIMILARITIES TO PRIOR CRISIS

The new rules enacted by the FHFA on May 1 aim to help lower-income borrowers afford their monthly mortgage payment. Under it, borrowers with a credit score of 679 or lower and less money for a down payment will qualify for better mortgage rates than they otherwise would have, while those with higher ratings ranging from 680 to above 780 will pay increased fees.

However, LoanDepot broker John Gerardi told Fox News Digital that people in the upper-credit score range will still get the benefit of having a better payment option than someone with a lesser credit score.

"They’re just maybe going to lose out on a very small discount that they might have had six to eight months ago with the old pricing grid," he explained. close video PA Treasurer Stacy Garrity blasts Biden’s new mortgage rule punishing borrowers with good credit: ‘Disaster’

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According to Gerardi lenders have been complying with the new adjustments way before they went into effect.

"These adjustments have been in play for a long time, and [the FHFA] go back to the drawing board, analyze which loans are doing better than other loans and make their changes," the New York-based loan consultant explained. "So right now we have the newest of their wave of changes, which most lenders were made aware of in January and already had started to build it into their pricing model."

Both Gerardi and Milner emphasized that the rate changes are normal and part of the FHFA's typical process for evaluating prices.

"Rates change all the time. The adjustments change often as well. So we're no stranger to these changes," Wilner said.

REALTORS DEFEND HOMEBUYERS OVER BIDEN'S ‘UNECCESSARY’ MORTGAGE RULE: ‘NOT THE TIME FOR FEE INCREASES’

However, she also pointed out that concerns from buyers have become "a little louder" since the changes began circulating in the media and challenged the idea that good creditors were paying the difference in new rates for poor-credit buyers.

"It's just different adjustments," Wilner said.

"It's nothing that you can really tangibly feel when a borrower comes to a lender and says, hey, you know, what's my rate going to be, what's my payment, we give the rate with everything built into it. It's not normally, hey, yesterday it was this, and today it's this kind of thing," she added. "I think the attention to it kind of makes people feel that way, but they're not seeing tremendous amounts of difference between it."

A recent change to the Federal Housing Finance Agency (FHFA) pricing adjustments has many buyers concerned about mortgage payments. Some have said the changes give better rates for buyers with low credit and have good credit buyers subsidizing those (AP Photo/Rich Pedroncelli / AP Images)

In an attempt to alleviate fears, FHFA Director Sandra Thompson said in a statement last month that the new fees will not "represent pure decreases for high-risk borrowers or pure increases for low-risk borrowers" and will instead be targeted at "products such as second homes and cash-out refinances."

"Many borrowers with high credit scores or large down payments will see their fees decrease or remain flat," Thompson explained.

The motivation behind it, according to Gerardi, may be to get first-time homebuyers into the market.

"We took some hits during the pandemic and now we want to make our new changes to kind of inspire first-time homebuyers, give them a little bit of benefit, even if they don't have the best credit," he said. "But in order to give to one side of the spectrum, they have to take from another."

Gerardi added that the pricing model for those purchasing second homes has also changed with the new FHFA rules. In the past second homes were priced like primary residences, but are now being priced "out closer to what an investment property would look like."

"There is a lot of risk to financing a second home investment property, especially with these inflated prices," he said. "So that's definitely a risk that shows you the intention behind it is where do we [FHFA] feel like the chips are going to fall in today's day and age? Who is going to really take that homeownership and basically hold on to it with all they've got? – The first-time buyer."

“A lot of people think that higher credit scores are now paying more for their mortgages than lower credit scores, and that’s actually not the case.” – Melinda Wilner, United Wholesale Mortgage COO

Given the tumultuous housing market with inventory shortages, high rates, and skyrocketing costs, the risk associated with second homes and investment properties has come under a new lens.

Market volatility has some experts like Gerardi concerned about these changes and the fear surrounding them could have a negative impact on an already weak housing market.

"So with these changes that are coming up, besides just discouraging people from coming out and looking to buy homes, they're already feeling like that they're behind the eight ball being a seller's market," he explained. "But now you might discourage sellers from wanting to list their homes because they're now concerned, well, what am I going to be able to afford on my next purchase?"

"The last thing that we want to do is discourage sellers from even listing their home because of the inventory issue that we're dealing with," he added. close video Biden’s mortgage redistribution rule adds ‘insult to injury’: Brian Lewis

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Wilner, however, said she does not believe the changes will "halt" the housing market as seasonality and numerous other factors come into play when buying a home.

"I don't see any of these LLPA changes as catastrophic or anything too significant that will impact a lot of people from buying homes," she said. "The bigger impact is really what are rates holistically going to do. These adjustments are not as significant as if rates came down into the fives and into the fours and into the threes again."

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"The hope is that there is some impact, especially on the lower credit and where there were decreases and maybe there is a group of people that now can buy the home based on changes that were made there," Wilner added.

