Stoneworker
Footballguy
Lol. Ok. You've had no problem making multiple digs at me already so this really carries a lot of weight.
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Mortgage Rates (4 Viewers)
- Thread starter MechEng
- Start date
Chadstroma
Footballguy
I never intended to make a dig. Where do you feel I did so I can explain and/or apologize.
Stoneworker
Footballguy
Dude. It's fine. Appreciate the gesture but no hard feelings and certainly no need for anyone to apologize let's just move on and talk rates from here forward.
Chadstroma
Footballguy
That isn't who I am. I am not perfect by any means and I make plenty of mistakes. I do my best to own up to those mistakes. I never want to be a jerk to anyone but am I occasionally a jerk? Yes. That is true of everyone to differing degrees. But it bothers me if I am being a jerk.... and even more so if I did not intend to be. It bothered me enough to go back through the last few pages, up until your post which basically called me a racketeer. I went through my responses and I didn't see anything directed at you other than mocking the comment that I am up to nefarious activities. I did take digs at the article you posted when you called me a racketeer but nothing directed at you personally. Did I miss something?
Chadstroma
Footballguy
Mortgage rates stabilize after Fed meeting.
(HousingWire by Sarah Marx). Mortgage rates stabilized somewhat on Thursday as the Federal Reserve kept rates unchanged on Wednesday, sending Treasury yields lower.
(HousingWire by Sarah Marx). Mortgage rates stabilized somewhat on Thursday as the Federal Reserve kept rates unchanged on Wednesday, sending Treasury yields lower.
Redwes25
Footballguy
10 year yield moving really lower today as well (price though is going up given how market works). Yield down about 12 bps which is a big move
Chadstroma
Footballguy
Some numbers for unemployment are showing signs of economic slow down.
Mortgage pricing came out better this morning though I did have some reprices to the higher earlier today.
Chadstroma
Footballguy
Friday saw equities rally and bond yields tumble following the weaker-than-expected payrolls report.
(Fannie Mae Morning Commentary by Richard Shin). Nonfarm payroll growth totaled 150,000 in October, lower than the 180,000 estimate, with the recent auto strikes removing ~33,000 from the payroll number. The unemployment rate notably rose to 3.9%, while the labor force participation rate fell to 62.7% from 62.8% the month prior. Only three sectors-healthcare, government, and hospitality-accounted for all the job gains, meaning there was little net job growth for the rest of the economy, a contrast to the broad-based hiring earlier this year. The cooling employment figures, coupled with the dovish rhetoric from the Fed last week, has reinforced optimism that the tightening cycle is over.
These interest rate cuts are fully priced in for June and some earlier odds have been set for March. At 5:00pm on Friday, all three major indices closed in the green. The S&P500 rose 40.56 points to 4,358.34, the Nasdaq added 179.95 points to 15,099.49, and the Dow gained 222.24 points to 34,061.32. Treasury yields were lower on the day. The 10yr fell to 4.57% and the 2yr to 4.84%.
Mortgages performed well again on Friday. The entire coupon stack tightened vs. treasury hedges by a range of ~6-10 ticks. By day end, the 30yr UMBS 6.5s was +15/32nds (100-27) and 15yr UMBS 5.5s was +15.5/32nds (99-05+). The Fannie Mae 30-year current-coupon spread tightened 4bps to +169 vs. the 5/10-year blend. On the supply side, origination volume was lower at $1.7bln, slightly below the 5-day average of $1.9bln. There are no events on the economic agenda today. This week, focus will be on jobless claims and the University of Michigan sentiment survey. To start the morning, treasury yields are pointing higher. The 10yr is at 4.59%.
(Fannie Mae Morning Commentary by Richard Shin). Nonfarm payroll growth totaled 150,000 in October, lower than the 180,000 estimate, with the recent auto strikes removing ~33,000 from the payroll number. The unemployment rate notably rose to 3.9%, while the labor force participation rate fell to 62.7% from 62.8% the month prior. Only three sectors-healthcare, government, and hospitality-accounted for all the job gains, meaning there was little net job growth for the rest of the economy, a contrast to the broad-based hiring earlier this year. The cooling employment figures, coupled with the dovish rhetoric from the Fed last week, has reinforced optimism that the tightening cycle is over.
