Daily Archives: July 20, 2015

Interest-only mortgages: They’re baaack

They were the villains of the housing crash. Federal regulators called them toxic. Now interest-only mortgages are making a comeback, but these are not the loans of yesteryear or yester-housing booms.

“I think it’s opening the door back to responsible lending, giving people choices,” said Mat Ishbia, president and CEO of Michigan-based United Wholesale Mortgage, the second-largest lender through brokers in the nation.

The company announced Monday it is now offering interest-only loans through brokers, with significant safeguards. Borrowers must put 20 percent down, ensuring that they have the “skin in the game” that so many did not during the heady days of the housing boom. They must have at least a 720 FICO credit score, which is well above average, and they must qualify on what the payments will be once they’re adjusted higher, not at the starter rate.

Read on.

Congress is screwing up your taxes yet again

And…they’re back. The temporary tax breaks known as “tax extenders” that caused so much tension on Capitol Hill in late 2014 are returning to the legislative fore tomorrow, as the Senate Finance Committee prepares to mark up a bipartisan effort to reinstate them for two years.

A quick refresher: The tax extenders are an alphabet soup of special tax provisions, mostly targeted at business, that most members of Congress seem to believe ought to be made permanent, but which never are. These include things like mortgage insurance premium deductions on individual tax returns, businesses tax breaks for research and experimentation costs, and tax credits for energy efficient construction.

They also contain a number of highly targeted tax breaks that some find objectionable. There’s a special allowance for Puerto Rican rum, a cut tailored specifically to the owners of NASCAR tracks, and possibly the most controversial, a cut for the mostly wealthy owners of racehorses.

Read on.

Q&A on success of Dodd-Frank with its creators

The Wall Street Journal sat down with the creators of Dodd-Frank for the five-year anniversary of the regulation.

Even after five years, there is still much debate surrounding the law and just how impactful or helpful it has been for housing.

But despite the talk from the industry, the legislation’s sponsors, former Sen. Christopher Dodd, D-Conn., and former U.S. Rep. Barney Frank, D-Mass., each view the regulation and its effects as pretty positive.

One major question the WSJ asked was, “How effective do you think the law has been in making the financial system safer?”

Frank’s response:

Considerably. … Go back to the Republicans’ fulmination that we were going to cripple the American economy, that we were going to wound our financial institutions. None of those are true. The American economy has been better than any other economy. The financial institutions are doing fine.

Check out the article for answers to questions like, “Do you feel confident that you can declare ‘too big to fail’ dead?” and “If there’s one thing you could go back and change in the law what would it be?”

Dodd-Frank isn’t the only thing celebrating an anniversary in D.C. right now.

Tuesday marks the four-year anniversary of the Consumer Financial Protection Bureau opening its doors.

Keep an eye on HousingWire on Tuesday, as we’ll take a look at some of the CFPB’s greatest hits (and greatest misses) in its four-year history.

Source: WSJ

Robbins Geller Rudman & Dowd Obtains $388 Million Recovery in J.P. Morgan MBS Class Action

SAN DIEGO, Jul 17, 2015 (BUSINESS WIRE) — Robbins Geller Rudman & Dowd LLP announced a $388 million recovery on behalf of a class of investors in nine 2007 residential mortgage-backed securities (MBS) offerings issued by J.P. Morgan – bringing to a successful conclusion one of the last remaining MBS purchaser class actions arising out of the global financial crisis. The settlement represents, on a percentage basis, the largest recovery ever achieved in an MBS purchaser class action.

“We’re pleased with the record-setting recovery for our participants and the class,” stated Ed Smith, Fund Manager for lead plaintiff Laborers Pension Trust Fund for Northern California. “Our lawyers at Robbins Geller were tireless in their efforts, and the result is a significant victory for the class.”

Read on.