As fears still remain for many homebuyers, the true impact of these rates is yet to be seen. Gerardi noted these changes could be reevaluated, and new adjustments could come within the year if the desired outcome is not met.

Wilner and Gerardi both stressed the importance of maintaining a high credit score when buying a home.

FOX Business' Michael Lee and Kristen Altus contributed to this report.

UK

‘We need help’: Workers say shoplifting is ‘out of control’ as brazen thefts explode

Published

3 hours ago

November 20, 2024

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'We need help': Workers say shoplifting is 'out of control' as brazen thefts explode

A woman casually walks into a convenience store and starts filling a bread crate with goods from one of the aisles.

A shop assistant tries to stop her, but she shrugs him off, undeterred. With the crate now full of items, she leaves without paying.

It is a scenario that is played out day in and day out across Britain, as retailers warn the surge in shoplifting is now “out of control”.

I’m sitting in the security office of a busy city centre shop and I’m watching as a schoolboy walks in and helps himself to a sandwich, stuffing it into his jacket.

Watching with me is shop worker Anton Mavroianu who positions himself by the main entrance waiting for the youngster to leave.

When the boy does leave, Anton demands the item back. Instead of being frozen with fear that he’s been caught, the boy laughs and walks off.

“All we can do is try to stop them,” Anton tells me. “But this is just another day for us.”

A few weeks earlier, when Anton tried to stop a shoplifter who had stolen from the store, the man pulled out a knife and tried to attack him.

This terrifying incident is an example of the very real threat posed to shop workers as they try to stem the tide of brazen thefts.

Shoplifting offences recorded by police in England and Wales have risen to the highest level in 20 years.

The British Retail Consortium (BRC) also reports that theft-related losses cost the retail sector millions each year, adding strain to an industry already grappling with post-pandemic recovery and economic uncertainty.

For small businesses, which lack the resources of larger chains, persistent theft can threaten their very survival.

Ricky Dougall owns a chain of convenience stores and says shoplifting cost his business around £100,000 last year.

“Shoplifting is a huge problem and it is what stops us from growing the business.

“People come in and help themselves like they own the place and when you call the police, most of the time, they don’t turn up.”

Mr Dougall says part of the problem is how this type of crime is classified.

Sentencing guidelines for thefts of under £200, so-called “low level shoplifting”, were relaxed in 2016. That is being blamed for the surge in cases.

An exclusive Sky News and Association of Convenience Stores survey shows that 80% of shopkeepers surveyed had an incident of retail crime in the past week.

The poll also found 94% of shopkeepers say that in their experience, shoplifting has got worse over the last year, with 83% not confident that the police will take action against the perpetrators of retail crime on their premises.

Paul Cheema from the Association of Convenience Stores says retailers are looking to Government to support them.

“I would say officials do not give a s*** about us retailers,” he tells me. “The losses are too big and I don’t think we can sustain that anymore.

“I would urge Keir Starmer to come and meet us and see up close the challenges that we are facing.”

Retailers have responded by investing heavily in security measures, from advanced surveillance systems to hiring more security staff.

But these investments come at a cost, often passed down to consumers through higher prices.

I get chatting to Matt Roberts, head of retail in the store I am in. He worries about shoplifting, but he worries about the staff more.

“I would imagine they dread coming to work because they’re always on tenterhooks wondering whether something is going to happen today, whether they are going to have to try and confront someone.

“It’s a horrible feeling. It’s out of control and we need help.”

The government has acknowledged the urgency of the issue. Home Secretary-led discussions with retail associations and law enforcement are underway to craft a comprehensive strategy.

In the King’s Speech, the government outlined details of a Crime and Policing Bill, which promised to “introduce stronger measures to tackle low level shoplifting”, as well as introducing a separate offence for assaulting a shop worker.

UK

Two-thirds of teens living with fear of violence, charity warns

Published

3 hours ago

November 20, 2024

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Two-thirds of teens living with fear of violence, charity warns

Children do not feel safe, a charity has warned, as a survey finds two-thirds of teens in England and Wales have a fear of violence.

The charity, which surveyed 10,000 children aged 13-17, found that 20% of teenagers have been victims of violence in the past 12 months.

“I think what shocked me most is how this is a problem that affects all of our children,” said Jon Yates, CEO of the Youth Endowment Fund.

“We found that two-thirds of all teenage children are afraid. And that fear is pretty real for a lot of them.”

He said it’s a fear so palpable that many teenage children are changing their patterns of behaviour, or have had it influence their daily decisions.

One third of teenage children – 33% – reported avoiding areas, whilst around 27% alter their travel routes or avoid public transport altogether to stay safe.

More worryingly, however, some say the fear of violence has led to mental health challenges, with 22% reporting difficulties sleeping, reduced appetite and concentrating in school.