These interest rate cuts are fully priced in for June and some earlier odds have been set for March. At 5:00pm on Friday, all three major indices closed in the green. The S&P500 rose 40.56 points to 4,358.34, the Nasdaq added 179.95 points to 15,099.49, and the Dow gained 222.24 points to 34,061.32. Treasury yields were lower on the day. The 10yr fell to 4.57% and the 2yr to 4.84%.
Mortgages performed well again on Friday. The entire coupon stack tightened vs. treasury hedges by a range of ~6-10 ticks. By day end, the 30yr UMBS 6.5s was +15/32nds (100-27) and 15yr UMBS 5.5s was +15.5/32nds (99-05+). The Fannie Mae 30-year current-coupon spread tightened 4bps to +169 vs. the 5/10-year blend. On the supply side, origination volume was lower at $1.7bln, slightly below the 5-day average of $1.9bln. There are no events on the economic agenda today. This week, focus will be on jobless claims and the University of Michigan sentiment survey. To start the morning, treasury yields are pointing higher. The 10yr is at 4.59%.
My wife and I closed on a house in July. A couple days ago, $600 randomly appeared in my savings account (savings account is with same financial institution that we have our mortgage). I didn't recognize the transaction and inquired about it online through their site. It was weird because the transaction description literally just read "deposit". I received a response today and it says:
"Our team has completed our research and this is what we found. During closing, the failed the TILA finance charge test and the $600.00 was refunded to your account."
Google says TILA stands for Truth in Lending Act. So what exactly does this mean? Is the $600.00 from a calculation or is this some sort of fine/penalty on the financial institution? Anyone see this before?
"Our team has completed our research and this is what we found. During closing, the failed the TILA finance charge test and the $600.00 was refunded to your account."
Google says TILA stands for Truth in Lending Act. So what exactly does this mean? Is the $600.00 from a calculation or is this some sort of fine/penalty on the financial institution? Anyone see this before?
Chadstroma
Footballguy
When you have a locked Loan Estimate, many items on that have a no tolerance or various other designations depending on which items. If they disclosed $1,000 in the locked Loan Estimate on a no tolerance item, for example, and then later realized that they were wrong and it was $1,600 by law they can not charge you for the $1,600 and they have to 'eat' the $600 charge. What most likely happened in your case was that they had something like that, charged and collected it anyways, then the file went to audit and the auditor flagged it and they had to issue the difference on the item.My wife and I closed on a house in July. A couple days ago, $600 randomly appeared in my savings account (savings account is with same financial institution that we have our mortgage). I didn't recognize the transaction and inquired about it online through their site. It was weird because the transaction description literally just read "deposit". I received a response today and it says:
"Our team has completed our research and this is what we found. During closing, the failed the TILA finance charge test and the $600.00 was refunded to your account."
Google says TILA stands for Truth in Lending Act. So what exactly does this mean? Is the $600.00 from a calculation or is this some sort of fine/penalty on the financial institution? Anyone see this before?
This is why I always ask people if they have a locked Loan Estimate versus a 'fee worksheet' or something else. Only a Loan Estimate will actually provide protection for you. A fee worksheet is meaningless and has no authority.
Chadstroma
Footballguy
Is this the beginning of the end of the housing market recession?
(HousingWire by Mike Simonsen). The industry is in a deep housing market recession this year. If we get lucky with mortgage rates, we might just be at the bottom. While home prices in the U.S. held up in 2023, sales volume in the housing market cratered. Consumers care about home prices and mortgage rates; the industry cares about transaction volume.
The industry is in a deep housing recession this year. If we get lucky with mortgage rates, though, we might just be at the bottom of the housing market recession right now. Or does a continued lack of affordable housing mean are we in for a continued decline in the number of people buying homes?
Inventory continues to build
There are 567,000 single-family homes on the market. As expected, that's up 0.7% from last week. Housing inventory. growing in November is rare due to seasonality, but it looks like we're roughly at the top.
Remember the Altos rule: If mortgage rates go up, inventory will build in 2024. If rates fall, inventory will also come down again.
Additionally, there are 62,000 new listings this week, with 9,000 of those already under contract. We have the same number of sellers now as last year, which tells us that further declines in home sales because of supply constraints are unlikely.
Transaction volume no longer decreasing YoY
Pending contracts saw fewer sales compared to last year until October. Now the trajectory is the same. Plus, 39.2% of the homes on the housing market have had a price cut. That means the market looks a little more stabilized than it did in the fourth quarter of 2022. We know how sensitive consumers are to changes in mortgage rates. When rates spike, mortgage demand is impacted.
Home prices still hold strong
Home prices continue to be 2% above last year and look to end the year at that level. The median price of single-family homes is now $430,000.
(HousingWire by Mike Simonsen). The industry is in a deep housing market recession this year. If we get lucky with mortgage rates, we might just be at the bottom. While home prices in the U.S. held up in 2023, sales volume in the housing market cratered. Consumers care about home prices and mortgage rates; the industry cares about transaction volume.
The industry is in a deep housing recession this year. If we get lucky with mortgage rates, though, we might just be at the bottom of the housing market recession right now. Or does a continued lack of affordable housing mean are we in for a continued decline in the number of people buying homes?
Inventory continues to build
There are 567,000 single-family homes on the market. As expected, that's up 0.7% from last week. Housing inventory. growing in November is rare due to seasonality, but it looks like we're roughly at the top.
Remember the Altos rule: If mortgage rates go up, inventory will build in 2024. If rates fall, inventory will also come down again.
Additionally, there are 62,000 new listings this week, with 9,000 of those already under contract. We have the same number of sellers now as last year, which tells us that further declines in home sales because of supply constraints are unlikely.
Transaction volume no longer decreasing YoY
Pending contracts saw fewer sales compared to last year until October. Now the trajectory is the same. Plus, 39.2% of the homes on the housing market have had a price cut. That means the market looks a little more stabilized than it did in the fourth quarter of 2022. We know how sensitive consumers are to changes in mortgage rates. When rates spike, mortgage demand is impacted.
Home prices still hold strong
Home prices continue to be 2% above last year and look to end the year at that level. The median price of single-family homes is now $430,000.
There’s a recession?
Stoneworker
Footballguy
I always found this to be an interesting dynamic when it comes to selling a house. Not exactly 100% aligned
Chadstroma
Footballguy
It is pretty simple....
The consumer cares about themself. How much volume is being done in RE around them doesn't impact them (or at least they dont think it does or see how it does). The industry are professionals making a living. In order to make a living, you need volume. If there is no volume then you are not making a living. Plus, a whole lot of other people aren't making livings. It is pretty much the same across all industry. The consumer cares about their deal and the industry cares about making a living.
Chadstroma
Footballguy
Buyers are drying up.... demand is going in wait for rates to come down mode. Once those rates come down, all these buyers are going to be jumping in.
ghostguy123
Footballguy
I think he knows this, was just stating the fact.
Doesnt this pretty much say that the realtors don't have the best interests of the customers in mind? Something being argued about in the other thread?
Johnny Rock
Footballguy
That’s why Sellers need to remember they’re in charge. A $10,000 decrease in price for the Realtor is ~$500, but it’s ~$9,500 decrease for the Seller.
Stoneworker
Footballguy
Yep. And if the house sits on the market an extra two weeks to get that $10K, it's time well spent from a patient Seller's perspective. Not so much for the realtor.
FreeBaGeL
Footballguy
I work in real estate, and it's always been interesting to me that real estate agents are supposed to be fiduciaries, but aren't really held to that standard at all.
There are lots of great people in real estate, but it's a relatively easy field to break into certain aspects of it, and it's essentially a salesperson job (at least on the real estate agent side of things).
I've worked with some great realtors that I would totally trust to look out for me when getting into a deal. Likewise I've worked with, interviewed, or even know a LOT that I know are focused more on closing the deal than looking out for client interests, and who I know would ignore or belittle an issue with the property that would compromise the deal.
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Way back in 2006 we sold our first house and we interviewed a few agents that were recommended. One lady told us about how she was a top agent and she gave us a price she wanted to list at which was $50-60k less than we got for it (we went with another set of agents who agreed to 5%). At this point the market in our area hadn’t turned bad yet. We even dropped out price a decent chunk and still got way $50-60k more. I didn’t like the First lady at all. She had a price in her mind that she could get immediately and be done with a nice chunk of cash. The extra couple grand to her didn’t matter as much as the quick sale. I got the car salesman vibe from her.