Weapon carrying is also a concern for the charity, especially among vulnerable groups.

In England and Wales, 5% of all 13-17 year olds reported carrying a weapon in the past year, but that figure jumps to 21% for those suspended from school and 36% for children who have been excluded from school.

But Mr Yates said “shockingly” only 12% of children who repeatedly commit violence get any sort of support.

“That’s madness,” he said.

Jay*, 23, from Birmingham said depending on your environment, sometimes violence is hard to avoid.

“I’ve had friends be shot, I’ve got friends who have been stabbed, I had a friend die last month to be fair,” Jay told Sky News.

He said it is “damaging” because you never really get the opportunity to “heal”. He is now being supported by the charity Project Lifeline, but says before then it was difficult to find any hope.

“If you don’t have hope,” Jay added, “you can’t really get anywhere. It’s about finding that hope.”

Mark Rodney, CEO of Lifeline Project, mentors at-risk young children and said he has learned that “not only the perpetrator carries the knife, the victim sometimes carries the knife”.

“And not only the perpetrator does the killing,” he added. “The victim sometimes does the killing, because that’s where we’re at.”

He said far too many families ask themselves “is my child safe going to school or coming home from school?” and adds the government must “actually start addressing people’s concerns”.

The report also found that in 93% of cases where teenage children repeatedly harm others, adults intervene with punishments such as school discipline or police involvement.

However, only 12% of these children are offered support aimed at addressing the root causes of violence and preventing further harm.

Mr Yates said: “They go to school, they do something violent. They get excluded.”

He added: “We need to be much better at saying, ‘we’re not going to lose that child. We’re going to keep providing support to them. We’re going to keep providing a mentor’.

“Instead, we let them fall through the cracks”.

A government spokesperson said: “Halving knife crime in a decade is a clear mission this government has set out.

“It is vital to protect vulnerable young people who are too often the victims or perpetrators of this crime.”

*names have been changed

Environment

Corporate America is investing in record levels of solar and storage

Published

4 hours ago

November 20, 2024

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Corporate America is investing in record levels of solar and storage

Corporate America is investing in clean energy at record levels, with tech giants taking the top spots for users of solar.

Meta, Google, and Amazon are leading the charge in solar and battery storage adoption, according to the Solar Energy Industries Association’s (SEIA’s) latest “Solar Means Business” report.

Meta continues to hold the title of the top solar user in corporate America, with nearly 5.2 gigawatts (GW) of solar capacity installed. Meanwhile, Google leads the way in energy storage, boasting 936 megawatt-hours (MWh) of installed battery capacity. Through the first quarter of 2024, these companies have added the most solar capacity to their electricity portfolios, with major players like General Motors, Toyota, and US Steel also climbing the ranks.

The report reveals that US businesses have installed nearly 40 GW of solar capacity both onsite and offsite through Q1 2024, and corporate storage use now exceeds 1.8 gigawatt-hours (GWh). Even more growth is coming: Companies have over 3 GWh of battery storage under contract that will come online in the next five years.

“Some of the largest industrial and data operations in the world continue turning to solar and storage as a reliable, low-cost way to power their operations,” said SEIA president and CEO Abigail Ross Hopper.

Technology companies are at the forefront of this shift as data center growth drives skyrocketing electricity demand. Amazon, for example, leads the US with 13.6 GW of solar procurements under contract, while Meta and Google each have nearly 6 GW under contract – pipelines over 10 times larger than the next company in the rankings.

Target remains the US’s leading onsite corporate solar user for the ninth year in a row, with Prologis, Walmart, Amazon, and Blackstone also making the top five. For the first time, the “Solar Means Business” report is also tracking corporate battery energy storage, with Google, Apple, Meta, Target, Walmart, Home Depot, and Kohl’s among the top 10 companies using storage to meet more of their energy needs in real-time.

Looking ahead, both offsite and onsite energy storage are expected to play a bigger role in corporate renewable energy strategies. Medical companies like Kaiser Permanente are already using batteries to power microgrids, making their facilities more resilient to outages.

Carolyn Campbell, Meta’s head of clean and renewable energy, East, highlighted the importance of expanding solar capacity to match the company’s global operations with 100% clean energy: “We’re thrilled to rank number one for corporate solar procurement in SEIA’s report this year, and we continue to find ways to grow the grid to benefit everyone.”

Target’s vice president of property management, Erin Tyler, said of Target’s 20-year-old solar program, “Through our commitment to solar, we’re well on our way to achieving our corporate goal of sourcing 100% of electricity from renewable sources by 2030.”

The “Solar Means Business” report also looks at the policies driving corporate America’s adoption of solar. Many companies are taking advantage of the Inflation Reduction Act’s long-term clean energy incentives. To further accelerate their renewable energy investments, businesses are calling for improvements in interconnection processes, new community solar legislation, and simpler tax credit monetization.

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