Chadstroma
Footballguy
Mortgage Broker Quit Her Job To Become An Escort, Claims The Career Change Has Made Her A Better Mom
A single mom in her 50s was tired of all the hours that went into her six-figure corporate job and decided that she needed a career change. So in an attempt to achieve a better wor
www.outkick.com
In unrelated news.... how much do you think a guy in his 40's could make in this kind of gig?
FreeBaGeL
Footballguy
Mortgage Broker Quit Her Job To Become An Escort, Claims The Career Change Has Made Her A Better Mom
A single mom in her 50s was tired of all the hours that went into her six-figure corporate job and decided that she needed a career change. So in an attempt to achieve a better wor
In unrelated news.... how much do you think a guy in his 40's could make in this kind of gig?
Dozens of dollars.
DA RAIDERS
Footballguy
Start an only fanMortgage Broker Quit Her Job To Become An Escort, Claims The Career Change Has Made Her A Better Mom
A single mom in her 50s was tired of all the hours that went into her six-figure corporate job and decided that she needed a career change. So in an attempt to achieve a better wor
In unrelated news.... how much do you think a guy in his 40's could make in this kind of gig?
Runkle
Footballguy
RE agents seem like they're just as corrupt as lawyers, just without the degree.
massraider
Footballguy
It's commission based, and your clients have often never done this before. It's only natural
dkp993
Footballguy
I’ve been lucky and it’s not been my experience. My realtor, whom I purchased my last 3 home with, often had to slow us down. She truly wants us to find the right home for us and she works hard to do that. It’s why we continue to use her. She’s earned our trust.
TripItUp
Footballguy
Listening to the All-in podcast discuss macroeconomics, the consensus does seem to be that inflation is tamed and on its way down and that will coincide with rates dropping which is generally good for residential real estate. Commercial is very different situation but this thread isn't for that.
Chadstroma
Footballguy
The reality is that there are good realtors out there. Absolutely. There are a also a whole lot of bad ones. Absolutely.
I had an intro call with a realtor this week. He told me he was out on his way for vacation until February. He said that in his view, now is not a good time to buy so he has told his clients that and he won't represent buyers right now so he is going to take the time and go to.... I forget which country.
I told him that I very much respected and loved how he isn't pushing something he didn't believe was good for his clients. I then proceeded to tell him that I thought he was wrong and we had a conversation about it (fully expecting the call to end up badly because of that). He must have been impressed because he told me to call him in Feb so we could talk more.
Now, I could see someone saying "well, if he is wrong and you are right, doesn't that make him a bad realtor?" I don't think so. RE isn't a science. You can use data to make better decisions but when it all comes down to it, no one knows what will happen tomorrow but this individual clearly has his clients best interests at heart and won't do the business even though he had clients who want to buy now. Being wrong is one thing but giving professional advice with the best interest of your clients is another. I know many other realtors that are rooted in doing what is best for their clients. Those are the realtors I seek out to work with and it isn't coincidence that these realtors tend to be the better producing realtors. The one's that tell their clients "no" when it would benefit them are the ones that can the trust and loyalty as shown above. Those are the ones that gain referrals from friends and family of their past clients and have return clients. Those are the realtors that last and are productive. Does high production always mean a good realtor like that? No. Not at all. But longevity, and not just being licensed for a long time not selling or buying homes with clients, but active longevity is going to come from genuine advocacy or being really damn good at convincing people you are advocating for them when you are not.
Chadstroma
Footballguy
Commercial is headed into very, very, very rough waters.
Rates will improve, it is only really questions of how fast and how far.
Stoneworker
Footballguy
I'm curious what is driving your continual firm stance on this.
Short-term rates will only come down if/when there is a recession and the Fed needs to cut in order to stimulate economy and stem unemployment. Is rising unemployment good for the housing industry and buyers (honest question)?
Long-term rates (10-30yr) are currently being driven by the U.S. debt/fiscal situation and Treasury auctions. The 10-yr only recently rallied due to Yellen scaling back auction size. Do you see the U.S. fiscal situation improving any time in the near future to drive those down?
Waning demand for long-term Treasurys rattled the stock and bond markets in recent months before the Treasury Department offered a dose of relief with less-aggressive borrowing plans than many expected. Today's auction could revive worries that buyers of U.S. debt will now require higher interest rates to step up. WSJ - 11/9/23
Chadstroma
Footballguy
I am confused... is your position that rates will be stable at current levels indefinitely?
Stoneworker
Footballguy
My position is I don't (and the bond market doesn't) see what the catalyst is to bring rates down, like you apparently do.
Chadstroma
Footballguy
And your position is this will hold indefinitely? That rates will never fall below their current range?
Stoneworker
Footballguy
You're the one who said rates will improve, which is basically as unsophisticated as "what goes up must come down." I thought that when you made your statement that you had some market insight or macroeconomic trends maybe from being in the industry that supported that position.
Interest rates aren't gravity. They need a driver to change direction. So I was looking to understand what that was. My bad.
Carry on. No need to discuss further.
FTR, the 10-yr is currently 4.65%. That last time the U.S. had a bout with inflation in the mid 60's through early 80's the 10-yr steadily rose above 4.0% for 20 years. And then didn't sustainably decline below 4.65% for a 50-year period. So yes, there is precedent that 10-yr rates may not fall below current levels for a long, long time.
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According to this, the 1974-1981 period had 5 years where 55 of 60 months had 9% or more inflation. We hit 1 month of 9% in 2022. The inflation we’ve seen for more than a year is dwarfed by the period you mentioned. Not sure they are close to comparable enough to make your point.
CletiusMaximus
Footballguy
I would think commercial RE has some relationship to residential on some level, even if its remote. I don't doubt they are substantially de-coupled but it seems there is likely some overlap due to office conversions and other factors.
Stoneworker
Footballguy
There were three full mult-year cycles of inflation peaking and then receding between 1963-1981 before Volcker finally broke its back. Each peak higher than the previous one.
Cherry-picking the very last 5-year period in its final peak to make a point is not very useful.
Huh? From the end of 1973 to 1982 was the peak inflation cycle of your period. Nothing else in your period came close. To say it receded is not really accurate. It was in between 4-9% in 1976-1978 which were the 3 years I said weren’t 9%+. The first few months of 2021 and the last 5 months of 2023 are less than any month from early 1973-late 1982, almost a decade of inflation as high or higher than the mid 2021-mid 2023. So again, even though you love to be the man, it’s not comparable in length so saying rates may come down in the near future isn’t some crazy dream. Also, I do think there could be a recession soon with all the delinquencies and east money from COVID going away.
I’m taking the Browns to the Super Bowl while replying but with all those billion dollar deals you do, I’m surprised how quickly you respond.
Stoneworker
Footballguy
Well, I did say that recession was a scenario where rates would come down...so have no clue where you're going with all this. But I do appreciate the personal attacks.
Stoneworker
Footballguy
And by the way, the Federal Reserve itself calls the period 1965-1982 The Great Inflation. Not 1974-1981.
Federal Reserve History - The Great Inflation
Federal Reserve History - The Great Inflation
Chadstroma
Footballguy
I would agree, there is no reason to discuss further because you have no real interest in a real discussion.
My original statement was pretty much the broadest open ended statement regarding interest rates that you could really make that no one without some sort of agenda could not agree with. But you did. I further pressed asking you questions which you don't answer and while doing so seemingly get upset about it.
What is the point in me engaging with you? You have made clear, numerous times, in both this thread and the other NAR lawsuit- that you see mortgage lenders and realtors as hucksters and scam artists complete with direct personal attacks and passive aggressive slights. It isn't a fun discussion, and it isn't a lucrative or productive one.
Stoneworker
Footballguy
You've stated numerous times that you believe rates will come down. You have also said when recommending to others to buy a house that you "bet" they would come down within a two-year timeframe.
I merely asked what was behind those statements. Saying something akin to "because they always do" is not real insightful, but if that's your answer then it's perfectly okay.
higgins
Footballguy
@Chadstroma thanks for sharing your opinions — I find them useful. 
Btw: it’s ok to use the ignore function — I’m about to update my list now.
Btw: it’s ok to use the ignore function — I’m about to update my list now.
Chadstroma
Footballguy
I really dislike the idea of an ignore function. I have never used it before. I am capable of ignoring without the aid of technology.@Chadstroma thanks for sharing your opinions — I find them useful.
Btw: it’s ok to use the ignore function — I’m about to update my list now.
When not angry and belittling others, there has been some value in @Stoneworker posts. Clearly he thinks he is smarter than me and I have learned a long time ago that there is nothing to be gained in any discussion if the other side is confident that they are superior to you.
And thank you, I appreciate the positive feedback!
DA RAIDERS
Footballguy
had a realtor friend send this out today: if you're waiting for interest rates to drop before you buy, the last time interest rates were this high, it took 23 years for a significant reduction in rates 
BobbyLayne
Footballguy
Thousands of veterans face foreclosure and it's not their fault. The VA could help
Becky Queen remembers opening the letter with the foreclosure notice.
"My heart dropped," she said, "and my hands were shaking."
Queen lives on a small farm in rural Oklahoma with her husband, Ray, and their two young kids. Ray is a U.S. Army veteran who was wounded in Iraq. Since the 1940s, the federal government has helped veterans like him buy homes through its VA loan program, run by the Department of Veterans Affairs.
But now the VA has put this family on the brink of losing their house.
"I didn't do anything wrong," says Ray Queen. "The only thing I did was trust a company that I'm supposed to trust with my mortgage."
Like millions of other Americans, the Queens took advantage of what's called a COVID mortgage forbearance, which allowed homeowners to skip mortgage payments. It was set up by Congress after the pandemic hit for people who lost income.
But an NPR investigation has found that thousands of veterans who took a forbearance are now at risk of losing their homes through no fault of their own. And while the VA is working on a way to fix the problem, for many it could be too late.
For the Queens, this all started in September of 2021, when Becky's mother died of COVID-19. She had to take an extended leave from work and lost her job.
So last year, with their savings dwindling, the couple says they called the company that manages their mortgage, Mr. Cooper, and were told they could skip six months of payments. And once they got back on their feet and could start paying again, the couple says they were told, they wouldn't owe the missed payments in a big lump sum.
"I very specifically asked 'how does this work?'" says Becky Queen. "They said we're taking all of your payments, we're bundling them, and we're putting them at the end."
That is, the missed payments would be moved to the back end of their loan term so they could just start making their normal mortgage payment again.
But that's not how it worked out.
In October 2022, the Department of Veterans Affairs ended the so-called Partial Claim Payment program, or PCP, that enabled homeowners to do that. This happened even though the mortgage industry, housing advocates and veterans groups all warned the VA not to end the program, saying thousands of homeowners needed to catch up on missed payments. Interest rates had risen so much that many couldn't afford to refinance or get back on track any other way.
Ray Queen says nobody told him about any of this.
"How does that happen?" Queen asked. "This is supposed to be a program that you all have to help people in times of crisis, so you don't take their house from them."
The Queens say they tried to come off their forbearance in February of this year and resume paying their mortgage. They were both working again. But they ran into delays with the mortgage company.
Then, in September, the couple says they were told they needed to come up with more than $22,000, which they don't have, or either sell their house or get foreclosed on.
Their mortgage servicing company, Mr. Cooper, said in a statement it "explored every possible avenue to work through a solution for this customer." But it said the VA needs better loss-mitigation options and referred NPR to a letterfrom advocates, industry and veteran groups urging the VA to restart the PCP program.
"The homeowners entered into COVID forbearances, they were made certain promises, and there were certain representations that were made," says Kelly. "And the VA essentially pulled the rug out from under everybody."
For some homeowners, ending the program may not mean foreclosure, but it still means a financial hardship.
"Many of these people have 2 or 3% interest rate loans," Kelly says. With the PCP program they could keep that interest rate. But now, she says, the only way they'll be able to save their home is to enter into a loan modification where the interest rate will be around today's market rate of 7.5%.
"For most people, their payments will increase by $600 or $700 a month, because the VA has decided to end the partial claim program."
Many homeowners can't afford such a huge increase in their monthly payment.
According to the data firm ICE Mortgage Technology, 6,000 homeowners with VA loans who had COVID forbearances are currently in the foreclosure process. And 34,000 more are delinquent.
Kelly says most other homeowners in America — people with FHA loans, for instance, or loans backed by Fannie Mae and Freddie Mac — still have ways to avoid foreclosure by moving missed payments to the back of the loan term.
But homeowners with VA loans don't, because the VA ended that program. So veterans are being treated worse than most other homeowners, Kelly said.
"Service members are in a position where they're going to lose their home," she says. "And for most people, that's everything they work for — and all their wealth is in their homes."
"We had a short-term authority for that specific program during COVID," says John Bell, executive director of the Veterans Benefits Administration's Loan Guaranty Service. "It wasn't part of our normal authority."
Some in the industry think the VA did, in fact, have the authority to extend the program. But either way, it ended it.
Now, though, the VA is taking the situation seriously.
NPR has learned that the VA is working on a new program to replace the old one. It will work in a different way but to similar effect, to save people from foreclosure. Bell says it's going to take four to five months to get it up and running.
That's too long for many of those 6,000 VA homeowners already in the foreclosure process. Not to mention the many more who are delinquent.
Already, data shows that more VA homeowners have been heading into foreclosure since the VA ended its PCP program. The same is not true for FHA loans or loans backed by Fannie Mae or Freddie Mac.
"There should be a pause on foreclosures," says Steve Sharpe, a senior attorney at the National Consumer Law Center. "Veterans should really be able to have an ability to access this program when it comes online because it's been so long since they've had something that will truly work.
Sharpe says the VA could also restart the PCP program that it shut down. "They have the authority to do both," he says.
Pausing foreclosures sounds like a good idea to veteran Ray Queen in Oklahoma.
"Let us keep paying towards our regular mortgage between now and then," he says. "Then once the VA has that fixed we can come back and address the situation. That seems like the adult, mature thing to do, not put a family through hell."
NPR repeated Ray Queen's plea to John Bell at the VA directly. Bell said the VA is "exploring all options at this point in time."
"We owe it to our veterans to make sure that we're giving them every opportunity to be able to stay in the home," Bell said.
Ray and Becky Queen are hoping the VA does let people keep their homes until the new program can offer them a way to get current on their mortgages. Because if the firetruck shows up after the house has burned down, it's not going to do much good for the thousands of veterans and service members who need help now.
"My heart dropped," she said, "and my hands were shaking."
Queen lives on a small farm in rural Oklahoma with her husband, Ray, and their two young kids. Ray is a U.S. Army veteran who was wounded in Iraq. Since the 1940s, the federal government has helped veterans like him buy homes through its VA loan program, run by the Department of Veterans Affairs.
But now the VA has put this family on the brink of losing their house.
"I didn't do anything wrong," says Ray Queen. "The only thing I did was trust a company that I'm supposed to trust with my mortgage."
Like millions of other Americans, the Queens took advantage of what's called a COVID mortgage forbearance, which allowed homeowners to skip mortgage payments. It was set up by Congress after the pandemic hit for people who lost income.
But an NPR investigation has found that thousands of veterans who took a forbearance are now at risk of losing their homes through no fault of their own. And while the VA is working on a way to fix the problem, for many it could be too late.
For the Queens, this all started in September of 2021, when Becky's mother died of COVID-19. She had to take an extended leave from work and lost her job.
So last year, with their savings dwindling, the couple says they called the company that manages their mortgage, Mr. Cooper, and were told they could skip six months of payments. And once they got back on their feet and could start paying again, the couple says they were told, they wouldn't owe the missed payments in a big lump sum.
"I very specifically asked 'how does this work?'" says Becky Queen. "They said we're taking all of your payments, we're bundling them, and we're putting them at the end."
That is, the missed payments would be moved to the back end of their loan term so they could just start making their normal mortgage payment again.
But that's not how it worked out.
In October 2022, the Department of Veterans Affairs ended the so-called Partial Claim Payment program, or PCP, that enabled homeowners to do that. This happened even though the mortgage industry, housing advocates and veterans groups all warned the VA not to end the program, saying thousands of homeowners needed to catch up on missed payments. Interest rates had risen so much that many couldn't afford to refinance or get back on track any other way.
Ray Queen says nobody told him about any of this.
"How does that happen?" Queen asked. "This is supposed to be a program that you all have to help people in times of crisis, so you don't take their house from them."
The Queens say they tried to come off their forbearance in February of this year and resume paying their mortgage. They were both working again. But they ran into delays with the mortgage company.
Then, in September, the couple says they were told they needed to come up with more than $22,000, which they don't have, or either sell their house or get foreclosed on.
Their mortgage servicing company, Mr. Cooper, said in a statement it "explored every possible avenue to work through a solution for this customer." But it said the VA needs better loss-mitigation options and referred NPR to a letterfrom advocates, industry and veteran groups urging the VA to restart the PCP program.
The VA "has really let people down"
"The Department of Veterans Affairs has really let people down," says Kristi Kelly, a consumer lawyer in Virginia who says she is hearing from a lot of other veterans in the same situation as Ray and Betsy Queen."The homeowners entered into COVID forbearances, they were made certain promises, and there were certain representations that were made," says Kelly. "And the VA essentially pulled the rug out from under everybody."
For some homeowners, ending the program may not mean foreclosure, but it still means a financial hardship.
"Many of these people have 2 or 3% interest rate loans," Kelly says. With the PCP program they could keep that interest rate. But now, she says, the only way they'll be able to save their home is to enter into a loan modification where the interest rate will be around today's market rate of 7.5%.
"For most people, their payments will increase by $600 or $700 a month, because the VA has decided to end the partial claim program."
Many homeowners can't afford such a huge increase in their monthly payment.
According to the data firm ICE Mortgage Technology, 6,000 homeowners with VA loans who had COVID forbearances are currently in the foreclosure process. And 34,000 more are delinquent.
Kelly says most other homeowners in America — people with FHA loans, for instance, or loans backed by Fannie Mae and Freddie Mac — still have ways to avoid foreclosure by moving missed payments to the back of the loan term.
But homeowners with VA loans don't, because the VA ended that program. So veterans are being treated worse than most other homeowners, Kelly said.
"Service members are in a position where they're going to lose their home," she says. "And for most people, that's everything they work for — and all their wealth is in their homes."
VA has a plan to help, but it could be too late
The Department of Veterans Affairs says it had no choice but to end the program."We had a short-term authority for that specific program during COVID," says John Bell, executive director of the Veterans Benefits Administration's Loan Guaranty Service. "It wasn't part of our normal authority."
Some in the industry think the VA did, in fact, have the authority to extend the program. But either way, it ended it.
Now, though, the VA is taking the situation seriously.
NPR has learned that the VA is working on a new program to replace the old one. It will work in a different way but to similar effect, to save people from foreclosure. Bell says it's going to take four to five months to get it up and running.
That's too long for many of those 6,000 VA homeowners already in the foreclosure process. Not to mention the many more who are delinquent.
Already, data shows that more VA homeowners have been heading into foreclosure since the VA ended its PCP program. The same is not true for FHA loans or loans backed by Fannie Mae or Freddie Mac.
Will the firetruck arrive too late?
With so many homeowners at risk, there's growing pressure on the VA to stop foreclosing on veterans until it gets its fix up and running."There should be a pause on foreclosures," says Steve Sharpe, a senior attorney at the National Consumer Law Center. "Veterans should really be able to have an ability to access this program when it comes online because it's been so long since they've had something that will truly work.
Sharpe says the VA could also restart the PCP program that it shut down. "They have the authority to do both," he says.
Pausing foreclosures sounds like a good idea to veteran Ray Queen in Oklahoma.
"Let us keep paying towards our regular mortgage between now and then," he says. "Then once the VA has that fixed we can come back and address the situation. That seems like the adult, mature thing to do, not put a family through hell."
NPR repeated Ray Queen's plea to John Bell at the VA directly. Bell said the VA is "exploring all options at this point in time."
"We owe it to our veterans to make sure that we're giving them every opportunity to be able to stay in the home," Bell said.
Ray and Becky Queen are hoping the VA does let people keep their homes until the new program can offer them a way to get current on their mortgages. Because if the firetruck shows up after the house has burned down, it's not going to do much good for the thousands of veterans and service members who need help now.
massraider
Footballguy
People think 3% is what's fair.had a realtor friend send this out today: if you're waiting for interest rates to drop before you buy, the last time interest rates were this high, it took 23 years for a significant reduction in rates
That's not what they gonna get.
ghostguy123
Footballguy
Has a realtor ever said it's a bad time to buy?had a realtor friend send this out today: if you're waiting for interest rates to drop before you buy, the last time interest rates were this high, it took 23 years for a significant reduction in rates
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